ISRG, Intuitive Surgical, Inc.

This folks make equipment for surgeons to do minimally invasive surgery by remote control. First developed by a non-profit foundation it quickly drew the attention of the military where its advantages were obvious. Sometime around 2004 or so it merged with a rival which ended a bitter dispute and it was blue skies ever since. Here is the chart, long and short term;

isrg july 12 2018 bisrg july 12 2018 s

At 1.7 million a piece of equipment like this must be very sophistic. Nevertheless the very basic essence is that it is architecturally little different from your RC (radio controlled) model airplane from 80 years , or more, ago and in most applications is not even remote, being hardwired instead. The intuitive part is a complete misnomer as one of the objectives must be to reduce the subjective elements as much as possible in favour of a more dogmatic approach. Originally the names for these “machine” were well chosen as they conjured up images of God. Zeus, and or unlimited inventiveness, da Vinci.

Today I think the stock is a sell, at least from an EW point of view, primarily because the fifth wave is, one way or another, a diagonal. This should result in a fast retracement back to the baseline which , in and of itself would constitute a drop of about 28%. Both RSI and MACD are very much in overbought territory and the stock is trading at around a P/E of 73X.

The company already is making more on the sale of accessories, a sign of maturity, and is becoming more vulnerable to competitors that may challenge the virtual monopoly it enjoys in this field of robotics. There are plenty potential competitors, Medtronic, J&J, Philips Medical Systems or Siemens just to name a few.

Dow, once again

dow july 10 2018

Just as things look to become clear they do not work out as expected. That would not be so bad if it was not for the annoying fact that this up and down has now been going on for a full five months. Again we can only work with our understanding of the pragmatic tenets of EW. It is possible that we are in wave 2 of 3, the triangle mentioned previously would have been a little b wave in an a-b-c wave 2 that should now be near completion given that we already have more than 62% retracement. Alternatively we have a large triangle B-wave covering the entire period of 5 months. Either way the next big move should be down and down a lot.

All the good stuff is on the menu. We have a president that seems to have adopted Machiavelli’s dictum of keeping your friends close and your enemies closer. In the mean time the British government seems to be falling apart. NATO is meeting and Helsinki will be the next focal point of two man summits. Maybe nothing will come of any of this but how much longer can this continue?


dow july 7 2018

We may have been a little ahead of ourselves in our previous blog on the Dow. It appears that the index is tracing out a fairly decent triangle which would imply that the first wave of wave 3 down was not yet complete. If correct the Dow should drop any moment now to challenge the intraday lows of the past five months only to rebound back to the present levels. Then wave 3 of 3 should start.

Perhaps Trump will try to pull out of  NATO and join the Warsaw pact instead.

Dow update

indu july 2 2018

This is the count that should be preferred. I understand that even the gurus in Gainsville have come around to this view. Not sure that that adds confidence.

So we just completed wave 2 of 3 and are now entering wave 3 of 3. That is usually where things start moving a little more rapidly which is about time since we are not even at the lows set in February. After 3 of 3 we would still need 4of 3 and 5 of 3 just to complete this third wave. Then another 4 and 5 to complete wave 1. By that time we should be well under 20000.

This is Trump economics at its best. Economics 101 will teach you, as mentioned in this blog before, that if a country’s government runs a budget deficit (that is pay for things with money created out of thin air) then in an open economy the excess purchasing power has to be satisfied from offshore sources. This is the economic equivalent of the gravitational forces on water, which always flows downhill. Larry Kudlow is not there yet and, more surprisingly, nor is Peter Navarro. They were probable AWOL for this lecture. The recent tax-bill basically guarantees larger trade deficits.

If you are living in the States, you should buy your Mercedes, Audi, Rolls Royce now rather than waiting because these cars will cost so much more. This itself will trigger a J-curve effect which simple states that things almost certainly get worse before they might get better.


Costco is ready to turn and both Intel and Boeing are already down appreciable. This is just the start.