Month: August 2011

Stox50, Dow Jones Stox 50 index

Hamilton

stox50 aug 31 2011   stox50 aug 31 2011 s

The STOX50 gives a reasonable cross section of Europe without having to look at X different exchanges. All have in common and A-B-C rally from the lows and most peak around April of 2011. But some are falling a lot faster than others, the STOX50 is more or less in the middle of the pact. This index contains all the big names such as Shell ,Nestlé, Unilever, Siemens, Deutsche Bank etc.etc. It is somewhat underweight the German companies and overweight the Brits and the Swiss but all in all it is a reasonable proxy for Europe. Notice that we are already below the B-wave level of the A-B-C up .(The Dax is right at that point whereas the SMI, MIB, AEX are below).

Looking at the detail chart this is the only one that still might be making a triangle,  -  others are also in waves 4 but not triangles  -  presumable a wave 4 of 3 of the first down leg. Despite the recent rally this drop may not be over yet!

CM , Canadian Imperial Bank of Commerce.

Hamilton

Earlier this year, on the 21 of March, we opined that this bank would not go much higher and should in fact start a very steep decline.Here is the chart at that time;

CMmar22 2011

At the time the stock had traded as high as $83.31, subsequently it managed to eek another dollar  but then did precisely as expected, dropping a little over 20% to, almost $67, a few dollars shy of the then suggested target.

cm aug 31 2011

Today’s earnings were good and that may have given it an extra little push, but the stock might have completed a 5-wave down sequence just a few days ago. The bottom part is a little muddled but with the benefit of hindsight it looks like wave 4 was an irregular flat (on the day the US was downgraded. Then followed a wave 5, more or less equal to wave 1. Waves 2 and 4 alternate and given the proximity to the expected target this makes the most sense (probable with a lot of other stocks as well!). What this means is that we are now correcting the entire wave 1 down, typically one should then expect a 62% retracement, to wave 4 or wave 4 of 3 etc.etc. and that is what is happening. $77.5 would be an ideal target and then the stock should drop, and do so faster than during the last 6 months (see previous blogs).

BHP, BHP Billiton Ltd.

Hamilton

bhp

BHP completed a B=wave almost 6 months ago. The rally is a clear A-B-C (same as TCK.A) right into the double top level and the usual Mnt.Everest target of +/_ $100. It dropped roughly 30% from there and has now overlapped with the top of wave A, excluding any possibility of this morphing into a higher 5-wave move. In detail;

BHP 2 BHP 3

The B-wave is as plain as daylight. It does not channel and there is a clear, single break in the upward move. The 30%, so far, drop is a little more complicated. It would appear that we are in a fourth wave of wave 3 down, having completed 1 and 2 but there are other possibilities. In any case the first serious target is around $60.