Month: January 2009

Dax home of the “wirtschaftwunder”

Hamilton

dax-jan-23

Here too we have a good deal of ambiguity – the best count suggest that the 3d wave had a failed (by very little 5th and that most of the past few months were spent on addind the 5th wave. This is not necessarily the low as in 2000/2003 it lost about 6000 points out of 8000, but it does suggest that a fairly solid rebound may be around the corner soon. This one is a great precurser for north-American markets as it had the same double top that , for instance, Citigroup and quite a few others had. Today it is within 100 points of the low set months ago, we will see if it holds.See the RSI which suggests it might. Germany is , of course, also the country of “schadenfreude”, try not to become the subject of that.

CM and TSE jan 23

Hamilton

This is an art not a science so there is an element of judgement which can only be partially eliminated by doing it often.  As far as the TSE is concerned I will go with the triangle, typically you then hit a bottom right under he apex and 5 tends to equal 1 so roughly around 7000. The S&P works better without the triangle, just an a-b-c 4th wave, otherwise the conclusions stay about the same.

Looking again at the Canadian banks I have added Commerce to see how it compares to the Royal. The chart is , as usual, open to different interpretations but given a very clear triangle and a fairly clear 3d wave I assume that ether the bottom has been hit already (and we are in a b-wave) or we are one leg short and could still drop to say $38 (this can happen in either scenario). In any case we have done slightly more than 61.8% from the $105 high and given that the next major move is probable a (counter-trend???) rally of perhaps $15 plus the risk/reward equation supports the idea that around here to a few dollars lower might well be a good buy. Here are the charts.

Click to Enlarge
Click to Enlarge

RY again, this time in E-wave terms

Hamilton

As much as I try , I find it very difficult to put a reasonable plausible count on this stock. The problem is that there are seemingly a lot of overlaps or 1=2,1-2 type of situations followed by 4-5, 4-5 etc. etc. On the chart below I have tried a compromise that I feel could be it. If correct the stock will bottom anywhere between $29 and $25 as it completes a 5th wave diagonal (as in RIM but less pronounced) No exact point can be determined as the last leg can overshoot or fall short of the model target. In any case, wherever it does go the next move is back up at least to $38, tradeable as it would be about a 30% gain regardless of the price you pay. Looking at RSI and all this other wonderful stuff that techies get excited about this looks pretty attractive. Here are the charts.

Click to Enlarge
Click to Enlarge

BMO’s fertile brain

Hamilton

I was wrong the other day when I mentioned the falling IQs of  bankers as soon as they see  one of their own. Here is the proof. We are all familiar (there are exceptions) with concepts like prime-rate, bank-rate, LIBOR. TIBOR, cost of  funds etc.etc. But did you know that if you juggle them you can have your cake and eat it too? Yes , this time they dropped prime one for one with the Bank of Canada’s 50 beeps but before you get carried away into sentimental admiration, read this. By the way, I cannot figure why the interest is $9.88 a instead of $10 (semi-annual?).bmojan21005