LLU, Lululemon Athletica

Hamilton

llu may 21 2012 sllu may 21 2012 b

A year ago it looked like this stock was cooked at about $60 (post split). It did drop almost 30% but then regained its footing. Now, that is a month or so ago, it again looks like the stock has topped. At that time the p/e would have been close to 60x. At the time I compared the stock to KKD, Krispy Kream Dougnuts, the operative part in that name is “nuts”. If you have ever wondered how herding works, all you need to do is watch your  better half do a little shopping in this store. The first target would be around $43.

HXD, Horizons Betapro 2x bear update and HXU, Less is Better!

Hamilton

If you had a really good broker he/she would not bother you with all the minute little details that can be reported on just about any stock all day long, 95% of which is simple noise. A good broker would take the Less is Better approach and suggest that you invest either in the HXU or the HXD , not both, alternatively. That would cut out all the BS. It would also be unacceptable as it would negate most silly rules and principles adhered to religiously, when it suits, by most practitioners. What it would do is show you if the emperor is wearing any clothes. Most times he /she is not. Here are some updated charts, but also see previous blogs;

HXD l may 18 2012Hxd s may 18 2012

As usual, click to enlarge. This is the HXD, D is for down 2x because this thing is leveraged which is not an added risk provided you keep a comparable amount of money idle (in T-bills). Over time , as the bear market progresses, this one could again trade at $40 or even a lot higher. To see how the HXD trades relative to the HXU, the U is for up, I have created the chart below on Bigcharts , it does not show absolute values so I have inserted them, roughly;

HXD HXU relative may 18 2012

In black is the HXU, which acts like the TSX itself, up or down. Notice that the B-wave retraced a fairly precise 62%.  In light-brown we have the HXD which is the inverse of the HXU or the TSX. Both “track” reasonable well and both have been in a range of about $40 to $8. Soon the two lines might cross once again. The extreme was reached back in March or April of last year. In both the HXD and HXU we should be in the beginnings of a third wave, when the moves are fast and large. Do not count on your broker calling you, we all know the adage about reversing your money and your broker’s experience. And QE3 is just around the corner.

For the record, the HXD is the only stock/etf that I own. I do not normally trade my blogs, it interferes with ones objectivity. By the way , the HXD was recommended back in late Feb. 2011 when it was trading at about $8 and as it is now almost $12 you would be up about 50% for the 14 months. The HNU was recommended big time at $8 just before my departure from DS on Nov 6, 2009. It hit the $8 target purchase price a few months later and then tripled.

Oh, and before I forget , that little sailing boat featured in the brochure (see below), is not yours after you followed all the recommendations, it is your broker’s.

ailing boat

HNU and GAS

Hamilton

This blog was filed less than a month ago under “Natgas HNU GAS”. The recommendation was to buy HNU then at $8.42 and GAS at $8.50 Here they are today;

hnu may 18 2012gas may 18 2012

The HNU traded well through $14. and peaked at $14.22 today, so far. GAS peaked at $12.44 We are out, not because we think these ETFs cannot go higher, but because we are not sure. Take the 50% or so profit for the month and move on.

The HNU actually peaked today at 14.74 but closed lower. The trading has all the earmarks of desperation but given all the other excesses who knows what can happen.

PAA, Pan American Silver (in Can $$)

Hamilton

paa 2012 lpaa 2012 s

EW seldom provides an unambiguous answer, there are always little things that do not fit perfectly. PAA is a good example. A case can be made that the stock hit a major low yesterday. But the notoriously imprecise long-term chart still leaves a little leeway to the downside. The short term chart allows for two different counts depending on which top was the real top. If the first one is chosen (in black) this should be it. The RSI, MACD and the 62% retracement support that scenario. The fact that waves 2 and 4 do not alternate is the only fly in the ointment but it does not categorically negate the count! When all is said and done, the difference is only about$2 at the most. The first (lowest) target for a rebound is about $20 and the most probable target is $25. Given that the stock is down almost $30 these targets are not unrealistic or overly optimistic. Take your pick.

PS. Previous blogs sketch the path this stock would take quite some time ago and, if I may say so on behalf of EW, with uncanny precision. Just plug/search the index for PAA.