AFL was one of those stocks that had a B-wave and was expected to go down. Here is the chart;
See the earlier blog from May 17th. We were where the black arrow is on the chart. Call it $53, from there it dropped to $44 or about 17%. Waves one and two especially are pretty clear, but wave three may not even be complete. Time will tell but ultimately this stock despite it’s affable duck should go a lot lower.
Back on the 6th of May I suggested that SWI might soon be a buy, however the danger was that the stock would trade all the way to $4. Here is then and now;
Again,click on the charts to enlarge. So the stock , not so surprisingly , did drop to the 4th of prev. degree and actually broke the channel by a little. This is now a buy;
The stock looks good here. It has retraced 60% of it’s entire value (I use $10 as a top, that one trade at $11 occurred in the middle of the night with an order for a 10 lot from Papua New Guinea ). It dropped to the 4th of previous degree, just cut through the trend-line and the RSI has turned up. What it has not done yet is drop the measurement of the triangle which could possible take it to about $3.50; not likely at this point. From here $6.50 and then $8.20 are reasonable targets (in a bear case!)
By the way, if you happen to enjoy technical analysis,(I do not) you might recognize the above pattern as some sort of Head & Shoulder formation, which would call for an immediate rise to the shoulder line.
MacLean’s came through my postbox as a teaser, I think they would like me to subscribe. In any case I leafed through it and found this interesting little gem that I had never even heard of. I have no idea how this one is compiled (Citigroup), but I did just happen to listen to some lady that pointed out that today a credit card agreement might be as long as 30 pages of legalese. she called it sneakerism, or something to that effect implying that obfuscating as much as possible is the name of the game . Not too long ago it would have been a single page.This index is, somehow, supposed to tell you to what extent economists , read financial advisors, are wrong on their expectations. This does not necessarily imply that they are not telling you the whole truth from their point of view, after all most are upstanding blokes. What it does mean is that they are as clueless as the rest most of us, and are like Pavlov dogs in pursuit of their next gratification.
What is particularly interesting is that this index appears to be , more or less, coincident for most of it’s life. Oddly enough, it seems to be out of touch lately, or is the action just around the corner, suspended from revealing itself by all sorts of machinations by our governments desperate to keep the ball rolling, or, if you prefer, kick the can forward ???
Just like Pepsi, Coke may have some trouble ahead, again there is nothing wrong with the stock, it yields 2.7% and trades at a P/E of about 13. The stock has been out of phase with the market for some time now but the pattern is pretty clear. Looking at a more detailed chart;
The c-leg up has already travelled as much as the a-leg (a common equality), and is forming a wedge of sorts that does not leave much room, in fact the $70 high may be as good as it gets. A normal 62% retracement of the entire bull market occurs at a little over $32. No idea why this might happen but soon 1/3 of North American (and the world?) will be overweight. Soon diabetes will affect 15/20% of the north American population. Schools are getting annoyed with vending machines that do not sell the right stuff etc.etc. etc. In short there are many reasons why selling sugared water may become less popular soon.