IBM update

Hamilton

Back on Jan 7 we confidently predicted this stock would not trade above $195. Of course it did, reaching about $210 or so. Nevertheless the charts were pretty clear and now, almost a full year later the stock is still at $190. Here are the charts;

IBM dec 7 2012 bibm dec7 2012 s

To get a better view of the big picture look at the previous blog. From the chart on the left it is clear that this 5th wave, coming from $80 in late 2008, has broken out of a channel that has worked well for the past 3 years. From the detailed chart it is furthermore clear that the top was reached by way of a wedge and that the initial leg down was a 5-wave move. From this one can conclude with near certainty that , at the very least, a second leg down should develop in the near future, targeting roughly $175. However, it is far more probable that this is the start of a more serious bear market for IBM that has the potential to cut the stock by half , or more. Once again we would be sellers, perhaps after the bounce. More detail below;

ibm dec 7 2012 vbibm dec 7 2012 mb

The wave count shown on the 40 year chart is probable wrong as the 5th wave probable started in late 2008, after the “thrust” from the triangle had returned to the apex,  but this shows better.

CPG, Crescent Point Energy update

Hamilton

cpg jul 2012cpg dec 6 2012

Last July (chart on the left) we warned to step aside until such time that the count became clear. There was the potential of a large A-B-C wave 4 (to be followed by  wave 5 up). Apparently that is exactly what happened even if our target of $47 was not quite met ($44.95). If you look closely that B wave is , in fact, a single tick higher than the “orthodox” high. We had a clear 5 waves going up into that peak and again one going down for a first wave.

Looking at a bigchart, with a lower resolution, the three top numbered in purple as 2,3 and 4 are actually dropping, which would lead to calling that first top the top. That would be an error. Counting waves is an art, not a science.

cpg dec 6 2012 b

HPQ update

Hamilton

hpq dec 6 2012hpq dec 6 2012 s

HPQ has the potential to go a lot higher but if you did buy at around $12.50 or even a little lower you may start thinking about unloading some at around $14.85 (a gain of about 19%). For the moment there is no particular hurry it would seem as neither the RSI or the MACD are near levels where they normally peak. A trend line runs at around $15,50 which might be achievable in one straight go given that 5.1% of the stock is borrowed to create short positions, that equates to 4 full days of trading.

DJIA update

Hamilton

DJIA dec 6 2012

This is little more than a wild , but educated, guess. I am assuming we are in a second wave and that that second wave will be the usual a-b-c. Also, as we lately have so many wedges , I would guess that the c is also going to be a wedge. The whole thing would end up looking like this. Note that the correction has already travelled about 50% of the drop in wave 1 and that 60% is around 13250. These Fibo ratios are useful for making guesses when there is nothing else to go buy, otherwise there is no compelling reason why these levels should be met exactly. Moreover if the experiences of the past are any guide at all, this index will try to get back up as far as possible. The only thing it may not do for this interpretation to stay valid, is move above 13662. As always, we will see.

The DAX has already made a new high as of today!