We would be sellers here of GS simple because of the EW pattern. This is a huge flat that has completed waves A and B (give or take) and is about to start C in the near future. You do not want to go along for the ride as C waves can be messy and should take the stock below the lows of the A wave. Right now the stock is still creeping up on borrowed time but this should stop any moment now. The RSI, MACD etc. suggest a turn is right around the corner.
One day ago we showed the Shanghai index as an example of a stock market gone mad. The next day this index drops by 5.4% but during the day must have been down about 8.3%. This market is losing any connection with reality that it might have had. With this market resembling a casino and with an economy that has massive overcapacity in every direction Schumpeter’s creative destruction should start in earnest any moment now.
Like most others, OXY topped out in 2011, completed a first leg down and then corrected that with an a-b-c wave 2. That puts us in wave 3 starting from about $100. A very good looking triangle was formed around the $83 level. To keep the proportions more or less right, this must be a 4th wave, however not of the entire wave 3 but just of wave 3 of 3. That puts us in wave 4 (which may also become a triangle), to be followed by wave 5. This wave should take the stock below $71. Then we still need 4 and 5 to take the stock to below $44. By that time the stock will have lost $76 out of $120, close to the 62% normal target.
To help things along, the stock has been downgraded by several investment firms. However the target prices are still for the most part above $100. This is another way of saying that they do not have a clue but definitely want you to feel warm and fuzzy about the stock.
Up 50% or so in 4 months, 1/2 of that in a matter of weeks. This index comes from 6000 so we are now only at the halfway mark but it is shown here simple to point out how idiotic markets can behave when the central powers intervene or otherwise manipulate markets.