IFN, India and CHN, China update

Hamilton

First the old blog from Febr. 10, 2011, 17 months ago;

india and China feb 2011

And here today’s charts;

ifn jul 2012chn jul 2012

The little red arrows show where and when these ETFs were on Febr. 2011. Both were at about $30 at the time, so now , a year + later they are down to roughly $20 which is about 30%. Both are probable in a wave 4 of a five wave sequence for wave C. We do not now how low they will ultimately go, but they should , at least , go below the ‘09 lows. IFN comes from $70 and CHN from $55 so both are down by more than 50%. Using the FXI as an alternative ETF (iShare) for China we get pretty well the same picture;Same with Shanghai DJSH

fxi jul 2012shanghai jul 2012

The FXI is down about 60% from the highs. It should, as a minimum, trade below $28 after which it will probable make new post peak lows. Shanghai has done very little over the past year but the EW count is analogous to the others. If China and India are making “soft” landings, investors in these indices probably do not agree.

IVN, soon to be TRQ

Hamilton

Ivanhoe shareholders approved changing the company’s name to Turquoise Hill Resources Ltd. The new name is anticipated to become effective on or about August 1, 2012. The company’s new trading symbol on the Toronto Stock Exchange, the New York Stock Exchange and the NASDAQ Stock Market will be TRQ and is anticipated to take effect on or about August 6, 2012.

Juliet:
"What’s in a name? That which we call a rose
By any other name would smell as sweet."

Romeo and Juliet (II, ii, 1-2)

How you go from a character out one of Sir Walter Scott’s romantic books to Turquoise Hill  Resources is not immediately clear. What is clear, and the tragic ending of Shakespeare’s play makes that rather obvious, is that a name is everything and changing it deliberately expresses a desire to part from the past or to embark on a new future. Arthur Anderson did that when they formed Accenture, stating quite clearly that A new name, meant a new direction. Countries do it when they want to cast off the colonial past, Rhodesia, named after an English scoundrel, changed to Zimbabwe leaving my dogs in limbo. Burma and Ceylon are now Myanmar and Sri Lanka and so on. In short the name and or brand is everything, you only change it if you have to and when you do, change is in the air. We are getting close.

IVN jul 13 2012

Do we need to wait for August 1? That is now the question.

Supply Management

Hamilton

cow1cow2

Each one of these is now worth $28,000, not the meat, not the milk, just the quota!

Farmers are the politicians greatest supporters, provided they get what they want. The simple way it works is you vote for me, and I will give you a monopoly. The system keeps on giving un till it hits a brick wall.  Apparently many recipients are no longer small farmers but big biz. We are good at it in Canada, we have it for milk, beef, poultry, potash mining, grain transportation,communications and banking, just to mention a few. We are not the only ones, The US is big at this through subsidies, a slightly different approach with the same result. Europe, once upon a time, had its “butter mountain” and certainly the idea has not been abandoned entirely. New Zeeland seems to be the only bright star in the firmament; they went capitalist overnight.

It is no different when Central Bankers practise supply management when they set interest rates far away from equilibrium levels, it hurts certain groups and favours others all on an arbitrary, frivolous and capricious basis. Keep an eye on this politically hot potato, it may shed some light on the future of Central Banking.

HXD, Horizons Bets Pro 2x bear, update

Hamilton

HXD JUL 12 2012

We do not tire from recommending this ETF either as a hedge or simple to make money. It has been disappointing as every single time when things seem to fall in place there is another Central Bank ready to spoil the fun with a twist, a QE3, a bribe or whatever it takes. This one is now up for about a year and one half, seemingly forever. The faster moves should not be that far away. Again , see previous blogs; we expect this one to go above $40+ but, as we are wont to do, only show the more immediate possibilities. We do not expect a triangle here at all, but show it simple as a possibility.