Year: 2011

RUT, Russell 2000 small cap index

Hamilton

Rut nov 2011

For the Big Picture, the Russell 2000 is as good as any. The pattern , of course, is identical to that of the DAX, AEX, FTSE , and half a dozen others. It is different from the SMI or the TSX but nevertheless gives a good roadmap for the world stock markets overall. The 5 waves down is relatively clear and the a-b-c correction back up for wave 2 even clearer. The a-b-c is well formed and retraces about 62% ending just slightly above a wave 4 of previous degree. The speed is a little off but as long as adults engage in games of sophistry , arguing whether or not a voluntary default is a default, anything is possible.  The most reasonable take on this is that we will soon be in wave 3 down, that is when things get serious.

RY, Royal , Canada’s second largest bank, update. BNS

Hamilton

ry nov 10 2011

In the end we actually got the expected $5 rebound, but by tripping over our own feet in trying to execute on that. Anyway, this is where we are now. The stock has dropped back to about $45 and is bouncing off the upper channel line of 7 or so months. The move from the lows might include a minor failed 5th wave, leaving a clear a-b-c. Whatever the case, it is not an impulsive move. It could be just the A of a larger A-B-C that will be more complex but nevertheless still a correction ( in grey ). Alternatively a triangle wave 4 (in blue) could be in the making. This too will kill time and will limit the upside to $50 maximum. Either way you should be able to buy this stock cheaper, perhaps much cheaper.

Looking at the Bank of Nova Scotia a more complex correction seems to fit best;

BNS nov 2011

It looks like we are doing a small triangle wave b of an a-b-c wave 2 correction that could potentially take the stock to about $55. Then wave 3 down starts!

IVN, Ivanhoe, update

Hamilton

Back on Oct. 6 we commented that we were fundamentally bullish on this stock but were not sure about the count. $23 was mentioned as a “critical” level . Here is that chart;

ivn oct 6 2011

The stock has obliged so far, moving up a lot faster than expected but otherwise following the script. Here is today’s chart;

ivn nov 2011

The problem is that the move from $13 to $23 is pretty well a clean a-b-c, in other words corrective. This could still become a 5-wave move over time , but right now  it does not look as if it will. Stepping aside or using a tight stop is advisable. By the way , even if this becomes a 5-wave initial bull wave, you will probable revisit the $23 to $19 range in any case!

CTC.a Canadian Tire Corp.

Hamilton

Here are 3 charts, large medium and small, there is nothing more to say;

ctc.a oct 2011 l

Except that wave 1 seems to be missing, but then wave 5 is pretty robust.

ctc.a oct 2011 m ctc.a oct 2011 s

Wave 1 down in the medium term chart is a fairly rare type 2 wedge, but it is well formed which makes it more credible. A sell of course.