EL, Estee Lauder Cos. Inc. update

Hamilton

el june 2012 mel june 2012

Since our comments of March 5th earlier this year.this stock went right to the max and then dropped about 20%. It will drop quite a bit more! The very first EW target is at $40, which is where wave 5 , a diagonal (wedge), started and these should be retraced entirely. Beyond that $31 is the 62% retracement of the entire value of this stock at the peak (roughly $65). These are all normal levels but they can easily be exceeded. We all know the meaning of putting lipstick on a pig. Here it is a matter of keeping the pig behind the lipstick which, as any hog farmer will tell you,  is near impossible.

PGF, Pengrowth undate

Hamilton

tPengrowth is one of the oldest energy trust structures, as well as one of the best. Unfortunately it is difficult to get long-term charts for these companies as they changed their legal structures and most chart services then start all over as if the company had not existed before. There are two previous entries on this stock, the earliest is from Jan. 24, 2011. We recommended a sell after the $14 level for several reasons (see that blog). Had you done so you would have saved 50% more of your money. At the time the a-b-c from the May 2009 low was assumed to be a wave 4. We have reason to change that count but the ultimate target is about the same ( as then < $6). Here is the chart;

pgf june 2012

The a-b-c X a-b-c structure now makes the most sense. This is essentially a double zig-zag which occurs when the first bear market was not enough, it is then followed by a second one and sometimes even a third. More detailed charts below;

pgf june 2012 mpgf june 2012 s

From $26 to $6 would be a 78% drop, certainly enough for a real bear. Equality between c and a occurs at around $6. Wave 5 equal to 1, if indeed it is a 5-wave sequence gets you just a little lower. As all upward moves are a-b-c countertrend moves the trend is still down so at some point we should get a new low (barring a failure). Considering that you are a single dollar away from a possible low selling now does not make sense. Buying should if you are willing to hold but waiting a little might help get a better entry.

HNU update, GAS update

Hamilton

HNU june 2012

Fortunately we recommended selling at $14+, see previous blog. If the a-b-c is correct, a new low should be forthcoming, after a 5-wave move. There is already one there but not yet complete. It is a buy soon and certainly under $8.

GAS, the other ETF is just a little clearer;

gas june 2012

The counts are not clear on either, but in the case of GAS the latest drop down looks a lot more like an a-b-c, which is corrective, perhaps a wave 2. It should then not make a new low!

FTP, Fortress Paper

Hamilton

Fortress paper makes speciality papers that are used as wallpaper but also for currency. One of their mills is located in the Swiss Alps, just a hundred kilometers from Zurich. They have made the paper for the Swiss Franc for years as sole supplier but do so also for many other countries’ currencies. What could be more appetizing than that? And if they are preparing to make drachmas, liras and perhaps even francs and marks they will not say. Here are the charts;

ftp june 2012 lftp june 2012 s

This stock did outperform gold briefly after the 2009 lows, going from $5 to about $62+. The Fibo ratio gave it away. It should come down in a large A-B-C and so far it has. C waves must be 5-waves so there is still one down-leg missing. At $25 overlap occurs which then would have to imply that a “diagonal” (wedge) is forming. These come in two varieties , expanding and contracting (both are shown). In the case of the expanding model the stock could trade to as high as $35 or so. Under the contracting variety not much above $26 should be expected. Take your pick.