Nikkei

TSE , S&P , NASDAQ , DAX and NIKKEI

Hamilton

TSE March 24

spx march 24

Nasdaq march 24

DAX march24

Nikkei March 24

Here we have the whole lot. From TSE to S&P to Nasdaq and then overseas to DAX and Nikkei. All charts are similar but as you go down the list the idea of a triangle moves from a perfect fit to less likely in the case of the Nikkei. Anyway after yesterday it is clear that we are not going to get that little leg down that  would make it conclusive. Not that surprising seeing that just about everything looks like a buy. RY in the meantime is up almost $12 from the low just under $26, all of this in two weeks.

On the TSE we are entering a corrective up wave that typically retraces at least 38% (10400), often 50% (11250)  and or 68% (12135).  That does not mean that we might not first get a little pull back but for the time being one should try to be long. Some segments of the market are already up 20% or so, whereas others have not budged that much (Sherritt f.i.). By the way, BBD.B made the 30% sell point and so did BAC.

Pattern recognition March 4, or why diversify?

Hamilton

All learning is pattern recognition as in “monkey see monkey do”. That is how we learn to talk, learn to walk and nearly everything else. Here are two charts to make the point.

nikkei march 4

Tse march 4

At first ,and superficial, blush these two charts are pretty well identical. They break down at about the same time, have their largest move , wave 3, between about September and November/December, then are a little unsure and do show some divergence but after all is said and done they are very,very similar. In fact numerically they are almost in tune, both having started at about 15000 and having dropped 50% to 7000. One has just made a marginal new low, the other may soon do so.

   There is nevertheless a slight difference, one of these two will make a new 25 year low tonight, while the other is only in the 9th month of a bear market. One comes from a high of 38000, now down 81% or so, whereas the other is just down 50% and only 9 months old. They are half a world apart, one is the second largest economy and the other an auto plant for the United States.

   What we learn from this, if we chose to do so, is that , first of all , “diversification” does not work as we live in a global world where correlations approach 1 for just about everything, certainly in a bear market, and secondly that as these patterns do not just occur simultaneously in different markets but also sequentially, it helps if you recognize the pattern early while it still has a predictive value. This is what E-wave is all about!

The top chart is the Nikkei 225 index, the bottom one the TSE, just in case. Click to enlarge.

Nikkei Feb 26.

Hamilton

There appears some confusion as to where we probable are in the wave counts. To try to clarify all this, as best as I can ,  here is the Nikkei which, at least to this point is clear. Here it is.

Nikkei Feb 26

There are 4 possibilities, all pointing down.

The most bullish for the next few weeks would be the one in red, an A-B-C. We just recently completed the B leg and are on our way to do the C. This one is not very elegant and we require a few adjustments at the top.

Exact same idea but much shorter in time (in green) an a-b-c flat as above  followed by wave 5 down. This last leg is already well developed as it is about halfway down.

The 3d possibility, in light blue is the moat elegant. We are in a triangle, just embarked on wave c up, d and e to follow. This is the most “acceptable” interpretation as it fits wave wave 2 and the alternation guideline. Also it explains breaking the trend channel to the right as this is exactly what triangles commonly do.

The 4th possibility, not shown , is that we are in a downward pointing wedge and are in the first or second downward leg, see below on “Are we there yet”or Telus.

All these possibilities apply in different ways to the different markets, the TSE, S&P etc. etc.

There is no credible bullish count that I can find, without resorting to that deus ex machina , the failure, the structure just is not there to support that notion. Remember that what may apply to an index does not necessarily apply to an individual stock.