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Technical Action Yesterday
Technical action by S&P 500 stocks was bearish yesterday. Two S&P 500 stocks broke resistance (Estee Lauder and SunTrust Banks) and sixteen stocks broke support (Bemis, Boston Properties, Carefusion, CME Group, Coach, Rockwell Collins, CSX, Express Scripts, Fedex, Goldman Sachs, Illinois Tool Works, Life Technologies, Newmont, Waters Corp, Exxon Mobil and Weyerhaeuser. The Up/Down ratio plunged from 6.11 to (372/70=) 5.31.
Technical action by TSX Composite stocks also was bearish yesterday. One TSX stock broke resistance (First Service) and eleven stocks broke support (Equinox, European Goldfields, Goldcorp, IAMgold, Inmet, Kinross, Pan American Silver, Pacific Rubiales, Ritchie Brothers, Silvercorp Metals and Yamana Resources). The Up/Down ratio fell from 6.11 to (158/34=) 4.65.
Interesting Charts
Significant short term technical deterioration in major North American equity indices occurred yesterday. Indices fell sharply on rising volume. Several indices broke below their 50 day moving average, a level that has proven to be support during the past eight months. Technical action yesterday implies greater than expected downside risk to previous support levels set in early November
. 
Chart courtesy of StockCharts.com www.stockcharts.com
Chart courtesy of StockCharts.com www.stockcharts.com
Chart courtesy of StockCharts.com www.stockcharts.com
Chart courtesy of StockCharts.com www.stockcharts.com
North American equity indices continue to follow their expected pattern during a post U.S. presidential election year.
Chart courtesy of SeasonalCharts.com
What’s happening in North American equity markets? Traders have anticipated strong fourth quarter earnings gains relative to the same period last year. As soon as earnings are released, traders are taking profits. Look for this trend to continue in the short term. Weakness during the earnings report season will set the stage for the next intermediate uptrend lasting until at least May.
The U.S. Dollar broke resistance at 78.45 and established an intermediate uptrend. Next resistance is at 79.51.
Chart courtesy of StockCharts.com www.stockcharts.com
Keith Richards on BNN Television
Keith, one of our regular contributors appears on BNN Television today at 2:05 PM.
THE CASTLEMOORE INVESTMENT COMMENTARY
Our latest newsletter is coming off the presses now. Sign up below to receive the latest and future issues.
A survey conducted by Angus Reid Public Opinion found that 87% of Canadians missed the stock market rally of 2009. Presumably, the bulk of those people did not miss the downturn of 2008.
At present we only have a small initial position (3%) in the Canadian broad markets across all investor classes, in addition to a larger utility sector positions. We have been anticipating a pullback in the market, and want to be patient until it runs its course. This next leg up, if it occurs, we believe will be shorter, to the end of Q1, and set up a meaningful bottom in the fall which may possibly test the March 9/09 lows
Another position we established—rather re-established in the last few weeks—is that of the gold bullion ETF. It appears that the corrective phase of the trend has run its course.
Another position we have established recently is in the Japanese market. The ETF, depicted below has shown a pattern of rising after periods of consolidation and at present is maybe the strongest market in the world.
Our significant positions in long Canada’s and US Treasury have been soft leading into this week, but appear to have tested support and for the time being will be a repository of nervous equity investors. Granted no one likes long bonds with the bond bullish sentiment at 49%; but then again the equity advisor bearish sentiment stands at 15%, lower than the market peaks in 2007.
Our relative strength tables show some interesting shifts up and down the rankings. In Canada and the US utilities shot up both rankings. In Canada technology and real estate were big movers up too, while materials dropped significantly (large gold producer component, overlap with the actual gold producer sector). In the US healthcare was also a big mover.
CANADA
|
|
Sector/Index |
Weekly ROC |
|
1 |
Metals & Mining |
19.3% |
|
2 |
Small Cap |
11.9% |
|
3 |
Utilities |
11.6% |
|
4 |
Mid Cap |
9.9% |
|
5 |
Technology |
9.0% |
|
6 |
Industrials |
8.0% |
|
7 |
Real Estate |
7.9% |
|
8 |
Income Trusts |
6.4% |
|
9 |
Consumer Staples |
6.2% |
|
10 |
Materials |
4.6% |
|
11 |
Consumer Disc. |
4.1% |
|
12 |
TSX Composite |
3.9% |
|
13 |
Energy |
3.1% |
|
14 |
Health Care |
2.5% |
|
15 |
Telecom |
2.0% |
|
16 |
Financials |
1.9% |
|
17 |
Gold Producers |
-5.0% |
US
|
Sector/Index |
Weekly ROC |
|
|
1 |
Health Care |
10.5% |
|
2 |
Material |
10.1% |
|
3 |
Semiconductors |
9.9% |
|
4 |
Trans. |
9.0% |
|
5 |
Industrial |
8.1% |
|
6 |
Nasdaq100 |
7.6% |
|
7 |
Utilities |
6.9% |
|
8 |
Cons Disc. |
6.7% |
|
9 |
Technology |
6.6% |
|
10 |
S&P Index |
6.1% |
|
11 |
Dow Jones |
5.6% |
|
12 |
Silver |
5.6% |
|
13 |
Financial |
4.4% |
|
14 |
BioTech |
3.9% |
|
15 |
Energy |
3.8% |
|
16 |
Gold |
3.2% |
|
17 |
Telecom |
2.9% |
|
18 |
Cons. Staples |
2.2% |
|
19 |
Internet |
1.2% |
|
20 |
Commodities |
1.0% |
—————————————————————————————
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
Highlights from the FP Trading Desk
Headline reads, “ETF markets keeps growing in Canada, globally”. Following is a link to the report:
Tech Talk’s Financial Post Column This Saturday
The column offers an outlook for unleaded gasoline prices into spring.
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 directly at Amazon.ca and Amazon.com. Following are links to these book stores:
Seasonal trades in the book that currently are active include Information Technology, Consumer Discretionary, Small Cap, Platinum 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.
Don Vialoux is a research analyst for JovInvestment Management Inc. All of the views expressed herein are the personal views of the author and are not necessarily the views of JovInvestment Management Inc., although any of the recommendations found herein may be reflected in positions or transactions in the various client portfolios managed by JovInvestment Management Inc
HAP Seasonal Rotation E.T.F. | HAC-T $10.22 January 21 2010
|
Open |
10.350 |
|
) |
- |
|
High |
10.350 |
- |
||
|
Low |
10.160 |
- |
||
|
Bid x5 |
|
- |
||
|
Ask x50 |
|
- |
||
|
Volume |
30,199 |
- |
||
|
52-wk High 01/18 |
10.650 |
- |
||
|
52-wk Low 12/09 |
10.000 |
- |
Net Asset Value: $10.15 per unit.
| Sponsored By... |
|
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|
Discussions from the Tech Talk Forum:
An error has occurred, which probably means the feed is down. Try again later.
|
January 22nd, 2010 at 4:28 am
Don, during a correction I suspect some seasonal trades still apply (e.g. Energy on Feb 25th). Is the short term metals trade on silver and platimun out the window in this environment? Is the trading objective in this environment to do seasonal trades that apply within a post election cycle?
January 22nd, 2010 at 4:37 am
Don . . . . Aren’t we currently in a “Mid-Term” year as part of the Election Cycle? I thought the “Post Election” year part of the cycle was last year.
January 22nd, 2010 at 6:48 am
In Canada, this is the only financial blog I read everyday, first thing in the morning. Thanks Don. Your effort is appreciated in days like today.
January 22nd, 2010 at 8:24 am
Don,
Are you able to reveal when 4th quarter earnings releases come to an end ? I figure it might be a factor in timing the buy in again. Thank you for all the great information.
Richard
January 22nd, 2010 at 8:45 am
Hi Don
I read your posting daily and appreciate very much your educational articles.
Please comment on this observation:
You said on 18 Jan that SILVER has a seasonal strength NOV TO APRIL.
But the chart of SILVER FUTURE from SEASONALCHARTS.COM
for SILVER FUTURES for 37 years shows
a SEASONAL STRENGTH from NOV TO MID FEB.
From MID FEB to END OF JUNE it is DOWN.
Similarly for PLATINUM you said SEASONAL STRENGTH
from 1JAN TO 31 MAY.
But PLATINUM FUTURES FOR 37 YEARS shows
SEASONAL strength from JAN TO MID FEB.
After that it is random.
Your kind comment will be appreciated.
Thanks
NG
January 22nd, 2010 at 8:57 am
Hi Don:
I would appreciate you opinion on Nat Gas, seasonality is over as per your previous reports, however, the price keeps trending up for the last few days. Any idea how long this upward trend will last.
Thanks
Kay
January 22nd, 2010 at 9:05 am
Hi Don..
Please clarify… I believe the election cycle chart you have in today’s comments is for the post election year 2009 not 2010. The time period for the chart label ends in 2005 and hence 2009 would be the next one. In the seasonal charts web site, 2010 is shown as a mid-term year and is up to and including 2006 so thus 2010 would be the next mid term year. The charts are quite different. Please comment… am i missing something?
Thanks as always for your great site…. John
January 22nd, 2010 at 10:38 am
Hi Don, you suggested in yesterday’s comments, that PPLT is the preferred investment vs. PGM. There is virtually no guidance in the PPLT charts since the history doesn’t yet exist. Is it acceptable to watch PGM for an indication of when to get back into platinum or is there another chart to follow? I was stopped out of PGM yesterday and when I go back in, I will seriously consider PPLT.
January 22nd, 2010 at 11:28 am
Freddibuoy – Try $plat in stockcharts for the commodity itself. PGM has been trading at a premium to $plat over the last couple of months (see $plat:PGM).
January 22nd, 2010 at 12:55 pm
Don,
Can you please clarify Castlemoore’s statement relative to Gold’s period of seasonality. “It appears that the corrective phase of the trend has run its course.” If the period of seasonality for Gold has just ended, do you agree with Castlemoore that Gold will once again be a decent play out of this correction we’re seeing ?
Regards,
Richard
January 24th, 2010 at 7:35 pm
Dear Don,
I too am confused, along with John A in regard to the election cycle chart that you have displayed for 2010. The introduction to the chart is as follows:
“The four-year cycle is determined by the US presidential election. 2008 is an election year. We have 2010 and the cycle years are:
2008: Election Year
2009: Post-Election Year
2010: Midterm Year
2011: Pre-Election Year”
Therefore, would we not look to the Midterm Year chart for 2010?
Thank you for your clarification.
Ana
January 26th, 2010 at 9:12 am
Hi Cesare. Seasonal plays in silver and platinum continue to apply. Most recent technical entry points occurred for both metals on December 24th. Multiple entry points can occur during a period of seasonal strength. There is only one exit point. Another technical entry point appears to be evolving in silver, but it’s not there yet.
January 26th, 2010 at 9:15 am
Thanks, Mario. Corrected the chart. Busy fingers lead to unexpected errors.
January 26th, 2010 at 9:18 am
Hi Richard. Selling on news when fourth quarter earnings reports are released continues to be a theme in North American equity markets. Most S&P 500 companies will have reported by the end of next week. Most TSX companies will have reported by the end of the second week in February. An earnings calendar is available at http://www.cnbc.com
January 26th, 2010 at 9:21 am
Hi Nirmal. When available, Tech Talk is using Brooke Thackray’s seasonal charts instead of charts available from SeasonalCharts.com. Brooke’s charts are up to date. Charts from SeasonalCharts.com are slightly dated.
January 26th, 2010 at 9:27 am
Hi Kay. The period of seasonality from August to December is caused by a series of recurring annual events (e.g. The spike late in the year triggered by the first major winter storm in the Eastern U.S. ). From December to August, events influencing natural gas on an annual recurring basis do not exist. Accordingly, natural gas prices are random (some years higher, some years lower)and are not predictable from December to August.
January 26th, 2010 at 9:31 am
Hi Richard. CastleMoore’s comments are independent of Tech Talk’s comments and occassionally are opposite. Best to raise the question with CastleMoore.