ShareThisPre-opening Comments for Monday October 26th
U.S. equity index futures are slightly higher this morning. S&P 500 futures were up two points in pre-opening trade. Futures were helped by continuing weakness in the U.S. Dollar and by third quarter earnings reports that exceeded consensus. Companies that reported better than expected third quarter earnings reports this morning included Verizon, Corning and McGraw Hill.
Microsoft added 1% after Canaccord upgraded the stock from Hold to Buy. Target price was raised from $24 to $34.
Pitney Bowes slipped 4% after Goldman Sachs downgraded the stock from Neutral to Sell. Target slips from $25 to $24
Fifth Third and SunTrust Banks fell 3% after well known U.S. bank analyst downgraded Dick Bove downgraded them from Neutral to Sell. SunTrust Banks is expected to open below a key support level at $20.04.
![clip_image001[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2009/10/clip_image001111.gif "clip_image001[1]")
Chart courtesy of StockCharts.com www.stockcharts.com
Economic News This Week
The economic focus this week is on the preliminary third quarter GDP report.
September Durable Goods Orders to be released at 8:30 AM EDT on Tuesday are expected to improve to 0.7% versus -2.4% in August.
October Consumer Confidence to be released at 9:00 AM EDT on Tuesday is expected to improve to 54.0 from 53.1 in September.
September New Home Sales to be released at 10:00 AM EDT on Wednesday is expected to increase to 440,000 from 429,000 in August.
Preliminary third quarter GDP to be released at 8:30 AM EDT on Thursday is expected to increase to 3.0% from -0.7% in the second quarter.
September Personal Income to be released at 8:30 AM EDT on Friday is expected to be unchanged versus a gain of 0.2% in August.
September Personal Spending to be released at 8:30 AM EDT on Friday is expected to decline 0.4% versus a gain of 1.3% in August.
October Chicago PMI to be released at 9:45 AM EDT on Friday is expected to increase to 48.5 from 46.1 in September.
October Michigan Sentiment to be released at 9:55 on Friday is expected to increase to 70.0 from 69.4.
Earnings News
Canadian companies are prominent on the list of companies reporting third quarter earnings this week.
Monday sees reports from Avon, Corning, Electronic Arts and Verizon.
Tuesday sees reports from Apollo, Canadian Pacific, Massey Energy, Methanex, Norfolk Southern, Open Text, Rogers Communications, TransAlta, U.S. Steel and Visa.
Wednesday sees reports from Agnico Eagle, Conoco Phillips, General Dynamics, Goodyear, Exxon Mobil, Imperial Oil, Kellogg, Lundin Mining, Newmont and Procter & Gamble.
Thursday sees reports from Aetna, Apache, Barrick Gold, Canfor, Colgate, Exxon Mobil, Imperial Oil, Kellogg, Lundin Mining, Newmont and Procter & Gamble.
Friday sees reports from Chevron, Domtar, Eldorado Gold, Tim Horton and Weyerhaueser.
Equity Index Trends
The ratio of S&P 500 stocks in an uptrend to a downtrend (i.e. the Up/Down ratio) fell last week from 9.07 to (390/66=) 5.91. Most of the technical damage was done on Friday when 21 S&P 500 stocks broke resistance and two stocks broke support.
Bullish Percent Index for S&P 500 stocks was unchanged last week at 84.80%. The Index remains above its 15 day moving average, but is giving clear signs of passing its intermediate peak five weeks ago.
Chart courtesy of StockCharts.com www.stockcharts.com
The Up/Down ratio for TSX Composite stocks also fell last week from 6.83 to (122/21=) 5.81. Six TSX Composite stocks broke resistance last week and five stocks broke support. The ratio remains intermediate overbought and is showing early signs of peaking.
Bullish Percent Index for TSX Composite stocks was unchanged last week at 81.86% and remains just above its 15 day moving average. The Index remains intermediate overbought.
Chart courtesy of StockCharts.com www.stockcharts.com
The S&P 500 Index in Canadian Dollars peaked five weeks ago and is 2.0% below its peak level.
Chart courtesy of StockCharts.com www.stockcharts.com
The S&P 500 Index slipped 8.08 points (0.74%) last week. Intermediate trend is up, but is testing the trend line. The Index remains above its 50 and 200 day moving averages. Support is at 1,019.95. Volume continues to trend lower. MACD recorded a negative rollover from an overbought level on Friday. RSI recently turned lower after briefly reaching the 70%. Stochastics recorded a short term sell signal on Friday on a fall below 80%. First downside risk is to support at 1,019.
Chart courtesy of StockCharts.com www.stockcharts.com
Percent of S&P 500 stocks trading above their 50 day moving average fell last week from 84.20% to 71.00%. Percent has established a downtrend from an intermediate overbought level.
Chart courtesy of StockCharts.com www.stockcharts.com
Percent of S&P 500 stocks trading above their 200 day moving average slipped from 95.00% to 93.60% last week. Percent appears to have peaked at an all time high and remains intermediate overbought.
Chart courtesy of StockCharts.com www.stockcharts.com
The Dow Jones Industrial Average slipped 23.73 points (0.24%) last week. Intermediate trend remains up, but is being tested. The Average remains above its 50 and 200 day moving averages. Support is indicated at 9,430.08. Volume continues to trend lower. MACD recorded a roll over from an overbought level on Friday. RSI is trending lower, but remains overbought. Stochastics is above 80% and shortly will record a short term sell signal on a move below 80%. Strength relative to the S&P 500 Index remains negative. First downside risk is to support at 9,430.
Chart courtesy of StockCharts.com www.stockcharts.com
Bullish Percent Index for Dow Jones Industrial stocks was unchanged at 93.33% and remained above its 15 day moving average. The Index remains intermediate overbought.
Chart courtesy of StockCharts.com www.stockcharts.com
Bullish Percent Index for NASDAQ Composite Index stocks eased last week from 72.65% to 71.02% and remains below its 15 day moving average. The Index peaked five weeks ago and remains intermediate overbought.
Chart courtesy of StockCharts.com www.stockcharts.com
The NASDAQ Composite Index slipped 2.33 points (0.11%) last week despite the release of a series of better than expected third quarter reports from information technology companies. Intermediate trend is up, but currently is being tested. The Index remains above its 50 and 200 day moving averages. Support is at 2,040.73. MACD rolled over from an overbought level on Friday. RSI is trending lower from an overbought level. Stochastics recorded a sell signal on a move below 80% on Friday. Strength relative to the S&P 500 Index currently is neutral.
Chart courtesy of StockCharts.com www.stockcharts.com
The Russell 2000 Index fell 15.32 points (2.49%) last week. Intermediate trend is up, but broke below its uptrend line on Friday. The Index remains above its 200 day moving average and currently is testing its 50 day moving average at 594.44. Support is at 576.40. MACD has rolled over from a short term overbought level. RSI continues to trend lower from an overbought level. Stochastics recorded a short term sell signal on Thursday on a break below 80%. Strength relative to the S&P 500 is turning negative. First downside risk is to support at 576.
Chart courtesy of StockCharts.com www.stockcharts.com
The Dow Jones Transportation Average fell 218.20 points (5.42%) last week. Intermediate trend remains up. The Average briefly broke above resistance at 4,055.58 last week but was unable to sustain that level. The Average remains above its 200 day moving average, but fell below its 50 day moving average on Friday. MACD rolled over on Friday from a short term overbought level. RSI continues to trend lower. Stochastics recorded a short term sell signal on Thursday on a break below 80%. Strength relative to the S&P 500 Index has started to turn negative. First downside risk level is to support at 3,655.77.
Chart courtesy of StockCharts.com www.stockcharts.com
The TSX Composite Index lost 122.63 points (1.07%) last week. Intermediate trend remains up, but its trend line is being tested. The Index remains above its 50 and 200 day moving averages. The Index peaked five weeks ago at 11,648.55. Support is at 10,855.16. MACD and RSI rolled over last week from a short term overbought level. Stochastics recorded a short term sell signal on Friday on a move below 80%. Strength relative to the S&P 500 Index remains negative. First downside risk is to support at 10,855.
Chart courtesy of StockCharts.com www.stockcharts.com
Percent of TSX Composite stocks trading above their 50 day moving average plunged last week to 65.69% from 75.00%. Percent peaked five weeks ago with the Index, remains intermediate overbought and is trending lower.
Chart courtesy of StockCharts.com www.stockcharts.com
Percent of TSX Composite stocks trading above their 200 day moving average slipped last week from an all time high at 87.75% to 86.27%. Percent remains intermediate overbought.
Chart courtesy of StockCharts.com www.stockcharts.com
The Australia All Ordinaries Composite Index added 17.10 points (0.35%) last week. Intermediate trend is up. The Index remains above its 50 and 200 day moving average. Short term momentum indicators are overbought and showing early signs of rolling over. Strength relative to the S&P 500 Index remains undetermined.
Chart courtesy of StockCharts.com www.stockcharts.com
The Nikkei Average added 25.44 points (0.25%) last week. Intermediate trend is down. The Average remains above its 200 day moving average and managed to move above its 50 day moving average last week. Support is at 9,628.67. Resistance is at 10,767.00. Short term momentum indicators are recovering from oversold levels with Stochastics reaching the overbought level. Strength relative to the S&P 500 Index remains negative.
Chart courtesy of StockCharts.com www.stockcharts.com
The Shanghai Composite Index added 131.21 points (4.48%) last week. Intermediate trend remains up. The Index remains above its 200 day moving average and moved above its 50 day moving average last week. Resistance at 3,068.02 was broken. Next resistance is at 3,478.01. Support is at 2,639.75. Short term momentum indicators are recovering from oversold levels with Stochastics already reaching an overbought level. Strength relative to the S&P 500 is changing from negative to neutral.
Chart courtesy of StockCharts.com www.stockcharts.com
The London FT Index added 52.33 points (1.01%), the Frankfurt DAX Index slipped 3.14 points (0.05%), and the Paris CAC Index eased 19.36 points (0.50%) last week. Charts courtesy of StockCharts.com
Currencies
Weakness in the U.S. Dollar continues to dominate trader activity in equity and commodity markets. The modest recovery on Friday triggered significant selling in North American equity indices and commodities priced in U.S. Dollars. Strength was attributed to rumors of international central bank activity to stabilize the currency. The U.S. Dollar slipped another 0.15 last week. Intermediate trend remains down. Short term momentum indicators are oversold, but may be trying to recover. Upside potential is to its 50 day moving average at 77.00. The 50 day moving average has proven to be a reliable short term resistance level during the past six months. However, a recovery to the 50 day moving average should not be considered as a change in the Dollar’s intermediate downtrend.
Chart courtesy of StockCharts.com www.stockcharts.com
Conversely, the Euro added 1.00 last week. Intermediate trend remains up. Short term momentum indicators are overbought, but have yet to show signs of rolling over. Downside risk if momentum indicators roll over is to the 50 day moving average currently at 145.83.
Chart courtesy of StockCharts.com www.stockcharts.com
The Canadian Dollar dropped 1.56 cents U.S. last week after the Bank of Canada “jaw boned” the currency lower. Resistance at the bottom of a band of resistance between 97 and 103 was confirmed. Intermediate trend remains up. Short term momentum indicators have rolled over from overbought levels and continue to trend lower. The Dollar remains above its 50 and 200 day moving averages. Downside risk is to its 50 day moving average at 93.33. Its 50 day moving average has proven to be a reliable support level during the past six months.
Chart courtesy of StockCharts.com www.stockcharts.com
Commodities
The CRB Index added 4.24 points (1.53%) last week thanks mainly to weakness in the U.S. Dollar. Intermediate trend remains upward. Short term momentum indicators are overbought. Note the reversal on Friday when the U.S. Dollar recovered.
Chart courtesy of StockCharts.com www.stockcharts.com
Crude oil added $1.48 U.S. per barrel last week, but stalled late in the week with the recovery in the U.S. Dollar. Intermediate trend remains up. Downside risk in a correction is to its 50 day moving average currently at $72.08. Upside potential is to $86.50,
Chart courtesy of StockCharts.com www.stockcharts.com
Unleaded gasoline added $0.06 per gallon, but found resistance near $2.10. Support remains at $1.60 per gallon.
Chart courtesy of StockCharts.com www.stockcharts.com
Natural gas showed technical signs of peaking last week. Short term momentum indictors have rolled over.
Chart courtesy of StockCharts.com www.stockcharts.com
Natural gas has a history of peaking in the third week in October.
Energy stocks on both sides of the border are rolling over.
Chart courtesy of SeasonalCharts.com www.seasonalcharts.com
Chart courtesy of StockCharts.com www.stockcharts.com
Gold added $2.30 U.S. per ounce last week. Early technical signs of a short term peak have appeared. MACD and RSI have rolled over from a short term overbought level. However, technical requirement for seasonal profit taking (i.e. a move by Stochastics below 80% and at least one day when price moves lower than the previous day) have yet to be met. Requirements likely will be met this week. More information on seasonal trades in gold is offered near the end of this blog.
Chart courtesy of StockCharts.com www.stockcharts.com
Gold equity indices on both sides of the border show a similar technical pattern. Short term momentum indicators either have or are about to provide sell signals.
Chart courtesy of StockCharts.com www.stockcharts.com
Silver has a similar technical profile.
Chart courtesy of StockCharts.com www.stockcharts.com
Copper managed to move above resistance at $2.9940 U.S. per lb. thanks to weakness in the U.S. Dollar. Seasonal influences turn positive in November.
Chart courtesy of StockCharts.com www.stockcharts.com
Grain prices had another big week. JJG gained $2.26 (5.9%) last week and broke resistance at $41.19 on Friday. Short term momentum indicators are overbought, but trend remains up. ‘Tis the season for grain prices and Ag stocks to move higher.
Chart courtesy of StockChart.com www.stockcharts.com
Financials
The yield on 10 year U.S. Treasuries added 0.08% last week and moved above its 50 day moving average. Short term momentum indicators are overbought.
Chart courtesy of StockCharts.com www.stockcharts.com
Conversely, long term Treasury ETFs remained under pressure, but short term momentum indictors are oversold.
Chart courtesy of StockCharts.com www.stockcharts.com
The S&P Financials Index remains range bound between 183.11 and 212.09.
Chart courtesy of StockCharts.com www.stockcharts.com
The TSX Financial Services Index continues to struggle. It peaked five weeks ago and currently is testing short term resistance. Short term momentum indicators have rolled over from overbought levels.
Chart courtesy of StockCharts.com www.stockcharts.com
Other Factors
The VIX Indicator touched another 14 month low last week. Intermediate trend remains down.
Chart courtesy of StockCharts.com www.stockcharts.com
Equities continue to move higher in anticipation of third quarter results and quickly come under profit taking pressures after results are released (unless “blow out” results are announced). About 40% of S&P 500 companies have released third quarter results to date. 81% of reporting companies have beat consensus earnings estimates by at least $0.01. However, only 62% have reported higher than expected revenues. Companies reporting revenues in line or slightly less than consensus were notably weaker last week. Look for more of the same week.
Short and intermediate technical indicators clearly turned negative last week. Look for additional confirmation this week (e.g. the breaking of more uptrend lines by major equity indices, the breaking of more support levels by stocks in an uptrend, more short term momentum sell signals, additional weakness in Bullish Percent indices, continuing declines in the Up/Down ratios, etc. Most broadly based equity indices and large cap equities peaked five weeks ago and have been moving sideways. Continuation of a shallow correction into November is anticipated. The charts will let us know.
Favourable seasonal influences for equity markets that normally appear in late October are likely to be delayed this year. Thackray’s 2010 Investor’s Guide notes that the average optimal date to buy the Canadian and U.S. equity market is at the opening on October 28th. However, the actual optimal date varies slightly each year by up to two weeks either before or after the average optimal date. The optimal date each year can be identified using short term momentum indicators. Given that short term momentum indicators for the S&P 500 Index and the TSX Composite Index have just registered sell signals, the optimal entry date this year likely will be delayed slightly. Stay tuned for updates.
Political events will not help equity markets this week. This Administration and Congressional leaders are showing their true colours. The move last week to demonize Wall Street through limitations on compensation to employees of companies that used TARP and threats to extend legislature beyond TARP lending companies will do more damage than good (particularly to companies with TARP money who quickly will lose key traders and employers who were making a profit for these firms). Ironically, the winners with this arrangement will be international banks including large Canadian banks that will be able to hire top notch traders and employees who normally would not be available. Health care is the focus issue in Washington this week.Health care legislation, as it currently stands, is filled with “side deals” designed to gain passage despite a lack of support by the public. Net result will be a convoluted bill designed to serve special interests that will prove to be more expensive and less effective than originally proposed. Next shoe to fall this week is the “global warming issue”. Obama commented over the weekend that the issue on global warming has been settled and that the U.S. must proceed aggressively. His comments do not coincide with public opinion which has becoming increasingly skeptical about the importance of acting on the issue at this time. One thing is certain! Energy costs will escalate significantly when legislation is enacted .Energy users (including the public) will pay more either in higher taxes or in higher fees to energy producers when their higher costs are passed through. However, this Administration and Congressional leaders have no intention of changing their policies. Ironically, new legislation on these issues likely will cause only minor ripples on equity markets in the short term because the real impact on the public will not surface until next spring. The period leading to the mid-term election (most notably the third quarter of 2010) is lining up to be a major period of economic and political stress. Investors should plan their investment strategies accordingly.
The Bottom Line
Weakness in equity markets over the next few weeks will provide a buying opportunity (particularly in sectors that benefit from favourable seasonal influences). Selected sectors (notably information technology) already are showing positive seasonal influences. Now is the time to do your home work in order to determine which securities will be top choices for investment during the November to April period of seasonal strength.
Tech Talk’s Weekly Column in the Financial Post
(As published last Saturday in the National Post and available by paid subscription at www.nationalpost.com )
An Update on Gold Bullion
Gold bullion entered into a period of seasonal strength in the second week in July. Gains since then have been significant thanks mainly to weakness in the U.S. Dollar. Where does gold bullion go from here?
Seasonal Influences
According to Thackray’s 2010 Investor’s Guide, gold bullion has a period of seasonal strength from July 12th to October 9th. The trade has been profitable in seven of the past 10 periods for an average gain per period of 4.8%. This year, short term momentum indicators recorded a buy signal on July 10th at $907.30 U.S. per ounce. Short term momentum indicators remained positive beyond October 9th, the average optimal exit date. Profit taking for the current period of seasonal strength is pending. Likely timing of a technical sell signal is this week. Gold also has a second period of seasonal strength from the end of November to the beginning of February.
Technical Influences
The breakout by gold above its all time high at $1,033.90 per ounce at the beginning of October implies a significantly higher technical target. Gold completed a two year reversal pattern with an intermediate term technical target of $1,300. However, its $80 per ounce gain since the beginning of October has been excessive and a period of consolidation is likely. Short term momentum indicators (Moving Average Convergence Divergence, Relative Strength Index and Stochastics) are overbought. The end of the current seasonal trade will occur when short term momentum indicators roll over and record sell signals. Intermediate downside risk is to $941 U.S. per ounce, its 200 day moving average.
Chart courtesy of StockCharts.com www.stockcharts.com
Fundamental influences
Most of the strength in gold bullion is due to weakness in the U.S. Dollar. The U.S. Dollar fell to a 13 month low last week and has yet to show technical signs of bottoming. International investors and central banks continue to diversify their holdings out of U.S. Dollars. The annual $1.4 trillion U.S. government deficit announced last week encouraged international investors to accelerate their efforts to diversify. On the charts, the U.S. Dollar currently is deeply oversold and due for a short term recovery. However, fundamental reasons for the weak U.S. Dollar have not been resolved. Government spending continues to accelerate and deficits continue to grow. A brief recovery in the U.S. Dollar and subsequent weakness in gold will be followed to a reversion to current trends.
Gold faces a barrier to significant short term gains. The International Monetary Fund (IMF) plans to sell 403 tonnes of gold into the market in an orderly manner in unison with sales by European central banks. However, the IMF is willing to negotiate sale of part or all of the gold to one or more major buyers. Negotiations with the Chinese government to purchase at least part of the block are rumored. The IMF has an incentive to liquidate at least part of the block before the end of this year in order to support emerging nations that have suffered unduly from the world financial crisis. A deal to distribute proceeds of the sale could become part of an international agreement on climate change scheduled for negotiation in mid December in Copenhagen. Completion of an agreement to sell the block is the likely trigger for the next major upside move in the price of gold.
What to do
Investors holding gold bullion are in an enviable position. Should they take profits during the current period of seasonal strength that started in July or should they wait until the end of the next period of seasonal strength from the end of November to the beginning of February? Holding between now and the end of November implies downside risk of approximately 10%. On the other hand, holding until next February offers intriguing upside potential. Investors will make the decision this week based on their personal investment circumstances and ability to take risk.
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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Discussions from the Tech Talk Forum:
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October 26th, 2009 at 4:39 am
Fantastic Monday post Don. I’m trying to absorb everything I can from you. I’ve gone through your education page and have a question regarding the interpretation of technical indicators: MACD(12,26,9) has three different numbers (black/red/blue) and FULL STO %K(14,3)has two (black/red) which numbers do we pay attention to? When running our own charts do we just pay attention to the lowest number for MACD(12,26,9)and FULL STO %K(14,3)? Or is it a bit more complicated than that? Thanks for your help. -Shawn
October 26th, 2009 at 5:48 am
NAT GAS . . . Don I am short with HND. I see a re test of the $2.41 level before the end of the year. If the market in general pulls back, I think NAT GAS goes with it. Your thoughts would help.
October 26th, 2009 at 6:19 am
Hi Don;
Re nat gas charts above,is seasonal chart different for Canada- I think I heard you once say Can. nat gas peaks in Dec.? Thanks.
October 26th, 2009 at 6:27 am
Hi Nick. Please check comments on natural gas in today’s blog.
October 26th, 2009 at 6:35 am
Hi Shawn. When looking at MACD, sell signals are given when both the 12 day and 26 day moving average are above the 0 line and the 12 day moving average fall below the 26 day moving average. Buy signals are the mirror image: Both the 12 day and 26 day moving averages are blow the 0 line and the 12 day moving average moves above the 26 day moving average.
My preferred way to use Stochastics is to see %k(14,3)fall below the 80% level for a sell signal and, conversely, the level recovers above the 20% for a buy signal.
October 26th, 2009 at 6:56 am
Hi Don,
Thanks for the update on seasonal plays, this is a pretty exciting time of year as so many of them are setting up now.
On the subject of the second period of Gold’s strength, in one of your tables on June 2nd you listed Gold as being from the end of October to the end of February, 8/10 13.9% avg return. In today’s post you suggest it is instead the end of November to the end of February. Is this difference between US & Cdn Gold vehicles (like AB vs. US NatGas), or have you refined your seasonal model for Gold since June? If the latter is true, I will go back and take another look at my own ‘homework’ on Gold and make some adjustments.
October 26th, 2009 at 7:31 am
Hi Andrew. Enclosed is a link to seasonalcharts.com showing seasonality for gold futures. It shows that gold tends to reach a seasonal low in the middle of November (i.e. in between the end of October and the end of November.See: http://www.seasonalcharts.com/future_metalle_gold.html
More intriguing than gold is silver. Its period of seasonal strength is from near the end of November to mid Februay. Silver has a history of outperforming gold during this period. Following is a link showing seasonal trends in silver futures:
http://www.seasonalcharts.com/future_metalle_silver.html
October 26th, 2009 at 10:00 am
Hello Don,
Thanks for your comments about market and showing in the charts, so it is easy to understand. At this time I had bought HND.to, ETF’s trading in Canada in CD fund at 4.5 and inventory is high in storage. Now I read your comments that n.gas is highest in Oct. 4th week, does that means we are going to use the n.gas from storage in coming winter season. With your comments I am kind of confused. USA’s Industries will pick up use of n.gas. N.gas future is trading higher than today’s price, so future price will go higher? I am still confused?
October 26th, 2009 at 10:51 am
Hi Don
Would seasonality still be profitable for AGU.TO and POT.TO even though they had bad earnings? In other words, do we still buy these stocks on weakness? Thanks
October 26th, 2009 at 11:24 am
Hi Don,
would you consider buying some DWI since the sell off from 12.10 recently for the telecom seasonal trade? I would assume this could still have a lot of downside movement since i cannot really see any support levels. what are your thoughts?
October 26th, 2009 at 2:59 pm
Hi Don,
After reading Bill’s second blog about CSTA, I agree that he’s got a point.
What’s your comment?
October 26th, 2009 at 3:14 pm
Hi Roy. Seasonal influences for the agriculture sector remains positive until the end of December. Agrium has been an outperformer in the sector and the S&P 500 Index since mid July. Potash Corp has been an underperformer in the sector and the S&P 500 since mid July. Preferred strategy is to continue to hold until near the end of the period of seasonal strength.
October 26th, 2009 at 4:21 pm
Reference the Natural gas chart above. One has to wonder about the accuracy of a chart that finishes the end of December at 90 and starts out January 1st at 100!
October 26th, 2009 at 4:41 pm
Hi Dave A. Just confirming that the end of the period of seasonal strength for natural gas in Canada is the end of December (versus near the end of October for natural gas in the U.S.). The difference mainly is caused by currency and inventory levels (greater draw down of gas in Canada in November and December for heating purposes than in the U.S.)
October 26th, 2009 at 5:12 pm
Thanks for the reply Don!
Is there a silver equivalent to GDX / XGD.to that you would recommend I investigate further? I am aware of SLV but am a bit leery of it for the same reasons that some have concerns about GLD. I would rather hold an ETF/ETN of producers (unless you know of a good reason not to). Thanks as always!
October 26th, 2009 at 5:19 pm
Great work as usual Don! Thanks.
Waiting to buy Suncor.
October 26th, 2009 at 7:00 pm
Hi Dave A. Seasonality charts shown on SeasonalityCharts.com show relative stength during the year starting at 100 at the beginning of the year. The end point in December can be higher or lower than 100 relative to its starting point in January.
October 26th, 2009 at 7:04 pm
Hi Andrew. A couple of additional possibilities for silver. Horizon BetaPro offers an unleveraged silver ETF that is U.S. Dollar hedged. Symbol is HUZ. PowerShares offers a silver ETN in U.S. Dollars. Symbol is DBS.