Month: February 2015

STN, Stantec.

Hamilton

stn feb 15 2015 b

Never knew what these fellows do for a living! Apparently they are design engineers doing all sorts of projects. They are located at the top of the Don Valley Parkway.

You can see here that the stock obeyed the 15-year channel by stopping right on the line. Ever wonder how it knows the line is there? Well it does not , but every Tom, Dick and Harry and their brothers that have the faintest acquaintance with “technical analysis” and have received a ruler from their employer plus an in house training programme on how to use it, draw that line a thousand times a day in order to determine if they are there yet.

In more detail;

stn feb 15 2015 mstn feb 15 2015 s

It would seem that the big correction has begun. (the best alternative is that the first 5-waves down was not wave 1 but wave A, even then the potential is towards $20). Wave 2 is nearing completion in this cluster of targets, c=a, 62% and the moving average. $33.58 embraces two of those so that is where this stock should be shorted. Normal targets, according to EW rules and guidelines, are at the 4th wave of previous degree, about $8.

The 1% Club.

Hamilton

Value line feb 15 2015Russell 2000 feb 15 2015ftse feb 15 2015

smi feb 15 2015mib feb 15 2015IBEX feb 15 2015

This is not intended as an exhaustive list of different indices , nor is the exercise without creative license , but hopefully the point will be made. That point is that there was never a time in history that so many Central Bankers did so much, for so few, with so little result.

  It will soon be March so I have simple taken the high point (about) a year ago and drew a horizontal line through the chart from there. We have – in the normal reading order – the Value Line (geometric and equal weighted) and the Russell 2000 representing the US broad markets. Then the Footsie to complete the Anglo-Saxons. Next is the Swiss index known for a lot of good and bad things but recently best remembered for 180 degree policy turns. Then comes Italy which was thought to follow the Costa Concordia’s footsteps but somehow has managed not to do so. Spain, always a bit of a basket case, managed to hold its ground.

    All six are , or will be, within 1% of where they were a year ago! The Central Bankers keep doing the same thing over and over again expecting a different result. That is insanity. What they should understand is that the mood is what counts. When you keep saying that things are so bad that you have to keep rates low for another few years the mood is ruined. Instead they should raise rates and the mood will improve and with it the economy.

TSX update

Hamilton

TSX feb 13 2015

After looking at the HXD and HXU, it occurred to me that the TSX might – I repeat, might – be peaking at around this level. Again the drop in September is unequivocally a 5 wave downward move, not 3. The bounce following it is without question a 3 wave leg. The next one down, b , is ambiguous. The c that follows should be 5, which might actually be the case if this is a wedge. Put all this together and you have a W1 down followed by a wave 2 retracement. It is a lot of retracement but , provided the peak stays below the 15685 level of Sept. that is fine.

     The bullish alternative would be if the Dec. low was the end of a correction (or alternatively there is actually a triangle that ends in Jan. In those scenarios we would be in wave 3 of 5 that could continue to 16000 or so (see chart below). The RSI and MACD do not support this.

tsx feb 13 2015 b

At this point all this is rather academic considering how far it has already gone, but it will be helpful in determining how fast we go down. If 15685 is not exceeded we will find ourselves in wave 3 down, good for at least 3000 points!

HXU update and HXD

Hamilton

The usual then – Jan 14, 2015 – and now charts;

HXU jan 14 2015HXU feb 13 2015

We strained to believe it but the triangle was unmistakeable (as it was in so many other places) that it could not be ignored. In case you did heed the advice you could have owned this at about $26. We would sell today for a small profit of about 16% for the month. The very simple reason is that despite the very clear possibility of this ETF going to $34, we recognize that there is a possibility that there never was a triangle. The first leg down, the a leg, always looked more like a 5-wave affair than 3 waves. That is a no no in a triangle. From that low point in October we could have been doing a simple a-b-c (in black) counter trend bounce. This will be negated at around $31.30 , so less than a dollar away, but in the mean time this is a big risk for an investment that goes against the grain in any event.

A look at the counterpart, the HXD makes the above all the more plausible;

HXD feb 13 2015

Essentially this is, of course, the inverse of the HXU. Here we have a similar triangle which is probable a valid interpretation as this ETF actually already has made a new low. The last leg down, moreover, very much resembles a wedge. RSI and MACD are turning so this might be a very good thing to buy now. The extra charming attribute is that the HXD is relatively immune to a further rise in the TSX if that unexpectedly were to occur.