Month: April 2009

TSE AORD April 7

Hamilton

One would intuitively expect diversification to work better over a greater distance, like from Canada to Australia. Not so in this example as language, common heritage, natural resource dependence and a few other factors conspire to make the two economies, at least their stock exchanges, operate in an almost identical fashion. Here are the charts of the TSE and the AORD.

TSE April 7

AORD April 7

Notice that the TSE, the top one, starts later and therefore misses a wave that the AORD does have; otherwise the two are more or less identical. Something is distorting these indexes to cause this difference, perhaps capital weights, total return , whatever is responsible. To avoid this we will use the EWC and EWA iShares instead. Here they are.

ewc april 7

ewa april 7

Both iShares are pretty well identical having lost about the same proportion and doing it in synch. Both also suggest a 5th wave is missing to take them to their logical targets! In the future we will avoid the TSE index and use the iShare instead.

DML Denison Mines April 6

Hamilton

This is a little above my present pay-rate but tentatively i suspect that we are looking at an    A-B-C X A-B-C. As chance will have it, being so close to ground level there is no possibility for another A-B-C (three in a row is the maximum). As always lows occur perpendicularly under the apex of a triangle, in this case the B wave of the second A-B-C. Here it is;

DML 

In this scenario the move from 70 cents to $2.10 early Dec. would be wave one (or a) up, then 2 or b back to 80 cents, now 3 or c to >$2.10 , probable around $3.

DJIA Dow Jones and the missing wave????

Hamilton

DJI April 6

Again, compared to the TSE which does appear to have completed a 5-wave sequence, the same can not readily be said for the Dow Jones Ind. Ave. In my opinion a good case can be made for a missing 5th wave, possible even a 4-5, 4-5 sequence. Compressing a 4-5 into wave 3 (green) requires the assumption of a failure, never a good thing. Also in the DJIA the existence of the triangle wave 4 is by no means all that plausible. Wave 2 would be a zig-zag unless one looks at wave 0ne as a 1-2, 1-2 situation. If a zig-zag we should now anticipate a flat. Given the sharp rise in the past few weeks a flat would probably take the form of a triangle. We will see.

F Ford April 6

Hamilton

F April 4

I have been dead wrong on this one, premature would be a better word, having predicted a rise to the top of this pattern ( around $9.50) many months ago (prior to the existence of this website). This is and was , in my opinion , an expanding diagonal triangle. They occur when the market has gone too far too fast and normally (read always) retrace right back to the top – and do so quite violently.  My error was in thinking the pattern was complete when it was not. The mistake is not that extraordinary considering that the 5th wave in this pattern frequently falls short of the trend line, occasionally breaching it.

In the mean time these guys have 23 bln in cash, are buying their debt back at 30cents on the dollar and are not beholding to the government. Perhaps they will be the only one of the three standing when all this is over, imagine the upside potential! Below is the model.

diagonal april 6