Year: 2011

MMM, 3M

Hamilton

 mmm jul 26 2011 mmm aug 10

3M is by all accounts “blue-chip”, so is J&J, P&G,IBM, Colgate,TRP in Canada, the Royal Bank Siemens,SKF,Nestle etc. etc.  The way you know that you are in a bear market is when these stocks for seemingly no good reason, en masse,start dropping and often rapidly. Another good indicator is that you get stopped out of all the carefully selected “buy” stocks such as Cameco, R, Pfizer etc.

3M is an excellent example. On the left are my comments as of July 26, the stock that day was around $91.50. On the right today’s chart with a low of $78.50, that is 14+% in about ten working days. From the top in early July of about $98 it is 19.9% The first target still is $72, and that is not necessarily the bottom by any means so be careful not to fall for the temptation of buying “bargains” Last time your broker bought RIM for you at $80 it too was a bargain seeing it came off $160 whatever.Today, it is a quarter of that.

DOW update

Hamilton

DOW 10 Aug 2011

It is near impossible to get a tick chart, even on the internet, so I will use this one from Stockcharts. I suspect that we are in some sort of 4th wave of 3 of 3, this may be a wrong assumption but at least it give a road map.

Yesterday’s low was at about 10600.The rise thereafter was was good for 600+ points to about 11200. It is , I think, a 5-wave move, which immediately excludes the possibility of a triangle! This morning’s dive down was for about 400 points (very close to a normal Fibo 62%) to 10800. This corrects the euphoria created by the Fed acknowledging that we are indeed in BIG trouble. Next move should be another rise of about 600 points to 11400. Then down it goes again as we are nowhere near a bottom. We shall see.

DOW.

Hamilton

indu aug 10 2011

Here we have it. A market rejoicing in the fact that even the Fed. ,certainly not the most astute observer, believes it is time to tell us that it will hold rates at unbelievable low rates for another two years. What happened to capital formation, the cornerstone of all civilization, what happened to honesty, do we really have to go by the backdoor by way of degrading our currency?? I do not think that Bernanke has even a remote idea what he is doing.

From an EW perspective , we may be in wave 4 of 3 of something the degree of which is yet unclear. The market should go down first and then may go higher, this may take some time, but in the end the fundamentals will prevail, and that means stocks are going lower.

What happened to capital formation? If you were a bond trader is it time to pack up? In my opinion the Fed. has no idea what it is doing. We need much higher interest rates, period.

F, Ford.

Hamilton

F aug 8 2011

Our ideal target for Ford was in the high $7, $7.84 being a Fibo 62% down. The stock may well be a buy at these levels despite being about $2 short of that low. The reasons are;

1. The stock dropped 50%

2. It dropped to the 4th wave of previous degree.

3 The drop is a crystal clear a-b-c, 5-3-5 structure, complete even of it could become more complex yet.

4. The RSI and MACD is at lows not previously seen over this period.

5. Fundamentally they are doing relatively well.

Recognizing that the correction could become more complex, for instance by moving back up to say $16, and then going south again towards $8 (shown in black). Even in those circumstances this is a buy for a very reasonable trade , up $5 or so is, after all 50%. Just use a stop, mental or real at $10.