Nikkei 225, update

Hamilton

nikkei 225 june 2012

Heard the other day that the TOPIX index in Japan had made a new absolute low since the highs of ‘89.  The Nikkei 225 is not quite there yet but it did drop about 2000 points in the last two months. So far it is following our script quite accurately and the news seems to be getting worse with each passing day. We are looking for the 5th wave of this diagonal to complete. There is no precise point as it may go all the way to the trend-line or stop well before that. 5000 to 4000 is a reasonable guess but much lower levels are possible. See previous blogs.

BNS update

Hamilton

bns june 5 2012bns june 5 2012 s

The 4th wave triangle shows up in a multitude of stocks. Here we have the same possibility with Bank of Nova Scotia. Again the degree is not clear, even if it materializes. It is either 4 of 1 of 3 (or C) or 4 of 3 of 1 of 3 (or C). In any event the clear a-b-c rebound virtually guarantees a new absolute low sometime in the not too distant future. For the moment this is the best road map.

WPT, Westport innovations update

Hamilton

wpt june 5, 2012

After a little hesitation the stock broke well below the expected $26 retracement level, retracing $6 to $7 of the initial rebound. This still could be the anticipated b-wave of a flat, however it could also indicate that a triangle is forming. If it is going to be a triangle the stock will not move much higher than it already has (on the news of some deal with CAT). The only way to play this is to use a very tight stop. The stock could ultimately fall to about $20 if there is a triangle. Furthermore it is not at all clear at this time what degree of a triangle we would have, 4 of 3 or 4 period.

IMG , IAMgold update

Hamilton

img june 2012

On an arithmetic scale at least, our target of $9.60 or so was pretty good. That was based on an A-B-C where C equals A. Assuming the top was in Nov. it is also possible to count the downward move as 5 waves with an extended 5th wave. Both scenarios would allow for a pop back to the $17/$18 high point of the triangle B or 4th wave. That seems to be a bit high but the speed at which the gold stocks are going back up is quite impressive ( look at G and BRK). The move up from the lows seems to have traced out 5 minor waves, promising more to come. In the big picture people are now once again absolutely sure that QE3 , 4 and 5 are still to come but gold itself may still be doing a 1-2, 1-2. Only a clear break above $1650 would negate that possibility. It is hard to tell but the outcome is not as obvious as the market would have you think.

gld june 2012