Comments on: Tech Talk for Thursday October 15th 2009

By: Don Vialoux

Don Vialoux — Fri, 16 Oct 2009 13:28:17 +0000

Thanks, George. Your comments give a good explanation why grain prices and the agriculture sector usually reaches an important high near year end.

By: Don Vialoux

Don Vialoux — Fri, 16 Oct 2009 13:24:50 +0000

Hi Roy. Just confirming that intermediate technical parameters for AGU, COW, JJG and POT continue to improve. Stick with the discipline of holding until near the end of the period of seasonal strength in December.

By: George

George — Fri, 16 Oct 2009 12:45:19 +0000

Hi Don …wanted to make a comment re: the iPath Grain “JJG” ETF ,I noticed it being touted as a candidate for the Fall Ag play.
I live in the Belleville area , one of the larger farming/Ag areas in Ont.
Over the next 6 weeks most of the soyabeans and corn will be harvested,this leds to an over supply of these 2 commodities , most farmers will buy their seeds for next year at this time [Dec] when prices are typically low.Farmer with good cash flow will store their crops and sell late Spring [June] when prices typically peak.
So I would expect “JJG ” to actually bottom over the next few month , if I owned “JJG” I would sell now or hold off till late June early July next year.

Hope this helps you city folks !!

By: Roy

Roy — Fri, 16 Oct 2009 02:50:41 +0000

Hi Don
Since VT and MOO broke out, can we also assume AGU, COW and JJG may soon be doing likewise?

By: Don Vialoux

Don Vialoux — Fri, 16 Oct 2009 01:37:15 +0000

Hi Kevin. What a difference currency risk can make. It must be frustrating when playing S&P 500 on the downside when the Index in Canadian Dollars is 3% lower than highs reached more than three weeks ago. The S&P 500 Index in U.S. Dollars remains intermediate overbought and significant intermediate technical signs of weakness have yet to surface. The situation is amazingly simple. The U.S. equity market currently is a “one trick pony”. The trick is the U.S. Dollar. As long as the Dollar continues to drop, the pony will continue to run. As soon as the pony turns up lame, look out below.

By: Don Vialoux

Don Vialoux — Fri, 16 Oct 2009 01:29:46 +0000

Hi Sunil. Yes, nice break out by Viterra. Vittera was one of several equities in the ag sector that recorded strong technical gains today. The U.S. Ag ETF (MOO) also broke resistance and reached a 12 month high.

By: Don Vialoux

Don Vialoux — Fri, 16 Oct 2009 01:25:31 +0000

Hi Andrew. Yes and no on XIT. Yes, seasonal influences for XIT also are positive and similar to seasonal influences for XLK (Actually,historic returns are slightly higher for XIT). The catch is content of XIT. Units are heavily dominated by two stocks, RIM and GIB.A. Accordingly, risk characteristics are higher. Your choice based on your risk/reward parameters.

By: Don Vialoux

Don Vialoux — Fri, 16 Oct 2009 01:22:02 +0000

Hi Richard. Nice move in the Tech sector since October 6th when favourable seasonal influences for this year were confirmed by most big cap tech stocks and ETFs! Short term momentum indicators on XLK(notably Stochastics)already have recovered from oversold to overbought. Preferred strategy now is to buy on weakness. A return to its 50 day moving average currently at $20.31 would be an optimal entry point.

By: sunil

sunil — Thu, 15 Oct 2009 19:56:36 +0000

Hi Don,
Viterra making 12 months high, do you think its time to accumulate it.

Thanks
Sunil

By: Andrew

Andrew — Thu, 15 Oct 2009 14:37:02 +0000

Hi Don,

Regarding IT seasonality, can your comments about XLK and the IT sector’s seasonality in general be taken to apply for XIT.to as well?

Thanks!

Andrew