FTT

FTT, Finning update

Hamilton

The then, Aug. 2014, and now charts as usual;

ftt aug 16 2014ftt feb 18 2016

So you saved yourself half your money or a little more, but we are still not sure what count is correct so we would go neutral here with a downside bias as we prefer the B-wave count. Finning is big in the Alberta area and all over the west. More pain is definitely possible but the short-term chart is decidedly unhelpful.

Note; If it was a B-wave then we are now in C which continues as a 5-wave structure; that is not visible on short-term chart. If on the other hand the latest top is wave 5, you would now expect an a-b-c down. The a could be complete so a sizable b could be next.

TIH, Toromont update and FTT, Finning.

Hamilton

The usual then – June 3 ,2011 – and now charts;

tih 3 june 2011tih aug 16 2014

Toromont was trading at about $32 when we recommended the immediate sell of this stock about three years ago. The target was just a tad under $15 and in reality it got close to $14. The labelling was never entirely clear but the B-wave definitely was even though, today we could argue that it was not a B but a 5th wave wedge similar to the one at the top of wave 3.

This was a pretty accurate prediction that would have netted 50% on the way down and, if bought at $15 another 50% minimum on the way up, or perhaps even more, see detailed chart below;

tih agu 16 2014 s

Remember that when you do hit a target that it invariable pays to go the other way. In this case the drop was 62% from the peak so that became very compelling. Then you stay with the trade un till at a minimum there is an a-b-c rebound. Even today you do not yet have that! So why does nobody really listen? Here are some answers;

Many people believe that EW is a theory, comparable to something like EMT- Efficient Market Theory. Well, it is not. The reasoning underlying it is entirely inductive and pragmatic, no silly hypothesis at all. It is also not deterministic per se. Nevertheless many view it as some sort of voodoo economics which, in practice, is hard to accept as invariable EW will tell you to buy when things are going awry, and tell you to sell when things are going well. That is counter-intuitive so no one does it.

Things are going swell so, perhaps, it is again time to sell. To be more comfortable we like to look at similar stocks, in this case Finning would be a good choice. What is good for the goose is good for the gander. Here it is;

ftt aug 16 2014

The A-B-C “looks” great on this one, particularly since it has more than double topped. It may yet go to about $37 where it would re-enter the channel which we would not expect. Time to sell the lot. DE and CAT, though not clear, do also suggest that they are near highs.

JOY Global.

Hamilton

Joy dec 12 2012joy dec 14 2012 s

JOY is in the business of supplying above and below ground mining machinery. It is comparable to companies like Finning, Cummings, Cat. etc. etc. It did quite well the most recent quarter but it also “guided” down for what is coming next, citing oversupply in the mining industry. The stock, together with the others mentioned,  has done extraordinarily well due to the commodities bubble that we have had or are having. Another factor that may have played a role is that as of today, precisely in fact, we have had 4 full years of interest rates essentially at zero. On top of that 100% accelerated depreciation for corporate tax purposes makes buying capital equipment relatively very attractive, more so than hiring labor. Other than in such wonderful places as the Congo, more machines and less people are used than ever before. (This is an economic phenomenon that every first year economist is aware of, except , it seems, the Fed.) This all caused the euphoria that pushed this stock into a Mnt. Everest high of $100+ in what is clearly a B-wave. So far the stock has only lost 50% or so. More will come.

Below is Finning for comparison purposes;

ftt dec 14 2012