Month: June 2015

VALE and TCK.B

Hamilton

Then, three years ago, and now charts;

valevale june 22 2015

We had targeted $8 to $7, with the proviso that it could go lower. The actual low was at $5.45. The count as shown, correct or not, actually developed accordingly. Therefore we would now be buyers of this stock.

tck.b jan 4 2011TCK.B july 22 2015

Then in this case was Jan. 4 2011 so more than 4 years ago. Now is today July 22, 2015. At the time we tried to keep an open mind with regard to the actual count. We favoured the idea that there was a big, and irregular B wave but we also toyed with the possibility that it was a 5th wave. Today the B wave idea  looks far and away to be the better fit. That implies that the C wave down should subdivide into 5 separate waves as shown in the top part of the old chart. We have to struggle to find such a 5-wave subdivision and show only one possibility using an elongated 5th wave wedge. That would target about $10. Also C waves usually make their low below the preceding A wave which would call for a price below $5. In short , unlike with Vale, there is no reason to rush in here.

     One of the problems with this company is that it is run with the mindset of an M&A , Mergers and Acquisitions department of a bank with all the financial engineering that goes with it. The real world of mining simple does not play by those rules. Nor does China.

Before you buy anything, have a look at BTU and better yet WLT, Walter Energy a “pure-play” coal minor that went from $140 to 26 cents, see below;

wlt jul 22 2015

SUNE update

Hamilton

sune june 21 2015

May 10th at $28 and change this one looked well done. Today, 40 days later and about $2 higher it looks even better done. Perhaps, like the mythological figure of Icarus, this one is getting too close to the sun and is about to drop back to Earth. For the record we did suggest buying FSLR in April of 2012, but not this one having never even heard of it. So we missed the proverbial boat and , from here on, would prefer to keep missing it. As with the previous blog there may be a triangle around about $19. This could, if it actually exists be either a B or 4th wave triangle. We prefer the latter, partly because if the former applies the implications are far more bearish. So expect a drop back to at least $12.50. Our usual technical indicators, RSI and MACD are pointing in the same direction. See also CSIQ which we would have shorted, see previous blogs.

NYA, NYSE update. THIS IS IT (for now). and FTSE

Hamilton

nya may 27 2015NYA june 21 2015

The usual then, May 27th, and now charts of the NYSE. This is one of the many “wedges that we identified over the past few months. Unlike the Nasdaq, which still has the possibility of going slightly higher, this wedge is so clean, tidy and perfect that we would be very surprised if the top was not already in. We remain open to the notion that the entire structure from the October low is a wedge. Alternatively it is not impossible to assume a large triangle followed by a wedge. In both cases the structure is complete.

    Furthermore it is not that hard to see an initial 5 wave leg down followed by an a-b-c corrective wave 2. I cannot get charts in sufficient detail to properly make that determination with a lot of confidence. Nevertheless it does not require a leap of faith and in the overall context of this index it is reasonable to conclude, at least for the NYSE, that the bear market started on the 21 of May 2015 at 11254.87. The RSI and MACD appear to be in agreement.

There are other wedges like this that are equally clear. The FTSE is another index that is identical to this one but has already come down much faster. Both traded just a few days ago at levels they were at more than a year ago! The FTSE actually two years ago.

FTSE june 21 2015

ABX update

Hamilton

ABX june 19 2015 ca babx june 19 2015 us b

These charts are both of ABX. On the left as measured in Canadian dollars and on the right the same thing except in US dollars. The consequences of the differences between the two can have a substantial impact on the count in EW terms that one would come up with. Things like overlap, where the top is, staying in the channel are all different depending on the currency. This is a philosophical issue that I am sure will never be answered, primarily because EW is simple discarded out of hand by some or followed with the fanaticism of myopic cultists by others. I don’t have the answer but in this case I would prefer using the US$ chart as gold is measured in US$, ABX’s operations are in the States and they report in dollars. Put in other words, the chart on the right is free from currency distortions. So is the detailed one below;

 

ABX june 19 2015 s

Our best guess here is that the entire correction took the form of a double zig-zag, i.e. an a-b-c X a-b-c. It is fairly symmetric and already well outside the channel. From the lows of about US$10 we appear to have either a wave 1 followed by an a-b-c wave 2, or a series of 1-2. In both cases the stock should go up. The XAU, HUI and CEF fund all have triangles that they should return to. None has done so so far.