SUNE, SunEdison Inc. Z, Zillow

Z  may 10 2015sune may 10 2015 s

Zillow, on the left, is a relatively new company. They tell you what a property is worth if you put in the correct coordinates. This blog is NOT about Zillow!

SUNE is America’s largest “renewable” energy company. A lot of energy (electricity generating) companies are named after Edison in the US. It has been around in various forms for some time now. For the moment we are interested in the last 3 to 4 years only. Both charts display a pretty standard 5-wave bull market sequence, both in roughly the same proportions with wave 3 the longest or, at least, not the shortest and wave 4 probable a triangle. This, according to EW, is essentially how all stocks behave and more often than not it is easy to see “the picture” if you gloss over some of the detail. Once 5 waves are done you inevitable get a correction. Done, or mostly done, in the case of Zillow which IPOed  three years ago, not even started in the case of SUNE. Then the whole process starts again etc. etc.. It helps to know where you might be in this process. Looking at the big chart of SUNE;

sune may 10 2015 b

it looks like we are in a new bull market with a lot of potential but not before wave 2 is done, at somewhere between $13 to $11 or perhaps a little lower.

SDRL, Seadrill Ltd.

SDRL may 9 2015 bSDRL may 9 2015 s

Seadrill Ltd. NYSE is a company that drills in the sea. The name is appropriately chosen. I have never heard of it but using the Dogs of the Dow screen for most active and worst performer for the year, this one ranks number 2 with a price drop (today) of 62%. At the low that would, according to my calculation, have been just over 80%.

Their mission is to safely unlock energy for our clients anywhere. . . . . .  Sounds almost like an investment dealer except that these people unlock the energy (value) for their clients as opposed to from their clients. In any event business is, not so surprisingly given the price of oil, less than stellar of late. In EW terms it looks like a full A-B-C correction. Considering the size of the drop, there is no compelling reason to assume that it has to go lower, whereas the structure suggests that there may well be a compelling reason for it to go higher. Waves A and C relate to each other by roughly a factor of 2.6 which is normal. The first leg up from the low is a clear 5 wave sequence which should be wave 1 of a new bull. Wave 2 should retrace about 60% of one, from $8.45 to $15.44, so to $11.10, close to $10.93 of the 4th wave. When and if it gets there this stock should be bought. An initial target should be in the area of $18 where C=A, but probable more like $20 in order to close the second gap.

The other day Janet Yellen actually opined that stocks were overvalued, this after this confession was teased out  by none other than Christine Lagarde. Nobody seems to have taken notice but the ladies were definitely not thinking about Seadrill.

DJW, Dow Jones World (Global)

This will be the last blog about wedges, expanding, contracting or otherwise. The Dow Jones World Index would seem to be an excellent choice as it should reflect the state of affaires as they exist today globally. It has always occurred strange to me that while central bankers all over the world seem to be unanimous in their desire to get rid of the “too-big-to-fail” among their flock, they themselves are almost religiously of one mind, conveniently forgetting that this single mindedness itself may pose a greater danger to the world economic and financial fabric. There is no more any academic diversity left, the whole world knows , with the  unwavering conviction of a moron , that the solution is Keynesian pump & prime, regardless of whatever the malady is or where we are in the healing process. The scariest part is that all of this is orchestrated by a handful of , unelected, individuals most of whom are alumni of the school of Goldman Sachs and one or two other , similar and compatible , institutions. Entire branches of economic thought, such as the Austrian school, have been unceremoniously dumped on the garbage heap.

Here are the charts;

djw may 3 2015 bdjw may 3 2015

It is getting ennoyingly repetitious, but in the big picture we have the first two legs, A and B, of a a very large “flat”. C is next. As always there are a number of astonishingly precise symmetries . For instance, the a and c leg of the B wave are equal in terms of travel (in black)! Also, to the day (April 27) the three tops on the chart are equidistant from each other (in red). For EW-ers it is gratifying to see that wave A, after travelling about 200 points, stops within 5 points of the wave 4 six years earlier. If you take the recent Sept. high as THE high – possible if you assume a small irregular wave b – then the vectors are perfectly equal (in blue).

     In the short-term chart the wedge is very clear, even doing a slight throw-over just to make the point that in a world where the battle cry is “doing what must be done” ( in order to get the market up and the trickle down economy trickling), unbridled optimism and faith in the system should be embraced. By the way, here too wave 5 is equal to 1 (both of c of B). The RSI and MACD are not confirming the new highs.

    The question, as always, is what could be wrong with this analysis. After all a broken clock is still right on time twice a day. The count could be wrong and we are not in a B-wave but, instead, in a 5th wave. Even then it might be a wedge and just about complete, after all going up almost 3X in 5+ years is no mean feat however you slice it. This thing is ripe as a rotten plum, EW or not. We have seen this before, the world is flat, obviously otherwise you would fall off, but now, after numerous burnings at the stake, it is round but there are still quite a few that are not sure. It takes time.

RGR, Sturm Ruger & Co

Last year Febr. when the stock was about $70, we had this to say about this company;

This is somewhat counter-intuitive. Pres. Obama does not like hand guns and would like to restrict them so people in the US decided to make hay while the sun still shined by buying 26 mln. during his first term. Just last year they added another 8.5 mln. This is completely contrary to the president’s intentions. In economics this is a phenomenon that is referred to as the J-curve. If it is a J-curve, things will soon go the other way. A drop to the low point of the triangle ($35) is a first target.

This is what happened;

RGR may 2 2015.

The actual low was at $33.90  Depending on how it gets there it looks like a sell again when it gets closer to $70 if we notice!