Year: 2012

S&P 500 , update

Hamilton

s&p sept 2012S&P s sept 2012

See also a previous blog on the S&P (SPX). Though we never ever expected the S&P 500 to rebound to these lofty levels, and take almost 4 years to do so , we do find this pattern very intriguing now that we are here. Over the past two years this index seems to have traced out a pretty classic diagonal, that is a wedge. The wedge is moreover of approximately the same height as the move in the first nine months of the rebound. This makes for a very symmetric A-B-C pattern forming a B-wave.. It travels fairly precisely to the level of the B in the preceding large down drop (the great recession). What it tells us is that the S&P may be in for a big disappointment soon. As always if this does occur a minimum expectation would be for the index to fall at least halfway down this chart.

We would sell all stocks that do not have a clear positive outlook !

UN, Unilever update

Hamilton

un sept 2012

A month or so ago this stock looked ripe for a good drop. Instead it is up marginally by a single dollar. Over all of last year it has managed to add only a dollar or two compared to the $16 or so immediately following the lows of March 2009. That was 100% up in less than a year and lately it took more than a year to add 5/10%. In fact, over the last full 3 years the stock added a mere $3 to $33, less than an absolute 10%. Clearly momentum is waning. This stock may be more representative of the US markets, at least as expressed by the Dow Jones or S&P. As it stands they too are just 8% away from the all time highs.

The rise from the March lows is clearly still an a-b-c counter-trend move. Even if this stock manages to double top the next big move should still be down to $26 in the best case, much lower in the worst case. Quantitative easing, twisting, bond buying  and most importantly talking up, should have little or no impact anymore on the amount of margarine you put on your toast.

Below is another picture of this stock and where it sits relative to the longer trend-lines;

un b sept 2012

CIS, Camelot Information Systems

Hamilton

 camelot

"Don’t let it be forgot, that once there was a spot, for one brief shining moment, that was known as Camelot,"

Know your history before you name your company! This, by the way, is a “zig-zag” correction so if you are a bull a new bull market could be born at the next new low, if you are a bear the stock may briefly drop below the zero line. That is normally not that brief!

K, Kellogg update

Hamilton

K sept 2012

The stock followed the script more or less as expected, losing roughly 20% only to rebound quite rapidly, proving that not only the precious metals but also most anything else is sensitive to Fed easing. This chart is a replica of the one below. Not sure what it means but pretty certain that the next major move is to new lows (see previous blog).