Year: 2009

BLD March 5 (by special request)

Hamilton

 

ballard march 2Ballard march

I do not particularly like penny stocks, but then this is not yet a penny stock. I understand that there is a “house” that specializes in these things recommending the stock, with a target at around $3. Well what I did not like about this thing is that I never understood how you put a 10 ton machine in a car (bus maybe), nor do I see how it solves the energy problem as you are simple transferring the “burning”to another spot. Anyway what is clear is that if there is a time to buy, there has never been a better one, from $210 t0 $1.20 is quite a move. Nevertheless it may pay to wait for $0.90. The triangle in the upper section measures about 70 cents, so if e ended at $1.50 that suggests 80cents so that would be $0.70. You would not want to miss it after waiting 10 years so you go 10 cents higher. Good luck.

STOXX S&P 50 largest European index, March 4

Hamilton

Stoxx

The STOXX made a high of nearly 4600 so the “box”should be in the 2300- 1760 range and presently it is at 1864. The RSI is  below 30% and there are valid wave counts that can be made to suggest a complete sequence is done. I do not particularly like the last leg, but I do like the two different channels that can be used and indicate that if a new low were to occur it would probable not be outside the 100 point range that separate us from a perfect Fibo 61.8 %. All of this suggest that the EWN might be a buy in the next few days if not immediately. The upside is considerable, about 1000 points or roughly 50%.

Pattern recognition March 4, or why diversify?

Hamilton

All learning is pattern recognition as in “monkey see monkey do”. That is how we learn to talk, learn to walk and nearly everything else. Here are two charts to make the point.

nikkei march 4

Tse march 4

At first ,and superficial, blush these two charts are pretty well identical. They break down at about the same time, have their largest move , wave 3, between about September and November/December, then are a little unsure and do show some divergence but after all is said and done they are very,very similar. In fact numerically they are almost in tune, both having started at about 15000 and having dropped 50% to 7000. One has just made a marginal new low, the other may soon do so.

   There is nevertheless a slight difference, one of these two will make a new 25 year low tonight, while the other is only in the 9th month of a bear market. One comes from a high of 38000, now down 81% or so, whereas the other is just down 50% and only 9 months old. They are half a world apart, one is the second largest economy and the other an auto plant for the United States.

   What we learn from this, if we chose to do so, is that , first of all , “diversification” does not work as we live in a global world where correlations approach 1 for just about everything, certainly in a bear market, and secondly that as these patterns do not just occur simultaneously in different markets but also sequentially, it helps if you recognize the pattern early while it still has a predictive value. This is what E-wave is all about!

The top chart is the Nikkei 225 index, the bottom one the TSE, just in case. Click to enlarge.