Year: 2017

ITA, iShares Defence and Aerospace

Hamilton

ita defence and aerospace 1ita defence and aerospace 2

Both these charts are of ITA, which is an iShare of the US Defence and Aerospace industry. On the left is the “normal” or arithmetic , and on the right the semi-log chart. Sixfold in less than nine years and almost double since Trump. Of course the military industrial complex in the US is huge and no doubt it did little harm to have a president, already favourable disposed to this sector, who is surrounded by billionaires or generals.

The iShares has Boeing, Northrop, United Technologies, General Dynamics, Raytheon and similar companies in it. In total 39 of them. The iShare looks like it has done a clean 5 wave sequence since the great recession. This is one of those things where you wonder, why did I not think of this. Well we didn’t and now it MIGHT just be too late. Apart from another 10 points or so to take this to the upper boundary on the semi-log scale, this thing should be a sell. Maybe Trump and Kim Jung-Un or whatever his name is are going to meet and immediately become soul mates. They are, after all, birds of a feather.

DOW update

Hamilton

dow july 31 2017

Today is the last day of the month. Typically this is good for 100 points or so to the upside in the Dow, intraday or for the day. Just a few days ago Amazon hit a new high, together with some of the other FANG stocks. Briefly Jeff Bezos beat out Bill Gates as the richest man in the US, perhaps even the world provided that stories about Putin’s wealth are untrue.

AMZN has dropped about 10% since. At the peak the P/E was close to 200, which is another way of saying that if you do buy the stock, it will take you 200 years to get your money back. On the political front a New York businessman, actually a fund of funds outfit’s principal , a bad business at this time sold at too high a price to a Chinese firm according to rumours, survived only eleven days of the White House. While his wife gave birth during that time and filed for divorce, he demonstrated his knowledge of the English vernacular. In any event there is no chaos in the white house and the economy is doing extraordinarily well as witnessed by the stock market.

Could this maybe be a top of sorts? Clearly the RSI is back up there for the first time in 5 months. There are 5 waves up and the 5th is equal to the first. The trend line was broken today. We would play it safe here and get out. First drop could be about 600 points, next 1600 points. After that we will see.

ABX update

Hamilton

In our most recent blog we had ABX as a sell around $30. Well here we are now;

abx july 24 2017

We are well on our way to the target (see previous blog). Look for C=A, base of diagonal wave 5 at just a little above $16 and 61% retracement of the $8 to $30 leg which is somewhere between $16 and $17. Also the RSI should be below the 30% line.

HCG update

Hamilton

hcg july 24 2017

It has taken a fortnight – that is 14 nights in case you grew up on this side of the pond –, a long time if you are waiting for it but here we are. It appears that we completed an A-B-C correction down right into our target of below $13. (see our previous blog). Not only did we do that but we hit the 50-day moving average and we are ending today with a beautiful Japanese candlestick formation known as a Doji, in this case a Hammer. This is supposed to announce a reversal! If you bought at $13 your patience is already rewarded but things should get a lot better in the next little while. Just back to where we were a fortnight ago generates a return of roughly 50% but we would expect higher prices than that.