Year: 2009

DAX again feb 25

Hamilton

DAX feb25

A quick thought on the DAX. Notice that all movement in 2009 looks like a .B wave, it is an a-b-c in which the c and a legs are about vector equal. So if it looks like a duck , quacks like one etc maybe it is. We will keep an eye on this canary bird as it is a very good precursor of what awaits the market overall. Look also at EWN, the Dutch EFT back at the $10 level. For the moment all this means little as the wave can still develop further but lets not lose sight of it.

Note wave 1 could be one spot higher up.  Waves 1 and 4 would both be about 5 months.

T Telus technical analysis=/ EW Febr 25

Hamilton

Telus feb 25

Here is Telus again. It may have completed the ride down but it did not yet reach our original target of $30 ($31.25 was yesterday’s low). That low was obtained by looking at the pattern and/or structure of the decline, i.e. pure EW which is concerned primarily with the psychology. Overlay that with a little technical analysis, of which, I at least , do not claim to know much, one will notice that the bottom line has been touched precisely four times. As we know the chance of having 2 points on a line is 100%, 3 or 4, 1 in a million, so clearly someone is looking at that line. Maybe we should too and buy at $30 when and if it gets there a 5th or 6th time. Upside from there is to $44 minimum. Remember the bottom may already be in if all those watching that line got impatient!

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Are we there yet?? DJI and TSE ——————– MFC is done.

Hamilton

Today’s action was pretty good and very close or even at buying points for a number of stocks, like the banks, Manulife, Ge etc. So are we there ? Not sure, as I mentioned you run the risk of missing the boat, but then again you may get a better deal.

Tse feb 24

Starting with the TSE it looks like we are NOT there yet. Typically in time the low occurs straight under the triangle apex, which means we have another week or two to go. Secondly it is short in size. Typically a 5th is equal to wave one (green) AND the triangle itself measures a greater distance (blue). Also there is barely a discernable  structure, let alone a 5-wave one.

INDU feb 24

The DOW also is a little stunted at this point. The normal distance, (blue arrow) has not happened yet and as there is no triangle here the 5th wave so far is an a-b-c which is incomplete. Either a d-e should be added over the next little while or we might actually be in a diagonal, that is a wedge that needs another week or two. Time will tell. Manulife , of course, is done with a low of 12.25 today at the lower end of the 14/12 suggested range.

GOLD, SILVER and the XAU

Hamilton

When gold reaches about $1000 for the second time in a couple of years it is hard not to take notice, all the more so as this area for investing is so confusing and full of mythology. There are the died in the wool gold bugs that see the world coming to an end and somehow the gold will comfort them. At the other end of the spectrum are those that see little more than an industrial commodity. Indeed it is impressive to see how at least silver, ever since the demise of Eastman Kodak and the traditional photo, has not even been able to regain  half of the value  it had when the Hunt bros. tried to corner the market, about $55. The truth is likely somewhere in the middle. Believing in the guideline that things alternate, my guess is that this time deflation will more likely be the problem so I am not (yet) inclined to believe that gold is going to $2000 and higher (where , by the way, it should already be given what is happening lately) Here is what we do know.

Gold Feb 24

Gold clearly double topped or should proceed onwards and upwards immediately. It never corrected to the level that it “should” have at about $580 which begs the question will it. Looking at gold stocks the XAU is probable the best  to go by.

XAU Feb24

Notice that while the metal went up 5-fold, the 13 stocks in the XAU have barely moved from the arbitrary red line I put in the chart as an average for the past 20+ years. Given the non-correlation why would you own stock?

Concerning the stuff itself, the US government in the early 1900s confiscated all gold in the country at about $24 /ounce and then revaluated it to $35 while  prohibiting ownership and commerce in the metal. Not a great prospect either.