Talisman did not make that last leg down which we hoped for but were not sure we would get. We know now that it is not going to happen anymore. In the mean time the company reported atrocious earnings and the stock went up, a clear sign that things are getting bullish. If you did buy at around $12 or so look for about $14.50+ to get out.(see 2 blogs ago, where $3 on $12 was viewed as a minimum upside.)
Just a few days ago we suggested buying this stock below the market at around $33, which was roughly an equality point between two down legs over the past year or so, and the 62% Fibonacci point. (see previous blog) As it happens the stock dived down to $31.50 on horrific results and then rebounded briefly to above $37. This is and inside-outside day reversal pattern and a big one moving almost 20% in a single day and right on time to boot; here is the chart;
These charts do not do the move justice but they will have to do. Had you bought at $33 or below, you would have been up 10% for the day if you sold at the close. These type of days promise a little more usually. $40 is the top of a 4th wave of minor degree and $48+ is the top of wave 4 of the second downleg. Both could be reached. At the very least one should get a small a-b-c pattern, so far there is only an a, perhaps incomplete at that.
Long term ask your broker for real fundamental research, not the “we hold management in high esteem” rubbish. Veritas has just rated the stock as a sell over the longer term and they believe, according to a BNN presentation, that gold itself will move to about $1000. Right or wrong , who knows, but at least refreshing compared to all the Pavlov talking heads.
NUAN produces voice-recognition software. It had it’s largest single day drop in more than 5 years. It is interesting only because it falls in that category of stocks that (perhaps) did not have B-waves, instead they(may) have 5th waves and therefore are also topping but for different reasons. Here are the charts;
Both possibilities are shown. Either way the stock should drop to , at least $16
Talisman did actually go up but not quite as expected. Things are unclear now so we are reverting back to the big picture (see previous blogs). The light is amber.
The DOW has clearly exceeded its May 2 high of 12876 by about 50+ points. This would normally negate the count, that is the one where this was wave 1 down followed by an a-b-c correction/rebound. I simple do not know what to do with this! The structure is just fine, only it should not have gone this high. EW is supposed to work when markets work, that is when there are a multitude of participants who freely make up their minds to buy or sell. Perhaps this precondition is no longer met now that CB’s have thrown in 15 trillion into the punch-bowl (1/3 of the value of world equities!), never mind all the other “stimulating” factors. I just do not understand but at the same time will not get religious or dogmatic about it. Other than the Nasdaq, which is in a completely different phase, just about every other major index has NOT negated this count, so for the time being we will stick with it. Below are some examples;
You can click on them to enlarge. Un till such time that a few more of these “negate” the count I will take the catholic approach and simple nullify this one single incident.
A great stock, but what goes up , must come down. With a p/e at 44 that would not be all that surprising.
Russell Metals is another one of those stocks that has followed a very bearish pattern. However each time it retraces so much of the preceding drop that it is hard not to wonder if this is the correct interpretation. A few more dollars and this stock will make a new high! Un till it does remain bearish. This stock trades at a p/e of 15+. One alternative scenario would be a much larger B-wave making new highs. This is so contrary to all the evidence that it realy cannot be taken seriously at this time. After QE5 and another 10 trillion who knows.
Can we have a bid please?
One decidedly negative outcome of the resolution of the Greek bailout would be that we would lose all hope, after all this farce has concentrated our attention for quite some time now while we wait , time after time, for the “deus ex machina” to come on the stage to resolve this tragedy. We are not quite there yet but this farce is starting to resemble that other story, “one thousand and one nights”, where the sultan’s wife tries to delay her execution by telling fascinating to-be-continued stories.
This whole thing is a wonderful example of sophisticated political engineering. There will not be a default but right away you can whistle good-bye to 70% of your money if you are a creditor. The remaining 30% will be exchanged for 30-year bonds paying an interest rate of, reportedly, 3.6%. As soon as interest rates in the world, and the Eorozone, normalize (if they ever do) to say an interest rate of 6% (the basis of the last 30-year US bond futures contract), you will lose one half or more of that 30%, leaving only the hope of getting back 15%. Straight out of Alice in Wonderland?
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