Month: September 2011

DAX update

Hamilton

Mrs Merkel spoke today in Berlin, did not say that much but upped the mood with solidarity etc. etc. The Greek prime minister weighed in with a personal guarantee that the Greeks will do what they have to . For the moment everybody is happy. Here is the DAX;

dax seot 27 2011 

This could all just be wave 4, or 2 depending on what degree we are looking at, but the action lately has been clear, it is a wedge (diagonal)  It should retrace to its base just under 6200. Then perhaps 50 to 62% of wave 3 from the start of July.

PD, Precision Drilling. $WTIC, West Texas

Hamilton

pd l sept 2011 pd s sept 2011

Precision Drilling may just have the same pattern as Netflix had the other day, that is an A-B-C down where C=A, give or take. In PD’s case a “logical target would be around $8 even though the level of the B-wave on the way up is a little lower, more in the order of $6. In Canada things might brighten up a little bit as soon as the frost gets into the ground. These rigs are heavy and consequently easier to operate in the cold , never mind the black flies etc.

Looking at West Texas suggests oil might still want to go a little lower, more in the order of $70 near-term, perhaps enough to give this one a little push down.

wtic sept 2011

FVI , Fortuna

Hamilton

fvi sept 2011

There was a time that this could have been a triangle with a thrust up. It is now clear that it is not. This is an irregular B-wave so we are now in the first stages of C down and wave 1 (W1) should be reclassified as wave A. My educated guess is $3.50 at best. An alternative would be a wedge,after an a-b-c irregular flat. Possible but still targets $4.25, see below.

fvi sept 2011 alt

Actually this may just be a little more elegant.

Silver, the stuff.

Hamilton

Today it was reported that silver had its largest drop since 1979. Not sure but it was Silver Thursday, 27 of March 1980 that the Hunt brothers , Nelson Bunker and William Hubert were caught with there their pants down . started the long process of going tits up from being billionaires . Only in Texas, USA.

This is the chart today;

silver

Lets start of with conceding that I have no idea where this might go, other than listening to most people that are cock-sure it is up making me wonder at the very least. So lets just be objective! Common sense tells me that this should revert to the mean, all things do at some point. The mean to regress to is about $23 by the time this might happen. Next we should go back to wave 4 of previous degree, and having no idea what the count might be , it still looks like that might be at $27. Next we have the c=a vector symmetry, again around $27. Then there is that silly wave count, clearly wave c cannot be complete, a little 4 and 5 are the very least that is still needed. Again $27 stands out as a reasonable target.  Then there is the RSI, already at a 3 year low but still not excessive. Anytime now. The MACD is already up, but that means very little.

There you have it, $25 and the stuff is a buy, a nice 50% drop and about 62% of the rise from the lows of 3 years ago. Will it stop there? No idea. Is there going to be another billionaire ready to corner the market, not if they know the history, but that is the beauty of it all, they do not and that is why this can , and will, go on forever.

I like the symmetry, probable a buy at $27, at least for a trade, but do not go to the washroom while you hold the position, it could be painful.