Custodians Make Money Off Of Money

• Posted by Greg Harmon
• on October 4th, 2012

And two of the biggest Global Custodians are Bank of New York Mellon, $BK, and State Street, $STT. These companies make money by reporting accounting balances, and charging asset based fees for investments and settlement activities. As the markets rise their fees rise. And their charts are suggesting a next leg higher in the market may be right around the corner. Take a look.

Bank of New York Mellon, $BK

Bank of New York Mellon, $BK, is testing the long term resistance/support level at 23.70 from a higher low, making an ascending triangle. A break higher has a target of 30.70. The positive Moving Average Convergence Divergence indicator (MACD) and rising Relative Strength Index (RSI) gives it a tailwind and the RSI is on the verge on moving into bullish territory. Look for a break of 23.70 to enter long.

State Street, $STT

State Street, $STT, has been in a broad channel with a slight bias lower since mid 2010 but recently has moved to the top in a symmetrical triangle. A break over the triangle carries a Measured Move to 53.75. That would take it well over the channel and trigger a Measured Move to 63.50. There is less commitment on this chart as the RSI is at the mid line and the MACD around zero. Wait for the break and watch the broad market as a leading indicator.

I helped build State street into a top custodian from 1992 – 2005 but have no current position.

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Dragonfly Capital Views Performance Through September 2012 Expiry

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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