Pre-opening Comments for Monday January 25th
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 comments over the weekend by members of Congress and the White House assuring bi-partisan support for the renomination of Ben Bernanke as chairman of the Federal Reserve. The Senate must approve the renomination by January 31st.
The U.S. Dollar weakened on the news. The weaker U.S. Dollar triggered strength in commodities priced in U.S. Dollars. Gold, silver, copper, platinum and crude oil are trading higher. The U.S. Dollar has found short term resistance at its 200 day moving average.
![clip_image001[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2010/01/clip_image00113.gif "clip_image001[1]")
Chart courtesy of StockCharts.com www.stockcharts.com
AK Steel added 5% after reporting higher than consensus fourth quarter earnings. The company continues to benefit from rising steel prices.
Apple added 2%. Traders are anticipating launch of Apple’s tablet on Wednesday.
Goldcorp added 1% following an upgrade from Hold to Buy by TD Newcrest. Target price is $50.
Thomson Reuters improved 1% following an upgraded by Citigroup from Hold to Buy.
Bank of Nova Scotia was upgraded by Macquarie from Under Perform to Nuetral.
Economic News This Week
Focus this week is on the Federal Reserve Open Market Committee (FOMC) meeting on Wednesday and preliminary U.S. fourth quarter GDP on Friday.
January Consumer Confidence to be released at 10:00 AM EST on Tuesday is expected to slip to 52.9 from 53.3.
December New Home Sales to be released at 10:00 AM EST on Wednesday is expected to increase to 370,000 from 355,000.
News from the FOMC meeting is scheduled to be released at 2:15 PM EST on Wednesday. No change in administered rates (i.e. Fed Fund rate) is expected.
January Durable Goods Orders to be released at 8:30 AM EST on Thursday is expected to increase 2.0% versus a gain of 0.2% in December.
Fourth quarter real GDP to be released at 8:30 AM EST on Friday is expected to grow at a 4.5% annualized rate versus a gain of 2.2% in the third quarter.
January Chicago PMI to be released at 9:45 AM EST on Friday is expected to slip to 56.0 from 58.7 in December.
January University of Michigan Sentiment Index is expected to improve to 73.0 from 72.8 in December.
Earnings News This Week
U.S. fourth quarter earnings reports pour in this week. Canadian earnings reports start to trickle in. Following is a list of prominent companies scheduled to report and their expected report dates:
Monday sees a report from Union Pacific
Tuesday sees Baker Hughes, Canadian National Railway, Dupont, Johnson & Johnson, Nucor, Travelers and U.S. Steel, Verizon and Yahoo.
Wednesday sees Abbott Labs, AGF, Boeing, Canadian Oil Sands Trust, Caterpillar, Celestica, CGI Group, Conoco Phillips, Illinois Tool Works, Methanex, Norfolk Southern and United Technologies.
Thursday sees MMM, AT&T, Becton Dickenson, Bristol Myers, Canadian Pacific, Colgate, Eli Lilly, Lockheed Martin, Microsoft, Potash Corp and Procter & Gamble.
Friday sees Chevron and Honeywell.
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 5.77 to (344/81=) 4.25 (including 38 stocks that broke support on Friday). The ratio has rolled over and established an intermediate downtrend.
P.S. This Up/Down ratio is a preliminary estimate and does not include our regular due diligence. An exact figure will be offered tomorrow. Ditto for the TSX Up/Down ratio!
Bullish Percent Index for S&P 500 stocks dropped last week from 83.00% to 77.00% and fell below its 15 day moving average. The Index remains intermediate overbought and appears to be forming an intermediate downtrend.
Chart courtesy of StockCharts.com www.stockcharts.com
The Up/Down ratio for TSX Composite stocks plunged last week from 7.00 to (156/37=) 4.22. The ratio has rolled over and established an intermediate downtrend.
Bullish Percent Index for TSX Composite stocks fell last week from 85.15% to 81.68% and dropped below its 15 day moving average on Friday. The ratio is intermediate overbought and probably has past an intermediate peak.
Chart courtesy of StockCharts.com www.stockcharts.com
The S&P 500 Index fell 44.27 points (3.90%) last week. Its intermediate uptrend line was broken. The Index broke below its 50 day moving average, a level that had proven to be a reliable support level during the past nine months. Short term momentum indicators are trending lower from overbought. Stochastics already are approaching a short term oversold level. Seasonal influences remain positive. Downside risk is to support at 1,029.38
Chart courtesy of StockCharts.com www.stockcharts.com
Percent of S&P 500 stocks trading above their 50 day moving average plunged last week from 79.40% to 40.40%. Percent no longer is intermediate overbought, but continues to trend lower.
Chart courtesy of StockCharts.com www.stockcharts.com
Percent of S&P 500 stocks trading above their 200 day moving average slipped last week from 93.40% to 88.20%. Percent is past its intermediate peak and trending lower.
Chart courtesy of StockCharts.com www.stockcharts.com
The Dow Jones Industrial Average fell 436.67 points (4.12%) last week. It also fell below its 50 day moving average and broke below its intermediate uptrend line. Short term momentum indicators have rolled over from overbought levels and are trending lower. Stochastics already are short term oversold, but has yet to show signs of bottoming. Seasonal influences are positive. Strength relative to the S&P 500 Index remains negative. Intermediate downside risk is to support at 9,679.
Chart courtesy of StockCharts.com www.stockcharts.com
Bullish Percent Index for Dow Jones Industrial stocks slipped last week from 90.00% to 86.67%. On Friday, it broke through its 15 day moving average. The Index remains intermediate overbought and probably peaked last week.
Chart courtesy of StockCharts.com www.stockcharts.com
Bullish Percent Index for NASDAQ Composite stocks eased last week from 65.07% to 64.28%. It is testing its 15 day moving average. It remains intermediate overbought.
Chart courtesy of StockCharts.com www.stockcharts.com
The NASDAQ Composite Index dropped 82.70 points (3.61%) last week. It broke below its 50 day moving average and below an intermediate uptrend line. Short term momentum indicators are trending lower from overbought levels. Stochastics already are short term oversold, but have yet to show signs of bottoming. Strength relative to the S&P 500 Index peaked at the beginning of January. Seasonal influences no longer are positive. Downside risk is to support at 2,024.27
Chart courtesy of StockCharts.com www.stockcharts.com
The Russell 2000 Index fell 20.84 points (3.27%) last week. Intermediate trend remains up. The Index is testing its 50 day moving average and intermediate uptrend line. Short term momentum indicators have rolled over from overbought levels. Stochastics already are short term oversold, but have yet to show signs of bottoming. Strength relative to the S&P 500 Index remains positive. Seasonal influences are positive until March 7th.
Chart courtesy of StockCharts.com www.stockcharts.com
The Dow Jones Transportation Average gave up 175.71 points (4.20%) last week. On Friday it broke below its 50 day moving average and its intermediate uptrend line. Short term momentum indicators are trending lower from overbought levels. Stochastics already are oversold, but has yet to show signs of bottoming. Strength relative to the S&P 500 Index remains neutral. Downside risk is to support at 3,546.
Chart courtesy of StockCharts.com www.stockcharts.com
The TSX Composite Index lost another 341.94 points (2.93%) last week. It already has fallen 6.0% from its peak set on January 11th. Last week, it broke below its 50 day moving average and its intermediate uptrend line. Short term momentum indicators are trending lower from intermediate overbought levels. Stochastics and RSI already are short term oversold, but have yet to show technical signs of bottoming. Seasonal influences remain positive. Strength relative to the S&P 500 Index remains negative.
Chart courtesy of StockCharts.com www.stockcharts.com
Percent of TSX stocks trading above their 50 day moving average plunged last week from 72.77% to 52.97%. Percent continues to trend lower from an intermediate overbought level.
Chart courtesy of StockCharts.com
Percent of TSX stocks trading above their 200 day moving average fell last week from 85.64% to 78.22%. Percent remains intermediate overbought, has passed its intermediate peak and is trending lower.
Chart courtesy of StockCharts.com www.stockcharts.com
The Australia All Ordinary Composite Index gave up 157.60 points (3.20%) last week. Intermediate trend remains up. On Friday, it broke below its 50 day moving average. Short term momentum indicators are falling from overbought levels. Seasonal influences remain positive. Strength relative to the S&P 500 Index remains undetermined. Intermediate downside risk is to support at 4,515.30.
Chart courtesy of StockCharts.com www.stockcharts.com
The Nikkei Average dropped 391.55 points (3.57%) last week. The Index remains in an intermediate uptrend and above its 50 and 200 day moving averages. Short term momentum indicators have rolled over from overbought levels. Strength relative to the S&P 500 Index remains positive. Seasonal influences remain positive.
Chart courtesy of StockCharts.com www.stockcharts.com
The Shanghai Composite Index fell 95.57 points (2.96%) last week. It fell below its 50 day moving average and below a seven month triangle pattern. Support is at 3,040. Short term momentum indicators have rolled over from an 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.
Chart courtesy of StockCharts.com www.stockcharts.com
The London FT Index fell 147.39 points (2.79%), the Frankfurt DAX lost 180.65 points (3.08%) and the Paris CAC gave up 133.60 points (3.34%) last week. All fell below their 50 day moving average.
Charts courtesy of StockCharts.com www.stockcharts.com
Currencies
The U.S. Dollar gained 1.04 last week. It broke above resistance at 78.46 and established an intermediate uptrend. Resistance is significant above current levels including its 200 day moving average at 78.69 and levels indicated below at 79.51 and 81.47. Short term momentum indicators are recovering from oversold levels. Stochastics already are short term overbought, but have yet to show signs of peaking. Seasonal influences are positive until April. The U.S. Dollar has advanced since the beginning of December despite a stuttering economic recovery, huge government deficits, deteriorating U.S. credit and uncontrolled money supply growth. In other words, the main reasons for weakness in the U.S. Dollar since March 2009 have not disappeared. Indeed, these issues are expected to persist and likely will have a significant impact on the U.S. Dollar in the second half of 2010. Despite these circumstances, the U.S. Dollar is likely to continue to recover into spring mainly because other major economies (most notably in Europe) are in a worse fiscal and monetary condition than the U.S. economy.
Chart courtesy of StockCharts.com www.stockcharts.com
The main reason for U.S. dollar strength is weakness in the Euro. Last week the Euro broke support at 142.40 and established an intermediate downtrend. In addition, it broke below its 200 day moving average. Short term momentum indicators are trending lower. Stochastics already are short term oversold, but have yet to show signs of bottoming. Downside risk is to support at 137.57.
Chart courtesy of StockCharts.com www.stockcharts.com
The Canadian Dollar fell 2.64 points last week mainly because of declining commodity prices. On Friday, it broke below its 50 day moving average. Support is indicated at 92.16. Short term momentum indicators are trending lower. Stochastics already are short term oversold, but have yet to show signs of bottoming.
Chart courtesy of StockCharts.com www.stockcharts.com
Seasonal influences on the Canadian Dollar relative to the U.S. Dollar turn negative from January to March. They turn positive thereafter. Following is a chart offered by Brooke Thackray showing seasonality of the Canadian Dollar relative to the U.S. Dollar from 1971 to 2009. Strongest month for the Canadian Dollar is the month of April.
Chart courtesy of Brooke Thackray
Commodities
The CRB Index fell 2.08% last week with strength in the U.S. Dollar. It fell below its 50 day moving average. Short term momentum indicators have rolled over from overbought levels. Support is indicated at 267.35.
Chart courtesy of StockCharts.com www.stockcharts.com
Crude oil lost another 4.89% last week and already has dropped 11.2% from its high two weeks ago. Last week, it fell through its 50 day MA. Short term momentum indicators continue to trend lower. Support is indicated at $69.81
Charts courtesy of StockCharts.com www.stockcharts.com
See a full comment on unleaded gasoline later in this report.
Seasonal strength for natural gas ended in the fourth week in December. Short term momentum indicators continue to move lower from overbought levels.
Charts courtesy of StockCharts.com www.stockcharts.com
Energy SPDRs dropped 5% last week. Short term technicals continue to deteriorate. It’s too early to enter the seasonal trade from February 25th to May 9th.
Ditto for the Canadian Energy sector!
Chart courtesy of StockCharts.com www.stockcharts.com
Gold lost another $38.20 (3.38%) last week with strength in the U.S. Dollar. Support at $1,075 is being tested. Short term momentum indicators continue to trend lower.
Chart courtesy of StockCharts.com www.stockcharts.com
Silver also is testing a key support level at $16.72. Support also is indicated at $16.11. Strength relative to gold turned positive in early December.
Charst courtesy of StockCharts.com www.stockcharts.com
Platinum continues to outperform gold. ‘Tis the season for Platinum to move higher relative to gold and relative to the S&P 500 Index!
Copper slipped another 2.0 cents per lb. last week. Short term momentum indicators continue to trend lower from overbought levels.
Chart courtesy of StockCharts.com www.stockcharts.com
Grain prices (and Agriculture stocks) remain under technical pressure.
Chart courtesy of StockCharts.com www.stockcharts.com
Lumber was the star performer again last week, up 8.9%. ‘Tis the season for lumber prices to move higher from October to February! Strength is in anticipation of a spring surge in infrastructure spending and new home construction.
Chart courtesy of StockCharts.com www.stockcharts.com
Financials
The yield on 10 year treasuries continued to decline last week despite strength in the U.S. Dollar. They slipped another 0.08%. Resistance between 3.85% and 3.98% remains formidable. Momentum indicators have rolled over from a short term overbought level.
Chart courtesy of StockCharts.com www.stockcharts.com
Obama’s pronouncements on a possible special tax on the largest U.S. banks took its toll. Last week Financial SPDRs led the market lower with a 5.2% decline.
Charts courtesy of StockCharts.com www.stockcharts.com
Weakness in U.S. banks quickly spilled into the Canadian financial services sector. Short term momentum indicators continue to trend lower.
Other Factors
The VIX immediately exploded on the upside following Obama’s comments on the banks, up 52.5% for the week. His comments greatly increase uncertainty in equity markets. The VIX broke above its 50 and 200 day moving averages.
Chart courtesy of StockCharts.com www.stockcharts.com
The Baltic Dry Index slipped 2.9% last week
Chart courtesy of StockCharts.com www.stockcharts.com
Fourth quarter earnings reports remain a focus. Most companies are reporting in line or better than consensus fourth quarter results and many are offering positive guidance for the first quarter and full year 2010. However, strong earnings reports have been widely anticipated. Investors are selling on news. Look for more of the same this week.
Economic news is expected to be mixed at best this week. U.S. fourth quarter GDP could surprise on the upside. Economists recently have been raising their estimates. Nothing new is anticipated from the FOMC meeting. Bernanke’s nomination as Fed chairman must be accepted by the Senate Finance Committee by January 31st. Accordingly, news from the meeting likely will “not rock the boat”. Other economic news generally is expected to be mildly bearish reflecting a slight slow down in the U.S. economy in December caused mainly by inclement weather.
Technical parameters for equity indices and commodities (Bullish Percent indices, Up/Down ratios, Percent of stocks trading above their 50 and 200 day moving averages, short term momentum indictors) dropped significantly last week and have yet to show signs of bottoming implying that North American equity indices face additional short term risk.
Currency trends also will influence equity markets. The U.S. Dollar currently is testing its 200 day moving average and a series of resistance levels up the 81.47 level. Short term momentum indicators already are overbought. Will the Dollar’s momentum be curtailed? Favourable seasonal influences suggest that the U.S. Dollar likely will move higher into spring.
The Bottom Line
The “hoped for” short term correction has arrived. The correction will set up seasonal trades in several sectors including silver, mines & metals, basic materials and energy. However, the technicals for these sectors currently are unfavourable. Please be patient.
Tech Talk’s Column in Saturday’s Financial Post
(Available by paid subscription at www.nationalpost.com)
Low Gasoline Prices: Enjoy them while they last!
U.S. and Canadian unleaded gasoline prices are about to enter into a period of seasonal strength. Will they move higher again this spring?
Seasonal influences
U.S. unleaded gasoline prices have a period of seasonal strength from the end of January to the end of May. The trade has been profitable in nine of the past 10 periods. Average gain per period is 25.6%. A major reason for seasonal strength is a decline in inventories in the U.S. starting in mid February and continuing into May. Inventories usually decline during this period because refiners are converting their production from heating oil for the winter heating season to unleaded gasoline for the summer driving season. Refiners also complete their annual maintenance during this period. Breakdowns in refineries frequently occur during this period including fires and explosions.
Chart courtesy of SeasonalCharts.com www.seasonalcharts.com
Technical influences
Unleaded gasoline currently has a positive intermediate technical profile. An intermediate up trend was confirmed early in January when the wholesale price of gasoline broke above resistance at $2.10 to reach a 16 month high. Short term momentum indicators currently are overbought. Support is indicated at its 200 day moving average at $1.85 U.S. per gallon. Upside potential on a resumption of an upward trend is to $2.75. Since the price of unleaded gasoline in Canada is directly connected to the price of gasoline in the United States, upside potential for the price of gasoline in the Greater Toronto area is to $1.27 per liter. Current price is approximately $0.96 per liter.
Fundamental influences
A series of events are expected to complicate the supply/demand balance for unleaded gasoline this spring.
- Demand for gasoline already is showing early signs of revival due to a recovery in North American economies. Demand this summer could be enhanced by travel by car instead of by aircraft. Aircraft travel has become increasingly onerous due to restrictions triggered by the recent terrorist attack.
- Production of gasoline and heating oil is impeded this year by a contango in the price of crude oil. A contango occurs when the future price of a commodity exceeds the current or spot price. Owners are able to profit by holding crude oil in storage instead of processing into refined products.
- Profitability of the refining industry is questionable. Crack spreads determined by the difference in the price of crude oil and refined product prices recently have narrowed to a level where North American refiners no longer have an incentive to operate at a high level of efficiency. Chevron recently announced negative fourth quarter earnings guidance due to sharply lower profit margins from refining and marketing operations. Exxon Mobil lost $203 million from U.S. refining operations in the third quarter. Several smaller refiners in the U.S. including refineries operated by Shell and Valero have permanently closed facilities. Approximately 700,000 barrels of refining capacity have been idled or shut down in North America during the past year. North American refiners have little or no incentive to complete their annual maintenance and transition period this spring on a timely basis.
- Cap and trade provisions in the proposed U.S. climate bill further limit potential for profitability. Provisions include an additional cost for the purchase of credits to pay for emissions from domestic refineries during production of gasoline. Importers of gasoline will not face this cost. In addition, Congress is examining the feasibility of increasing the ethanol content limit in gasoline from 10 percent to 15 percent. A decision is expected this summer. Complicating the decision is realization that cars manufactured in 2001 or earlier do not operate efficiently on gasoline with a15 percent ethanol content. Gasoline filling stations will need to offer pumps with two different grades and refiners will need to process and transport two different grades.
The Bottom Line
Now is a good time to drive to the southern U.S. for your winter holiday. Enjoy low gasoline prices while they last! By May, gasoline prices will be significantly higher.
Tom Rogers’ Blog (based on Elliott Wave analysis).
Tom says, “We are in the second intermediate wave within a bull market”. Following is a link to his blog:
http://www.tomrogers.net/signpost.htm
Correction
Tech Talk included an incorrect chart on the U.S. Presidential cycle on Friday. The incorrect chart has been replaced with the correct chart. Comments on the U.S. Presidential cycle were unchanged.
Exchange Traded Fund News
Bank of Montreal is scheduled to launch nine more ETFs today (Assuming official clearance has been received). Following is a summary:
ETF Asset Class/Index Ticker MER (%)
Mid Corporate Bond Index DEX Mid Term Corporate Bond ZCM 0.30
Long Corporate Bond Index DEX Long Term Corporate Bond ZLC 0.30
Aggregate Bond Index DEX Universe SM Bond Index ZAG 0.28
Global Infrastructure Dow Jones Brookfield Infrastructure ZGI 0.55
China Equity Hedged ZCH 0.65
India Equity Hedged ZID 0.65
Equal Weight Utilities DJ Canada Select Equal Weight ZUT 0.55
Utilities Index
NASDAQ 100 Equal Weight ZQQ 0.35
Hedged to the Cdn. Dollar
BMO Junior Gold Index DJ North America Select ZJG 0.55
Junior Gold Index
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 $10.02 January 22nd 2010
|
Open |
10.110 |
|
- |
|
|
High |
10.320 |
- |
||
|
Low |
10.010 |
- |
||
|
Bid x- |
10.010 |
- |
||
|
Ask x- |
10.020 |
- |
||
|
Volume |
28,135 |
- |
||
|
52-wk High 01/18 |
10.650 |
- |
||
|
52-wk Low 12/09 |
10.000 |
- |
Net Asset Value: $9.96 per unit
January 25th, 2010 at 5:46 am
Good article above on gas pricegoing forward. How does one buy into that bet?
Keep up the good work
Thx
Rick
January 25th, 2010 at 5:46 am
Good article above on gas price going forward. How does one buy into that bet?
Keep up the good work
Thx
Rick
January 25th, 2010 at 6:43 am
Platinum overtakes gold: http://www.bloomberg.com/apps/news?pid=20601082&sid=a6xB9k81GzXk
January 25th, 2010 at 6:54 am
Can someone explain to me how the USD can be strong through til April at the same time as equities are strong? Seems contradictory to me .
January 25th, 2010 at 7:20 am
Hi Don … didn’t see a support level for the TSX composite in to-days report.
Thanks.
January 25th, 2010 at 7:23 am
Don: Your statement on Natural Gas above was …..”Seasonal strength for natural gas ended in the fourth week in December. Short term momentum indicators continue to move lower from overbought levels.” If you could elaborate a bit more on the short term direction. It would appear there are also influences on the positive side that drove the price up late last week. A drop in reserves contributed to the rise I suspect. Seasonal charts say Gas should drop significantly during this period, but it is not dropping much in fact late last week rising again. What do you see over say the next 4 weeks….. still downward? Thanks Don.
January 25th, 2010 at 8:29 am
Fred, the TSX support (short-term) should be, I think, at the blue line of about 10,800.
January 25th, 2010 at 11:07 am
Don, in a blog last week, stated that the TSX Comp support is at 10745.25. That would appear to still hold.
January 25th, 2010 at 12:21 pm
I wonder about commodity trading for the average person. Seems to me that, unless you possess an understanding futures including contangoes and backwardation, you’re a babe in the woods. This includes platinum, and most certainly natural gas. Today, platinum shows future pricing of 1536.5 in January, 1537.5 in February, 1535.5 in March then up to 1549.0 in April. All of this adds up to very volatile markets. And I can find no info in either PGM nor PPLT to provide info on the price fixing of the commodity hold. Jimmy Pattison once said that if he didn’t understand an investment, he didn’t invest in it. And Warren Buffett said that in a poker game, if you don’t know who the sucker is in five minutes, you’re the sucker.
I would value any comments that anybody might have.
January 25th, 2010 at 12:25 pm
Good article on the seasonality of gasoline.
Are only USD ETF’s available?
Having difficulty location a Canadian ETF specializing in this sector.
Any suggestions?
Thanks for the informative data presented on your site.
TB
January 25th, 2010 at 2:52 pm
Don,
Can you please clarify Castlemoore’s statement on 22nd Jan, 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 ? Do they and you as well see an upside to $Gold, gold equities and ETFs?
Regards,
Richard
January 25th, 2010 at 10:17 pm
Hi Don,
What is the difference between SPY and XSP.TO ? Is it just that XSP is hedged against USD ? Thank you again.
Richard
January 25th, 2010 at 10:59 pm
Hello,
What is the best way to play pure crude oil through ETFs ?
Joe
January 26th, 2010 at 6:52 am
Hi Joe,
HOU for double bull NYMEX oil contracts and HOD for double bear NYMEX oil contracts.
Be careful of daily rebalancing!
Joe
January 26th, 2010 at 6:59 am
Hi Joe…….I play HOD (Oil down) and HOU (Oil up), these ETFs are leveraged 2X
so you have to watch them close as the price of crude can move quickly.
I have been pleasantly surprised how close they have been following the traditional/ historic seasonal patterns ( as per Seasonal Charts ).
George
January 26th, 2010 at 9:37 am
Hi Rick. The only direct way to play gasoline is through the futures market. Refining stocks are not recommended despite the bullish seasonal scenario for gasoline because the industry is struggling to turn a profit under a difficult political environment. The column on gasoline is the first of a series of articles on the energy sector. However, timing to enter the energy sector for a seasonal trade this year is early. Stay tuned for addtional reports when timing appears more appropriate.
January 26th, 2010 at 9:40 am
Hi DaddyO. Natural gas has entered into the January to July period when annual recurring events influencing its price are random. Accordingly, no predictions are offered.
January 26th, 2010 at 9:44 am
Hi Richard. XSP is the hedged version of iShares on the S&P 500 Index (Symbol: IVV).
January 27th, 2010 at 12:14 am
Dear Don,
I was interested in what you thought about stock to bond ratios and charting them. I was hoping to chart the S&P 500 index over the 10 Year US Treasury Note Price over a long period of time like 20 years. I have been able to chart a couple years of data on StockCharts.com but have been much more interested in using 20 years worth of data. I have been able to find historical prices on T-bill yields but nothing on the actual prices of T-bills themselves. From the chart I have made it appears the stock/bond ratio is strongly correlated with S&P 500 chart maybe I am wasting my time.
The whole point of this is I am trying to build upon your HAC fund strategy for a project in school and thought using a tactical asset allocation approach outside of your seasonal investing though sector rotation strategy would help my lower risk and possible enhance returns since you can earn capital gains on bonds as well.
Is the stock to bond ratio a good indicator to help decide whether we should overweight equities or debt?
Steve