We should be there! See also previous blog.
Month: January 2016
Oil and RDS.B
The usual then, August 8, 2015, and now charts;
Since August oil has dropped from, roughly, $45 to $33 or about another $12. As you can see, now the A and C legs are vector equal as today’s low is on the circle that we had drawn back then. Despite that we are not at all certain that this is the bottom as there still appears to be a wave down missing. Theoretically we could solve that problem by assuming that there was a triangle B wave to begin with. It looks absolutely awful so we do not give it much weight, but still it remains a possibility that we will still get the missing waves 4 and 5 and therefore it could drop even lower to $11,23. But that is something we would not bet on at this stage.
We can show the missing waves 4 and 5 perhaps more clearly using futures;
So all though we have the requisite 9 waves to make a full sequence for wave C down, the count looks weird, particularly the second wave 2 which takes two full years to unfold. It might be possible that we will still get a very elongated wave 4 followed by a slightly lower low years from now.
Royal Dutch tells us the same story. We are as low as we need to go, but could still go a little lower;
Again we are not sure which top is THE top but our preference is the first as this fits better with the rest of the world. In that event the recent wave C down should unfold in 5 waves. It is possible that we have that but a further drop to about $34 would be reasonable should de stock want to retrace 61%. With a yield of 9.5%, which no doubt will be reduced, this stock is now definitely in the buy, not sell category.
ABX update
The usual then, August 4, 2015, and now charts;
Back in August we had an $8 target for this stock, based on the diagonal triangle or wedge that appeared to be the operational pattern. The stock actually traded marginally below that level twice before starting it’s trek north. At the recent highs of $12+ you are up 50%, not a bad result.
Things might get a lot better as the minimum target for this kind of a pattern is at the starting point, that is $23 or so. If it breaks the upper downward sloping line sentiment could become a lot more positive as that would be the midpoint, roughly, of an initial 5-wave move up. Hold on.
FANG, Facebook, Amazon,Netflix and Google
Last year the S&P eked out a small gain. According to some that would not have been the case if not for the above 4 stocks. They are Facebook, Amazon, Netflix and Google. Together they presently have a cap. of about 1.1 trillion.
Back in the early seventies there was this group of stocks that were known as the nifty-fifties, that played a similar role. Within that group their was the terrific 24, all growth stocks with relatively high p/e’s. Some names were Polaroid, Xerox, FNCB, Sears, Phillip Morris but also Wallmart. As a group they substantially underperformed the market. Will history repeat?