Month: January 2012

BNS, RY spread (pairs) trade.

Hamilton

We already exited this trade, either as a spread or BNS long only. Patience is not our strongest suit. Had you waited the results would be even better today, as BNS trades at a higher price than RY, by almost a dollar!

BNS jan 19 2012RY jan 19 2012

Both are now either at or above the 200 day moving average. BNS clearly caught up with the RY. Things could still get a little better but we certainly do not recommend sticking around. The pairs trade would have earned about 7/8% and the BNS long only well over 20%, in absolute terms, not per annum!

DAX update

Hamilton

DAX bloomberg 2012 jan

Today’s intraday high of 6389.99 is just a few hundred points shy of a perfect 61.8% retracement of the down wave with a range of 4966 to 7600. Waves C and A are almost vector equal. So the answer to the question, “are we there yet?” is a resounding maybe.

For comparison purposes we have added the S&P below;

spx bloomberg jan 2012

TRP update

Hamilton

trp s 2011trp jan 2012

For the big picture, see the previous blog from December 22, 2011, about a month ago. It hit the anticipated target with less than 1/2 dollar to spare and then started on it’s merry way down. These are not insignificant  moves as they are in the order of 10%. The next one should be much larger.  All the analysts babbling on BNN are not in the least concerned about this stock. Todays news and action was just a blip on the way to financial nirvana. The greatest accolades came from the dividend chasers who commented that the return is now better than yesterday. On that basis all things bad are good so why worry. That this stock traded once upon a time not too long  at $9 after an event that was then considered a major betrayal (they cut the dividend after repeatedly promising not to) seems to be entirely forgotten. Our view; stay out!

RIM update (see also Dec 21 blog)

Hamilton

rim jan 2012

We were a little early and tentative to start but when this stock hit $12.80 we did recognize it as a major low. As mentioned then , the stock is probable worth more than $20 even in a break-up situation and the targets of $10 or lower seemed a bit ludicrous.  Had you bought at $14, you are now up 20%+. I suspect that it will go further but usually not in a straight line. At $20 (about 50% up) I would be out in any case.