SI, Siemens update.

Hamilton

SI june 2011 si aug 5 2011

On the left the big picture as of early June, on the right, where we are now. The drop is from $147 to $105 which is just over 28%. In this case Kon. Philips of the Netherlands (PHG) gave a solid warning that retail sales were not doing all that well weeks ago, and all though Siemens is a bit more on the industrial side of the spectrum it was bound to feel the pinch as well. Much of the drop is just in the last few days and looks like a water fall.

This is an excellent example why one should be suspicious of triangles , particularly irregular ones (where the second leg rise above the beginning), because even if it is yellow and quacks, it is not necessarily a duck!

DAX

Hamilton

DAX aug 5 2011

We were correct in stating, the other day, that the DAX did not have the time to have a thrust up. Like all markets, not surprisingly considering the abundance of B-waves (see for instance Siemens, SI.) the DAX went down like a rock and now sits at about 18% below the top, having lost about 38% of the gains made since the lows in March of ‘09. Others have done worse, see below Zurich’s SMI.

Where from here? I think it is pretty clear that we had an A-B-C up,with the B as a triangle.    This is a correction and therefore we should see a new low below the March low. Unless we are making a far more complex structure, perhaps a multi year triangle.  For the moment that is of little concern as the present leg down is not complete. We still require a 4-5 of 3, and the a 4th and 5th wave to complete this down-leg. A reasonable initial target would be about 5100. That level is at the lowest point of the triangle B and also about a 60% give-back of the entire rally of the last 2+ years.

smi aug 5 2011small

The Zurich index had gained roughly 2750 points the year after the low. It has been in decline for a year and 1/2 and has lost 1750 points or about 60%. That is a nice Fibo # and could signal that it is complete. However this is highly unlikely because the pattern certainly is not. In any case it is not unreasonable to assume that the DAX could also drop this much. Note that any chart using Swiss Francs as a measuring stick looks awful. Expressed in US dollars the drop would be a lot less pronounced.

EMP.a Empire Co. or Sobeys

Hamilton

EMP.a aug 2011

A year ago I thought I had this one nailed down. Since then it has not budged, never exceeding the $60 level. EW is not very helpful in terms of timing.

Looking at it again , I am even more convinced that this one is going into the tank. The 5-waves up are clear even if different little variations from what is shown in the chart could apply. But the outcome is perfectly clear. Either the irregular B-wave that took the stock slightly above the top is correct, and the subsequent moves are a 1-2. Or the top was not in yet and we have been doing a wedge for the past 5 years, see details below;

emp.a aug 2011 d

Personally I favor the idea that the top is already in and that we are in wave 3 down. In practice it does not matter much as it is practically certain that it will not trade above $62 and soon (a year or two) it should trade at about $34. If nothing else writing a few call options with a strike above $62 and a reasonable time to maturity should be very productive.

See also Colgate CL which is in a virtual identical position.

PH Parker Hannifin

Hamilton

Back on Jan 29 we posted this blog;

PH history

The original can be found either under the archives, the index or by entering the symbol in the top right hand corner.    The stock did go to $97, even to $99.40 adhering nicely to the Mnt.Everest idea. Below is where it is now;

ph aug 2011

The stock traded as low as $66.49, which is roughly 1/3 of it’s value gone. The greater fool theory worked until there were none left. It is virtually impossible that this stock will resurrect it self any time soon. We have a 1-2, and then a 1-2 of 3 and perhaps a gap at about $75. $55 would be an optimistic target.