Year: 2012

FNV, Franco Nevada

Hamilton

fnv oct 2012fnv xau 2012

Franco Nevada is a gold royalty and stream company. It is essentially a holding company that does not itself have operations that can go wrong, or costs than can go up etc.etc.  It’s performance has been spectacular, certainly the last few years. It is up from a little over $10 to $60 in a 4 year period. In the Bigchart it is compared to the XAU, the Philadelphia Gold index of 13 or so major gold producers. They barely moved over that period whereas Franco is up a tidy 300%. Gold itself has done very little over the past year so this stock has outperformed the metal itself and the gold miners. It may have completed 5 waves up, it is now outside its channel  and the technical indicators such as RSI and MACD suggest an overbought condition. We would sell the stock, or at least keep a trailing stop-loss underneath this stock.

DJIA, SPX, NASDAQ A picture is worth 1000 words

Hamilton

DJIA oct 6 2012S&P oct 6 2012

Nasdaq oct 6 2012.

The 3 musketeers of the US financial system. All three sport reasonable well defined “diagonal triangles” which is Elliotte-speak for wedges, pennants, rising flags, whatever you prefer. They occur only in 5th , or C waves. This cannot be a 5th as it would have had to start at the March 2009 lows of the great recession. This is the C of an A-B-C large B-wave. or a wave 2 which has the same implications. A throw-over is normal and at times the index “hugs” the top line for a while and sometimes it falls a little short, here we have all three. Invariable the stock (index) falls back to the level of the base, in this case the bottom of the chart. It does not necessarily stop there!

The RSI and MACD are suggesting something similar or at least a turnaround. The unemployment rate is not as hot as they would like you to believe. It is perhaps not the conspiracy that Jack Welch is suggesting but it is definitely a matter of changing the way things are counted. Read about it at www.Shadowstats.com ;

unemployment oct 6 2012

BNS Bank of Nova Scotia

Hamilton

bns sept 27 2012

The Bank of NS is a great bank that must have studied EW it conforms so nicely. Look at the big black line, the RSI and the MACD, none of which has anything to do with EW but paints a very negative picture in its own right.

The wave structure is that if a 1-2, 1-2 starting, presumable, wave C down. The two retracements are , roughly , similar in size, give or take 70 % calculated simple by counting the blocks. The only fly in the ointment is the 5th wave in the second, smaller, impulse wave down. I assume it was a failure. There are a good number of alternative interpretations. For instance W2 may not have been complete so the stock could rise to $59 or so and then fall. For the moment we will assume that wave 3 of C is about to start. See below.

bns b sept 26 2012

DELL update

Hamilton

DELL sept 27 2012

It is almost a month ago that we last commented on Dell. We commented that this is a buy no matter what but that it would probable drop another 50 cents or so to get to the bottom trend-line. Well it took a month but here we are, yesterday’s low was at $9.78, pretty well right on that line. To this we add our “keep-the-gap-in-the-middle” theory and voila, we have a perfect 5 wave sequence. Furthermore the RSI is not confirming the new low and the MACD is almost shouting from the rooftops that we went too far. The odds are exceptionally good that at the very least a rebound should start any moment now. If it does a first and minimum target is $12.50, a handsome 25% and well worth the trade (unless you are working with full brokerage, in which case you could lose half of it to your broker for filling your order). The P/E is at about 5.8 . See also previous blogs.

For perfect clarity a buy now to a target of $12.50 does not imply a bullish stance for the long term. For all we know computers may go the way of the Do-Do bird and Dell with it, but not before this stock rebounds to at least $12.5.