Year: 2012

DJIA

Hamilton

dji sept 2012

The Dow Jones Industrials sport the same “wedge” pattern as the S&P,. In fact this one is even prettier than the other. The throw-over to date is hardly discernable, a slightly thicker pencil would eliminate it entirely. So, for the moment at least, we will continue to assume that this is the correct pattern. It then follows that we should get a rather sharp breakdown to the base of the pattern at around 9500. What might trigger such a drop is , as always not clear today but, with the help of a little hindsight a few months from now, will prove to have been entirely foreseeable.  Then again, maybe nothing will happen.

CDE, Coeur d’Alene Mines

Hamilton

cde sept 2012cde b sept 2012

Coeur d’Alene is an interesting high Beta precious metal (silver) stock. Had you bought this as a hedge against the financial market falling apart you would not be a happy camper given that you are left with about 1/3 of your money. As far as the future is concerned this stock might give a hint as to what is in store. From the big chart it is clear that this stock has made three A-B-Cs in succession leaving us guessing what the next move might be. The shorter term chart shows the last A-B-C in more detail. Superficially it looks like an A, triangle B and then a C equal in size to the A. There is a problem with the triangle, the e leg goes too high but lets ignore that. Looking at the RSI (Relative Strength Index) the stock is more overbought than any time in the past 3 years. It is doubtful that the stock will trade above , say , $31 where it is already up by about 100% from a month and a half ago.

A similar message can be drawn from the platinum ETF PPLT;

pplt

It is by no means clear that this one should go up much further, in fact it looks like it is about to reverse. The light is still amber in our opinion.

CMG , Mexican Grill update

Hamilton

The usual then and now;

cmg s 2012cmg sept 2012

We had not looked at it for a while but it did as predicted falling close to the target of $275. From there it has rebounded and could still go higher, perhaps even closing the gap. After that it is adiós , possible to about $125. What is unclear at this junction is whether or not this is the end of wave 1 or just wave 4 of one. The shape of the descent will differ but the target will not.