Pre-opening Comments for Wednesday October 14^th

U.S. equity index futures are higher this morning. S&P 500 futures are up 15 points in pre-opening trade. Futures are responding to better than expected third quarter earnings released overnight by Intel, JP Morgan and Abbott Labs. Better than expected September retail sales also helped.

September retail sales fell 1.5% versus a gain of 2.7% in August. However, the August report was influenced by the “Cash for Clunkers” program. Consensus for September was a decline of 2.1%. Excluding autos, retail sales rose 0.5% versus consensus of 0.2%.

Intel added 5% after beating third quarter consensus estimates and after raising fourth quarter guidance. Consensus was $0.28 versus $0.35 per share last year. Actual was $0.33 per share.

JP Morgan added 4% after beating third quarter consensus estimates. Consensus was $0.52 versus $0.09 per share last year. Actual was $0.82 per share.

Abbot Labs added 2% after beating third quarter consensus estimates and raising fourth quarter guidance. Consensus was $0.92 versus $0.69 per share last year. Actual was $0.95 per share.

Goldcorp and Barrick Gold are slightly higher after JP Morgan raised its ratings on both stocks from Neutral to Outperform. Target price for Goldcorp is $47 U.S. Target price for Barrick Gold is $54.

Technical Action Yesterday

Technical action by S&P 500 stocks remained bullish yesterday. Another nine stocks broke resistance and one stock broke support (Sprint Nextel). In addition, twenty S&P 500 stocks broke resistance on Monday and none broke support. Also, Tech Talk examined all S&P 500 stocks that were in a neutral or downtrend to verify their trend. A few stocks were adjusted accordingly. The update was complete in preparation for launch of a new service on Tech Talk that will provide indicated intermediate support/resistance and trend for each S&P 500 and TSX Composite stock. The Up/Down ratio for S&P 500 was adjusted to (400/50=) 8.00.

Technical action by TSX Composite stocks was quietly bullish. Two TSX stocks broke resistance (Dorel Industries and MacDonald Detwiller) and none broke support. The Up/Down ratio was unchanged at (118/19=) 6.21.

ETF News

The Horizon Alpha Pro Gartman Fund listed on the TSX (HAG.UN) should become an ETF on Friday if all goes according to plan.

Bank of Montreal is hoping to launch another nine ETFs on October 26^th. It recently launched four ETFs.

Jefferies Hopes to Strike it Rich with Wildcatting ETF

October 8, 2009 at 9:39 am by ETF.com

Jefferies has filed with the SEC to create two new funds in the natural gas industry. One of the funds is unique to Wall Street, offering investors the chance to invest in companies that may strike it rich with lucrative natural gas and oil field findings.

The two new funds, which will be created in partnership with ALPS, are the Jefferies Natural Gas Equity ETF and the Jefferies Energy Wildcatters Equity ETF. The Jefferies Natural Gas Equity ETF will invest in companies that generate at least 50% of their revenue from the exploration, production and refinement of natural gas, according to the SEC filing.

The Jefferies Energy Wildcatters Equity ETF seeks more speculative investments, including small-cap companies that earn 75% of their revenue from the exploration of both natural gas and oil. The companies can be no smaller than $200 million in market cap and no larger than $2 billion. Upon launch, the fund will be the first small-cap energy fund.

Adrienne Toghraie’s “Trader’s Coach” Column

Telltales of a Pro-Trader
By Adrienne Toghraie, Trader’s Coach

www.TradingOnTarget.com

The bragger

It is a wonderful experience in human psychology to observe people at a trade show. After participating in trade shows for twenty years, I am pretty good at intuiting who are the want-to-be traders and who are the professional traders or those who are heading in that direction. The want-to-be traders who do not have a clue about what they are doing are those who need to prove something. Trading buzzwords trip off their tongue, i.e., Fibonacci numbers, Bollinger Bands, Stochastics, etc. Most often, if you were to pin them down to a definition, they would shuffle to find a meaning. Another sign that a trader will never be more than a want-to-be is when they make it a point to tell me about the importance of discipline as they walk by my booth looking for the Holy Grail strategy year after year. The Holy Grail to them is a strategy that takes little effort in learning, has huge wins and minor losses. A favorite topic of these want-to-be traders is to talk about the big trade that got away. And there I stand trapped in my booth listening for a question that never comes.

It has been my experience that professional traders are individuals who will do whatever it takes to improve their strategy and improve themselves. They are direct, humble, know how to ask questions, say when they do not know how to frame a question and want to listen more than talk.

The chat room and investment meeting junky

These are people who year after year attend gatherings on the Internet and also attend local meetings, but never commit to a system or method long enough to earn a living from what they have learned.

A pro-trader listens and learns from one mentor and makes it his own. The lessons he learns from there forward are lessons only to enhance the strategy he is using or his ability to follow it. If he listens to trading live, he continues to make decisions based on his own calculations and learns from the differences between himself and the other trader. This pro-trader takes full responsibility for his actions.

Want-to-be to pro-trader

If you are willing to recognize that you have some of the behaviors that keep you from becoming a professional trader and are willing to break these patterns read on:

Do you now have a viable strategy that would earn you a profit if you could follow it?

If you do:

Focus your attention on improving this method or improving yourself to be able to follow this method.

If you do not:

Decide the kind of trader that you want to be, the time frame that you want to trade and the amount of time that you are willing to commit to learning and trading. Decide the teachers, coach or mentor that could help you to achieve this goal. Put together a business plan that includes this strategy. Test it. Trade it with real money and then follow the above “If you do.”

Bill Carrigan’s Blog

Bill discusses “Gartmanisms”. Following is a link to his blog: http://www.gettingtechnicalinfo.blogspot.com/

Ken Norquay’s Column

Newfoundland’s Government Finally Gets It!

The citizens of Buchins NL found out that their town is contaminated. It appears that the old mine wasn’t closed down properly and there could be a lead poisoning problem. Dirty business.

But at least the provincial government did the right thing this time. Two cabinet ministers made public statements about the problem shortly after it was discovered. The town folk are being asked to get blood tests: they’re trying to find out how big this problem really is.

Good for them.

These past few years there was a scandal in Newfoundland because of a cover up in the detection and treatment of breast cancer. Government officials kept secret the fact that there were problems in the diagnostic testing in Newfoundland’s medical labs. Those delays caused unnecessary problems for the women who were improperly diagnosed.

It looks like they learned from their previous mistake. In the previous cover up, they put their shame and embarrassment about the labs’ mistakes ahead of the health of the women who were worried about having cancer. This time the government saw fit to put the health of the Buchinsians ahead of their own political interests.

Good for them.

Politics is a dirty business, isn’t it? Our elected representatives take great pains to insult and blame each other for the most unlikely things. Lab technicians in Newfoundland screwed up in a big way. We don’t know how many women died prematurely because of faulty cancer testing. Then the government, in complete denial of the seriousness of the problem, delayed correcting the error. They would surely have many embarrassing questions to answer in the provincial legislature. Their delay and cover up decisions were all done to protect their own best interest.

Most Canadians are well aware that they are being deceived: they know the representatives they elect will say anything to get elected again. That’s how it works in a modern democracy. It’s all about staying popular: ranking high on the polls. We have learned to live with it.

The same thing is true in the world of commerce. We all know advertising is a form of deception. It’s all about selling your product. Customers expect to be lied to, to be told that this product is better than that one. Modern advertising is not about producing quality products; it’s about selling products. We have learned to live with it.

In my book, Beyond the Bull, I discuss this “deception” component of our lives. The book talks about how deception is a natural part of our lives in modern societies. It offers advice about investing in a world of deceit.

The first important fact we need to know is: deceit is a huge part the typical Canadian’s life. Bull is part of politics, medicine, commerce, advertising and investing. So relax! In today’s Canada, we get lied to. Wake up to it.

My second offering to Canadian investors is to stop being so judgemental about the lying. Relax! Politicians lie. Salesmen lie. People try to cover up their mistakes. So quit complaining about it. Just wake up to it.

By far the most important attitude we need to adopt in this world of bull is responsibility. Who is responsible if we re-elect a liar or buy from a liar or lose our money by trusting a liar? We are! And who is responsible for letting the lies continue? We are!

So, what should the women of Newfoundland have done when their test results said they were OK when they, in fact, had cancer? What should the Buchinsians do now that they realize they’ve lived in contaminated land for thirty years? What should Ontarians do when they see massive corruption in the E-health, Cancer Care and Lottario?

Lets do what Newfoundland’s provincial government just did. Come clean. Tell it like it is. And get it fixed.

Ken Norquay, CMT

Financial Philosopher

ken@castlemoore.com

links to 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
UK
http://www.amazon.co.uk/Beyond-Bull-Taking-Market-Wisdom/dp/0980923182/ref=sr_1_1?ie=UTF8&s=books&qid=1228245979&sr=8-1

CSTA News

The CSTA Toronto chapter is pleased to present Dr. Van K. Tharp as a workshop speaker at its upcoming annual conference scheduled for November 6 & 7th, 2009, at the Toronto Board of Trade Downtown Centre.

In the unique arena of professional trading coaches, Dr. Tharp stands out as an international leader. Helping others become the best trader or investor that they can be has been his mission since 1982. Dr. Tharp uses a risk control method in his trading. Most people don’t understand risk, they think risk has to do with market volatility. But there is another way of thinking about risk that Dr. Tharp teaches in his risk control workshop that will transform how you think about trading. Visit http://www.csta-conference.com/ for Dr. Tharp’s complete biography and workshop abstract.

Don’t miss this extraordinary opportunity to hear from top traders and technical analysts. Register now at http://www.csta-conference.com/ to take advantage of the Early Bird special. Registration rates increase as of October 26th!

Other featured speakers and their topics over the 2 days include:
Dr. Marvin Appel – Moving Average Convergence/Divergence (MACD)
Richard Mogey – Intermarket Cycle Analysis
Ron Meisels – Market Update and Expectations
Doug O’Brien – Identifying Trading Opportunities (Doug placed 1st of 35,000 in 2008 trading contest)
Keith Richards – Money Management / Portfolio Management
Kathryn St. John – Patterns, Pattern Recognition and Measuring
John Person – Trading Tactics Workshop

Sponsorship opportunities are also available. For more information, please contact Chris Vassallo at 416-8488-0277 x 2242 or vassallo@radiusfinancialeducation.com

Interesting Chart

Intel reported significantly better than consensus third quarter earnings after the close and offered positive fourth quarter guidance. The stock quickly gained 5% in after hours trade. The stock broke above resistance at $20.65. Next short term technical target is $22.80. Favourable seasonal influences from October 9^th to January 17^th for Intel, the semiconductor subsector and the information technology sector appeared this year on October 8^th and was confirmed when Stochastics recovered above the 20% level.

Chart courtesy of StockCharts.com www.stockcharts.com

Chart 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 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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