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SPXS, Direxion Daily S&P 500 3X Bear.

Hamilton

spxs april 19 2016 bspxs april 19 2016 s

This is one of those inverse 3x bear ETF’s. It is very suitable for people that only want to play from the long side. As is clear from the above 5 year ski slope this was not a good place to be. Neither was our favourite HXD which we think started the trek back up now almost a year ago, albeit without much progress.

The SPXS gives you 3x the bang for your buck and judging from the detailed chart it looks like a flat 3-3-5 was completed in February followed by a 5th wave down to the trend line. This should be complete at about $13.85 or so. The first target is a double at $23/$25 but clearly much higher levels are realistically possible. A buy now.

BBD.B, Bombardier

Hamilton

bbd.b april 17 2015bbd.b april 17 2016 s

A year ago this stock looked like a buy at around $2.50. It proves the point that just because a stock has lost 90% of it’s value, it does not mean that it cannot lose another 70%. In any event the entire drop from the highs of about $25 now looks a lot like a double zig-zag in which the second a-b-c travels the same distance as the first. The spurt up from the lows looks pretty impulsive so the next serious target is around $4.50/$5 where the e wave is.

As we mentioned earlier this stock cannot go bust. It is the only Canadian company that manufactures a recognizable product, furthermore because of it’s anchor in the French culture of Quebec letting it go is tantamount to splitting the country in two. It is simple not going to happen. There is already 1 bln. set aside to help it out and there is always more where that came from. A buy for now, but short-term the stock is a little overbought.

CP, another update and revised count.

Hamilton

cp apr 15 2016

Looking at CP a little closer, it might be better to start the drop in early Oct. of 2015. If we do that it would imply that we are now in wave 4 and not already in wave 2. That is a change in degree that may, or may not, prove to be correct. In any event we should not have to wait very long.

Waves 2 and 4 in this labelling alternate nicely as 2 is an irregular flat and 4 a zig-zag. Right now we are pretty close to the 50% retracement of 3, or 1 and 3, and are essentially on the parallel upper trend line. At about $200 we will have overlap that would negate this count. So basically you have the potential of another $8 up against $52 ($192-$140) down as a minimum. These are already very attractive odds that may just get slightly better in the next few days. Note also that the RSI is now , for the first time in more than a year and a half, back in overbought territory. The 5th wave down should take anywhere between just a month or two or about six months. There are options on this stock.

If the other count, that is where this is a wave 2 up, is correct, the overlap is not an issue and the stock can rise to $200 or even higher. We should know soon enough what applies.

CP quick update

Hamilton

cp mar 13 2016

If you sold today at >$185 you would have gotten at least $187 or so. As mentioned this one could go higher by another $10+ but we would caution the longs that this thrust can turn around in the blink of an eye. The RSI is entering overbought territory for the first time in a long time and if the triangle is correct, a drop back to $160 is next as a minimum. By the way, the entire triangle can be moved one step to the right if you prefer.

P.S. Today’s high is at $193.88 that is up almost $9 on the day. This is clearly a “thrust” and most likely  a third wave at that. $200 becomes more likely but I am always too cautious.