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Pre-opening Comments for Monday November 2nd
U.S. equity index futures are higher this morning. S&P 500 futures are up 6 points in pre-opening trade. Futures are responding to weakness in the U.S. Dollar as well as encouraging news from China and from the semiconductor industry. China’s Purchasing Manager’s Index rose again last month to reach an 18 month high implying accelerated economic growth. The Semiconductor Association announced that world wide semiconductor sales in the third quarter rose 19.7% on a year over year basis.
Commodities priced in U.S. Dollars moved higher including gold, copper and crude oil.
CIT Group moved into Chapter 11 bankruptcy over the weekend. The stock has fallen to $0.38 this morning from a close at $0.72 on Friday. The move had been anticipated and did not influence equity index futures.
Analysts are starting to take a more positive stance on the North American forest product industry. Credit Suisse upgraded Weyerhaeuser this morning and boosted its target price from $34 to $37. Domtar is up 5% after RBC Capital upgraded the stock from Outperform to Top Pick. Target was raised to $70. Also, Raymond James upgraded Domtar from Market Perform to Outperform. Demand for lumber and fine papers is increasing. Lumber prices broke to a two month high on Friday. ‘Tis the season for forest product stocks to move higher!
![clip_image001[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2009/11/clip_image0011.gif "clip_image001[1]")
Chart courtesy of StockCharts.com www.stockcharts.com
Research in Motion fell 3% after Citigroup downgraded the stock from Buy to Sell and removed the stock from its Top Pick list. Target goes from $100 U.S. to $50 U.S. Citigroup suggests that new competition will reduce growth prospects.
Ford gained 9% after reporting better than expected third quarter earnings. Consensus was a loss of $0.12 per share. Actual was an operating profit of $0.26 per share.
Yum! Brands added 2% after RBC Capital raised its rating from Sector Perform to Outperform.
Cott Corp. was upgraded by Bank of America/Merrill to Outperform from Sector Perform.
Economic News This Week
The economic focuses this week are on the FOMC meeting on Wednesday and the October employment report on Friday.
September Construction Spending to be released at 10:00 AM EST on Monday is expected to decline 0.2% versus a gain of 0.8% in August.
October ISM to be released at 10:00 AM EST on Monday is expected to improve to 53.0 from 52.6.
September Factory Orders to be released at 10:00 AM EST on Tuesday are expected to improve 0.9% versus -0.8% in August.
October ADP report to be released at 8:15 AM EST on Wednesday is expected to fall 190,000 versus a fall of 254,000 in September.
October ISM Services to be released at 10:00 AM EST on Wednesday are expected to improve to 51.5 versus 50.9 in September.
Meeting minutes from the FOMC meeting to be released at 2:15 PM EST on Wednesday are expected to maintain the Fed Fund rate at 0.25%.
Preliminary third quarter Production to be released at 8:30 AM EST on Thursday is expected to improve 6.5% versus a gain of 6.6% in the second quarter.
October Non-farm Payrolls to be released at 8:30 AM EST on Friday are expected to decline by 175,000 versus a decline of 263,000 in September. The October Unemployment Rate is expected to increase to 9.9% from 9.8% in September. October Hourly Earnings are expected to improve 0.1% versus 0.1% in September.
September Wholesale Inventories to be released at 10:00 AM EST on Friday are expected to decline 1.0% versus a 1.3% decline in August.
Earnings News
This week is the busiest week for third quarter earnings reports on both sides of the border.
Monday sees Cameco, FNX Mining, Ford, Humana, Kinross, Magna International, Power Corp. and West Fraser.
Tuesday sees Archer Daniels, Emerson Electric, Hudbay Mining, Kraft, Pitney Bowes, Russell Metals, Saputo, Talisman, Viacom and Yamana.
Wednesday sees Aecon, Agrium, Baker Hughes, Cisco, Comcast, Enbridge, Fannie Mae, Goldcorp, IAMGold, Pulte Homes, Time Warner, TransCanada and Yellow Pages.
Thursday sees Biovail, Cdn. Natural Resources, Fortis, Gerdau AmeriSteel, Great West Life, Linamar, Manitoba Telecom, ManuLife, Sun Life, Thomson Reuters and Wendy’s
Friday sees Brookfield Asset Management and Suncor.
Equity Index Trends
The ratio of S&P 500 stocks in an uptrend to a downtrend (i.e. the Up/Down ratio) plunged last week from 5.91 to (289/131=) 2.21 (including 22 stocks that broke support on Friday). The Up/Down ratio continues to trend lower from an intermediate overbought level.
Bullish Percent Index for S&P 500 stocks dropped last week from 84.40% to 74.8% and fell below its 15 day moving average. The Index remains intermediate overbought and has established a downtrend. .
The Up/Down ratio of TSX Composite Index stocks plunged from (170/24=7.08 to (131/55=) 2.38(including one stock breaking resistance and seven stocks breaking support on Friday). The Up/Down ratio continues to trend lower from an intermediate overbought level.
Bullish Percent ratio for TSX Composite stocks fell last week from 81.86% to 73.53% and dropped below its 15 day moving average. The Index remains intermediate overbought and has established an intermediate downtrend.
Chart courtesy of StockCharts.com www.stockcharts.com
Despite recent weakness in the Canadian Dollar, the S&P 500 Index in Canadian Dollars remains 3.2% below its high set six weeks ago.
Chart courtesy of StockCharts.com www.stockcharts.com
Seasonal influences for the S&P 500 Index and the TSX 60 Index turn positive near the end of October. Charts courtesy of SeasonalCharts.com www.seasonalcharts.com
The S&P 500 Index fell 43.41 points (4.02%) last week (5.9% from its October 21st high). Its intermediate uptrend and 50 day moving average were broken last week. MACD and RSI continue to trend lower from short term overbought levels. Stochastics already are short term oversold, but have yet to show signs of bottoming. Support is at 1,019.95. Next support is at 869.32. If history is used as a guide, the average decline after a strong recovery following a recession is about 12% implying downside risk from its recent high to 970.
Chart courtesy of StockCharts.com www.stockcharts.com
Percent of S&P 500 stocks trading above their 50 day moving average plunged last week to 34.00% from 71.00%. Intermediate trend is down and has yet to show signs of bottoming. Lows in an intermediate cycle frequently are found near 20%. Percent needs to be watched closely for possible signs of an intermediate bottom.
Chart courtesy of StockCharts.com www.stockcharts.com
Percent of S&P 500 stocks trading above their 200 day moving average slipped from 93.60% to 88.20% last week. Percent has reached an intermediate peak and is trending lower.
Chart courtesy of StockCharts.com www.stockcharts.com
The Dow Jones Industrial Average dropped 259.45 points (2.60%) last week (4.0% since its October 21st high). Intermediate trend remains up, but is being tested. The Average fell below its 50 day moving average on Friday. Support is indicated at 9,430.08. MACD and RSI continue to trend lower from an overbought level. Stochastics already are short term overbought, but have yet to show signs of bottoming. Strength relative to the S&P 500 Index is showing early signs of turning positive from negative. Using the 12% rule, downside risk is to 8,900.
Chart courtesy of StockCharts.com www.stockcharts.com
Bullish Percent Index for Dow Jones Industrial Average stocks slipped last week to 86.67% from 93.33% and fell below its 15 day moving average. Percent appears to have reached an intermediate peak and has started to trend lower.
Chart courtesy of StockCharts.com www.stockcharts.com
Bullish Percent Index for NASDAQ Composite stocks plunged last week to 62.33% from 71.02% and remained below its 15 day moving average. Percent remains intermediate overbought and trending lower.
Chart courtesy of StockCharts.com www.stockcharts.com
The NASDAQ Composite Index dropped 109.36 points (5.51%) last week (6.64% from its October 21st high). Last week, it fell below its intermediate uptrend and its 50 day moving average. It also broke support at 2,040.73 on Friday. MACD and RSI are trending lower from a short term overbought level. Stochastics already are short term oversold, but have yet to show signs of bottoming. Strength relative to the S&P 500 Index remains neutral. Using the 12% rule, downside risk is to 1,925 where support is indicated.
Chart courtesy of StockCharts.com www.stockcharts.com
The Russell 2000 Index fell 38.09 points (6.34%) last week. (9.83% from its October 21st high). The Index already has broken below its intermediate uptrend, its 50 day moving average and support at 576.40. The break below support completed a double top pattern. MACD and RSI continue to trend lower from a short term overbought level. Stochastics already are short term oversold, but have yet to show signs of bottoming. Strength relative to the S&P 500 Index is negative.
Chart courtesy of StockCharts.com www.stockcharts.com
The Dow Jones Transportation Average gave up 191.61 points (5.04%) last week. The Average is down 11.14% from its recent high. The Average recently broke support at 3,655.77, its intermediate uptrend and its 50 day moving average. MACD and RSI continue to trend lower from a short term overbought level. Stochastics already are short term oversold, but have yet to show signs of bottoming. Strength relative to the S&P 500 Index is negative.
Chart courtesy of StockCharts.com www.stockcharts.com
The TSX Composite Index lost another 461.38 points (4.14%) last week. Total decline from its high set six weeks ago is 6.27%. Last week, the Index broke below support at 10,955.16, fell below its 50 day moving average and completed a double top pattern. Downside risk based on the technical pattern and the 12% rule is to 10,250. MACD and RSI continue to trend lower from short term overbought levels. Stochastics already have reached a short term oversold level, but have yet to show signs of bottoming. Strength relative to the S&P 500 Index remains negative.
Chart courtesy of StockCharts.com www.stockcharts.com
Percent of TSX Composite stocks trading above their 50 day moving average plunged last week to 37.25% from 65.69%. Intermediate trend remains down and has yet to show signs of bottoming. Percent becomes intermediate oversold and due for a recovery when approaching the 20% level.
Chart courtesy of StockCharts.com www.stockcharts.com
Percent of TSX Composite stocks trading above their 200 day moving average fell last week to 76.96% from 86.27%. Percent has peaked and is trending lower. It remains intermediate overbought.
Chart courtesy of StockCharts.com www.stockcharts.com
The Australia All Ordinaries Composite Index gave up 284.50 points (4.38%) last week. Intermediate trend remains up. The Index fell below its 50 day moving average last week. Resistance has formed at 4,897.50. MACD and RSI continue to trend lower from a short term overbought level. Stochastics already are short term oversold, but have yet to show signs of recovery. Strength relative to the S&P 500 Index remains undetermined.
Chart courtesy of StockCharts.com www.stockcharts.com
The Nikkei Average gave up 248.25 points (2.41%) last week. Intermediate trend remains down. The Average found short resistance near its 50 day moving average. Intermediate resistance is at 10,767.00. Intermediate support is at 9,628.67. Short term momentum indicators are mixed. Strength relative to the S&P 500 Index remains negative.
Chart courtesy of StockCharts.com www.stockcharts.com
The Shanghai Composite Index lost 112.00 points (3.60%) last week. The Index has formed a triangle pattern. Short term momentum indicators are mixed. Strength relative to the S&P 500 Index is neutral.
Chart courtesy of StockCharts.com www.stockcharts.com
The London FT Index gave up 198.02 points (3.78%, the Frankfurt DAX Index lost 325.29 points (5.67%) and the Paris CAC Index dropped 200.55 points (5.27%) last week. Charts courtesy of StockCharts.com
Currencies
Day to day fluctuation in the U.S. Dollar continues to dominate equity trading activity. The U.S. Dollar recovered 0.89 last week. Notice that the Dollar consistently has found resistance near its 50 day moving average in recent months. It tested its 50 day moving average last week and once again found resistance. Intermediate trend remains down. MACD and RSI are neutral. Stochastics are short term overbought, but have yet to show signs of peaking.
Chart courtesy of StockCharts.com www.stockcharts.com
Conversely, the Euro lost 2.89 last week. Its 50 day moving average has proven to be a reliable support level in recent months. Intermediate trend remains up. MACD and RSI are trending lower from short term overbought levels. Stochastics already are short term oversold, but have yet to show signs of recovery.
Chart courtesy of StockCharts.com www.stockcharts.com
The Canadian Dollar lost another 2.73 cents U.S. last week and slipped below its 50 day moving average. Intermediate trend remains up. Next support is at 90.0. Resistance is forming at 97.69. MACD and RSI are trending lower from overbought levels. Stochastics already are short term oversold, but have yet to show signs of recovery.
Chart courtesy of StockCharts.com www.stockcharts.com
Commodities
The CRB Index fell 3.6% last week in response to strength in the U.S. Dollar. Short term momentum indicators are overbought and rolling over.
Chart courtesy of StockCharts.com www.stockcharts.com
Crude oil fell $3.50 per barrel (4.35%) last week in response to strength in the U.S. dollar. Short term momentum indicators have rolled over from overbought levels.
Chart courtesy of StockCharts.com www.stockcharts.com
Seasonal weakness in crude from mid October to mid December has started.
Ditto for unleaded gasoline! Resistance was found at the top of a five month trading range. Short term momentum indicators have rolled over.
Ditto for Natural Gas! Seasonality in U.S. natural gas peaked in the third week in October.
Chart courtesy of StockCharts.com www.stockcharts.com
Ditto for U.S. energy equities and ETFs!
Chart courtesy of StockCharts.com www.stockcharts.com
Ditto for Canadian energy equities and ETFs! XEG fell below its 50 day Moving Average on Friday
Chart courtesy of StockCharts.com www.stockcharts.com
Ditto for gold! Resistance has formed at $1,070.70 U.S. per ounce. It dropped another $9.50 U.S. last week. Short term momentum indicators have rolled over from overbought levels. Stochastics already has dropped to an oversold level and are trying to recover. Support is likely near $990, the top of a previous trading range.
Chart courtesy of StockCharts.com www.stockcharts.com
Gold’s second period of seasonal strength usually starts in the second half of November and continues until the end of January.
Chart courtesy of SeasonalCharts.com www.seasonalcharts.com
Ditto for Gold Equity Indices and related ETFs! Gold equities on both sides of the border were prominent on the list of stocks breaking support last week. The TSX Gold Index already has dropped 12% from its high set in the third week in September. Congratulation to investors participating in the seasonal play in gold stocks that peaked in the third week in September! The question now is when to enter the next period of seasonal strength that normally appears in second half of November and continues to early February. The answer is “Technicals are not there yet, but stay tuned”. Look for a period of base building in preparation for the next period of seasonal strength.
Chart courtesy of StockCharts.com www.stockcharts.com
Ditto for Silver! Support is at $15.73.Intermediate uptrend remains intact.
Chart courtesy of StockCharts.com www.stockcharts.com
Silver is closely following its historic period of seasonal strength this year. Notice its seasonal high near the end of May, its seasonal low near the beginning of July and its seasonal high early in October. Next seasonal low is scheduled to appear near the end of November for a seasonal trade into February. Stay tuned for a possible entry point based on technical analysis.
Chart courtesy of SeasonalCharts.com www.seasonalcharts.com
Ditto for Platinum! Notice recent support at its 50 day moving average.
Chart courtesy of StockCharts.com www.stockcharts.com
Platinum’s period of seasonal strength appears slightly later than gold and silver. Itsperiod of seasonal strength starts in mid December and continues into February.
Copper slipped $0.05 per lb last week. It remains in a three month trading range.
Chart courtesy of StockCharts.com www.stockcharts.com
Copper has a period of seasonal strength from the end of October to at least the end of March. According to Thackray’s 2010 Investor’s Guide, equities and ETFs in the Metals and Mining sector have a period of seasonal strength from November 19th to May 5th in response to rising base metal prices.
Chart courtesy of SeasonalCharts.com www.seasonalcharts.com
Grain prices retreated from short term overbought levels last week, but maintain an intermediate uptrend. Short term momentum indicators are oversold.
Chart courtesy of StockCharts.com www.stockcharts.com
Corn and Soybeans have seasonal strength starting from the end of October.
Stick with the seasonal trade in the Agriculture sector until December!
Chart courtesy of StockCharts.com www.stockcharts.com
Lumber’s period of seasonal strength from October to February has started to track nicely this year. Notice the breakout by lumber on Friday above resistance.
Chart courtesy of SeasonalCharts.com www.seasonalcharts.com
Financials
The yield on 10 year U.S. Treasuries slipped last week by 0.10%. Yield remains in a 5 month trading range between 3.21% and 3.98%. Momentum indicators are near neutral.
Chart courtesy of StockCharts.com www.stockcharts.com
The S&P Financial Service Index broke support at 188.23 on Friday.
Chart courtesy of StockCharts.com www.stockcharts.com
The TSX Financial Service Index already has declined 9% from its high set six weeks ago. Short term momentum indicators already are oversold and may be trying to bottom.
Chart courtesy of StockCharts.com www.stockcharts.com
Other Factors
The VIX Index rose 38% last week and broke resistance at 29.56%. The bounce coincided with the recovery in the U.S. Dollar.
Chart courtesy of StockCharts.com www.stockcharts.com
The Baltic Dry Index has recovered 43% from its low at the beginning of October, a sign that world trade is recovering strongly.
Chart courtesy of StockCharts.com www.stockcharts.com
Equities continue to move higher prior to release of third quarter results and continue to come under profit taking pressures shortly after results are released. Look for more of the same during the next two weeks when most of the remaining major U.S. and Canadian companies report quarterly results. A bottoming in equity markets is likely to occur after the earnings report season is over.
Seasonal influences turn positive for a wide variety of equity markets and sectors at this time of year. A word of caution on the seasonality studies offered in this report! Seasonality can vary slightly from year to year based on available data. Data in these studies is somewhat dated and therefore results are less accurate than studies that include recent data. Most of the studies were completed in spring of 2007. The inclusion of recent data is important, particularly after fluctuations seen in markets during the past year. Seasonality studies offered in Brooke Thackray’s 2010 Investor’s Guide may vary slightly with seasonality studies offered by SeasonalCharts.com, but are more current and are preferred.
Technical deterioration was significant last week with most technical indicators moving lower or breaking below key support levels. A close by U.S. equity indices near their lows on Friday likely will lead to additional weakness at the opening this morning. News over the weekend did not help. Another 9 U.S. banks were closed by the FDIC.
Political events also are unlikely to be friendly to equity markets this week. Health care, regulation of the financial service industry and global warming remain major issues. All are anti-free market issues.
Economic news is expected to be mixed this week. The employment report is expected to show fewer people losing their jobs, but the unemployment rate is expected to rise closer to the 10% level.
Federal Reserve policy is to be watched closely. The market is anticipating no change. News of a plan to remove economic stimulus would not be greeted favourably.
The rally in the U.S. Dollar is a short term event triggered by too many traders that took positions on the bearish side. Strength can be attributed to short covering. Intermediate and long term factors, that have caused the U.S. Dollar to trend lower, have yet to be resolved. A less than favourable auction of seven year Treasuries late last week suggests possible difficulties with future auctions of Treasuries with maturities greater than five years. Look for the intermediate downtrend in the U.S. Dollar to resume before the end of the year in line with its seasonal trend.
Chart courtesy of SeasonalCharts.com www.seasonalcharts.com
The Bottom Line
Weakness in equity markets during the past six weeks and probably into the next couple of weeks will provide a buying opportunity for the seasonal trade into next spring. “Buy when it snows, Sell when it goes”. Technicals are lining up, but are not there yet. Stay tuned.
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)
Seeking an Entry Point for the Seasonal Trade in North American Equity Markets
History shows that the best time to “buy the equity market” each year is near the end of October. When is the best time to “buy the equity market” this year?
Seasonal influences
According to Thackray’s 2010 Investor’s Guide, the best time to “buy the equity market” each year is at the opening on October 28th and the best time to “sell the equity market” is at the close on May 5th.
An investor with an initial investment of $10,000, who applied this strategy since 1950 with the S&P 500 Index, saw his investment increase in value to $862,619. The seasonal trade has been profitable in 48 of the past 59 periods. In contrast, an investor who applied the strategy from the close on May 5th to the opening on October 28th since 1950 saw his $10,000 decline in value to $5,750.
Canadian investors applying the strategy with the TSX Composite Index had similar results. A $10,000 investment in the TSX Composite Index from October 28th to May 5th since 1977 rose in value to $174,551. The trade has been profitable in 26 of the past 32 periods. In contrast, a $10,000 investment in the TSX Composite Index from May 5th to October 28th declined in value to $5,638.
Seasonality in equity markets happens because of a series of annual recurring events. Many of these events are tax related: year end tax loss selling in October and November, encouraging investment reports by investment brokers near year end highlighting favourable prospects for the following year, bullish sentiment during the traditional year end rally and investments into registered investment plans such as Registered Retirement Savings Plans and 401K plans in the New Year. When funds are fully invested, the period of seasonal strength comes to an end. Other annual recurring events favourably influencing equity markets include year end selling of underperforming equities by U.S. mutual funds with an October year end, a tendency for fundamental analysts to lower fourth quarter earnings estimates following release of third quarter results, investment of year end bonuses normally paid in January and encouraging comments by chief executive officers in annual reports in March and at annual meetings in April.
Returns during the period of seasonal strength for equity markets can be enhanced significantly by fine tuning entry points using technical analysis. October 28th and May 5th are average optimal entry and exit points over a long period of time. Last year, the optimal entry point for the S&P 500 Index and TSX Composite Index based on technical analysis actually occurred at the opening on October 28th, but that was a rare event. Optimal entry points each year are based on the average optimal entry date plus or minus about two weeks. Technical indicators used to fine tune the optimal entry point each year include short term momentum indicators such as Stochastics, Relative Strength Index and Moving Average Convergence Divergence. Short term momentum indicators preferably are oversold and showing signs of recovery.
Technical influences
The refined entry point this year is lining up, but is not there yet. Short term momentum indicators for the S&P 500 Index and TSX Composite Index two weeks prior to October 28th were overbought until early last week when they began to trend lower. Some indicators such as Stochastics already have reached an oversold level, but have yet to show significant signs of recovery.
Fundamental influences
The pattern for North American equity markets during the past few weeks has been consistent. Equity markets began moving higher from the beginning of October in anticipation of strong third quarter earnings reports. The S&P 500 Index and Dow Jones Industrial Average managed to reach new 2009 highs. However, equity prices on most well known stocks quickly came under profit taking pressures shortly after better than consensus results were released. Exceptions existed if a company managed to report extraordinary gains. Look for more of the same during the remainder of the third quarter earnings report season.
Prospects beyond the third quarter earnings report season are encouraging. Favourable annual recurring events will start to appear. Economic stimulus programs on both sides of the border are just starting to have an impact. Highest impact is expected to occur in the first and second quarters of 2010.
What to do
Prepare for a refined entry point for the annual period of seasonal strength in North American equity markets.
Brooke Thackray’s Book
The book entitled, “Thackray’s 2010 Investor’s Guide”is now available through major book distributors. Following are links that can be used to buy the book electronically:
http://www.chapters.indigo.ca/books/Thackrays-2010-Investors-Guide-Brooke-Thackray/9780978220037-item.html?ref=Search+Books:+%27thackray%27s%27
http://www.amazon.ca/gp/product/097822003X/ref=s9_sims_gw_s0_p14_i1?pf_rd_m=A3DWYIK6Y9EEQB&pf_rd_s=center-1&pf_rd_r=0773ED3P045NMSDK94ZA&pf_rd_t=101&pf_rd_p=465532811&pf_rd_i=915398
http://search.barnesandnoble.com/Thackrays-2010-Investors-Guide/Brooke-Thackray/e/9780978220037/?itm=1
http://www.amazon.com/Thackrays-2010-Investors-Guide-Seasonal/dp/097822003X/ref=sr_1_1?ie=UTF8&s=books&qid=1252640152&sr=8-1
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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November 2nd, 2009 at 6:38 am
Hi Don,
I am already 50% invested in TSX (bought on dips-couldn’t resist!)Would you advise selling here and buying back in in mid-nov. or do you see only a small % down from here.Thanks.
November 2nd, 2009 at 7:07 am
Hi Don, just read Thackray’s november letter and he lists a chart that has favourable and unfavourable times to be in and not in the market for the SP500. I would assume that this would be in US dollars? is there any way we can get data for the same chart but returns in canadian dollars invested in SP500? would this play a big roll in returns?
November 2nd, 2009 at 7:21 am
Hi Steve. Downside risk is about 6% in the short term. Upside potential is about 25% in the medium term. Personal investment circumstances will determine your strategy.
November 2nd, 2009 at 7:22 am
Hi Marc. Try $spx:$cdw on http://www.stockcharts.com. Choose the time horizon of your choice.
November 2nd, 2009 at 8:53 am
Marc, in addition to $Spx:$cdw, iShares offers an ETF of the S&P 500 in Canadian dollars, XSP.TO.
November 2nd, 2009 at 10:11 am
Hi Don
Thanks again for the great summary! As always, the best of the bests! It’s hard to get it wrong with your reports. Thanks again.
November 2nd, 2009 at 10:25 am
Hi Don,
Do you mean downside risk for the SP500 is 970 (not 9700) or are you referring to a different index ? Thank you.
November 2nd, 2009 at 10:33 am
Hi Don,
Is support for Agrium still around $50? Do you have any information on whether they are expected to meet or beat earnings expectations? If this turns out to be another selloff on higher earnings, do you see this as an opportunity to buy on weakness or is it best to wait till mid Nov ? Thank you for your continued efforts.
Regards,
Richard
November 2nd, 2009 at 10:36 am
Is there an inverse Canadian ETF for XSP.TO?
November 2nd, 2009 at 10:39 am
Hi Don,
Are the metals & mining stocks good to buy for November? If so would XMA.TO a way to play the mining stocks?
November 2nd, 2009 at 11:03 am
Hi Don,
Would you consider Viterra as an agricultural or consumer staples stock? It does not seem to benefit from agricultural seasonality. Do you think it’s because of its fundamentals or is it protectionism? Any opinion on intermediate term outlook based on technicals?
Thanks.
November 2nd, 2009 at 1:03 pm
Don, your writting this morning, several times, referred to the 12% rule which is new to me. Is this a possible downside risk as opposed to a support level? And can you point me to some further information so I can understand it better? I have read several books includeing Thackray’s 2009 Investor’s Guide and am about to order the 2010 version. And I have been following your blogs for over a year, but I still consider my learning curve as steep (on a long term positive trend).
Any help you can provide would be appreciated.
November 2nd, 2009 at 1:31 pm
Hi Don,
With reference to your comments on the next period of seasonality for Gold can you please elaborate on what to look for in charts when you speak about base building? Thanks again.
Richard
November 2nd, 2009 at 1:51 pm
Hi Heinz. OOOPs! Busy fingers. 970 is correct (Not 9700).Will adjust.
November 2nd, 2009 at 1:55 pm
Hi Richard. Just confirming that AGU currently has support at $50. That level also is near its 200 day moving average, another possible indicator of support.
November 2nd, 2009 at 1:58 pm
Hi David. Sorry, no inverse to XSP, just a double inverse.
XMA looks like an interesting way to invest in the seasonal play in the metals and mining sector. Additional comments are offered in Brooke Thackray’s November investment report. The trade is lining up nicely, but its not there yet.
November 2nd, 2009 at 2:04 pm
Hi Jerry A. Viterra is considered as an Agriculture stock because it serves the Agriculture community. It is included in Claymore’s Agriculture ETF (Symbol: COW). It also could be considered as a consumer staple stock under S&P’s classification. Seasonality studies suggest that the stock is more closely associated with seasonality in the ag sector.
November 2nd, 2009 at 2:11 pm
Hi Fred. The word “rule” probably was a bit strong. “Guidline” is more accurate. It’s based on a recent study done by Brown Brothers Harriman showing that the average recovery by the S&P 500 Index following a recession (based on data since 1932)is 53.7%. This time the S&P 500 Index gained about 60% from its March low. The average correction following the recessionary recovery peak was 12.2% (Median was 11.3%). Hence, the 12% guidline.