NLN, Neulion Inc. (on Toronto)

January 13, 2015 Hamilton

This stock has part of its origins in Jump TV, a stock that I am also not familiar with. In any event it hit a low of roughly 15 cents back in July of 2013. It is consequently reasonable to assume that some first wave started at that point. There are 3 simple things that must be taken into consideration when trying to get to an EW count. 1. Structure, you need 5 waves up or 3 down. Here it must ,of necessity, be up. Typically the wave 3 sits somewhere in the middle all though that is not always true. Simple, for starters, assume that it is. Here we show in green where the middle appears to be and than simple go equal distances from there. 2. Channel. Nearly always the whole thing channels well. Here shown in purple. 3. Extensions. This is often ignored but nearly always there is an extended wave, that is it is abnormally long. Often it is the 3 of 3 but in commodities it is frequently the 5th. This company is a mini Netflix and, arguable, not commodity related. Nevertheless it looks like wave 5, more precisely 5 of 5 is going to extend.

If you do all that then a slightly higher high is still a possibility. A rough guesstimate would be about $1.53. If it is worth sticking around is a different matter.

Alchemy, and we thought it impossible! Copper, Gold.

January 13, 2015January 13, 2015 Hamilton

Here are two charts from InfoMine, same scale, same timeframe , more or less, and so on. On the left Copper and on the right Gold.

With the exception of the spike down in 2008 for copper the two charts are very similar. Both have their lows in or around 2001+ and both peak in 2011+. Moreover both manage an amplitude of about 9-times. The most recent, multi-year correction takes back roughly 3 out of 8 lines which equates to about 38%, normally a Fibonacci minimum. We can only speculate why the exception of 2008 occurred, perhaps copper as a base metal is more sensitive to economic growth which seemed to disappear during the initial phases of the great recession. Or perhaps gold was more sensitive to the expansionary monetary experiments of the Worlds central banks. Whatever the cause it is clear that the difference was short lived and that for the most part the two metals behave like twins, have an extremely high correlation (at least for this time period!), and are essentially interchangeable as if alchemy actually works. Those that delight in conspiracy theories might want to delve deeper into what the Chinese have been up to.

For our purposes all this is important only in that if you can predict one, you can predict the other. Here are then – 29, Oct., 2012 – and now charts;

That was a bulls eye even if it took a year and a half longer. Nevertheless we do not think the count at the time was correct. For the triangle to be a 4th wave it is too big. A 5th wave may have started earlier and taken the form of a wedge. This would then complete wave A or 1 down at toady’s low. Perhaps a better characterization would be a double zig-zag with the triangle in the middle as the X-wave. We are not entirely sure as other variations are possible but the main thing is that we got to $2.70 per pound, the initial target. At the very least we would expect a pause of some duration at this stage, more or less. So if that is the case with copper, why not with gold?

DAX update

January 12, 2015 Hamilton

The DAX sports a similar triangle as discussed elsewhere ad nauseum. These triangles are invariable either in a 4th wave, or a b-wave position. (Alternatively they are misinterpreted as triangles but are, in reality, a series of 1-2’s). The different position depend on whether or not this wave up is part of a normal 5-wave sequence that subdivides in individual 5-wave minor waves or, whether we are in a wedge-like structure within which all the sub waves are 3-wave structures. Either way,if this is correct, we should get a thrust, or c wave up to at least 10500 and then the whole thing should more or less collapse. Do not trade on this. Neither the RSI or the MACD provide any meaningful clues.

G, Goldcorp update

January 11, 2015January 11, 2015 Hamilton

See our previous blog from a few days ago. So far there is no decisive resolution of what is happening. A wedge or an incomplete 5th wave are still possibilities. Just a little higher we will get overlap and if we can get a little higher yet, say to $27, the probability shifts to the view that the low is in for the time being.

See also HGU and ZJG, neither of which are resolved decisively either.

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