We had to search for a stock where we called it incorrectly, this would be a good example as we thought it was a sell just under $40. We have learned that all things good are bad in economics, and all things bad are good. We know this stock sucks, literally, so we were warned that that might be good. It was. We are still not at all sure of what to make of this count, perhaps an extended 5th wave? In any event things are going so well with this company that that must be bad. We would sell, again.

We had $32 / $33 in mind as a top. Of course the stock went well above that but nevertheless we would sell. Bad is good, we know that much, but this is just a little too far for our liking even if a clear EW count does not present itself, at least not one that we can see. A sell.

Back on July the 8th we showed this chart;

In red what we thought would happen and , in green, the alternative possibility. Given the time that had already passed we preferred the red scenario and we were dead wrong. With the benefit of a little hindsight we should , of course, have known that all these QEs etc. would have elongated time itself and that is now water under the bridge. Nevertheless , now we can confidently predict once again that this stock is going to go down but probable not before it has once again traded above $32.  The exact EW count is somewhat confusing as there appears to be an extension of at least one of the waves in c though it is not entirely clear which one. The big picture, however, is quite clear;

We can be very precise where the top will come in. The trend line is at $32.50 but, in the event of a throw-over minor 5 will equal minor 1 after travelling $2.50 so the max. should be around 31 + 2.50 = $33.50. This time I do not have a clear alternative. The $5.85 shown in the old chart has no significance whatsoever.

Daylighting is the illumination of indoor spaces by natural light. Definitely not what this company does. It sucks. These fellows have about 500 trucks with huge airtight tanks on them that they use for all manner of construction work, mostly in places where the sun does not shine. The process is simple, make mud and suck it away. It is very popular as it causes very little collateral damage. Once upon a time they were an income trust but converted back to an incorporated entity which makes getting charts a little difficult. This one is from the Globe & Mail;

In 2002 I had this stock in my cross-hairs for a buy, but being my worst enemy, never got to pulling the trigger. Now we are at $27.05, recently. It was brought to my attention as it is one of Mr. Peter Hodson’s stock picks (see FP July 7). He has an impressive record and left his post as president of Sprott, reportedly for the simple, but impressive reason, that he had trouble stomaching the overall predatory nature of the business, quite an admirable confession or, if you prefer, accusation. This time I think he might be missing the mark.

The recent high at $27.50 is $4,55 higher than the highs back in 1998, or about 20% higher. This is well within the acceptable range for B-waves and even a larger A-B-C (in green) with a target of $32, though borderline, might still qualify. Even so,  it is very unlikely to be correct. Looking at just the C we get;

A very nice 5 wave sequence, with a throw-over in the 5th, a dive down for a and a retracement to the line for b, c should follow down to the lower trend-line and then wave 4 of previous degree at about $16 (the two charts do not have the same resonance, so there is a difference in the readings!). One would expect this to occur even in an ongoing bull market, too big a drop to ride out in our opinion.

If the B-wave concept is correct, the stock will fall at least to $10 if not more. This is not a high-tech business. In its rudimentary form it is what all rural people will be intimately familiar with as sewer or sceptic tank cleaning, a mom & pop business that is sensitive to real estate transaction volumes. In any event this is an excellent example in economics where bad is indeed good, or should that be was ? As always time will tell but we would sell now.