TSE update Feb 8, 2010.

Hamilton

TSE Feb 8 2010 DJIA

This gets pretty tricky as quite a few possibilities exist for the TSE (does not matter for the overall direction). The idea of a large a-b-c correction has to be discarded on the grounds that the b-wave has 5-waves internally and that just cannot be, so the preference at this stage goes to a 1-2, 1-2 scenario, which makes a lot more sense if you look at the Dow Jones (and the S&P, not shown), on the right. Today’s stellar performance supposedly has something to do with Mr. Trichet, the head of the European central bank, getting on a plane on his way to “solve” the Greek problem – a news bite that nobody yet knows what it means and presumable could be reversed on equally flimsy grounds.

AGU, Feb 2010

Hamilton

AGU and also POT and MOS with it have continued to drop and at least as far as Agrium is concerned the outlook does not look good. The stock dropped below the $61 level and this is a sure fire indication that the a-b-c perfectly symmetrical correction is over. The overlap with previous high points argues that the stock will go further down, most likely to new lows. See previous comments.

AGU Feb 2010

Mosaic has already overlapped and was not able to retrace to the 50%+ level at all and therefore looks even more fragile. Potash (not shown) is somewhere in between but also a sell.

MOS feb 2010

RMD Feb 2010, RESMED

Hamilton

This company has a solution for sleep apnea, a problem often associated with snoring that causes the breathing to be interrupted, sometimes so often that it reduces the quality of sleep to the point where the patient is constantly tired, and displays rather irrational behavior in some cases. The solution Resmed has , is a little machine that ups the pressure by way of a mask that has the effect of keeping the nostrils open (I think). Supposedly some 20% of men over a certain age suffer from this affliction to some extent.  RMD and its competitor, Phillips (medical systems) only have about 10% of patients sold on the product, a major problem is that nobody wants to own up to snoring. Anyway, this works and the market is a long way from its saturation point. Here are the charts.

RMD Feb 2010 2 RMD Feb 2010

The stock has just “double topped” at around $55, it may well go a little higher to the upper trendline somewhere around $63 but if the EW count is correct it will not do so. Again risk /reward favors a sell at these levels or just slightly higher  – pick your level between 55 and 63 – for a probable target near $30. The count shown is just a wild guess between a big B-wave or a 5th, either way $30 should soon be next.