Month: February 2015

Investors waiting for word from the Fed.

Hamilton

sheep, ewes

Waiting for word. Will it be “a considerable time” , “patience”, “data-based” or something entirely new? The direction is clear, so does it matter?

P.S. Those who do not believe in the Fed, or Keynesian mumbo jumbo for that matter, may want to read some of L. Albert Hahn’s writings, most specifically The Economics of Illusion. Unlike Bernanke or Yellen this fellow had one foot in academia but the other firmly in reality. Furthermore he did not just study this stuff but actually lived through parts of it. Some of his writings are available on the internet. The crux of his argument is that Keynes or the Fed are like a doctor with only one single remedy, say a laxative, that is then liberally prescribed as a cure for everything. The resulting unintended consequences invariable then outweigh the immediate good , if there even is one, of the prescription.

Photo is from the McDermit ranch. Pavlov is asking, “Where  the he.. is the bell??”.

FTSE, London update

Hamilton

FTSE feb 23 2015ftse feb 23 2015 s

These charts with all the annotations become very messy very quickly and , for those that are not really interested in the finer points of EW, rather annoying as well. It helps a little if you click on them to enlarge them. The “executive summary” reads as follows;

The FTSE is near completion of the first two legs, A and B, of a multi year “flat”. Once complete wave C should follow and take the index below the low of A. The high point of B is typically found where sub waves a and c are equal in magnitude. This should occur in close proximity to the starting point of A – that is why the whole thing is called a flat!. Essentially that is at the double-top level. Wave B itself should have a 5-3-5 structure and certainly wave c of B must subdivide into 5 waves.

    In the detailed chart  which does not show the entire c of B leg due to the 3 year limit, wave 3 is the extended wave and 4 a triangle. There are numerous variations but they all boil down to the simple fact that wave 5 starts at one of the 3 low points since October of last year. Again, typically, when the 3d wave extends there is a tendency towards equality between waves 5 and 1 (blue arrow). RSI and MACD are also turning so EVERYTHING suggests a top, soon.

    The one and only, remotely possible alternative bullish interpretation would be that this is not a B-wave and instead it is a 5th wave of the bull that is forming a wedge. That is extremely improbable and in any event does not project all that much higher (7400 maybe)!. Below is an example of what a wedge would look like;

ftse feb 23 2015 b2

ABX (on NYSE), update

Hamilton

ABX feb 21 2015 bABX feb 21 2015 s

If you look at ABX in US $ terms you may get a slightly truer picture. As gold and gold stocks came down, so did the Can $ and this may have a distorting effect on the miners that operate around the World (as opposed to in Canada only). In any event what is clear is that there was no triangle, just an a-b-c in the wave 4 of C position (unlike with, e.g. the XAU). This means that the 5th wave is still missing a wave 5 and that the low was actually created by an irregular b wave of wave 4 of 5 of C. The low , if we get it, targets $9 or so which is about $11.25 if the exchange rate does not fluctuate too much. A slight move up in the Can$ value would cause overlap almost immediately potentially negating this possibility. In US$ terms that would require a much larger move up of about $2.