Month: March 2015

DAX, another take.

Hamilton

dax mar 4 2015 sDAX mar 4 2015 b

The Dax’s performance is absolutely fascinating. At the recent high of 11465 it was up 37% in 4 1/2 months. In a very crude way I have figured out that there were only three previous occasions where the Dax may have performed in a similar super bullish fashion. The little purple arrows, all equally long (but this is not a semi-log chart!) indicate where and when those events might have occurred. In every case it would have been a 5th wave ( but not always the same degree). In both the two previous occasions the advance is immediately erased! They are separately shown below;

DAX mar 4 2015 i

Only the one starting in late ’99 and early ‘00 is comparable in duration and size (smaller in absolute terms but bigger as a percentage). It too appears to be a “thrust” out of a triangle and peaking just above the apex. Note that after that peak the Dax has it’s biggest drop ever, both absolute and as a percentage, losing roughly 3/4 of it’s value.

     Will history repeat itself ? Mostly it does as otherwise pattern recognition would be a useless endeavour, which , perhaps , it is.

ANF, Abercrombie & Fitch

Hamilton

Then – Nov. 13 2011 – and now charts,

anf nov 13 2011anf mar. 4 2015

The B-wave. Here is a good example of the B-wave that seems to prop up everywhere. The stylized  version was not followed tick by tick, it has taken much longer and the drop was more erratic but the main principle holds so far. Already the stock lost well over half its value since Nov. 2015 and we are not even close to our destination.

HCG, Home Capital Group

Hamilton

HCG L Mar 3 2015hcg mar 3 2015

This stock shows nice 5-wave structures but otherwise is just as confusing as most. Any higher and overlap will occur, which is fine if it is a double zig-zag but not if it is to become an initial 5-waves down. The drop was bigger than the other banks but so was the rise. We will wait and see what it does next.