Month: July 2015

AAPL update

Hamilton

aapl july 21-22 2015

Overnight AAPL traded down to about $121, losing about $60 billion in capitalization. Perhaps it was this odd lot trader from Papua New Guinea who got taken out of his 1 share stop-loss order. Perhaps there was real demand/supply. Whatever the case it demonstrates that a single trade resets the value of everybody’s holdings; you can get killed on no volume!

On April 28 we suggested this stock was really a sell, no ambiguity. Our friends in Gainesville followed suit a few weeks later with the exact same chart with the same triangle shown . We now have 3 tops at roughly the same distance from each other. They are about a dollar apart with the one in the middle the highest. This fits the very technical concept of a “rounding top”. In that situation the way down reflects the way up. That is not typically how it works as the downward path is normally much steeper, taking about 1/2 the time or even less..

AAPL missed by one million on 50 million units sold and 1 billion on 50 billion in sales. If my math is right that is about 2% which is why the stock is down 8%.

GOLD, Aug. Future

Hamilton

gold july 21 2015

This is the August future contract on the CME. We are just thinking aloud so do not take this too seriously!

There could be a triangle here. All waves within the triangle should be three’s.  a , c and e most certainly are; b and d lack clarity but they could be. Assume it is one than the “mouth” which is $240 wide projects a target of about 1200-240= $960 or roughly 4 lines lower than we are presently.

The high was at 1923 (spot) and the low in 2001 was 251, so gold travelled about $1672. Half of that is $836 on top of $251 equals $1087. You get the same result if you deduct $836 from $1923, if that works better for you. That is where we are now. 61.8% retracement would be 61.8×1672=$1033 From the top of 1923-1033=$890  I cannot verify these numbers but it appears that we might be going into the direction of a 62% retracement.

The $1000 even would be an acceptable compromise to both bull and bears. Time will tell.

UTX, United Technologies.

Hamilton

UTX july 2015

This is a conglomerate that has such companies as Otis elevators, Pratt & Whitney engines, Cessna airplanes and so on in its stable. Together with IBM this company caused a little pain in the US stock markets. It guided lower citing a drop in demand specifically from China, and that caused the worst day for this stock since Sept. 17 when the market reopened after having been closed for a few days on account of the Sept. 11 attack.

In about  5 months the stock lost $25 or 20% of it’s value which took six years to build. At this rate it would take about 2 1/2 years to get to the bottom. However it would appear that the stock is entering a third wave of some degree down and as a consequence is accelerating. The first serious support would be around $80 or so.

ABX update

Hamilton

abx july 21 2015 labx july 21 2015

Yesterday gold fell about $26 or 4%, give or take. ABX fell almost 16%. We do understand that as you approach the marginal costs of a producer, the impact on the stock is disproportionate to the change in the price of gold (oil, whatever), but this is a little ridiculous. 4X as much? Perhaps a sign of (the beginning) of capitulation. We believe there may be one more push down towards $ 8 or so.

In our opinion ABX is doing a full correction, that is an A-B-C from the recent top of $52+. I have used semi-log scale charts as they depict the proportions much better when such large moves are involved. At one point we thought the C could develop as a contracting wedge and consequently could have been complete at the $11.63 low. We did get a very nice bounce but it could not break the upper trend line. Now we are entertaining the idea that a expanding wedge is forming as the whole of wave C. This means that the stock could, but does not have to, move all the way to the lower trend line at about $8. From the structure it looks like we need another small 4 and 5 of 5 of C.  This is supported by the RSI. You will notice that when it hits a low it takes a little while for the stock itself to make a corresponding low. The lag could be as long as a month but under the circumstances, that is where we are in a capitulation phase, things may happen more rapidly.

The XAU at about $48 is in an identical position .