Month: June 2014

LULU update

Hamilton

Then – Dec. 2013 – and now charts;

lulu dec 11 2013LULU june 12 2014

LULU has followed the expected trajectory to a T, hitting a low of almost $36 briefly today. As we pointed out at the time, we are not the least bit confident about the degree of this drop despite the near perfect projection. Today we favour the idea that the recent moves were all part of wave 3 of C and that, therefore, we still need a wave 4 and 5 to complete the entire structure. A drop closer to the $30 level would “look” much better but would require a little more time. To remain bullish longer term the stock should not drop below $30 as this would cause overlap (see also previous blogs). By the way, we are once again amazed at the accuracy that can, from time to time, be gained by using EW principals. The charts can be aligned and put side by side to illustrate the degree of accuracy! Also, practically speaking, you have just saved yourself from a 50% loss.

FTSE update

Hamilton

ftse june 12 2014

So again we are wrong, the FTSE did make a new high and may even make a slightly higher high in the next week or two. However, the conclusion stays the same and that is that this index is ripe for a sizeable drop soon. Interestingly the offending new high, so far, is (6895-6876) all of 19 points or less than 1/3 of one percent measured over a period of, rather precisely, a year.

Just to put things in a longer term perspective, here is the twenty year chart. The Footsie is trading below where it was in late 1999. Clearly this index is in big trouble if it cannot decisively break the 7000 level soon. In our opinion it will not. See also previous blogs.

ftse june 12 2014 big

SOX, Philadelphia semiconductor index

Hamilton

sox june 10 2014

This is a great trading index simple because it moves a lot. It was at about 150 at the recent lows so it is up at least 4x. In the good old days it was well over 1000. However, at this point in time we would sell because the index has traced out a pretty nice triangle. It has also shot up slightly more than the triangle’s mouth measures, and both the RSI and MACD are displaying rather high readings. Short-term a return to 560 is virtually guaranteed. A 600 Aug put can be had for about $10 and should be worth about $40 in August. Chose your own strike and or maturity date.