Month: March 2015

HSI Hang Seng Index

Hamilton

HSI march 2015 bHSI march 2015 s

Hong Kong is far away and completely outside my “ken” so to speak. Some might say that is true for everything. Anyway for superstitious  or plain dumb reason I have always thought that if anything goes seriously wrong with the World economy, there is a good chance that it starts here in China with HK the most free part.

Notice that the index has NOT made new highs and I find this rather curious as this is not where the Lehman problems were and growth has continued here at a torrid pace. Initially, paradoxically, this index lost more (almost 70%) than the US DOW or S&P.(at about 50%). However, the really interesting thing is the absolute textbook contracting diagonal, the wedge! It needs just one more 1/2 leg up to complete which should target something just above 26000. This is where the “intermission” was on the way down. To get there could take a while or take hardly any time at all. Furthermore I am not sure how much this index is in synch with the rest of the World. But the message is pretty clear and that is that it is time to get out.

ACQ update

Hamilton

acq march 21 2015

We were lucky not to have bought this stock back yet, so we missed the 21% drop. This could, however, still be that b-wave in a more complex upward bounce, but we are leaning towards the possibility of this being a large A-B-C down correction which would normally call for a drop to where C=A around $25. This corresponds roughly with where the lower channel line is running . In this scenario we are presently in wave 3 of 5 of C.

IBB, the Ishares Biotechnology, update

Hamilton

ibb march 20 2015

Not too long ago this ETF looked like it was going vertical already at about $320. We thought it was a sell then, Dec. of last year and even earlier. Wrong. We are up another $30/$40 and are going more vertical. Of course you cannot possible go pure vertical as that would imply that time stands still , yes that takes a minute to digest but think about it.

    Looking at this chart again I was reminded of the Brenner cycle. It is a little known cycle that uses, alternatively, 7,8 and 9 year cycles for highs and lows in the market. More interestingly there is also the Joseph cycle which has biblical proportions and turns precisely on seven years. If you are so inclined you will notice that for the first seven years this ETF acted rather miserably (relative to the market overall which essentially doubled over the same time). Then we get seven years of plenty which period should end in about 5 months or so. If you buy into the message then you should save now for a rainy day, or more correctly in Egyptian terms, seven years without rain. In short a sell.

RUT , Russell 2000 update

Hamilton

rut march 20 2015

The index goes up and the technical picture deteriorates. In any event, it is possible that this , almost 6 month long, pattern is a 5th wave diagonal a.k.a a wedge. They are supposed to retrace right back to the base and do so rather fast. Perhaps Yellen’s sophistry, hairsplitting gobbledygook  can push the date of recognition even further in the future, but this chart is clear as a bell. Coming after a 25% rise it all seems to fit. Just for some perspective, below is the Bigchart of the Russell 2000. Clearly there is no bubble!

RUT march 20 2015 big