AEX, Amsterdam (the oldest stock exchange)

Hamilton

aex july 2010

The AEX is a reasonable proxy for most other exchanges. The CAC, the S&P, the FTSE, the STOX 50 or 100, Nasdaq and at least another half dozen exchanges that I am aware of. The ONLY clear outlier is the DAX; do not know why. All patterns are a first wave down followed by a wave 2 retracing a good portion of the first wave. (In the DAX essentially 100%) After that another wave down that is probable a first 5-wave down of the next wave 3. This promises a lot of downside to come. Because the DAX is the only aberration and all others point in this direction, I would favor that interpretation as the correct one.

Schematically wave 3 (of C ) should look something like this.

aex july 2010

Not shown are wave 1 and waves 4 and 5. At this point this is just a best guess EW scenario, time will tell if it occurs. In the mean time more and more evidence is surfacing that would indicate that it is at least possible.

DR.un, Medical Facilities Corp.

Hamilton

This company has a complex structure as it operates in the States but is traded here. It is comparable to an income fund US style with IPCs and other wonderful instruments. Anyway, from an EW perspective none of that matters. Here is the chart.

DR.un july 2010

The move from the lows is clearly corrective, most likely an a-b-c. The implication, of course, is either that we are going to get a much longer and/or more complex correction, or this was it. Either way , some day we should make a lower low. However, in the meantime this may be a good trading vehicle. At around $8 the stock is a buy with a target of at least $9.50 or so. The important thing here is that you are paid well during the carry and perhaps this analysis is wrong and we go much higher. Use a tight stop.

BP , again.

Hamilton

bp june 2010

We stick with the view that BP should get a recent bounce, either because the Arabs are going to inject capital, or at last they will make progress, or, and this is not that unreasonable, they are successful at deflecting some of the culpability on their partners in crime. In any case the symmetry of they down legs that suggests we should get a decent bounce soon. It is also down a near perfect 62% over the last two years. Stay with it.

By the way I mentioned Phillip Morris (MO) as an example of a stock that should have ended life given the sums of money that the courts figured they should pay the complicit governments for causing so much damage to the health of mankind and, by extension to the costs of medicine and healthcare. Incidentally, the latest take on this is that smoking actually diminishes these costs as people move on at an earlier date and avoid the most expenses years of their lives by signing off early. Look at this chart and wonder how MO was burdened by the damages it was assessed.

MO, june 2010

DLTR , Dollar Tree

Hamilton

dltr july3

dltr july 2010 2 dltr july 2010

A short? You be the judge. PE is actually not that bad, at under 12 but everything else suggests this one might be ready for a little pull-back. I love the name, having always been told that money does not grow on trees, but here it is , a real dollar tree. It , by the way, is totally out of synch with the markets overall, making new all time highs etc. etc, $37 is a reasonable short term target, by then we will know what the rest of the universe is doing.