Month: April 2014

TSX update

Hamilton

This brings us to the TSX;

tsx apr 30 2014

You will notice that at the bottom of the chart the TSX (or TSE) is trading at about 1000 points. Today it is at 14650 and rising everyday by roughly another 50/100 points. So it is about 14.6X as valuable as it was back in 1978. RDS.B was about $6 back then and is trading at $85 now, so that is 14.2X. The volatility of RDS is a little less than the TSE and the dividends are actually higher by a substantial margin. Furthermore the Dutch have managed their affaires much better than we have. If we have a dog like Nortel we hold on to it with our dear life and then loose our shirt. The Dutch with ABN-AMRO manage to get the Brits so excited that they get a bidding war going and buy the dog, right at the top, for almost 100% cash!

You can move the charts of RDS and the TSX next to each other and experience the similarities for all they are worth.

RDS.B Royal Dutch Shell update

Hamilton

Here are the usual then – December 2012 – and now charts;

rds.b dec 2012rds.b april 2014 b

Part of the prediction at least was correct. The question which remains is whether or not this is a B-wave (a-b-c X a-b-c) or a 5th wave. In the former case the triangle, which is clearly visible even if one cannot tell it’s exact size, is the b in the second a-b-c. In the latter case it would be a wave 4 in a 5 wave sequence. $87 or so (it has already reached $85) would be about as good as it gets, considering the double top and the triangle measure. We would sell here.

To put the growth of this stock in perspective below is a longer term  chart from the G&M.

rds.b apr 30 2014.

The count shown, arbitrarily, is that of a 5th wave even though we prefer the B-wave as it “fits” the big picture better.

LUN, Lundin Mining Corp. update

Hamilton

lun apr 30 2014lun apr 30 2014 m

Our original take on this stock was that it had traced out a clear B-wave from the lows at the bottom of the great recession. Despite the passage of two whole years – this is what QE does for you – that still seems to be the correct take. Since the lows of late 2012 this zinc and copper miner has moved sideways tracing out an a-b-c which would then have to be wave 2 of C down in a multi-year A-B-C down. Here is the c part of wave 2 in more detail;

Lun apr 30 2014 s

This is unequivocally a “diagonal triangle” in EW lingo. In normal English that is a rising wedge. It is a bearish pattern as invariable it is followed by  a drop back to the baseline or more, in this case roughly 50% or so. Given that prospect we would sell. By the way, this wedge is a classic, meeting all the requirements so our confidence is high. The only possible error would be that the wedge is not yet complete and still needs a 4 and 5. Not very likely given the time that has already passed.