TSX etc. update

tsx 20 october 2017

We had this interpretation in our previous blogs, either a series of 4-5s or, more likely, a diagonal triangle 5th wave.  This is a long chart and therefore does not lend itself for precise predictions but our take on this is that we are about to peak and that a dramatic drop is straight ahead as that is a “diagonal” which invariable retrace their entire advance. In this case that would amount to roughly a 2/3 loss from whatever peak lies ahead.

djia 20 oct 2017

The Dow is going vertical, and if anything, confirms the possibility of a major top.

DOW update

dow july 31 2017

Today is the last day of the month. Typically this is good for 100 points or so to the upside in the Dow, intraday or for the day. Just a few days ago Amazon hit a new high, together with some of the other FANG stocks. Briefly Jeff Bezos beat out Bill Gates as the richest man in the US, perhaps even the world provided that stories about Putin’s wealth are untrue.

AMZN has dropped about 10% since. At the peak the P/E was close to 200, which is another way of saying that if you do buy the stock, it will take you 200 years to get your money back. On the political front a New York businessman, actually a fund of funds outfit’s principal , a bad business at this time sold at too high a price to a Chinese firm according to rumours, survived only eleven days of the White House. While his wife gave birth during that time and filed for divorce, he demonstrated his knowledge of the English vernacular. In any event there is no chaos in the white house and the economy is doing extraordinarily well as witnessed by the stock market.

Could this maybe be a top of sorts? Clearly the RSI is back up there for the first time in 5 months. There are 5 waves up and the 5th is equal to the first. The trend line was broken today. We would play it safe here and get out. First drop could be about 600 points, next 1600 points. After that we will see.

DOW continued

dow oct 6 2016

A day later and it still looks like a triangle. Normally they have an a-b-c-d-e structure but in certain cases they just go on for a little longer and add f-g-h-i , so 5 legs become 9 legs but the end result remains the same. With the second “debate” scheduled for Sunday and the proximity to the apex of this triangle one would expect something to happen on Monday, good for at least 450 points but possible more like 750. The position of this triangle marginally favours the downside but, again, this can go either way!

If this is a 4th wave triangle, we are presently probable in wave g and only need to add h and i. These can be very short and then we get the upward explosion. This is what Clinton needs to win.  Trump of course, is hoping for the opposite move.

DOW, update

dow  oct 5 2016

Could this possible be a triangle? If so is it in a b-wave or a wave 4??  Perhaps this is the Clinton-Trump fight displayed in the stock market. By the way, if the market is down the month of October there is, statistically , an 88% probability that Trump would win and visa versa. The next utterly useless debate is this Sunday. Fasten your seatbelts. For the moment, EW favours the downside but as with all triangles you never know!

Keep in mind that Brexit got through just because Boris felt he could behave as an ass in order to further his own career, he really did not mean to go that far. Anything is possible.