This one also took its time to rebound, half a year more than we expected but soon, very soon the downwards move should resume.
HCG, Home
Home Capital Group, an excellent company growing like gangbusters, very profitable and trading at a p/e of about 8%. What is there not to like? The Chart, and this may also apply for similar financial institutions that do not have a chart, simple because they do not operate as a shareholder company.
Looking at the big chart it was either 5 waves up into the high of $60, or it was a B-wave that got the stock up there. Either way the next big move should be to the downside, at least to the trend line at around $25 (see previous blogs). Looking at the more detailed chart a clear 5 waves down occurred mostly in 2011, to be followed by an a-b-c wave 2 that has now lasted 13 months and may not yet be over. The next big move should start soon and take the stock below $41 right away. The important thing to remember is that there is no reason for such a decline. During the great recession this stock lost about 60% of its value for no reason. If it repeats that feat it will drop to about $24 also for no reason, which is in itself a good reason to step aside.
ABX , update
This one followed our script nicely, exceeding our upwards target by just a few dollars but already it is back in the doghouse. Assuming we are in a downward c wave we should get a clear 5 wave subdivision. The count shown provides that. If correct $24 would be a realistic target for starters.
DJIA, update
If you predict, do it often, your chances of success increase. So here is that wedge again, first mentioned a few months ago. So far, and this is typical for this market, the wedge has not been confirmed or negated. To stay intact the market should not trade above 13300, essentially where it is right now. To do so the employment number coming out in an hour and a half probable has to be bad, or at the very least disappointing. Looking at the minor waves we should have a 4th in the making right here and it should be either a flat or a triangle. After that wave 5 down should break the trend-line along the bottom of the wedge at about 13000. If not it is back to the drawing board.