RY update

ry dec 13 l 2012ry dec 13 m 2012

We showed the bullish count back in Oct, of this year. Here it is again, in purple. Given all the overlaps this is about the only bullish scenario possible. If it were to occur the peak should be at a little under $65, so just an additional $5 from today’s highs. There is no other bullish scenario that I can dream up (a triangle here over 6 years is just too tortured to be correct. So we continue with the bear scenario. Note that the stock tops no less than 5 times either a little above or a little below $60. That suggests that selling at $60 is not all that stupid, but then the past is no guide for the future.

We did not expect the last little leg up to happen, assuming that the stock was already on its way down in C. It took 9 months for the stock to climb from $59.13 to $59.41, all of 38 cents. It has come to within $2.12 of the high in the B-wave, almost a full retracement.  Even so , apart from taking much longer than expected the bearish count has not been negated. We expect wave 3 of C down to start now. This should take us down to below $44 fairly rapidly. With $5 up and $16 down this is absolutely a no brainer. Think about it.

ry dec 13 2012 s

As an aside , this chart shows how useful the RSI can be. Red lines are highs and green ones lows. With the exception of 4 months, June to Aug. 2011, virtually all turns correspond with turns in the stock. So sell with an RSI at or above 70 and buy with an RSI below 30. This approach is bound to leave your broker behind in the dust.