Nikkei , see previous comments.

Hamilton

Quite some time ago I ventured to comment on the Nikkei and made some purely EW observations. Here is a repeat, more or less. Please feel free to disagree or look at it as pure rubbish (secretly I may even sympathize). Anyhow a lot of things Japanese are hard to imagine, for instance a 20 year bear market, the Imperial grounds worth more than the State of California, real estate values down more than 80%, a people that is at the edge of extinction at this pace , a currency that is at a 15-year high and so on and so forth.To the point, here is the chart;

nikkei aug 2010

The interesting thing is that all the action since 1995 could (repeat COULD) be a single pattern known as a diagonal expanding (or contracting) triangle, that would constitute a wave C in a large A-B-C correction. This formation occurs fairly frequently either as a wave C (as in this case), or as a 5th wave, is very reliable and has a high predictive value as it represents an end-game and is, consequently, invariable fully retraced and usually quite violently. Also, perhaps because of the end position it takes, absolutely nobody believes the message!!! Just to elaborate that point, here is Ford during 2009 when it had this pattern (at the end of a 5th wave rather than as a C wave, but the point is the same).

ford aug 2010

If have stylized the point of wave 3 a little and this may be incorrect, but apart from that the resemblance is pretty obvious. Ford went to under $1, when it reached the trend-line. This is NOT a requirement of the pattern as often it falls well short of reaching that line. Evenso, given where we are now we could get to the 3000 level or so (where the market was in 1970). Should it ever get to those levels the Nikkei, like Ford in December of 2009, should be a screaming buy.

Once again, you can click on a chart to enlarge it AND you can move it around to make the comparison a little easier. if you do that this is what you get.

 

comparison

EMP.A , Empire Company a.k.a Sobeys

Hamilton

Here are the long and short term charts for this stock.

EMP aug 2010 EMP aug 2010 2

First of all, there is absolutely nothing wrong with this stock except , perhaps , the somewhat arrogant name. Essentially it is a food retailer with a home base in Nova Scotia that has been expanding towards Ontario etc. Perhaps because or as a result of its home base it has pretty good fish. Financially its P/E is a respectable 13X or so. It is a sell.

From the long term chart it is clear at a glance that this stock has done extraordinarily well, and has done so – arguable – in a clean 5 wave move. Two good reasons to sell. Furthermore, as is clear from the short-term chart , the rise from the initial low after that top, is a very clear symmetrical a-b-c which is the signature of a B-wave within an “irregular flat”. In this pattern the B-wave (itself an a-b-c) rises above the original top (it did at $57.45) and then the stock drops to below the initial low (< $35 ) and sometimes ,with a fairly large margin, more (to $25?). At today’s price that would be a 40%+ return, probable within the year. If that is not convincing, it is also a “double (or triple) top, another powerful argument.

For comparison purposes I have added a chart of Merck MRK, from ‘99 to ‘03. The stock had the same pattern with the irregular B-wave after a top. At the time this was a favorite bluechip pharma stock that was on everybody’s buy list. In the end it dropped to about $20.

MRK aug2010

So how certain is this? Provided the stock does not shoot up immediately I would think that chances are very good that this is going to happen. As always, ask your broker and if he/she disagrees the odds are even better.

SC , Shoppers Drug.

Hamilton

We recommended this one about two months ago when the stock was marginally below $33. It  immediately shot up to $37, but, the target is a few dollars higher, furthermore the wave 2 is clearly  corrective so a new high should be forthcoming. Stick with it.

sc aug 2010

POT. pre-market

Hamilton

The premarket indication is for US$ 152.39, with the exchange at 95.68 the Canadian equivalent is C$159.27, not far from the suggested $160.

The latest argument for a higher price according to the company itself, is that each year 75 million new people need to be fed and presumable they are the enablers.