Pre-opening Comments for Thursday March 26^th

U.S. equity futures are higher this morning. S&P 500 futures are up 8 points in pre-opening trade.

Economic data released at 8:30 AM EDT was mildly encouraging. Weekly jobless claims at 652,000 were in line with consensus. Final fourth quarter annualized GDP was slightly better than expected. Consensus was a decline of 6.7%. Actual was a decline of 6.3%.

The U.S. Dollar is slightly weaker this morning. Dollar weakness has boosted commodities priced in U.S. Dollars. Crude oil, copper, gold and silver are trading higher. The commodity sensitive TSX Composite Index is expected to open higher. Other commodity sensitive equity indices such as the Brazilian Bovespa also are expected to open higher. The Bovespa is testing resistance at 43,441. A break above resistance implies an upside technical target of 52,800.

Chart courtesy of StockCharts.com www.stockcharts.com

Best Buy reported higher than expected fiscal fourth quarter earnings. Consensus was $1.38 versus $1.71 per share last year. Excluding extraordinary items, earning were $1.61 per share. The company also raised guidance for fiscal 2010 ending January. Consumer electronic sales continue to grow despite recessionary conditions. Best Buy has a positive technical profile. Intermediate trend is up. The stock recently moved above its 200 day average.

Chart courtesy of StockCharts.com www.stockcharts.com

Research in Motion is trading 4% higher in pre-opening trade after Goldman Sachs raised its target on the stock. Research in Motion has an improving technical profile. Support recently formed at $45.56 Cdn. A MACD buy signal recently was registered.

Chart courtesy of StockCharts.com www.stockcharts.com

Technical action yesterday

Technical action by S&P 500 stocks remains bullish. Nine S&P 500 stocks broke resistance and one stock broke support yesterday. The Up/Down ratio improved from 0.27 to (93/322=) 0.29.

S&P 500 Stocks breaking resistance

S&P 500 Stocks breaking support

Technical action by TSX Composite stocks also remains bullish. Two TSX stocks broke resistance. None broke support. The Up/Down ratio improved from 0.83 to (59/68=) 0.87.

TSX Stocks breaking resistance

Interesting Chart

The technology sector continues to outperform the U.S. equity market. The sector is led by the semi-conductor subsector. The Philadelphia Semiconductor Index completed a base building pattern yesterday by breaking above resistance.

Chart courtesy of StockCharts.com www.stockcharts.com

 

Adrienne Toghraie’s “Trader’s Coach” Column

Gurus and False Prophets
By Adrienne Toghraie, Trader’s Coach

www.TradingOnTarget.com

In retrospect, Bernie Madoff and Alan Greenspan no longer appear to be gurus after all. One was a total fraud. The other was terribly wrong in some of his most influential decisions. But, when they were considered to be the most knowledgeable people in their respective arenas in the financial world, everyone wanted to hear what they had to say. Their words fell from their lips like pearls of wisdom.

Holy Grail seekers

Why are people who are themselves intelligent and capable of making insightful decisions so eager to listen to the self-anointed gurus for advice and guidance? This is an important issue for traders. Why? Because, over the years, I have seen so many highly capable men and women rely on the advice of others, elevating them to the status of gurus, rather than relying upon their own decisions and insights. In too many situations, the consequences were not good ones.

I have known many of these very “gurus” and have observed them from close proximity. I know from personal experience that they can have bad days and make bad judgments, that they, too, have their blind spots, their prejudices, their inadequacies, weaknesses, depressions, self-doubts, and most importantly for the ones who depend on their decisions, their self-sabotages.

The same traders who are searching for the Holy Grail are often the very same ones who attach so much of their futures to the advice of these gurus. I believe that there are a number of commonalities among these true believers that are important to note.

1. Insecurity. A confident trader knows what he knows because he has done his homework. He has done his research, developed his own system or trading methodology and carefully tested it. Then, he has put in his time trading and discovering the strengths and weaknesses in his methodology. He does not have to listen to someone else tell him what he already knows. Furthermore, because he is confident, he feels perfectly comfortable questioning the pronouncements and decisions of a revered Fed Chairman and going his own way. But an insecure trader will not have the confidence he needs in his own vision and experience to do what he thinks is right. Instead, he will attach himself to a Bernie Madoff. For him, there is a fatal attraction in the hype surrounding a famous individual. He wants to be one of his followers and if possible, to be close to that individual.

1. Intellectual laziness. Unfortunately, there are a fair number of individuals, and there are traders included in that group, who do not want to take the time and effort required to do their own research and thinking. They want someone else to do it for them. So, they spend the money they should be using for their trading to buy a system or an information/advice service from a “guru.” An energetic and self-motivated trader will not be content to listen to or pay someone else to do the work that he can do for himself.

1. Lack of talent and inclination. People who are predisposed to a certain occupation by virtue of having the right mix of natural talent, intelligence and personal characteristics are less likely to be influenced by a “guru” than the individual who has the desire to assume the role but does not have the right stuff.

1. Lack of world experience or naïveté. Why would you believe that there are people who are so much smarter than everyone else? Why would you believe that you need advice from anyone else? If you have found someone who is right more often than not and you discover that their opinion is at variance with your own, you might want to go back and recheck your facts and your assumptions. But, a trader who has some experience in the world, knows that the people at the top are often there for reasons other than their brilliance, perfection, and omniscience – in other words, they may have gotten there through their unbridled ambition, their personal connections, their ability to manipulate, inspire, or control others, their ability to play the game, or their gift for self-promotion. On the other hand, they may have achieved success because of some finer qualities such as their hard work, determination, and persistence. This still does not make them infallible.

If we have learned anything from the past year, it is that the people at the top of the financial world – the Feds, the brokers, the dealmakers, the bankers, etc. – were on the wrong track. Some were just plain wrong and others were criminal and/or greedy and unethical. This is a great lesson for traders who have been mesmerized by the Guru Class. Why should you listen to anything that Warren Buffet has to say about the markets except as entertainment? After all, he has a vested financial interest in each of his pronouncements, and he knows that each time he is interviewed. When Comedy Central’s number one character assassin, Jon Stewart, took Jim Cramer to task for his track record in recommending market positions over the recent past, another “guru” left the stage with his tail between his legs.

The lesson in all of this for traders: do your homework, build your own expertise based on research and hard work, and trust in yourself. Take all the rest of the chatter with a grain of salt. It’s just entertainment for the unschooled. Adrienne@TradingOnTarget.com

 

In this 45 minute Webinar with Joe Ross you will learn from a legend, who is both a master trader and a master teacher. Adrienne will be asking him:

X What are the best markets to trade in the present market conditions?

X Have there been any times in your history of the markets that you found it difficult to trade and why?

X How do you approach developing a system?

X Give us a simple system that you trade that makes money

THE CASTLEMOORE “FOCUS” PORTFOLIO

What does CastleMoore think its typical Canadian investors should be invested in NOW?

FOCUS MODERATE PORTFOLIO

 

The market has rallied over the past two weeks, but there seems to be missing ingredient essential for the growth of healthy portfolios. For one thing, its occurred on relatively low volumes. This means that the prospects of a healthy banking system aren’t as yet being accepted by the investing community at large.

 

The lack of volume accompanying this move makes it suspect for an intermediate term

investment, what CastleMoore does, but it can be a great trade for the short term focussed.

The second point that concerns us is that the market is not rallying on any identifiable event. Rather, it’s being schmoozed higher may a man of great charisma, Mr. Obama, and is based on what should happen given the bank rescue plan being proposed by Mr. Geithner.

Of course, the plan may well work out, but our client welfare is too important to entrust to anything outside our back tested methodology.

Right now we take more comfort in the fixed-income side of things, and may well have added to our positions by the time you read this.

Watch Hap Sneddon’s latest appearance on BNN, as he adjudicates a dispute between the two hosts of the Stars & Dogs segment as to prospects of the retailing firm Lululemon.

http://watch.bnn.ca/tuesday/#clip153579

——-

If you like to receive bi-monthly newsletter, know more about our model portfolios or access an audio file of our investment philosophy, “Modern Financial Fiascos”, click on the link http://www.formdesk.com/castlemoore/register .

We are accepting reservations for a webinar Tuesday, March 31, 2009 at 9:30PM EST/6:30AM PST. Send a note requesting a place to webinar@castlemoore.com

Read this commentary on your Blackberry or any other WAP-enabled device. Go to http://www.castlemoore.com/mobile. Feedback welcomed.

CastleMoore Inc. uses a proprietary Risk/Reward Matrix that places clients within one of 12 discretionary portfolios based on risk tolerance, investment objectives, income, net worth and past investing experience. For more information on our discipline and methodology please contact us.

CastleMoore Inc.

Buy, Hold…and Know When to Sell

www.castlemoore.com

= = = = = = = = = =

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

Disclaimer: Comments and opinions offered in this report at www.timingthemarket.ca 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.

Sponsored By...

More from the network: Stock Market Outlook for February 9, 2012 Stock Market Outlook for February 8, 2012 Stock Market Outlook for February 7, 2012 Stock Market Outlook for February 6, 2012 Next Report on Monday, February 6th

Discussions from the Tech Talk Forum: An error has occurred, which probably means the feed is down. Try again later.