Year: 2015

CMI, Cummings update

Hamilton

The usual then, June 15, 2014 and now charts;

CMI june 15 2014cmi dec 26 2015

See our blogs on this stock. We were targeting about $80 for the first drop, either a wave 1 or a first zig-zag of a double zig-zag as shown in the chart. The high was about $160, $159.06 to be precise on June 6th, a week earlier, but could have gone a little further to about $170. After that the stock went down rapidly to its first target of roughly $80, just about 50%. We expect a rebound from these levels after which the decline might continue to become more complex.

Diesel engines are nothing new even though there have been great improvements recently, particularly with regard to the injection systems and so on (see Borg Warmer, BWA). There is a high correlation between sales of heavy duty diesel machinery and farm income which is down by about 38% from the recent peak, so this kind of performance should be anticipated over a broader spectrum to include John Deere (DE), CAT, Kubota etc. etc. Most have yet to catch up with Cummings.

KXS, Kinaxis

Hamilton

KXS dec 24 2015

This is the chart, that is the part I think I understand. They were the best performing stock on the TSX for 2015 which is why 2016 may not be as good. Time will tell.

And this is what they do,that I do not understand;

About Kinaxis
Kinaxis is a leading provider of cloud-based subscription software that
enables our customers to improve and accelerate analysis and decision-making
across their supply chain operations. The supply chain planning and analytics
capabilities of our product, RapidResponse, create the foundation for managing
multiple, interconnected supply chain management processes. By using the
single RapidResponse product instead of combining individual disparate
software solutions, our customers gain visibility across their supply chains,
can respond quickly to changing conditions, and ultimately realize significant
operating efficiencies.

SOURCE Kinaxis Inc

GOLD , SILVER and the XAU

Hamilton

gold dec 24 2015silver dec 24 2015

gold fut dec 24 2015xau dec 24 2015

There are a few variations between gold, silver and the XAU (13 major gold miners), but taken overall it looks like we are at a serious low of sorts. This would be the initial 5 waves down for wave A, to be followed by a wave B. After that wave C will take gold down a lot further. In the mean time, if this is correct, there should be a decent bounce in gold of about $400. Silver has the potential to double and the miners could even triple. Gold statistically speaking goes up when interest rates go up and not the other way as seems to be the consensus.

RDS.B and IGM, so amazing!

Hamilton

RDS.B and IGM

I have combined two of the last few blogs to make a point. The point being that Elliot Wave is not another branch of witchcraft; instead it is what we all have done most of our life, that is copying others which is why certain patterns develop and do so in a fairly predictable sequence. We are particularly prone to be contaminated by the mood swings of those surrounding us and consequently that manifests itself in collective highs and lows.

     If you have ever wondered why it is that floor traders operating in such intense environments as the future pits (those that still exist) think nothing of walking from the coconut oil section to the long bond section, than you can stop wondering. They know nothing of either of these commodities and essentially could not care less. What they do care about is the order flow as that is all they need to get a sense of the market.

    As mentioned we have both Royal Dutch a.k.a Shell and IGM, an investment dealer and mutual fund manager, in the chart above. They have absolutely nothing in common. One is huge, the other relatively small. One is in oil and transportation, the other in financial services. One has enormous infrastructural and capital investments, the other hardly anything at all. One is Dutch/English and operates around the world the other Canadian, primarily in Ontario. One deals primarily in US dollars (but also Sterling) and the other in Canadian dollars.  Given all that, it is just fascinating to see that the charts that cover the time period from 1997 to today, almost twenty years, are for all intents and purposes identical. The reason is that the world is now global and getting more global with Facebook, Twitter, the internet etc.etc. with the predictable result that we all stop thinking critically and tend to be in a similar mood.

     The charts above are embellished with green, blue, red or purple and grey lines. The green ones run vertically and denote a certain point in time. The blue and red ones are vectors, they have the same direction and magnitude on both parts of the chart. All that helps to show how identical the charts in fact are.

     The moral of the story is that you should not knock EW, and if in the past you were a stock picker, stop and try to become a pattern picker, there are only 13 of them.  Merry X-mas, or is that Holidays?