Month: November 2012

RGR, Sturm Ruger & Co.

Hamilton

rgr nov 2012

Sturm Ruger & Co. is right up there with companies like Smith and Wesson (SWHC), Glock , Baretta etc.etc. The are in the business of selling handguns that have very little purpose in hunting or sports. Particularly those that are built to be carried around concealed. Last month more police checks were done that ever before. Apparently the new entries to this market are often women who believe that they are useful for self protection, and there can be little doubt that these “dispute resolving” instruments make convincing arguments.

As far as RGR is concerned, it is up 10x and some, not a bad run. It may have a 5-wave sequence into one of the tops, it may have a clear B-wave into the second top, and, it is reaching a level that is close to the 61 Fibo ratio. A sell when you add it all up, even if another $5 or so cannot be completely ignored (see chart below). In any case, IMO the UZI , carried under a raincoat , gives a much better bang for the buck.

rgr nov s 2012

DJIA update again.

Hamilton

djia nov 27 2012

Now that we have (probable) completed the minor wave b within the a-b-c counter-trend correction wave 2 another likely retracement level would be where c equals a, roughly at 13250, just 40 points above the 62% retracement level calculated earlier. Time is always next to impossible to gauge with any degree of precision but a wild guess would put it at around the middle of December. that is if it gets this high. We will see.

Fed. folly?

Hamilton

http://www.columbia.edu/~mu2166/Making_Contraction/paper.pdf

No pictures or charts here , just a website that brings you to a research report by a duo of professors at the university of Columbia, Martin Uribe and Stephanie Schmitt-Grohé . The paper is above my pay-scale because of the overdose of math that it contains, but if you abstract from that it is extremely interesting. It is , or will be one of the few peer-reviewed academic papers that argues that the Fed is barking up the wrong tree. The argument presented is essentially that under the presently accepted doctrines of the Taylor rule, the downward rigidity of wages, combined with interest rates close to zero there is a good argument to be made that the missing confidence level is perversely fed by keeping interest rates down. This is, of course, precisely the opposite of what the Keynesian Central Bank policy now purports to do. This fits very well with ideas presented by Prechter who, in his “socioeconomic” approach to markets preaches that mood precedes outcome. Granted it is a little bit like “bloodletting” in the middle ages, but provided the patient responds positively it may actually help.   Enjoy the paper as someday this may become the policy standard.