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ABX update

Hamilton

The usual then, little more than a month or so ago, and now charts;

abx feb 8 2016abx mar 12 2016

Looks like we are well on our way towards $23. That is the top of this “diagonal” and I suspect the end of wave A of a much larger A-B-C. That B should drop to about $15 and then the C can take the stock as high as $35. After that it may be game over for the gold stocks, we will see.

   In the mean time keep your eye on the RSI as it is getting right up there. As we said in the Feb. 1 blog, $22 is probable a good exit point – do not forget that golden rule of trading; always leave something on the table for the next guy. You can try to buy it again at about $15. In the mean time you will be able to tell your neighbour that you made a whopping 175% in a little over 1/2 a year. That is 560% per annum compounded, all from a free blog!

CP update

Hamilton

cp apr 11 2016

We have been wrong on this railway, never expecting it to reach such lofty highs. But then it did drop 42% in the last year. Moreover it did it in what could be seen as a clean 5-wave sequence. Now we are doing the first a-b-c retracement of that drop which should reach the 4th wave of previous degree and /or the 62% retracement level, both at about $200 or so. By coincidence, that is also where c=a. A very nice triangle – in the b-wave position – provides the icing on this cake. We would not wait that long and get out at $185 or earlier. Then the drop continues for , at least, another hundred points towards $100 (about 60% down) or further.

SPX, S&P 500 update

Hamilton

SPX mar 8 2016

I am not particularly happy with the above count. It seems a little contrived or artificial to me, but then we live in artificial times. This index moves roughly 200 points 4 times in about a year, depending where you put the top. That is a lot of movement without any headway, mostly created by Greenspan, Bernanke and the “data-dependent” lady and with a little help from Draghi, China, Japan and just about every other country and also more recently from the likes of C Lagarde of the IMF. Remember that it takes a Pavlov to make a Pavlov dog, and now the New Normal has essentially become the New Abnormal and is universally accepted as gospel throughout the corridors of haute finance. Except it cannot work. It is a bit like the perpetual motion machine which cannot exist under the rules of nature or physics, that is an open and shut case thanks to brilliant minds. Economics has not been endowed with an equal dose of brainpower and is still wrestling with ceteris paribus. Soon that may no longer be a reason to propound blatant nonsense. Wave 3 could take care of that.

By the way, so far at least we haven’t traded above 13646 on the TSX either. That was three weeks ago, a virtual lifetime in today’s terms.

CCO, Cameco

Hamilton

The usual then – Dec. 15, 2013 – and now charts;

cco dec 22 2013 bcco mar 7 2016

In our previous blog, now more than 2 and 1/2 years ago we expressed having a negative bias for this stock, based, in part, on the price of the stuff itself. It looked like there was a triangle wave 4, but in reality, if it even was one it would have been a minor b-wave. In retrospect we got the direction correct but not the count. This is not an A-B-C but a double zig-zag or an A-B-C X A-B-C. Our best guess now is that the rot will stop at a level approximately equal to the top of wave 1, twenty years ago.

Looking at the short-term chart a case can be made that the ideal level to buy is around $14;

cco mar 7 2016 s

The 5th wave of C of the second A-B-C appears to be a wedge that has one more leg to complete itself. Needles to say, we have no idea what might cause an increase in demand, perhaps Trump wins and he wants to bomb the hell out of the rest of the world, perhaps the recently re-elected Mr. Wall of Saskatchewan rereads the “Joy of Monopolies” and finds economic religion once again. Whatever, at $14 this is a good buy according to my understanding of EW.