Month: June 2012

STD (SAN) Santander , update, and BBVA, Banco Bilbao Vizcaya

Hamilton

san june 25 2012

This bank has been downgraded again, together with 25 others, this time to BBB. Even so apparently it’s rating is above that of Spain itself, makes you wonder if the rating agencies are now more catholic than the pope to make up for their negligence four plus years ago. In any event we remain constructive for the long haul even if the stock did not quite get to our ideal target of $4. Use a stop at the low of $5.22

Banco Bilbao Vizcaya Argentaria S.A is the second largest kid on the bloc. This is the chart;

bbva june 2012

Notice that the two charts are almost identical except that BBVA got closer to the low in 2009 than SAN, also it has more overlap and C=A has not happened by a long shot. Perhaps the entire structure is better viewed as a single wedge with a slight throw-over at the end. This makes a lot more sense in the big picture. The C waves would be “failures” in that they do not make new lows (yet?).

CRB, Thomson Reuters/Jefferies CRB index , update

Hamilton

Back in Jan of 2011 we opined that this index would peak at around 350 in or around March of that year, and then drop like a stone (see that blog under CRB). The timing was pretty well on but the level was slightly off as the index climbed to 370. Here is today’s chart;

CRB june 2012

We are not at all confident about the count that we put on this chart after the high of 370. It looks a lot like the “cascading waterfall” that Don Cox from Harris Bank used to call this thing in his “Points” publication. However that specific pattern does not exist in EW land, so perhaps it is a combination. In any event, what we are (and were) confident about is that this index will drop at least to the 250 level before a serious rebound might (repeat; might ) occur. The index is not readily tradable but if you extrapolate the direction of this index to stocks like Potash and even stocks in the metals and oil space, even if they are not represented per se in this index, you would have saved yourself a lot of agony lately.

TRI Thomson Reuters update.

Hamilton

tri june 2011

TRI has done precisely as expected in our Dec. 21 blog. It went from $26 to $30. Since then it has been killing time by , perhaps, triangulating. The possibility exists that the correction will become more complex and move on to about $32, the level of the 4th wave of 3 and an additional $4.  We are not anxious to play such a small move. If you still own it at least use a stop just under $28.

STOXX Europe 600

Hamilton

STOXX 600 june 20012

The Stoxx 600 index provides an excellent broad cross section of the European stock indices. The EW count , as shown, suggest that the next move would be a 3d wave down. Equally interesting are the performance numbers at the bottom of this Bloomberg chart. Year to date, that is the last 6 months, we are up 3.76%, but measured over the past year we are down 3.75 %. Over the past 5 years we are still down by about 50%. This is after an endless stream of interventions by central banks, the IMF, and other “regulators”, both in Europe, the US and elsewhere, covering the entire gambit of conceivable tools from direct equity participation to moral suasion and everything in between. On top of that there are, no doubt, dirty tricks being pulled off under cover of darkness and behind the scenes. Things that the English would judge being as not done or not cricket. The US plunge-protection-team comes to mind , never mind other nefarious operations that we have not even heard of.

    Someday, and it shouldn’t be that long from now, the World is going to wake up to the inescapable conclusion that all these government actions are little more than a display of ineptitude and impotence, all just an outlived economic fantasy. The so-called Greenspan/Bernanke put will disintegrate as we reach the point of recognition, usually the mid-point of wave 3, next on the menu.