K

K, Kellogg update

Hamilton

"A handful of patience is worth more than a bushel of brains." – Dutch Proverb

Then (June 2011) and now charts:

K ellog June 2011k ellog dec 16 2012

If you read the text in that June blog , it says that the next big move should be down but that it may first have to complete the double topping process by going to $58. Well we are almost there and it has taken more than a year longer than expected. I cannot remember ever hearing the quoted Dutch proverb, it is probable one of thousands that father Cats or someone like that used to liberally sprinkle Dutch literature, but it certainly seems to fit this situation. A sell now.

K, Kellogg update

Hamilton

K sept 2012

The stock followed the script more or less as expected, losing roughly 20% only to rebound quite rapidly, proving that not only the precious metals but also most anything else is sensitive to Fed easing. This chart is a replica of the one below. Not sure what it means but pretty certain that the next major move is to new lows (see previous blog).

GLD, Gold update and K, Kinross

Hamilton

GLD jul 2012

We have seen some very incorrect wave counts that would suggest the GLD is presently in a one year long contracting triangle as opposed to some form of a 1-2,1-2. Assuming, for the sake of argument that this is an acceptable count,  the above labelling would be the most plausible. This would have to be a 4th wave and, given the duration, probable one of high degree. A thrust should follow soon and swiftly take the GLD to just above the old high of 192 or to a new high of 225 or so. An almost immediate return to 150 would follow.

The problem with this count is that it has no counterpart anywhere! Not a single large cap gold miner has a pattern that comes close. Nor does that other precious metal silver which already has retraced 50% from the recent peak. K, Kinross is a good example even if some would cry foul given this stock idiosyncratic problems. Here is the chart;

K jul 2012

No count is ever certain but as more pieces fall in place confidence in the accuracy increases. So this stock drops from $45 to $1 in what has to be a 5-wave move! This is confirmed by the wedge or wedges that are always 5 waves (or Cs). 5-wave moves do not stand alone, there always has to be a second one (as in a flat or zig-zag). In between there is invariable a 3 –wave counter-trend rebound that often retraces 50, 62 or even more % of the preceding drop. There is also a tendency to go to the level of either the 4th wave or the 4th wave of 3. It more or less did all of this! Therefore it is safe to assume that we are in the second 5-wave leg down which should terminate <$1. At about $10 we will get overlap. Should this second 5 wave leg develop as a wedge, that will not matter. In the event that we are actually in a double zig-zag (in blue) overlap at this time would also not matter. Given that this stock is already down some 75% or more, the outlook on GLD shown above is downright impossible, but then impossible things seem to happen more often lately..

SLV, Silver update.

Hamilton

slv may 2012

We are rather agnostic about the precious metals. The idea of buying them as a hedge against the world collapsing does not seem to be fact based. They drop together with stocks. That they constitute “real” value as in contrast to fiat money is also a little stretched. Both are highly dependent on a “mutual understanding” with respect to their value. And everyone can readily sympathise with the notion that it is a complete waste of time and money – better used elsewhere – to dig up the stuff and then bury it in a vault, why not just agree on who owns it where it is? But apart of all this it does look like silver is at a critical point here or near here. We are at a 4th wave of previous degree, a normal retracement level. It has lost 50+% of its peak value and more of the run up over the past 10 years or so. The RSI is oversold and the MACD is already pointing the other way for 1/2 year. We are aware that some EW-ers like to suggest that the whole structure is, somehow a triangle. There is no such thing to our knowledge. The count that might fit is the one shown. An initial a-b-c down followed by an a-b-c up which has yet to complete the c part. This is bullish only on an interim basis as it targets about $37. Even so it could lead to nice gains on such silver stocks that have recently been cut in half (proportionate to silvers price). FVI would be an example even though we do not recommend the juniors. A Kinross at $7.40, down from $25 is starting to look a little like value, at least relative to where it was.