The usual then (13 Dec. 2011) and now charts;
EW like any other approach, has, from time to time, little oddities that should not really happen. In this case the e-wave went lower than it should have gone. Otherwise the call was pretty well dead on. We would sell here and even go short.
Then and now as usual;
The $17 line was quite important, if you got above it things could be alright, if you did not than things were looking decidedly ugly. Remember that these are the juniors, not the ABXs of the gold world. Looking at the chart $7 is a realistic possibility. Some of these companies have a problem even paying their listing fees. According to some in the know, about 1/2 of them will become extinct in the next few years. This is not altogether that surprising. Initially they spend all there money drilling holes all over the place in order to create some transparency with respect to what is actually there. Even if that goes well the next step is usually of a completely different magnitude, instead of 10/20 mln. you may be talking 50/100 mln. and upwards. For each geologist these companies often employ an equal number of financial types that are experts at extracting money from investors. But the mood has to be right and that does not appear to be the case now.
Autonation was a 10-bagger from the lows and has a nice 5-wave sequence to boot. The triangle in the 4th wave position, as always, is fairly clear. We should therefore be at a top of sorts. Time to sell.
“I am so excited about this new magical experience that will come to life aboard Norwegian Getaway,” said Kevin Sheehan, Norwegian Cruise Line’s chief executive officer. “The Illusionarium will be an experience unlike anything at sea today and take adults and children alike on a journey into the mystical world of magic. This is so perfect for the ship that will embody the vibe of the Magic City.”
Recently launched in Germany, the Norwegian Getaway and the Norwegian Breakaway, a sister ship, are on their way to start operations from Miami and New York. They do not come any bigger and have room for about 4000 passengers. The company has nine other vessels.
The company has been around for a while but only went public in January of this year issuing about 1/2 bln. of stock at $19.
The chart tells you very little other than that the stock immediately gained 60%, going from the $19 issue price to about $32. We would sell; the illusionarium may be an experience unlike anything else but at a cost of $1 bln. we suspect that this could, one day, prove to be one of the most grotesque misallocation of capital. Between Carnival, Royal Caribbean and a few others there are now at least 50 or more of these oversized ships. Some are so big that you cannot even tell when they leave the dockside. It is like living in a financial bubble, with Bernanke at the helm. We prefer our cruises on real ships like these;
The one on the left is the Samsun, passing by the Leander tower at the Black sea entrance to the Bosphorus, the other the Jadran (=Adriatic), you can have your illusion right at the waterfront in Toronto. At 3,000 tons the Jadran is 1/50th the size of the 145,000 ton sisters.