Hamilton’s E-Wave Analysis

As anticipated (see Dec ! blog) this stock has been breaking down and is now about $10 cheaper. The “rising flag” pattern at the top is highly reliable, look for another $20 at least!

EMP.A

The EEM has followed our script precisely, perhaps it will continue to do so (see various previous blogs). One can argue about certain minor details in the above count, but in the main it looks pretty acceptable. 5 down with a nice little triangle in the 4th wave position for Wave 1 down, taking back about 34% of the preceding rally and then an A-B-C in which C is vector equal to A, retraces roughly 62%, and moves right back to the 4th wave (highest point in the triangle). The RSI and the MACD are both topping. Somewhere around here this ETF should turn down.

The XEM, the Can $ equivalent, has pretty well followed the same pattern, shown below without annotations.

EEM

Agnico might well be a buy at these levels. It is only a dollar or two away from having lost 62% of its value (about $33). There are two possible counts, one has an a-b-c finishing at about these levels and the rest is all up. The other, a larger irregular A-B-C that now needs 5 waves down in C. in that case we are in wave 4 that could easily take us up about $10 at least before 5 starts. So in both scenarios we should get reasonable upside. In detail:

The wave 4 could go as high as $52. The stock is trading at levels where it was in 1986, gold itself is trading at levels triple that at least. By the way, I do not mean to convey the impression that I like gold, just this stock, just for a little while.

AEM

Same pattern. These guys do not fool around, they do it all in a day!

NSU

Disney reports today after the close. My guess is that it will go down regardless of what tale the numbers tell. A little pop could be possible but the next serious move is down.

Have a look at the August blog, it predicted both the low and the present high within two dollars or so, rather amazing I think.

DIS

See the Dec 1 blog. The charts is repeated on the left, reality now is on the right, if only they all behaved this well! The A – B – diagonal C is what we have seen on many stocks, and if not that then similar structures. They are all ready to cave in but still not doing it. The Dow has gone beyond the point where it should have stopped, not yet sure how to account for that!

CNQ

Talisman is the one in the red. The others are West Texas oil, Suncor and PetroBakken chosen on the basis that I have commented on all of them. Notice that they are all within 10-20% of the starting point in May except Talisman Energy, which is still 45% below that level. This is worrying as we may miss the boat (as with Morgan Stanley). On the other hand there is a train going by all the time so, you miss one, you take the next one. Up to you.

TLM

The tech stocks, represented by the Nasdaq, have enjoyed quite a bit of (irrational?) exuberance lately with the upcoming Facebook IPO, the Superbowl and  Greece’s soon to come “no-default” default. But the simple fact that this index is still down by 40% since the highs some twelve years ago, remains. Also, despite the longer timeframes involved,  the “picture” is essentially identical to most other indices and or individual stocks. The message is that this can turn any moment.

Some might argue that the market is full of negativity, pessimism and so on, but looking at the standard gauges like Put/Call ratios, sentiment indicators, volatility and so on , they clearly indicate the contrary. Not to bore the reader, we will show only two, the cash ratio at mutual funds in the US(see link),and a sentiment index for the Nasdaq; http://home.comcast.net/~RoyAshworth/Mutual_Fund_Cash_Levels/Mutual_Fund_Cash_Levels.htm

The sentiment is running at an all time high, at least for this 10+ year period. The cash levels at mutual funds are at an all time low at about 3.5% of assets held. The message here is that there is no one left to buy nor any money left to buy. Volatility – I am now boring you- that is now around 17 coming off 47 or so a few months ago, tells the same story;

Here I have overlaid the S&P onto a chart of the VIX, or volatility index. The current wisdom is that you should wait for the markets to calm down, which clearly is exactly what you should not do, at least not for the past 14 or so years. The zero line is just a base line set at the start of this chart, it does not represent a particular value! Note that when the S&P goes up, the VIX goes down and vice versa. This is logical as one should buy  when the proverbial blood is flowing in the streets. Obviously not now!

NASDAQ