Comments on: Tech Talk for Friday October 16th 2009

By: Don Vialoux

Don Vialoux — Sat, 17 Oct 2009 00:59:45 +0000

Hi Marc. A low U.S. Dollar has two positive impacts on U.S. based companies. Companies with international operations can consolidate offshore earnings with higher currency value than previous. In addition, companies with sales primarily in the U.S.are able to sell their products in the U.S. at a lower price than their international competitors.

By: GregDS

GregDS — Fri, 16 Oct 2009 19:09:16 +0000

Don

I would like to put some money aside in US dollars…at these rates. What is the best spot to put it – soemthing that is safe but yeilds more than just the currency?

By: Marc

Marc — Fri, 16 Oct 2009 19:03:51 +0000

Thanks Don for your insights on MO. considering the price of the USD and CAD dollars at this time, would one be better off purchasing MO now, collect the dividend, get some growth and sell when the dollar goes back down? I read somewhere that people are looking at purchasing US denominated stocks because of the low US dollar. could you explain that rationale in detail as i don’t understand?

By: Don Vialoux

Don Vialoux — Fri, 16 Oct 2009 18:29:28 +0000

Hi Marc. MO currently has a positive intermediate technical profile. Intermediate trend is up. The stock trades above its 50 and 200 day moving averages. Short term momentum indicators continue to recover from oversold levels. Strength relative to the S&P 500 Index has been negative since March (typical of most consumer staple stocks). Sorry, Tech Talk does not offer 3-5 year opinions. Too many events can occur during that time horizon to offer a valid opinion.

By: Don Vialoux

Don Vialoux — Fri, 16 Oct 2009 18:23:03 +0000

Hi Roy. Support and resistance for POT (in U.S. Dollars) are at $83.68 and $102.18 respectively. Nice move today. Supportr and resistance for RIMM (in U.S. Dollars are $64.92 and $88.08 respectively.

By: Don Vialoux

Don Vialoux — Fri, 16 Oct 2009 18:19:49 +0000

Hi Jordy. Interesting question. The yield on 10 year treasuries currently is in an intermediate downtrend (i.e. bond prices are in an intermediate uptrend), implying anticipation of a weaker economy. The S&P 500 Index currently is in an intermediate uptrend, implying anticipation of a stronger economy. Divergence is unusual and is unlikely to last for long. Longer term studies by authors such as John Murphy claim that U.S. bond prices tend to lead U.S. equity markets by about six months.

By: Don Vialoux

Don Vialoux — Fri, 16 Oct 2009 18:11:34 +0000

Hi Mayur. The break out by crude oil above $75 U.S. implies an intermediate upside technical target of $86.50 U.S. However, a word of caution. The break out is highly inversely correlated to the U.S. Dollar and has little to do with the fundamentals of crude oil. Crude oil in most other currencies including the Canadian Dollar and the Euro remains below levels set in June.

By: jordy

jordy — Fri, 16 Oct 2009 17:27:20 +0000

Double D:

I am referring to the fall in the 10y treasury yield (from around 3.9 in early August to as low as 3.2 last week–since rebounded to 3.5 but moving average is still down) vs the continued rise in the SP500 index (then 1000 now 1080).

By: Marc

Marc — Fri, 16 Oct 2009 16:53:37 +0000

Hi Don,
what is your analysis on Altria (MO)in the short term (6mo) and long term 3-5yrs

By: Double D

Double D — Fri, 16 Oct 2009 16:25:59 +0000

Jordy
Are you referring to the bond yield / dividend yield ratio?