Year: 2011

STJ, St. Jude Medical Inc.

Hamilton

First a little look back to July 11, 2011; here is that chart (you can retrieve the entire blog using STJ in the upper corner);

stj2

We were , once again , fascinated at how well markets are able to almost perfectly recreate certain patterns without much regard to the “noise”. The first target, of course would have been about $34, much further down after that. Here are the updated charts;

stj oct 17 2011 stj oct 17 2011 s

The stock did exactly that. The low was at $33.54. My (educated) guess is that the first wave is complete and that we are doing 2 right now. This wave 2 could, repeat could, continue to say $44, the apex of a triangle. I am sure some of you will think that this count cannot be correct as wave 3 looks to be the shortest. However if you look carefully it will become clear that it is indeed the longest. Stay out! By the way, the p/e is still well above 30 according to Bigcharts.

DAX, EWG and Siemens

Hamilton

Dax oct17 2011 ewg oct17 2011

si oct17 2011

The question is are we in wave 4 of 1, with 5 still to go to complete wave 1 (in black), or did we in fact already complete the entire wave 1 and are now in wave 2 (in blue)? Certainly the black interpretation is the more elegant one, but fortunately it does not matter all that much at this point as wave 3 was the lion’s share of the drop anyway so the proportion of either wave 4 of 1 or wave 2 are not that different. We have already retraced about 40% and are at a wave 4 level, a move to about 62% would not be negligible but certainly not tradeable for most of us. That is why we recommended getting out of longs the other day.

This market is like a casino and roulette is played without the numbers, just black and red and as a result it is a binary proposition, that cannot be controlled too well . This risk-on , risk-off  approach does not leave much for error. You should stay short for the next few months as this market has a long way to go. In terms getting short again , or more so, the 62% retracement level is as good a spot as any, but we may not even get there.

HMU Global Base Metals Bull Plus ETF

Hamilton

hmu oct 16 2011

We would sell for a few dollars of profit and will take the 25% or so. No idea what propelled this one so fast but it does prove that the worst sector rebounds the fastest. Maybe there is more in this but not worth sticking around to find out. This is a semi-log chart.

The previous entry was recorded under HMD.

FXP, Proshares Ultrashort FTSE China.

Hamilton

fxp l fxp s

This is not for the faint of heart. By the way, I first recommended it on Feb.12, 2010, when it was trading at $9.41, see my blog of the same date, you are still up more than 3X. The most recent low was around April/May of this year and since then it did a very promising 5 wave move up and a subsequent correction which is close to completion.

I have no doubt that China is going through a miraculous transition economically but it is also beyond any question that there stats are unreliable. Being a centrally planned state with many elements of raw capitalism it would seem that we have the ingredients for some very explosive surprises. First it was the US with a mountain of debt, today they recorded the 3d trillion dollar shortfall at 1.300.000.000.000, almost $4000 per person!/per year. This has all been forgotten as Europe took over the limelight, absolutely nothing has changed there either but we will have to wait a month or more to find out. Next shock could come from China, money supply is supposedly not growing at 50% a year anymore, if at all. Inflation is running at 6% if you believe their stats and it is rumored that some large builders are drowning in debt. The shadow banking system is out of control etc.etc.    Add to your position or start a position between here and $30. This, quite superfluously, is an inverted instrument, bad is good.