For those of my readers, there are few, only about 500 so far, that can read between the lines and still own Magellan, we still need a 4 and 5 to get us to the 1.20 level. Should not take too long as this one worked out just great. Before we all get too hubristic about it, remember that getting out of Timminco, TIM, after 30% proved to be very wise!
China has overtaken the US in car production, after about 20 years whereas cars have existed for about 100 years in the States. Amazing how fast things happen. But Goldman Sachs has put the company on it’s “conviction†list . Perhaps we should have more conviction in what the E-wave signature of the stock is telling us. Here are the charts again.
Nice 5 down to slightly below 4th of previous degree (that is the bump on the way up!
Good luck and try not to think!
Just a few days ago a spread trade was recommended selling 1.2 x RY at about $41 and buying CM at $51. The trade is essentially self financing so it can be done in a margin account, one side offsetting the other. Today RY is a little above $41 and CM at $53 plus for a net gain of, again roughly $2 which equates to about 4%. It may get much better than this but for anyone a little nervous on a directionally neutral position take your profit tomorrow and run.
Bank of America (NT & SA, as it used to be called) now owns Merryll Lynch Pierce Fenner & Smith and Country Wide and according to Mr Lewis this financial machine has the potential of generating about $5 per share which would easily put the stock at $50 in a few years. Then there is Meridith Witney who would not buy any major bank at this time . My guess is that reality is somewhere in the middle. Looking at the chart we have to be mindful of the fact that the ups and downs are not always meaningful (this one went from $17.50 to $ 37.50, predictable by the way, or about 120% before continuing the drop). But when trying to be reasonable one must agree that going from $50 to $2 IS a serious enough drop, we do not have to go further just to get to depression levels. In fact if this correction was an A-B-C X A-B-C then maybe we have seen the lows. First indication is that the move from the low is a 5-wave move (possible the start of a bull market but at the very least a first (out of two) legs up in a corrective rally. Should we drop to about $7-$7.50 this may well be a great buy! Here is the picture in more detail. Do not try this with Citi Group
