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RJET, Republican Airways Holdings Inc.

Hamilton

RJET

RJET filed for creditor protection, Chapter 11, yesterday. This begs the question if this could have been foreseen by EW practitioners. The answer, of course, is no, it could not have been foreseen. But you would have known that a basic corrective pattern is an A-B-C down. It can be a flat or a zig-zag. This is not a flat as the stock never climbed back to the $24 level, not even close. It is therefore a zig-zag which has the basic characteristics of a 5-3-5 move. The rule to remember  is that 5-wave sequences never stand alone, there is always either an A-B in front of it or a B-C behind it, that is another 5-wave sequence. You also know that a new low, below the low if the first 5-wave sequence should be anticipated. In this case that is a low below $2.61.

Also often you retrace back to the highest point in the triangle or a Fibo 61.8%. Here we did both.  So there is no excuse if you are still holding this stock.

There are other possible counts for this stock but they all have this same 5-3-5 pattern.

HCG, update

Hamilton

The usual then, less than two weeks ago, and now charts;

hcg feb 14 2016HCG feb 27 2016

The high on this stock was $53.78 and the recent low $22.99, that is a drop of $30.79 which is 57.25% of its value at the peak lost in little more than a year. As we do not know, and cannot find, the starting value of this stock we cannot calculate what percentage this is of the increase in the value but we assume that it would be very close to the Fibo. 61.8%.

If you played this stock you are up about 40/45%. We suggest you take that now or after a dollar or two and step aside. The reason is that we may be further along in the wave count than we originally thought. Closing the gap is less likely but the stock could get to $35 or so but we would not wait for that. Both the RSI and MACD could be ready to rollover.

Long term the target stays the same at around $7 or so. Note that wave 1 is $53.78-$25.46=$28.02. Reverse engineering that, assuming C will be equal to A, you get $7+$28.02=$35.02 for the high of this intermediate correction (an irregular flat).

Keep in mind that the count shown is just the preferred one, there are one or two other possibilities, as almost always.

CEF, Central Fund of Canada and Detour Gold DGC, GDX

Hamilton

cef feb 26 2016

Something bothers us with the Central Fund. It trades in US$$ so the lows should have been worse than if measured in terms of depreciating Can$$. Yet from July 2014 to the end of 2015 this stock traded hardly any lower and it’s lows stayed within a range of $13.57 and $12.52. That is a range of just a single dollar over 28 months or about 4% of the peak value of US$26.

It seems that today the market (whoever that may be) knows that gold is a screaming buy. This is a complete reversal from just a few months ago. This begs the question if everybody is, once again, wrong. We do not have the answer but just observe that at roughly $18 this stock will have reached the 4th wave of previous degree and will have retraced about 38% of the initial drop. Also, and this is outside EW, the RSI very predictable peaks with the stock. It may be doing that again right now. Other stocks, for instance IMG have similar patterns.

It is therefore possible that this stock is doing an a-b-c X a-b-c and could start the second a-b-c any moment now. Detour Gold DGC also made a low in October of 2014 at $2.50 and is presently trading at $22.50. A possible peak is at about $25.

dgc feb 26 2016

Note that this stock did not make a low late last year or early this year like most others. Food for thought, that is all. The market in general, as per the XAU or GDX , both also in US$$, still looks to have a good way to go, 30? But even here the RSI is warning of a potential minor turn.

GDX feb 26 2016

NKO, Niko Resources just a vague memory

Hamilton

nko feb 24 2016

We were very lucky to exit this stock back in September of 2012 with a decent gain, looking to perhaps buy it back later but never got to doing that.

These guys had been around for a while and then all of a sudden decided to go overseas and offshore. First oil and gas in India and Bangladesh, then Indonesia and Trinidad. Then a corruption scandal and here we are at 9 cents. This is full circle, something that tends to happen when there are bubbles.

We show this chart because it a good schematic picture of what can happen. We have seen this with iron ore, oil and so on and it is impossible to know in advance if there will be a soft landing  or a crash. Commodities, of course, always come back simple because they will continue to exist. Companies are not that fortunate. Their debts can pull them down below zero.