Pre-opening Comments for Friday September 5^th

U.S. equity markets are lower this morning. S&P futures are off another thirteen points following disappointing employment news. The decline in U.S. non-farm payrolls in August rose to 84,000. Consensus was a decline of 75,000. Of greater importance, the unemployment rate rose from 5.7% to 6.1%. Consensus was 5.7%. U.S. equities also are responding to rumors that one or more major hedge fund is liquidating positions following the realization of large losses in August. Atticus, a hedge fund valued at $14 billion denied that it has been liquidating. Speculation about its liquidation has surfaced because many of the equities known to be held by the fund have fallen sharply during the past few days.

Economic news in Canada this morning is more encouraging. Canada added 15,200 jobs in August. Canada’s unemployment rate remained at 6.1%.

Morgan Stanley upgraded Potash Corp and Agrium to its recommended list this morning. On the charts, both stocks have negative technical profiles. They have an intermediate downtrend and trade below their 50 and 200 day moving averages. Agrium broke support yesterday.

Chart courtesy of StockCharts.com www.stockcharts.com

Chart courtesy of StockCharts.com www.stockcharts.com

Natural gas prices are slightly higher this morning. Traders are concerned that Hurricane Ike could move into the Gulf of Mexico early next week.

Goldman Sachs added Merrill Lynch to its conviction sell list sighting possible additional write downs in the third quarter. On the charts, Merrill has a negative technical profile. Intermediate trend is down. The stock trades below its 50 and 200 day moving average. The stock is down 5% in pre-opening trade.

Chart courtesy of StockCharts.com www.stockcharts.com

Nokia is trading lower after giving negative guidance for the next quarter. On the charts, Nokia has a negative technical profile. Intermediate trend is down. The stock trades below its 50 and 200 day moving averages. The stock recently broke support to reach a one year low.

Chart courtesy of StockCharts.com www.stockcharts.com

UST broke a key resistance level yesterday on higher than average volume and now is testing its all time high. The company is in take over talks with Altria.

Chart courtesy of StockCharts.com www.stockcharts.com

Technical Action Yesterday

Technical action by S&P 500 stocks was exceptionally bearish yesterday. One S&P 500 stocks broke resistance (UST) and thirty stocks broke support. The Up/Down ratio for S&P 500 stocks fell from 0.94 to (188/220=) 0.85. Technology stocks such as Ciena, Sun Microsystems, Oracle, National Semiconductors and Texas Instruments were notable on the list of stocks breaking support.

Chart courtesy of StockCharts.com www.stockcharts.com

S&P 500 stocks breaking support included Ball, Biogen, BMC Software, Cabot Oil and Gas, Caterpillar, Ciena, Cummins, Danaher, EMC, EOG Resources, Exxon Mobil, Fluor, Hess, International Game Technology, Massey Energy, Monsanto, National Semiconductors, Nisource, Oracle, Parker Hannifin, Perkin Elmer, Public Service, Sun Microsystems, Teco Energy, Terex, Texas Instruments, Tyco, Verisign, Waters and Weatherford

Ditto for TSX Composite stocks! No TSX Composite stocks broke resistance and 12 stocks broke support. Mining stocks dominated the list of stocks breaking support. The Up/Down ratio eased from 0.56 to (51/104=) 0.49. TSX Composite stocks breaking support included Agrium, Denison Mines, Eldorado, Goldcorp, Major Drilling, Nuvista, Silver Wheaton, SNC Lavalin, Toromont, TransAlta and Yamana.

Chart courtesy of StockCharts.com www.stockcharts.com

Tech Talk comments on the FP Trading Desk site yesterday

(Posted at http://www.financialpost.com/trading_desk/index.html )

Charts have been updated to yesterday’s close.

FP Trading Desk headline reads, “Energy services sector will benefit from unconventional plays: Peters & Co.”. Following is a link to the report: http://network.nationalpost.com/np/blogs/tradingdesk/archive/2008/09/04/energy-services-sector-will-benefit-from-unconventional-plays-peters-amp-co.aspx

Canadian oil service stocks such as Calfrac and Savanna Energy currently are struggling on the charts. Most are in downward intermediate trends, trade below their 50 and 200 day moving averages and have negative strength relative to the TSX Composite Index. Technical evidence of a bottom has yet to surface for most stocks in the sector.

Charts courtesy of StockCharts.com www.stockcharts.com

Technicals for Claymore’s ETFs

Our weekly update on technicals for Claymore’s ETFs has resumed. Current technicals for most of Claymore’s ETF could be best described as “difficult”. The backhanded good news is that technicals are so bad that they are unlikely to become worse. The stage is set for a recovery. However, given the drawdown in world equity market today, technical evidence of a recovery has yet to appear. Stay tuned for updates each Friday. Look for interesting trading opportunities as they appear in the weeks ahead.

Claymore launched two interesting ETFs this summer, a global real estate ETF (Symbol: CGR) and a global infrastructure ETF (Symbol CIF). Both will be added to our technical list after they have traded for 90 days. More information is available on both at www.claymoreinvestments.ca

Following are the technicals on Claymore’s ETFs based on today’s close:

RS Relative Strength

+ Number of months with positive performance relative to its benchmark

- Number of months with negative performance relative to its benchmark

Bullish Percent Indices for U.S. Sectors

Bullish Percent indices for most sectors remain in an intermediate uptrend. However, early warning signs have appeared. Seven indices moved lower last week. Also, six indices moved below their 15 day moving average. Intermediate trend for most sectors remains upward, but the “orange flags” have been raised for Overbought sectors.

Bolded items are changes from last week

All Charts courtesy of StockCharts.com www.stockcharts.com

Disclosure: Mr. Vialoux does not own securities mentioned in this report.

Disclaimer: Comments and opinions offered in this report are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed.

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