ShareThisEditor’s Note: Mr. Vialoux is scheduled to appear on BNN Television at approximately 4:15 PM EST today.
Pre-opening Comments for Thursday November 26th
U.S. equity index futures are lower this morning. S&P 500 futures are down 12 points. U.S. equity markets are closed today and are open a half day tomorrow. Weakness is related to overnight strength in the U.S. Dollar. Commodities priced in U.S. Dollars including gold, silver, copper and crude oil are trading lower.
Technical Action Yesterday
Technical action by S&P 500 stocks remains bullish. Six S&P 500 stocks broke resistance (Staples, Pepsico, CIGNA, Harley Davidson, Sempra Energy and Symantec) and one stock broke support (Robert Half International). The Up/Down ratio was unchanged at 312/114=) 2.74.
Technical action by TSX Composite stocks was quietly bullish. Two TSX stocks broke resistance (Cineplex Odeon and TransCanada) and none broke support. The Up/Down ratio increased from 3.46 to (136/38=) 3.58.
U.S. Thanksgiving
U.S. markets are closed today for the Thanksgiving holiday. Happy Thanksgiving to our U.S. subscribers:
T….. is for our thankfulness for many joys and blessings…
H….. is for our homes so warm and bright…
A….. is for autumn, time for harvest and abundance…
N….. is for nature’s beauty and delight…
K….. is for the kitchens where good food is cooked with love…
S….. for spicy fragrances in the air…
G….. is for the gathering of family and friends…
I….. for the inheritance we share…
V….. is for the vision that the Pilgrims held so dear…
I….. is for high ideals in all they planned…
N….. is for our native country brave and great and free…
G….. for God’s great goodness to our land.
Interesting Charts
‘Tis the season for natural gas to move higher!
Nice trade!
Chart courtesy of StockCharts.com www.stockcharts.com
Nice trade!
Chart courtesy of StockCharts.com www.stockcharts.com
THE CASTLEMOORE INVESTMENT COMMENTARY
From the CastleMoore Investment Letter, hot off the presses:
Ken Norquay Writes:
It’s still like Halloween 2009. The media still has us in the grip of fear. Every day we hear a new swine flu story: we’re running out of vaccine; you have to line up for 6 hours to get the injection; the injection may be more harmful than the H1N1 virus; a healthy child has died from it. Every day there’s a new story. And what is the effect of this barrage of bad news? Fear. Canadians are becoming more and more fearful.
Hap Sneddon writes:
All the easy money appears to warrant concern by investors and economists over inflation even if you try to discount that credit is still contracting at 4-5% YoY. Hence you get bond bears at the extreme readings we have today. But the fact is interest rates have never been raised until after the employment rate peaks. After a two month bounce in the unemployment rate in August and September, the rate from youth and part-time jobs in the Canadian economy moved up again 8.6%. In the US, the rate is 10.2%. This week the true rate or U-6 number was released. According to CNBC “the government’s broadest measure of unemployment, some 17.5 percent are either without a job entirely or underemployed. The so-called U-6 number is at the highest rate since becoming an official labour statistic in 1994. The number dwarfs the statistic most people pay attention to – the U-3 rate – which most recently showed unemployment at 10.2 percent for October, the highest it has been since June 1983. Economists and the White House said the rate would peak at 8%. I am glad Canadian soothsayers just kept quiet.
Sheldon Liberman writes:
Portfolio managers are, it seems, respected or disrespected on the basis of their most recent performance. Methodology that works most of the time can bring about a torrent of disrespect to its practitioner should it fail for a quarter, or even a year. I’ve seen this as a portfolio manager. Clients who should never have been accepted as such due to short-term thinking have left during a period of underperformance, as if such periods were not inevitable. The ones who eventually look back on a long and rewarding career are those that persevere.
All of this, plus technical and fundamental commentary of Gold, Dow Theory, the U.S. dollar vs. global market, plus one-liners from Rodney “No-Respect-At-All” Dangerfield, in this edition of The CastleMoore News. Be sure to register using the link below.
—————————————————————————————
If you live in the Toronto area and would be interested in attending an upcoming CastleMoore investment seminar, send an email to info@castlemoore.com. If you live outside of the Toronto area and would be interested in participating in a Castlemoore online webinar, we’d like to here from you too.
If you like to receive bi-monthly newsletter, know more about our model portfolios or access an audio file of our investment philosophy, “Modern Financial Fiascos”, click on the link http://www.castlemoore.com/investorcentre/signup.php. We are also accepting interest for seminar attendance.
CastleMoore Inc. uses a proprietary Risk/Reward Matrix that places clients within one of 12 discretionary portfolios based on risk tolerance, investment objectives, income, net worth and past investing experience. For more information on our discipline and methodology please contact us.
CastleMoore Inc.
Buy, Hold…and Know When to Sell
Thackray’s 2010 Investor’s Guide
Tech Talk frequently mentions Brooke Thackray and his book entitled, “Thackray’s 2010 Investor’s Guide”. The book summarizes attractive seasonal trades that are available during the year. The book can be purchased electronically or directly at Chapters, Amazon.ca, Barnes & Noble and Amazon.com. Following are links to these book stores:
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
Seasonal trades in the book that currently are active include Agriculture, Information Technology, Consumer Discretionary, Retail and Metals & Mining.
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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November 26th, 2009 at 6:08 am
Good Day Don…You reference “Tis the season for natural gas to go up”…Is this a commdity seasonal trade beginning prior to American Thanksgiving till?
Follow up inquiry if it’s a seasonal trade…Brooke Thackaray you mentioned in today’s and recent posts doesn’t show it amongst the current active.Is it a timing factor?
Brooke does mention in his book commodity gas outperforms in the ‘last 5 months’, but only now may be a good short trade and perhaps a long term investment. Your views pls?
November 26th, 2009 at 6:17 am
Hi Don and company,
Is there a season for the global shippers? I am wondering about SEA and it’s releated companies.
Thanks.
November 26th, 2009 at 7:03 am
Hi Don,
I have been following your recommendations with interest for years. My question is since you use technical analysis to determine your entry point for a particular ETF during its good seasonality period, what happen if TA turns negative while you are still in this good seasonality period. Do you sell and re-enter when TA turns positive again or do you stay invested. As you know some of the seasonality periods can extend for months, however if you look at the short term TA, it could be positive for only days. Or do you use the long term TA instead? Please explain.
November 26th, 2009 at 7:15 am
Hi Rick. Thanks for the reminder. Will add natural gas to the list of sectors that currently are active in Thackray’s 2010 Investor’s Guide noted at the end of Tech Talk each day. According to Thackray’s book, the period of seasonal strength is from August 1st to December 21st. Chart in the book shows an exceptional “sweet spot” from mid November to the third week in December followed by a significant decline from December 21st to December 31st.
November 26th, 2009 at 7:16 am
Hi MTD. Sorry, have not done a seasonality study on global shippers.
November 26th, 2009 at 7:29 am
Hi Don. What are your thoughts about purchasing when prices are below the 200-day (or 50-day) moving average. I’ve heard a number of analysts, like Ron Meisels, say that you should wait until prices move above it because of resistance.
November 26th, 2009 at 7:48 am
Hi Don
Brooke recommended XMA.TO on BNN recently, when would you look to exit such a diverse ETF?
November 26th, 2009 at 8:22 am
Hi Mohamed. The preferred strategy is to use a disciplined approach by entering a seasonal trade at approximately the indicated date on entry (fine tuned by technical analysis) and by exiting approximately at the indicated date (fine tuned by technical analysis). The intention is to own the market or a sector when a series of favourable events occur. Guessing when these favourable events will occur is not always possible. Short term investors are welcome to use technical analysis signals during a period of seasonal strength to move in and out of the trade, but these trades are beyond the scope of Tech Talk.
November 26th, 2009 at 8:24 am
Hi Michael. A move above the 200 day moving average by a chart is an excellent confirming signal that intermediate trend is up.
November 26th, 2009 at 8:34 am
Don, I would like to invest in the new seasonal ETF you and Brooke are managing.However there is no liquidity yet. How does one buy and sell when there is no liquidity? Thanks and keep up the good work!
November 26th, 2009 at 9:28 am
Hi Don
I am confused about the new HAC etf. The TSX is down 200 points yet the etf is up.
Looks like you cannot lose with this etf.
November 26th, 2009 at 10:16 am
Hi Don
Could you please explain what is ‘nice’ about the chart of the natural gas plays. I would like to know what to look for.
November 26th, 2009 at 10:20 am
Murray, unlike stocks and closed-end funds, there is always liquidity in ETFs and mutual funds (unless the managers close the fund for short periods during unusual circumstances – rare). The managers of the funds are constantly creating and retiring units of the fund as money comes in (investors buy) or money is taken out (investors sell). Individual companies and closed-end funds on the other hand, have a fixed number of stocks or units.
November 26th, 2009 at 10:57 am
Hi Pat. Best to check out comments offered in Tech Talk during the past four days. The comment offered on Monday is a good starting point.
November 26th, 2009 at 10:59 am
Hi Murray. Liquidity is provided by the market maker. So far bid/ask spreads offered by the market maker have been relatively narrow. Volume during the first four trading days was higher that what I was expecting.
November 26th, 2009 at 12:40 pm
Murray, don’t look at daily volume, which is not that important in an ETF that is tracking a portfolio of securities and can issue additional shares on the fly to satisfy demand. Instead, look at level 2 quotes and what market makers are doing. Below is the screenshot taken today at 14:30. As you can see, there is 5000 shares available just one cent above the best offer, and I’ve seen this 5000 shares around the same spot all the day yesterday as well. 5000 shares at $ 10.25 that’s $51,250. Selling this dollar amount would be a bit different story, but, obviously, HAC is not intended for day traders.
http://img248.imageshack.us/img248/2466/11262009143110.png
November 26th, 2009 at 1:11 pm
Don, what is your fundamental assessment for Dubai’s news and its impact on oil prices and on CDS spreads/rates?
November 26th, 2009 at 5:53 pm
Hi Chrispycrunch. The Dubai news is a significant short term economic event and is expected to impact equity markets over the next 2-3 weeks. More information is offered in tomorrow’s Tech Talk. Also see the clip on BNN television where I confirmed the significance of this event. Preferred strategy on North American equity markets is to use short term weakness as an opportunity to accumulate favoured equities and ETFs in anticipation of a seasonal move lasting until early next May.
November 26th, 2009 at 7:40 pm
I enjoy this website and will consider purchase of many HAC shares!
November 26th, 2009 at 8:20 pm
Thanks, Don, for the response to Chrispycrunch. I was wondering the same thing.
Two to three weeks from now takes us to about Christmas… seems like this event closes the rally for this year potentially…