CCO, Cameco if at first etc. etc.

Hamilton

Cameco Corp., CACCO Advanced Chart - (TOR) CACCO, Cameco CorpCCO.TO - SharpCharts Workbench - StockCharts

Continuing on the previous theme , that is that electricity is the basis of civilization and that we are running out of fossil fuels, one would think that nuclear power would get rather popular rather quickly. Markets are notorious in their ability to ignore reality for the longest time and then, all of a sudden, acknowledge the inescapable and catch up real fast. Having been too early in liking this stock once before I hesitate to recommend it now. But should it drop further and make a slight new low below the March 2009 one (roughly below $15), then it would seem to me to be a compelling buy.

In EW terms the stock should trade at a new low under $15 to fulfill the pattern shown in the Bigchart. Then, depending on the degree of wave 5 into the top, it should not trade below $10as this would cause overlap (the top is actually wave 3 and for the past 5 years we have been doing wave 4).  Looking at the shorter term chart, there is no question that it was an A-B-C corrective rally, which should be completely retraced. The structure itself is a 5 wave move with a 5th wave diagonal expanding triangle (that is a wedge). It appears to need one more push down to complete. It should then trade back to the origin of that wedge ($27.50). An ideal point would be where the wedge is equal to wave 1, 2 and 3 combined, see black arrow.

The Olduvai Theory

Hamilton

The Olduvai Theory dec 13 2011

The internet has a lot of fascinating stuff in it. Here is one that I found to be of particular interest. I believe this “theory” a.k.a. the pulse theory of civilization , by a chap by the name of R.Duncan has some good points even if they are hard to accept. Civilization is not defined as reading Gibbon’s Decline and Fall of the Roman Empire in your spare time. A more pragmatic definition is used, namely that we are civilized when energy consumption per person on earth exceeds 30+% of the maximum possible. Consumption in terms of electricity plays a major role. The name is derived from the Olduvai Gorge in the Serengeti in Tanzania (near Mount Kilimanjaro, partly because this supposedly is a site of the start of mankind, i.e. the stone age, to which , by the way we may return, and partly because the slopes of this gorge start at a slight angle and then become steep cliffs. I suggest you Google this stuff as I cannot do it justice.

What is interesting is that the 100 years of industrial civilization that we will enjoy, is expected to be only 100 years from 1930 to 2030. Similar “theories” have been postulated, think of “peak-oil”, Jeff Rubin’s the world is getting a lot smaller and dozens of others. Most are geared to energy availability which is also a cornerstone of this theory but it is more refined in that it homes in not only on energy, but also our ability to generate electricity which, by far, is the main end use of energy. Read this and you may want to consider buying more CCO or other uranium miners.

FSLR

Hamilton

FSLR dec 13 2011

Last time, see previous blog, I mentioned that we COULD be at a bottom of sorts but that the count then shown left a lot to desire, so it might well be wrong. It probable was , so here we are on our way to much lower levels. $30 or so may be the next target. Coming from a high of $320, that would constitute a 90% drop!, much of it courtesy government meddling.

IVN, Ivanhoe

Hamilton

IVN dec 15 2011

Even though the exact count on Ivanhoe has eluded us, it was quite clear that the recent rise from $13 to about $23 was corrective and therefore probable not sustainable (see ou previous blog where we specifically warn about the $23 level). Today Rio won a court suit that confirmed it’s entitlement to acquiring an additional equity position in Ivanhoe. The stock has dropped about 15% on that news and has now overlapped the $16-$19 range, the b-wave and consequently chances are now better for the stock to trade below $13 than above $23. There still is , however, an outside chance that the corrective action from the lows was only a wave A of a more complex correction. The odds are fairly low so , once again,  we suggest getting out on a rebound.