Year: 2011

NYA , NYSE index

Hamilton

nya NYA apr 2011

Both these charts are of the NYSE index, NYA. The one on the left is a few months old and the one on the right is up to date. There does not seem to be that much difference, unless of course you are waiting for something  to stop this best 9 quarter advance since W2. We did get a little dip but are right back at it but with each passing day the picture gets clearer and clearer. A little further and we will have a very clear A-B-C counter-trend rally from the lows of March 2009. This implies that , at the very least, we should go down for a while in a measurable way, perhaps even to new lows.

Reading the latest forecast from the Prechter fellows in Gainsville , I was reminded of the existence of the Dow Jones Utility Average index. There is nothing very special about this index except that, so far at least, it has followed the EW prescribed path much better than most others. It has retraced 50%, right into the 50/62% range that one would expect when working with a clean board. This is actually quite amazing as the utilities are normally viewed as a defensive segment of the market so, with the financial world collapsing one would expect the DJUA to outperform, not underperform. Here is the chart;

djua

F update

Hamilton

F apr 2011

Ford has completed its a wave correction and is now doing the b part. That should roughly retrace about 60% of the drop which is 0.6 X $5 = $3 which from $14 gives $17. After that wave c of the correction should take the stock to about $10, or a little lower. At that level the stock should be a buy for a resumption of the bull market for Ford. We shall see when and if we get there.

There is an outside possibility that the first 5 wave up sequence is not yet complete. That would imply we are now doing wave 4. Highly unlikely but if it happens it would likely be a flat or triangle wave 4, in which case there would be ample time to adjust our strategy.

R Romarco Minerals Inc.

Hamilton

R 2011

So this company is doing a little alchemy of its own, regurgitating old gold tailings in the US of A. They made it to #1 position in “emerging” stocks in 2010, are having a few problems with the EPA (environmental protection agency) , had their stock halted etc.etc. Very, very speculative that is certain. But the wave count is classic and perfect. It has completed Wave 1 up and is now doing 2 down. Wave 2 should complete either at $1.50, $1.37 or $1.25 respectively wave 4 and c = b, 62% retracement and wave 4 of 3. Once complete the stock should rise back to the  $2.60 level, more or less as a minimum. It could, for all I know go much higher but I am only interested in a quick return of close to 100%. The stock hit a low of $1,80 today so pick your number and put in the buy order in advance, the lower you go the larger the return but also the bigger the chance of not getting it at all, which, needless to say equals a return of zero!

LZ Lubrizol or when do things become unethical?

Hamilton

All day I watched CNBC and other programs and I am totally amazed at the generally cavalier attitude displayed by some of the talking heads who, in some cases, are even apologetic .

Here are the long and short term charts;

lz 2 lz

I know absolutely nothing about this company other than that it makes lubricants. Not a business that is generally expected to take-off. But it has from $30 to $135 (that is the bid by Berkshire). Makes you wonder if the sage of Omaha is still the Graham & Dodd “buy low and never sell” type of guy, but that is a whole different matter. So this crown prince successor in waiting buys a few shares , 96,060 to be exact, over three days Jan 4, 5 and 6 after he initiated a contact with Citigroup that took place about a fortnight earlier. Actual contact takes place, first by phone on Jan 14 and (a week after purchase) and again on Jan 25. The deal is announced two months later.  This fellow is quite wealthy having sold his company to Berkshire and over the last 10 years or so having earned about $56 mln. Evenso how often is an order by an individual entered for $10mln in XYZ share? Not very often. Why at that point in time as the stock had been a lot cheaper earlier. The 3 mln profit is peanuts compared to what could have been earned if the timing was a little better, that is the market timing, not the timing dead smack in the middle between the initiation of the process and the first talks! We will get some very sophisticated arguments in the next few days to explain away this unfortunate mishap. Personally I would be just a little agnostic.