Month: January 2016

RDS.B a buy and CVX

Hamilton

rds.b jan 10 2016 bRDS.b jan 22 2016

We repeat the old chart from Jan 10, 2016.  At the time, roughly 10 days ago, we stated that we would prefer to see the stock drop below the low of the A wave. It got to $35.95 yesterday so that does the trick for now. One can never know for sure but even if one more move down were to occur, the rebound minimum target would still be at about $56 or so. Therefore this is a low risk entry point. CVX, Chevron already has a first wave up which has recently corrected about half way. The next leg up, regardless of whether or not it is in a correction , should take it much higher, closer to $110.

The count for CVX is probably different from RDS.B’s but the immediate buy opportunity is similar;

cvx jan 22 2016

The big question now is the spurt up today due to yesterday’s roll-over of the future contract from Feb. to March , or Mario Draghi’s ramblings about there being no limits to what they can do and similar talk in Davos, or neither, just the waves.

OIL

Hamilton

oil jan 20 2016

Unlike the Bank of Canada we have no idea how low oil might  go. Not too long ago they had no idea but now, all of a sudden they are confident it will trade at about $36 on average for the remainder of 2016. At least we have been pretty accurate with our predictions.

Where we are now it is hard to fathom . All we do know is that the 4th of previous degree, not that long ago in 1998 or so, is around $11. Furthermore the 5th wave in commodities unlike equities is often the longest. On top of that we still are of the opinion that a 4 and 5 are still required. In short, do not believe anything you hear on TV from experts that never dreamed that oil could  possible go below $80 or so.

Wave 5 would be equal to 3 at about $25. After that there is little else than that 4th wave of previous degree at $11 to guide us.

Tonight the futures roll-over with the front month becoming March instead of February. Due to contango, there will be a price increase of about a dollar due to the downward slope.

IBM update

Hamilton

ibm jan 20 2016

We have a particular interest in IBM, simple because some investors still consider this stock to be a blue chip. You cannot go wrong with this one as you are always in good company and these guys where 3-piece pin striped suits. Moreover this stock has always behaved a little out of phase, time-wise, with the rest of the market so it offers some diversification (which we don’t care for but the market does).

The top was in now 3 years ago. It was at $201 but elsewhere I found numbers more like $212. In any event this stock is now down by almost 50%. If this is a mid-point, and that fite the most plausible count you could easily go another $70 or so , bringing the stock to something like $50/60 and it could be even lower.

HXU and HXD

Hamilton

hxu jan 20 2016hxd jan 2016

These are the Yin and Yang, bulls or bears double inverse etf’s. They are often repriced to keep the nominal price at a tradable level, so be careful to make direct comparisons with previous charts. We have been too early often but are last blog was spot on.

The HXU, that is U for up, on the left is pretty well a replica of the TSX but not quite. In any event it has probably just reached the point of recognition. If so than it should go down about as much as it already has. If not than perhaps we will need a >6oo point drop or something like that.

At this time you, of course, want to own the HXD, D for down as it acts inverse to the market. There is nothing much between here and $25 to stop this etf.