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VRX update

Hamilton

vrx dec 15 2015

Today the stock gapped up and started trading at $143.36. Last blog we mentioned that we would sell once the stock would trade above $140, which it did today. So we would sell now for a 50% or so gain. We do expect, as mentioned last time, that the stock could easily trade above $160 or so. Tentatively we view this as a 4th wave but more importantly there is a public announcement re. Wallgreen etc. etc. For the courageous, you may want to hold on early in the morning and get out at the open of the market. These spurts up ($22 so far) tend to extend for at least a day.

By the way, at these low prices the stock is still trading at a p/e of 74.

Natgas

Hamilton

 

natgas dec 8 2015

Another look at Natgas. Long-term charts are hard to come by but this one is relatively good and at least 20+ years.

Roughly speaking we have triple bottomed three times (double Dutch??) in the past 5 or 6 years at about (again roughly $2)  Back in 1995 or so that was roughly also the bottom for quite an extended period. That suggests that somewhere around $2 there is a lot of support. However it should be noted that the absolute lows were more in the order of $1.25 (just eyeballing the chart).

In terms of buying low and selling high, the only sure way of making money, it is obvious that with gas down 87% from the peak you are a lot closer to the low than the high. Still I would wait at least for the price to better the $1.90 low of April 2012 before making a move.

The HNU, leveraged up ETF looks pretty good from an EW perspective and RSI;

hnu dec 8 2015

Somewhere here it should bottom.  Here is another chart;

natgas dec 8 2015 f

Gold, the stuff

Hamilton

Then July 30th and now charts as usual;

gold july 31 2015 bGold dec 4 2015

Back at the end of July we were looking for a wedge in Gold. It could be an expanding diagonal or a contracting diagonal. Our target was about $1050 or so (see blogs). Much depended on where you started the pattern. With the benefit of hindsight we have moved the starting point one notch to the right. This has the effect of sharpening the wedge and giving it a much better look. These are both contracting triangles. The expanding one is below;

gold july 31 2015 vbgold dec 4 2015 messy

The expanding pattern, in green, never materialized but at least the target price was spot on, so far at least. It has become a contracting wedge and there are at least 3 or 4 different ways you can view the pattern, but in the big picture we have to assume that the drop is done. In the minute picture I would not exclude a quick $40 or so up and down sequence just to make the 5th wave a clearer 3-wave affair than it is now. Additionally all three downlegs would become directionally equal and it would get us closer to year-end.

Gold should do well with expansive monetary policies, not if interest are about to increase. Given this weeks events it is therefore odd that gold should spike up today. A little wavering at the very last moment could cause some big swings. Ultimately the upleg should retrace this entire wedge or about 38% of the $900 drop. Both point to a little over $1400.