Wednesday, March 25, 2015

[CLB] update

Here is the backlink.  Below is the chart from the backlink.


The model seems pretty close this time so far.  The 78.6 fib held support.  I count this as a deep vee 2nd wave.

Then we had 5 waves up and are now likely working on 3 back to the level of the prior 4th.  This one is for those who like to be calm and not worry.  There is no time value in these shares so you can hold them as long as the sell trigger ($93.80 ish) is not tripped to the downside.   Just wait for a-b-c to the level of the prior 4th and then you can buy with perhaps 1% trailing stops.

CLB is a nat gas play.  Look how everyone is suddenly negative on oil these days, telling us that storage is full, etc., China will have to begin dumping their excess soon, etc.  Where were these "fundamentals" when I called the top in USO?  What has changed so much since then?  Have we entered an official recession, etc?  Nope!  In fact, the fed is talking about raising rates due to economic strength.

This is just more evidence for something I already know to be true: the so called fundamentals are useless indicators for trading.  The wave count is all that you can actually trade with and expect any success.  Even if the model turns out to be wrong, we will know within a few percent of the buy point.  That is the main value of EW IMO.

For the record, fundamentals absolutely do matter.  The problem is that you and I don't know what they are and probably neither does any individual or group of people.  I assert that in today's leveraged markets that leverage (or lack thereof) has a greater effect on the price of oil than actual supply and demand.  So a person might think you know what the fundamentals are but since they keep changing (supply and demand will become dominant again once the credit collapses...), you can never count on them.  Thus, "fundamentals" are largely for suckers when it comes to making money in the stock market.

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