SNC update

snc aug 2012

See our April blog. The stock was at $36 and we opined that it should go back up to $43 (it went to $42) and then down again to $32, or lower. So far so good. When things are not working out we put an American at the helm. We will see if that changes anything.

SNC Lavalin update

snc apr 2012 2

So we got the 5th minor wave as expected to finish of wave C. As a result we have a perfectly symmetric structure within the blue circle shown above. I have absolutely no idea what that all means except that has a tendency to expand in time. My guess, and that is what it is, is that we go up to about $43 and then back down to somewhere in the order of $32

SNC, then and now

snc jan 2011

Back in January we noted that SNC Lavalin  had retraced to a very nice Fibo number of 61.62 after tracing out an equally nice B-wave. The conclusion, as always an initial drop to about $41 and more after that. Here we are today;

snc  oct 25 2011

The actual top clicked in at just a few pennies higher and the stock dutifully drops to about $39. The way it does that could be 5-waves, or just waves 1-2-3-4 with 5 still to come. The rebound as either wave 4 or 2 is a clean a-b-c zig-zag that cannot go higher than $52 if a wave 4. We shall see but either way the next big move is down.

SNC , CRB (Jeffries), AGU , RDS.a and the B-Wave.

In EW terms the B-wave is normally the mid-wave in an A-B-C, correction, (by definition 3-waves). They tend to have an inordinate amount of symmetry and seem to ignore all fundamental information being almost oblivious to the rest of the world. There are 2 basic problems with the B-wave. First of all what may be 3 waves now can always develop further into 5 –waves and thereby stops being a B-wave. Next they can, and often do, rise above the origin of the preceding A wave which, intuitively, seems to make no sense. Yet it happens like clockwork and sometimes with a margin of about 30%. Despite this , it still is a B-wave. Here are 4 examples (there are literally dozens of them right now).

snc jan 2011 CRB jan 2011

and AGU.

AGU jan 2011 b-wave RD jan 2011 2

Typically the B-wave will retrace 50% to 62% in most cases, sometimes more and , if it gets that far, it frequently double tops, as in SNC above. The symmetry is nearly always present for reasons I do not understand, markets just love symmetry. In most cases that means that waves c and a in the B wave are equal (as vectors). This is pretty much the case with all four examples. In some cases the symmetry goes further and all 3 sub-divisions in the B-wave are vector equal, as, again, is the case with SNC. Anytime you observe this symmetry it pays to be very careful as once the B wave is complete, it is right back down often to below the starting point. If by some oddity the top should occur at a rather precise Fibonacci number (61.8) as for instance with the Canadian dollar in Oct. of 2001 or 2002 and now with SNC, I would get out altogether.