DAX update

Hamilton

DAX Aug 2010 1

Here is the longer term bearish case for the DAX, from about 8100 it dropped to 3600, just a little more than some other markets and it did so (arguable) in 5 waves. We know that 5 waves never stand alone hence the expectation that the next upward correction would be just that , a correction. Like most other markets the DAX also managed its way back to about the 62% retracement, almost precisely what the S&P, TSE, FTSE and a half dozen other indexes did.

dax AUG 2

Lately, for almost a whole year, this index has not gained very much falling back to levels that had been reached already by October last year. Obviously the momentum is pretty well dead, furthermore the overlaps that are occurring every 3/4 months make it next to impossible to count this action as impulsive! A triangle seems to be forming which would suggest that we get one more spurt up (about 600 points) in a thrust. This does not make sense in the bigger context so a series of 1-2, (1)-(2) etc. could be what is happening. We should not trade above 6400 or so to keep this possibility alive. (these charts are semi-log!).

Abbey Joseph Cohen is calling for 1250/1300 by year end on the S&P, presumable Goldman is long.

DJIA Update

Hamilton

Before I give up on this, here is an update on the Dow Jones.

djia aug 2010

As the DAX may make a new high any moment, negating much of the bearish scenario, the DJIA is still OK. Previously I mentioned 10625 as the 61.8% retracement level, which would be correct (10627 to be exact) if the second low applied. However , if the second low is used the precise number is 10695, just 30 points or so from today’s highs. Going beyond that is always possible without necessarily negating the outlook, but it would certainly undermine any confidence.

Cl Colgate Palmolive

Hamilton

cl Jan 2010 2 CL July 2010

In January we suggested this one might have topped, sofar that was correct as the stock never traded higher. Recently it is dropping like the proverbial stone, that it does so is not amazing, that it stayed up for another 1/2 year is. Perhaps it has started its correction for real in which case this one has a long way to go. To see the previous comments go to the index at the top of the website, it will give all entries by ticker, there is only one other for CL.

AZO

Hamilton

azo july 28

So $213 is about it as far as I am concerned, the count (not shown this time but see previous blog) as well as the RSI and MACD have probable topped. There are options on this stock. This one should drop to about $170 is a few months and possible a lot further thereafter.