(Editor’s note: Mr. Vialoux is scheduled to appear on BNN television today at approximately 2:50 PM EDT for a brief comment on equity markets in the month of September)

Pre-opening Comments for Tuesday August 25^th

U.S. equity markets are slightly higher in pre-opening trade. S&P 500 futures are up 7 points. Futures moved 4 points lower last night after the Shanghai Composite Index briefly fell 5% on concerns that the Chinese government may be tightening fiscal and monetary policy. However, futures quickly recovered on news that President Obama intends to re-nominate Ben Bernanke for a second four year term as Federal Reserve chairman. The nomination will need approval by the Senate prior to expiry of Bernanke’s current term in January.

U.S. equity futures moved slightly higher following release of the June Case/Shiller U.S. home price report. Consensus was a year-over-year decline of 16.4% versus a decline of 17.0% in May. Actual was a decline of 15.1%.

Overnight weakness in the U.S. Dollar following news of Benanke’s re-appointment has prompted commodities priced in U.S. Dollars to rally. Gold and crude oil are trading higher. Gold is up $11 U.S. per ounce.

The first of a series of fiscal third quarter earnings reports by Canada’s banks released this morning offered encouraging news. Bank of Montreal reported adjusted third quarter earnings at $1.05 versus $1.00 per share last year. Consensus was $0.97 per share.

Staples and Medtronics reported quarterly earnings in line with consensus estimates. Staples reported second quarter earnings at $0.16 versus $0.21 per share. Medtronics reported fiscal first quarter earnings of $0.79 versus $0.72 per share after adjusting for non-recurring items. Both stocks are trading slightly lower in pre-opening trade.

Technical Action Yesterday

Technical action by S&P 500 stocks was quietly bullish. Seven stocks broke resistance (Aon, Assurant, Disney, Heinz, Lorillard, Mastercard and Questar) and one stock broke support (Hudson City Bancorp). The Up/Down ratio inched up to (393/47=) 8.36 from 8.17.

Technical action by TSX Composite stocks was quiet and mixed yesterday. One stock broke resistance (Petrobank) and one stock broke support (Open Text). The Up/Down ratio for TSX Composite stocks was unchanged at (107/30=) 3.57.

CSTA News

Mr. Vialoux has become a director of the Canadian Society of Technical Analysts.

Next CSTA event in Toronto will be held tomorrow (Wednesday August 26^th ) at the Strathcona Hotel , 60 York Street (Across the street from the Royal York) between 4:30 PM and 5:30 PM. Speaker is John Person.

John will give his insights on:
Specific strategies based on his proprietary indicators in order to help you focus and prepare for next months potential major market moves.
He will discuss the basic concepts behind his highly accurate pivot point moving average system, which gives an indication on whether the market direction is bullish, bearish or neutral.
He will show you how his method helps to filter out predictive support and resistance for the next trading session. John’s method is applicable for day-trading, swing trading and longer-term position trading for stock, futures and foreign currency trading.
John will be giving a three hour seminar at the Canadian Society of Technical Analysts’ 2009 Annual Conference on November 7th. This ONLINE webinar will be a great opportunity to get ahead and preview some of his methods and teachings around the globe. For additional help please call his office at 847-730-5209 or email cgutmann@nationalfutures.com.
John is a 30-year veteran of the Futures & Options trading industry and expert on technical analysis and risk management. He started on the floor of the Chicago Mercantile Exchange and has worked his way through the industry as an independent Trader, Broker, Analyst and Branch Manager for one of Chicago’s largest discount/full service firms. He is the founder and president of Nationalfutures.com and is currently a registered Commodity Trader Advisor. John’s market predictions have continuously been accurate and he is a current consultant to many of the world’s top exchanges such as, CME, CBOT and ISE. CME is the largest commodities exchange in the world.

Registration Information

Cost

Members and First time attendees  0.00

Non-Members  $15.00

Register at www.csta.org

A note and an employment opportunity from CSTA president, Matt Caruso:

CSTA Members,
I would like to take this opportunity to introduce myself as the new CSTA President. I have been involved with this great organization for several years now, mostly as director of the Montreal Chapter, and as well as CSTA Vice President. As a TA practitioner, Senior Trader for National Bank Financial, I personally recognize the value that CSTA has brought to me. I have had the opportunity to meet and learn from other great traders in Montreal and from top analysts around the world. What this organization brings to its members is something very special that is not available anywhere else. CSTA was created to provide education to its members as well create a meeting place for people who are interested in Technical Analysis.
However, what really sets the CSTA apart from other organizations is the fact that we are a non profit organization operated primarily by volunteers with the purpose to serve its members. We are the only Canadian organization to be part of the International Federation of Technical analysts (IFTA), as well as the only Canadian TA organization to be officially partnered with the Market Technicians Association (MTA. To date, the CSTA offers monthly meetings in several major Canadian cities as well as a comprehensive library. As your new President, however, I am looking to greatly increase member services and benefits. My first order of business is to hire a part-time business director/administrator who can attend to members’ services and additionally help grow the organization. We are currently looking for candidates. If you or someone you know is interested, please read the job description below. We are accepting CVs until September 4th, 2009. Please email me at, matt.caruso@analyzingmarkets.com

I hope to expand the CSTA during my time as President and I welcome and comments or suggestions by CSTA members.

Sincerely,
Matthew Caruso, CMT
CANADIAN SOCIETY OF TECHNICAL ANALYSTS

CSTA Administrator
DESCRIPTION OF BASIC FUNCTION AND RESPONSIBILITIES

Performs a wide variety of complex responsible administrative, secretarial/clerical, and office functions in support of the CSTA. This position requires an advanced use of initiative, organizational skills, problem solving skills, and independent judgment in the processing of administrative details. Must be able to work independently without much supervision in a virtual office. Strong communication skills required.

RESPONSIBILITIES
Administration / Bookkeeping
• Receives, opens, and distributes incoming mail (this can be re-routed to your address); initiates and/or or transmits memorandums and notices
• Executing bank transactions (Can be done from any CIBC branch; you will be provided with a convenience card)
• Prepares cheques for signature (done using QuickBooks); Cheques need to be signed by 2 Board Members with signing authority upon presentation of invoices (as required, usually twice monthly) and mailing
• Attends Board of Directors meetings, taking minutes, and distributing last meeting’s minutes prior to subsequent meeting, publish minutes in member’s section on site
• Files and maintains invoices and other documents for quick retrieval. Establishes and maintains records, filing systems, and logs; Maintains Board calendars as assigned; monitors and records Board attendance;
• Prepares month-end financials, balances disbursements and deposits (from bank deposits, online registrations, etc), forwards information to bookkeeper and treasurer.
• Prepares / mails packages for Annual General Meeting for all associate and full members (financial data, selection committee paper, letter from the President, proxy forms, official AGM announcement, etc.) Proxy voting is now available online, but information must still be disseminated via mail
• Assists members of the Board by drafting correspondence, etc. and composes, types, edits, and distributes a variety of correspondence, reports, memorandums, forms, and CSTA publications
• Arranges printing of letterhead, brochures, etc.
• Schedules meetings and appointments; reserve meeting sites; makes travel arrangements; contacts and confirms appointments and meetings

Membership Management
• Maintains database with up to date information for all members. Enters new members into Online Registration System database and disable membership for members who have failed to renew
• Create a welcome package for new members and contact them via email with instructions on how to use the online system
• Follows up on membership renewal and issue reminders when membership is coming to an end
• Writes bi-weekly Email Bulletin with society news and forthcoming event announcements and benefits offered (html document) and distributing via CSTA distribution system
• Responds to all queries from members and the public by email, telephone, or fax, and/or forwarding queries to appropriate board member
• Creates a FAQ section for the website and assist members with any help they may need
• Creating and updating the website – includes updating links, populating the archives with journals, articles and webcasts, create section with job opportunities that members may be interest in, set up RSS feed, posts recordings of monthly meetings

Event Management
• Monitors and handles registrations for events (ensuring payments)
• Prepares receipts, sign-in sheets and badges for society events and conferences
• Attends events (as needed) and takes registrations and attendance
• Help plan the 25th anniversary events for 2010 – promotional material, find locations, co-ordinate speakers
• Help create new CSTA endeavours such as workshops and online forums

Library
• Manages the library (receives request and mails out the books)
• Monitors books not returned by due date
• Incorporates new additions to the library and communicates new material availability to members

Marketing
• Creates/updates brochures
• Updates website
• Designs business cards for directors
• Contact software suppliers and magazines for discounts
• Create and publish newsletters and other relevant products and services

Ken Norquay’s Blog

Want a clear picture of the markets? Invest in a big-screen TV.

I’ve been paying attention to the markets these days. Close attention. And I think I’m getting eyestrain from watching all those tiny numbers going up or down. By the time I’ve found my reading glasses and discovered that the market was up .2%, not 2%, I still don’t know if that’s good news or bad.

I asked Ken Norquay for a little help with reading the market. Author of Beyond the Bull: Taking stock market wisdom to the next level and a partner in CastleMoore Inc, Ken suggested my reading glasses are part of the problem. In this market, the daily details are supposed to be out of focus, because they don’t tell the average investor anything useful.

Ken’s approach to investing is simple. Take off your glasses, especially the rose-coloured or bear-coloured ones, if that’s what you’ve been wearing, and step back to get some perspective on what’s happening. Instead, he recommends, invest in a big-screen TV and a comfy chair. It all started with an email exchange about my problems with pixels.

Virginia: Every day there’s a new headline about trends in the stock market: Up by this much; down again. What if the trend is an absence of trends? Not flat lines, but just funky little changes every day or so. It’s like watching TV two inches from the screen; right now the market is all pixels. I’m not getting a clear picture.

Ken: The pixels are confusing the picture, even though they are part of the picture. There are two types of investments – trending and trendless. As investors, we want to be in the up-trending investments. Speculators try to make money with down-trending investments, but most of us have more success with up-trending investments. But what about investments that are trendless? Are these funky little pixels important? Do they mean anything? Or are you just sitting too close to the TV?

Let’s look at the market TV up close: this chart shows ten days of Toronto Stock Exchange action [ending August 19]. We are looking at the price of the Exchange Traded Fund [ETF] representing the S&P TSX 60, an index of Canada’s sixty biggest companies. The ticker symbol is XIU and it represents blue chip stocks in Canada. In this chart, each pixel represents opening price, highest and lowest prices, and closing price for an HOUR of trading over ten days. Based on this up-close look, the market appears to be going down.

What happens when we step back a bit and look at the picture for the last six months? This chart shows the same ETF: each line represents opening, high, low and closing prices for a DAY of trading. From here, the market appears to be going up.

Virginia: Well, that’s the picture we seem to be getting right now. I’ve been worried that I’m too worried. Almost everyone I talk to has made back some money in the market in the past few months. I’ve been standing on the sidelines, waiting for the picture to come into focus.

Ken: Shall we step back even further? This is the same ETF for the past two years: each line represents the open, high, low and closing prices for a WEEK of trading. At this distance, the market appears to be recovering from a sharp down trend.

Virginia: So, is that the whole picture? Can I stop worrying and start buying now?

Ken: First, get a big screen TV and look at the picture from a long way back. This chart shows the same ETF for the past 10 years. Each line represents one MONTH’S trading. From this distance, we see that long-term investors in the Toronto stock exchange haven’t done very well in the twenty-first century.

Virginia: I think that’s what has been bothering me. In the middle of all this mess, the experts kept saying we should think long term. But the long-term picture isn’t great. The view from your big-screen TV makes me want to buy a TV on a wristband. In the market, does anyone make money by focusing on pixels and just ignoring the big picture?

Ken: They’re called day traders. They make and lose money every day. They pay attention to the pixels and are prepared to move quickly. It might sound risky, but they are actually better at managing risk because they know they have to pay attention.

Most of us can’t stand the strain of sitting that close to the TV every day, all day. Most investors prefer to work with longer trends, not pixels. That means we need to keep the big picture in focus. But that’s where “buy and hold” investors lose out. They have developed a habit of sitting with their backs to the TV. Investors need to be active viewers who pay attention to what’s happening in the near term as well as in the longer term.

Sit up close to the TV and check that hourly chart again. If you bought ten days ago, you would be a loser if you sold today. Check the daily chart: if you bought six months ago, you are a winner today. If you bought the weekly chart two years ago you are a loser today. Ten years ago? Winner. Nine years ago? Break even.

Betting on trends is a mug’s game. If the market goes up in your timeframe, you win. If the market goes down, you lose. So, you’ve just got to ask yourself if you feel lucky.

Virginia: If it’s not important whether you sit up too close to the TV or back too far, how can we consistently make money in the market?

Ken: The key is to buy AND sell, not just buy. Once we acknowledge how important it is to sell out of the stock market, then we see how useful your pixel perspective is. Use the big screen TV again: the monthly chart [above] that goes back 10 years. If you had sold any time in the year 2000, bought any time in 2003, sold any time in 2007 or the first half of 2008, you would be way ahead. Buy AND sell, not just buy.

Virginia: While we’re thinking in pixels, can we use pixel size as an indicator about when to get in or out of the market?

Ken: In stock market jargon, pixel size is called volatility: how much the market moves up and down in a given time. And, yes, volatility does give us some clues about when we should buy or sell. But the important part of judging when to buy in or sell out is to want to buy in or sell out. If you look for reasons to act, you will find them. If you don’t look for reasons to act, you will not find them.

Yesterday’s “buy-and-hold” investors’ main problem is they were not looking for a reason to sell. The mortgage crisis that almost flushed the world’s banking system down the financial toilet came to the surface in July 2007. The huge decline in the stock market didn’t occur until autumn 2008. They had 14 months to sell! Why didn’t they sell? Because they didn’t believe in selling. They didn’t care about pixel size or trends: they had been taught to buy and hold for the long term.

Virginia: So, buy-and-hold baby boomers have turned on the TV to find the picture is really out of focus. It’s as if we had a collective mid-life crisis last year and have been unsettled ever since.

Ken: Those who were most affected by losses in the stock market last year were those closest to retiring. If your losses were truly a mid-life crisis, there’s still time to recover. But you don’t have to change your life; just change your attitude toward investing.

Investing involves buying AND selling, not just buying. Make that small adjustment in your thinking and you will have learned something from last year’s financial tsunami. Wouldn’t it be a shame to lose all that money and not learn anything? Wouldn’t it be a shame to NOT SELL again and lose another whole whack of money in the next sell-off?

Virginia: We are all 10 years closer to retirement than we were at the beginning of your 10-year big screen TV. I am part of a bubble of investors who have spent the past few decades thinking about the long term. Are you saying we should be less focused on the long term and start thinking about the medium term? That sounds like our mantra should be “Buy Low and Sell High,” not buy and hold.

Ken: Yes! If you don’t make that shift, you will have learned nothing from the 2001-2002 dotcom losses and nothing from the 2008 financial disaster. The long-term upward trend of the stock market ended in 2000. The old ways don’t work any more.

Try buying a comfy chair, then sit back and watch the market for a while. Can anyone tell if it’s going up or down? It all depends on how far you are from that TV. The key is to have the correct attitude. If the market is going up, you want to be in. If it’s going down, you want to be out. There is a time to buy and a time to sell. Once you develop that attitude, it’s just a matter of time until you develop market judgement. That’s why I wrote Beyond the Bull. We all need to find that Zen attitude that helps us to keep the market picture in focus.

Virginia Durksen’s company, Visible Ink: Writing @ Work, uses plain language to help clients describe technical topics. Ken Norquay is a veteran of the financial wars and a partner in CastleMoore Inc, an investment management company.

Amazon links for Beyond the Bull:

Canada
http://www.amazon.ca/Beyond-Bull-Taking-Market-Wisdom/dp/0980923182/ref=sr_1_1?ie=UTF8&s=books&qid=1228246016&sr=8-1
US
http://www.amazon.com/Beyond-Bull-Taking-Market-Wisdom/dp/0980923182/ref=sr_1_1?ie=UTF8&s=books&qid=1228246055&sr=8-1

Exchange Traded Fund News

Barclays Halts Issuing New Shares of iPath ETN

NEW YORK -(Dow Jones)- Barclays PLC (BCS) said Friday it would stop issuing new shares of an ETF-like investment that tracks natural gas prices amid new regulatory and political pressure on energy speculators.

The move follows similar ones by the United States Natural Gas ETF (UNG) and a Deutsche Bank AG (DB) investment tied to oil prices. Frequently, stopping the issuance of new shares causes ETFs and ETNs to trade at prices that are higher than their underlying values.

Barclays’ $188 million iPath Dow Jones-UBS Natural Gas Subindex Total Return ETN had seen a spike in trading volume recently, as investors appeared to balk at the premiums required to trade U.S. Natural Gas Fund once it suspended issuing new shares.

ProShares Trust Lists ProShares Short 20+ Year Treasury on NYSE Arca

August 20, 2009- NYSE Euronext (NYX) announced that its wholly-owned subsidiary, NYSE Arca, today began trading the ProShares Short 20+ Year Treasury (Ticker: TBF). The ETF is sponsored by ProShares Trust.

The Fund seeks daily investment results, before fees and expenses and interest earned on cash and financial instruments, that correspond to the inverse (opposite) of the daily performance of the Barclays Capital 20+ Year U.S. Treasury Bond Index (the “Index”). The Index includes all publicly issued, U.S. Treasury securities that have a remaining maturity greater than 20 years, are non-convertible, are denominated in U.S. dollars, are rated investment grade (at least Baa3 by Moody’s Investors Service or BBB- by S&P), are fixed rate, and have more than $250 million par outstanding. The Index is weighted by the relative market value of all securities meeting the Index criteria.

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.

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More from the network: Next Report on Monday, February 6th Stock Market Outlook for February 2, 2012 Stock Market Outlook for February 1, 2012 Stock Market Outlook for January 31, 2012 (Lite) Stock Market Outlook for January 30, 2012 (Lite)

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