Pre-opening Comments for Friday November 7th
U.S. equity markets are slightly higher this morning despite a worse than expected employment report for October. S&P 500 Index futures weakened slightly after release of the report at 8:30 AM but remains 5 points higher in pre-opening trade. Non-farm payrolls in October rose to 240,000 versus consensus at 200,000. In addition, September non-farm payrolls were revised upward from 159,000 to 282,000. The unemployment rate jumped from 6.1% to 6.5%, the highest rate in 14 years. Consensus was 6.3%.
Traders are waiting for comments from President elect Obama. He will hold a news conference at 2:00 PM with his economic advisor transition team.
In contrast, Canada’s October employment report offered a pleasant surprise. Consensus was a drop of 10,000. Actual was a gain of 9,500. The unemployment rate rose from 6.1% to 6.2%.
The U.S. Dollar was slightly lower following release of the U.S. employment report. Commodities priced in U.S. Dollars moved slightly higher. Strength in commodity prices will help the Canadian equity market at the opening.
Earning reports released overnight added to stock market jitters. Ford recorded a third quarter loss (excluding special items) of $1.31 versus a loss of $0.01 per share last year. Consensus was a loss of $0.94.
In Canada Telus reported less than consensus third quarter earnings. Consensus was $0.95 versus $0.94 per share last year. Actual was $0.89 per share.
Tim Horton’s third quarter report showed that coffee and donuts remain popular menu items. Tim Horton reported $0.43 versus $0.36 per share last year. Consensus was $0.41 per share. On the charts, Tim Horton’s has a negative technical profile, but is showing early technical signs of recovery. Intermediate trend is down. The stock trades below its 50 and 200 day moving averages. However, the stock recently found support at $26.39. Resistance exists at $34.60. Short term momentum indicators (RSI, MACD and Stochastics) are recovering from deeply oversold levels. Strength relative to the TSX Composite Index has been positive since July. The stock appears to be forming a double bottom pattern.
Chart courtesy of StockCharts.com www.stockcharts.com
Technical Action Yesterday
Once again, technical action by S&P 500 stocks was quiet. One S&P 500 stock broke resistance and none broke support. The Up/Down ratio remains the same at 232/455=) 0.05.
S&P 500 stocks breaking resistance
Technical action by TSX Composite stocks also was quiet. One TSX stock broke resistance and one stock broke support. The Up/Down ratio improved from 0.10 to (13/115=) 0.11
TSX stocks breaking resistance
TSX stocks breaking support
Comments from the FP Trading Desk
(Available at http://www.financialpost.com/trading_desk/index.html )
FP Trading Desk headline reads, “Canadian banks outlook best of a bad lot”. Following is a link to the report: http://network.nationalpost.com/np/blogs/tradingdesk/archive/2008/11/06/canadian-banks-outlook-best-of-a-bad-lot.aspx
Ishares on the TSX Financial Services Index currently have a negative technical profile, but are showing early signs of bottoming. Intermediate trend is down. Units trade below their 50 and 200 day moving averages. However, support has developed at $17.82 and short term momentum indicators (RSI, MACD and Stochastics) are recovering from deeply oversold levels.
Chart courtesy of StockCharts.com www.stockcharts.com
Interesting Charts
The U.S. Dollar strengthened slightly yesterday after European central banks reduced their overnight lending rates to banks. The surprise came from the Bank of England with a 150 basis point reduction. The U.S. Dollar continues to show early technical signs of peaking, but has yet to confirm a change in intermediate uptrend. U.S. equity markets likely will remain in their October 10th /October 14th trading range until change in trend by the U.S. Dollar is resolved.
Chart courtesy of StockCharts.com www.stockcharts.com
Chart courtesy of StockCharts.com www.stockcharts.com
Weekly Report on U.S. Sector Bullish Percent Indices
Most bullish percent indices moved higher again last week. All remained above their 15 day moving average. However, most indices already are approaching the 50% level (i.e. the neutral level). Transportation and energy indices are approaching an intermediate overbought level.
Bolded items are changes from last week
Weekly Technical Comment on Claymore’s ETFs
Technical profiles for Claymore’s ETFs continued to improve last week. A MACD buy signal was recorded by two more ETFs. Most have advancing MACDs from deeply oversold levels. In addition, the Global Agriculture ETF changed its trend from down to up.
The Global Infrastructure ETF was added to the list this week.
Following are technicals on Claymore’s ETFs based on the close yesterday:
Bolded items are changes from last week
RS Relative Strength
+ Number of months with positive performance relative to its benchmark
- Number of months with negative performance relative to its benchmark
N Number of months with neutral performance
CSTA News
CSTA Calgary
Technical Analysis Conference:
Return Of The Masters
Saturday, November 15, 2008
Speakers:
Don Dony www.technicalspeculator.com
Don is a professional technical analyst located in Vict oria and holds the top global designation of Master of Financial Technical Analysis from the International Federation of Technical Analysts in England. He is also a member of the Canadian Society of Technical Analysts and an instructor for the Canadian Securities Institute. Don is a respected specialist in the area of intermarket and cycle analysis and a frequent speaker at international investment conferences.
Don is the editor and publisher of the Technical Speculato r, a very successful monthly international investment newsletter, which specializes in major world equity markets, currencies, bonds and interest rates as well as the precious metals markets.
Don will speak on Trading Strategies in Bull and Bear Markets, which will include discussion on pairs trading, trends, Bollinger Bands and momentum indicators.
Richard Rhodes www.rhodes-capital.com
Richard resides in Philadelphia, Pennsylvania and is the editor and publisher of the independent trading letter – The Rhodes Report and has been a student and trader in the capital markets since 1983. In addition to the letter, he manages family and client portfolios. Clients of The Rhodes Report include a wide variety of banks, brokerage firms, mutual and hedge funds. Richard is also quoted from time to time in publications such as Dow Jones Newswires, Wall Street Journal, Barron ’s and MSN Money Central.
Many technical analysis oriented investors will recognize Richard as one of the guest columnists in the popular bi-weekly technical analysis market newsletter at the website www.stockcharts.com.
Richard Croft
Richard Croft has over 35 years experience in the financial services industry. He is currently the President of R.N. Croft Financia l Group Inc. and is licensed as an investment counsellor / portfolio manager. R.N. Croft Financial Group provides personal portfolio management services to high net worth individuals. The company manages approximately $300 million for individuals and institutional investors including two in-house mutual funds and two exchange traded closed end funds.
Richard is a well known guest speaker on BNN television and focuses on options related articles, blogs and speaking tou rs with the Montreal Exchange. In 2002 Richard Croft developed the MX Covered Call Writers Index (symbol MCWX) and the MX Covered Straddle Writers Index (MPCX), for the Montreal Exchange and writes in the Blog at www.optionmatters.ca.
In addition Richard is a well-recognized author on the topic of portfolio management. He has written or co-written seven books on investment strategies, his most recent release; Protect Your Nest Eg g. Richard will be speaking on the use of Options in our markets.
Tech Talk’s Column in Saturday’s Financial Post
(Available in hard copy or by paid subscription at www.nationalpost.com )
The column focuses on the global infrastructure sector.
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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.
November 7th, 2008 at 3:48 am
I found it interesting that the huge 1.5% ratecut from the BOE only had a slight effect in weakening Sterling further. Was that rate cut already factored in?
I bought $100,000 CAD of GBPs at just under .54 yesterday which i thought was not bad considering i felt i had missed the boat on Tuesday/Wednesday when the CAD was over .54
Anyone have any guesses as to when the GBP will be worth 2.00 CAD again? Yahoo says its down to .53 today so its moving in the right direction so far
November 7th, 2008 at 7:15 am
Hi Mike M
TD online rate today is, 100 GB Pound 100 = 194.57
$100,000 Canadian would receive a better exchange rate
Houses in UK are twice the price of Canadian homes so the GB pound will probably continue to decline, despite lower interest rates.
P.
November 7th, 2008 at 7:16 am
Yesterday, the HXU has very strange chart, which went to 15 from 13 very sharply several times), can anyone explain it?
November 7th, 2008 at 11:23 am
Will the somber mood of the economy, downward revisions of estimates, lack of bonuses this year, especially in financial services prevent the “Santa Claus Rally” from occurring this year?
November 7th, 2008 at 5:07 pm
Yes, chances of a Santa Claus rally this year are higher than average. The Santa Claus rally partially is triggered by tax loss selling pressures that climax in the third week in December. Stocks under tax selling pressures become oversold and traders look for bargains for a fast recovery late in December and early in January. Tax selling pressures will be more intense than usual this year due to stock market conditions since September.
November 8th, 2008 at 1:22 am
P,
Thanks for the info. Well looks like i might be stuck in GBPs for a while then
November 8th, 2008 at 10:13 am
Would anyone know how I can contact Mr. Vialoux. I would like his opinion on Gold in the next two months, especially Yamana’s share price (YRI) on the TSX. This stock seems to be going down more than others on a daily basis.
Thanks.
November 9th, 2008 at 10:35 am
Hi Don
Have you written anything about UPS?
I noticed that it has a seasonality from Oct to Dec.
I will apprexiate if you have written any article on this.
Thnaks
Nirmal
November 9th, 2008 at 1:53 pm
Just confirming that UPS and Fedex have a period of seasonal strength from October to December (’Tis the season for delivering Christmas parcels). UPS currently has a negative technical profile, but is showing signs of recovery.Intermediate trend is down. The stock trades below its 50 and 200 day moving averages. However, support has developed at $42.32. Short term momentum indicators (RSI, MACD and Stochastics) are recovering from deeply oversold levels. Strength relative to the S&P 500 Index has been positive since July. Earnings are negatively impacted by the economic slow down, but positively impacted by lower fuel costs.