APOL, Apollo Group

August 25, 2013 Hamilton

The For-Profit-Education stocks have performed badly (see also DV, Defry and ESI, ITT Educational Services) which may make them a value proposition now. Apollo Group is the most interesting one. First of all it is completely out of synch with the rest of the stock population. In early 2009 this stock almost double topped at a time when most of the stocks were making new lows. Secondly the entire pattern starting in 2004 to the recent lows of 2013 is a textbook EW sequence, that is a 9-year “flat” 3 –3 – 5 pattern. The large, unmistakeable, B-wave anchors the entire pattern. There is alternation between waves 2 and 4 of C and C is , of course, clearly a 5-wave structure. C is a little longer than A , but not by much. Also the entire construct fits in a parallelogram. From a technical point of view, it is nice to see that both the RSI and MACD have not supported the recent lows. The stock trades at a p/e of 6.87X and short interest is a whopping 23.54 % of the float. The stock shows up in three different “best-to-buy” value lists, even after broader testing of other relevant factors. A buy in our view, however with a stop-loss at $15.50 or thereabouts. An initial target would be around $30 as a minimum so the risk reward is about 1 to 6.

SLW, Silver Wheaton Corp. update

August 24, 2013August 24, 2013 Hamilton

We have had bullish and bearish outlooks on this stock, neither were necessarily correct. It is very elusive so here is another go at it;

From the 2001 lows in the precious metals, this stock has risen like a meteor in what any reasonable person eyeballing this chart would call a 3-wave move. Which either means that it is simple a large , corrective B-wave and we will continue down, or, that the 5-wave up sequence is not yet complete and we are just now starting the 5th wave which targets $60 or higher. So far the low point of wave 4 touches the high point of wave one, so there is no overlap. Un till that does happen, this bullish count remains valid and even if it does, a diagonal could still be a possibility. Alternation is lacking , perhaps, but that is in any case not an absolute requirement. But even so wave 2 is steep zig-zag down whereas wave 4 is more like a sideways flat.

So, to repeat, this is either a wave 4, a-b-c (with 3 subsets of a-b-c’s within it, remember a c always has to have 5 waves) and we are on the way up, or will get bigger and we are presently in wave 4 of c. Overlap for that occurs at $34. Presently the rebound from the recent lows is very decidedly itself a symmetric a-b-c , as is the case with virtually all the gold mining stocks, but this can change. In short the bullish scenario is negated with a drop below $18 and, more or less, confirmed with a rise above $34. This stock , by the way, does not suffer from the usual stock specific idiosyncrasies like most minors, it just collects royalties.

See previous blogs for earlier bullish calls.

VWO Vanguard FTSE Emerging Market ETF, update, EEM

August 23, 2013August 23, 2013 Hamilton

The usual then – July 8, 2011 – and now charts;

This is not a well known ETF but it does represent the emerging markets well. If it is true that a banker is someone who will lend you money when the sun shines, but asks for back as soon as it might start to rain, then the emerging market countries are the real recipients of such policies. But it all takes a lot of time so this is nothing more than a roadmap. Even so it is a correct roadmap so far so, perhaps that will stay that way. At the time of writing it was not clear yet if the large B-wave would have two equal parts or parts that relate to each other by about 1 to 0.62. The latter proved to be the correct choice. We are in a large C wave which will unfold as a 5-wave affaire if history repeats. We are presently in wave 3 so things could get nasty fast. Stay away for a few more years.

See also EEM etf from May 12, 2012 and now;

ABX and GLD

August 23, 2013 Hamilton

ABX has hit our target of $21.50 ($21.28 so far). As mentioned a few days ago we would sell here. (For the record our targets should always be viewed as minimum targets; we do recognize that much higher levels are possible, often even likely!). ABX has followed the gold ETF GLD quite nicely. It still has a little more potential but $8 on $14.5 (on ABX) is 55%. For the moment we have no idea where gold or gold stocks will go. But this is an a-b-c and that is a correction so unless it somehow morphs into a 5-wave sequence we will continue with a bearish bias.

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