We are simple repeating the same chart we did on Feb. 15th, about two months ago. It took that long to add 17 cents to a new high the other day of $60.37. This is exactly as expected and with a chart of this size, time wise, we cannot get too exercised about a dollar or two. So a little higher is still a distinct possibility but waiting for it is probable not a very smart thing to do. A sell here and now.
This is the light crude oil future on the CME. Futures change all the time and when going backward, there is a lot of distortion as you are not necessarily looking at the same thing. Still ,even with that caveat it can be a good exercise (see our prescient previous blog).
Now that we are up close to 50% from the lows (of $26, on the then current contract) it is useful to have another look. Could this be an A-B-C correction, or part of a correction? If it is then we have a nice diagonal, C will equal A at about $48/49 and will terminate close to a 4th wave of previous degree. This may just be as good as it gets for a while.
Rumours have it that at the university of Delft (where the blue china comes from) they are working on a prototype engine that will be able to burn water which might have a disruptive effect on the supply and demand balance. One of the few remaining technical issues is if this only works with Rhine water, or any water. Of course, the city of Rotterdam, the largest fuel transfer station in the world and not that far away from Delft, is doing all it can to suppress word about this project getting out to the world at large, which is probable why you have not heard this before.
See our earlier blog. We were expecting at least another 4-5 before this party would be over. We are getting that. A little further – watch the RSI – and this stock might be reaching a major low. It should reach below $32.35 to make a new low. Our guess is that with Papa running the place and Ackman on the board a little revival should be in the cards soon. Where exactly we do not know but it should be something like $30 or so. The MACD is already not responding to the latest drops in the stock.
Somehow we have always managed to keep Maple Leaf Foods out of this blog. No idea why as it is a true Canadian Company in a very real business. So here is it’s belated debut.
As always click on the chart to make it bigger.
Today the stock shot up a little because the company beat analyst expectations, which means essentially nothing other than that the stock will enjoy the spotlight a few minutes longer. We would sell this stock. The reasons are very simple. The stock has more or less quadrupled in value over the past eight years and probable did so in what could be a clean 5-wave sequence. In the process it has broken the channel (if there is one) and is now at or on another line connecting tops over some twenty years. The last leg is also a nice 5-wave sequence and every other indicator is looking not so hot. RSI, MACD and even volume is deteriorating fast. Time to sell.