TSX

Hang Seng, TSX, XFN and RY

Hamilton

 hang seng hsi nov 29 2011 tsx nov 29 2011

xfn nov 29 2011 ry nov 29 2011

Superficially, all four, the Hang Seng, TSE, Capped Financial ETF and the Royal, have done roughly the same thing, but if you drill down a bit there are some differences. For instance, the Hang Seng starts tanking a full six months before the others topping in Nov. of ‘09. The others wait till March or even April of ‘10. From hi to low the HSI loses the most at about 34%, RY 30% and the TSX 24%. The XFN only manages about 20% The path for all four follows a neat EW pattern, 1-2-3-4-5, except that the wave 2 is very messy and so is the 4-5. In fact it is not even clear if a 5 wave sequence is indeed complete. The only one of the four that, so far at least, adheres strictly to a clean channel is the HSI. In all cases we cannot be completely sure that the recent rebound is a wave 2 ,or part of that, or a wave 4, and consequently we do not know if the most recent down leg was a wave b, or wave 5 of 1 , or wave 1 of 3. Fortunately b-waves are followed by c, a 4 by 5 and a 1 by 2. On average the Royal should be a screaming buy anywhere between here and $41, at least for a trade. (see previous blog).

CBQ, the Claymore BRIC ETF and TSX

Hamilton

CBQ Claymore Bric

CBQ, the Claymore BRIC (Brasil, Russia, India and China) is illustrative of what is happening all over the place. Again from the recent Oct 4 lows , the unit price of this ETF has shot up in a very, very, clear a-b-c rebound. This is a corrective pattern meaning that the stock/unit will trade below the low from where it started. In this case a very similar a-b-c precedes this one, starting in early August. To have two such similar patterns usually means that they are of a different degree which is indeed the case in both the blue and brown interpretations. Both should go down soon.

By the way, the TSX is uncanny in it’s similarity. Apart from proportionately smaller moves , the moves are directionally alike. See below;

TSX oct 28 2011

You can click on these charts and move them around if that is easier. Perhaps BRIC should be renamed as BRICC. This chart suggests a high close to 12750 , or just below that.

ACWI, see the blog of March 5. Then & now 3X.

Hamilton

On the left then, on the right now;

ACWI acwi oct 2011

ACWI are iShares, the high was $49, it peaked at $49.83

$stox50 $stox50 oct 2011

The Stox50 high was 2698 on March 4, it peaked at 2741 a few days earlier.

tsx march 4 2011 tsx 25 oct 2011

The high was 14280 on March 4, the actual high was 14315. The blog is available under ACWI. Does it matter? Not really, everyone knows that EW is nonsense anyway. Better to listen to your broker. Unfortunately Stockcharts is not free if you want to go back more than 3 years, consequently I cannot line-up the charts the way i would like to.

TSX update

Hamilton

On the 26 of August, about 2 months ago this was my expectation with regard to the TSX;

TSX 26 aug 2011

One of my better charts, I think, with the A-B-C B-wave loud and clear in this stylized format. That, as it happens also puts an initial low very near the 10700 level where 62% of the entire correction will itself be corrected. Notice that we did and are doing pretty well exactly as expected, except that wave 4 is sharper to the upside having already regained about 800 points in just a few days. It could have another two days of 300 points to get to 12200 or so for wave 4.Time will tell. In the meantime here are some updated charts of the TSX and the XIU (the same thing in a slightly different format);

tsx oct 6 2011 xiu oct 6 2011

Rather than two 1-2 to start , as in the top chart, I have used three, so the pattern becomes 1-2,1-2,1-2,3-4-5,4-5,4-5. using the first top which is actually higher by 4 and 1 point respectively. It is actually possible to add even a fourth 1-2. What speaks for the first top is that the entire drop so far is perfectly contained within a channel. It is possible that there is one too many 1-2 as well, but even then we need a fifth down to complete the entire thing. If we get to 12200 or a little under that it would be a fairly fast move of more than 1000 points. In all probability this would be wave A of a triangle (all waves 2 are zig-zags) so I would look for alternation. We will see.