Hamilton's E-Wave Analysis

The World and Canada.

These are the various country indices available under the iShare symbol EW.. . For the most part they are logical, EWG is for Germany and EWI is for Italy. There are exceptions as in Brazil which is EWZ. There are 17 shown here together with the S&P and the DOW. Click on them to enlarge and  the country name will be more visible.

All charts have an arbitrary 10-year time-frame. Therefore what you see pertains to that specific time-frame only. For instance, we all know that you haven’t made a dime being in the S&P for the past ten years. That is not true, because ten years ago the S&P was at such a that you did make money. It is over twelve years that you made nothing.

A number of things are patently clear looking at these charts. For all of them 2003 (the second column) was the low, and nearly all peaked in the 5th column (Brazil being the exception). Most hit the lows in early 2009 (again Brazil is the sole exception). From the lows the vast majority go up in a clear 3-wave A-B-C counter-trend B-wave. Very clear are Switzerland , Germany and Taiwan. Not so clear Spain and Brazil. The S&P and seem to have one leg too many. In the process Sweden and Switzerland “double-top”, give or take. Italy, France and Spain do not even make it to the halfway point. Mexico,  of all places, does best and even manages a knew high (maybe). If it did it is the only one, with Switzerland,to do so! Together with the S&P and the Dow, Mexico actually manages to pretty well stay up there. Little wonder that the Telefonos de Mexico fellow is now the richest man. All these indices are expressed in US dollars as that is the currency the EW.. is quoted in. 20 in one chart becomes unreadable but here are 5 of the main ones;

Relative to the starting point 10 years ago, the USA, the United Kingdom, Spain  and Germany, despite large variances in the interim, end up more or less in the same spot, that is up 15 to 35%. Up un till the peak Spain , and Canada a close second, were the star performers. Today Canada is all alone up there at 135%. For a long time both countries poured a lot of concrete and we are still doing it! Of course Canada is so well managed that we now can teach the Europeans how to do it. The moral of the story “Pride goes before the fall”. And, diversification is not what it used to be.

P.S. In case this is not clear, B-waves are counter-trend rallies and ergo new lows should be made afterwards. Also the charts can not only be enlarged but also moved so that you can compare any set of two.