Our favorite, first love if you wish, is of course the HXD. It is the inverse as well but leveraged two to one. We were pretty adamant that this was a screaming buy at around $8. (See previous blogs for the reasons). It is now up 42%. The count could be similar to the HIF but more importantly this thing has barely budged. There is no reason why this one could not go to $20 or higher in good time.
The HIF came into existence around the time of the lows in the market, March 2009. This is an inverse ETF and consequently does the opposite of what the market does. As financials moved up to peak sometime in Q2 of 2011 this ETF hit it’s low. From $21 to just under $8. There is no leverage. As we know the Royal just to pick on one of them is now down more than 20% from the highs, this one is up 9.40-7.90/ 7.90 = 19%, a fairly good hedge.
The wave count suggests that we are in a first up leg, perhaps in 5 of 3. An initial target is around $12 , but much higher levels are fairly reasonable. This ETF contains most financials which would include the insurers and the banks. If selling for tax reasons is not acceptable ( in my opinion something that is upon to debate depending on the expected size of the loss) this is a great instrument. You keep the dividend (where applicable) and avoid the capital gains taxes.
It has always been our contention that Colgate is the real canary in the coal mine. We got it wrong the other day thinking it was game over, instead the stock climbed almost two bucks. But then today it reversed down almost four dollars. This happens not surprisingly at a point in time where the C wave is precisely equal to the A wave of the larger counter trend B – wave rally. Measure it yourself if you doubt it.
Today’s almost $4 drop, unheard of for this blue-chip stock, tells us a lot. It tells us that not only is the Fed. incompetent but, and this is the real revelation at this time, it is impotent, plain and simple. Perhaps the market and the moronic advisors that serve it, is catching on.
Concerning Cl, it should drop to $70 for starters, a lot lower after that .
This was back in June. We had called the peak a few months earlier and the stock had completed wave 1 down and wave 2 up. It was around $105 just shy of a 62% retracement and a 4th wave of previous degree. Here it is now;
As anticipated, it did go a little higher but then dutifully started wave 3 down. It has lost 27% in wave 3 alone. Longer term the target is much , much lower at $60 or so;
