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Pre-opening Comments
U.S. equity index futures are lower this morning. S&P 500 futures are down 12 points in pre-opening trade. Weakness accelerated after release of a disappointing jobless claims report released at 8:30 AM EST. Weekly jobless claims surprisingly rose 8,000.
A stronger U.S. Dollar also weighed on equity index futures. Commodities priced in U.S. dollars including gold, silver and crude oil moved slightly lower.
Index futures did not respond to better than expected January sales announced by most major U.S retailers.
Slightly offsetting the jobless claims report was news that Productivity in the fourth quarter improved greater than expected. Consensus was an increase of 5.9% versus 8.1% in the third quarter. Actual was an increase of 6.2%.
Europe’s central bank is continuing its easy money monetary policy. It maintained its overnight lending rate at 1.0%.
Several companies reported higher than consensus quarterly earnings overnight including Domtar, Canaccord, Open Text, Cisco, Clorox and Visa.
BCE reported fourth quarter earnings in line with expectations. It also offered mildly positive guidance for 2010.
‘Tis the season for analysts to take a more positive stance on the Metals and Mining sector! Yesterday, UBS upgraded key stocks in the sector. This morning, Credit Suisse upgraded several stocks in the sector from Neutral to Outperform including BHP Billiton and Teck Resources.
Open Text was upgraded from Hold to Buy at Benchmark Company. Target is $48.
Visa was upgraded by Barclays from Equal Weight to Overweight. Target was raised from $91 to $97.
Technical Action Yesterday
Technical action by S&P 500 stocks was quietly bearish yesterday. No S&P 500 stocks broke resistance and five stocks broke support (CH Robinson, Met Life, Tesoro, Walgreen and Western Union). The Up/Down ratio slipped from 2.94 to (309/109=) 2.84.
Technical action by TSX Composite stocks was quiet yesterday. One TSX stock broke resistance (Pengrowth Energy Trust) and one stock broke support (TMX Group). The Up/Down ratio slipped from 2.44 to (131/54=) 2.43.
Interesting Chart
Selected energy stocks and trusts have improving technical profiles.
Chart courtesy of StockCharts.com www.stockcharts.com
Tech Talk on BNN Television
Following is a link to the interview last night:
http://watch.bnn.ca/clip263202#clip263202
Headline from the FP Trading Desk
Headline reads, “Time for a retail-fueled rally”. Following is the link:
Lou Schizas’ Happy Capitalism Column
Lou offers an interesting comment on Husky. Following is a link to his blog:
http://www.happycapitalism.com/
THE CASTLEMOORE INVESTMENT COMMENTARY
Thanks to the 100 plus investors who signed up for presentation #1 this past Monday night in CastleMoore’s Beyond Bullmanship Webinar Series. The next webinar, #2, will be held March 1 and can be signed up for below if not already a member of the Investor Centre
Velocity versus acceleration:
You can gain insight into what future velocity will be by knowing what your current acceleration is. Acceleration can be positive or negative (deceleration).
It’s astounding to us how many people will exercise the utmost caution when making investment decision, then, when satisfied that the right decision had been made, climb into their recalled Toyotas.
Well, the brakes work.
But the drop in stock price—deceleration if you will—accompanied by a surge in volume often indicate a reaction to an event far in excess of what is warranted. Time alone will tell what the salvage value for TM will be, but being alert to violent price swings which are accompanied by commensurate volume changes are always worthwhile.
But back to velocity versus acceleration.
We apply these concepts to our observations of momentum of ETFs of various sectors and countries. The monthly indicators are what we base decisions on (the velocity) and the weeklies tell what is accelerating and will likely, at its current rate of acceleration, show up in the monthly numbers at some point in the future.
We have, in fact, increased the number of countries we follow to 28. What are the hot markets right now? The top two on the weekly list are Turkey and Chile (which is also tonight’s dinner) followed by followed by Japan and Israel. Japan is interesting in that it still ranks at the bottom of the monthlies. This is one way to identify trend reversals.
We are long Japan (EWJ).
At the bottom of the country weeklies are China, Spain, Austria and Brazil.
The monthlies to the end of January look like this: Top ETFs: Turkey, Russia, Thailand, Brazil. At the bottom: Japan (as mentioned), China, Germany.
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Sector ETFs (Canada):
Monthlies- Best: Metals/Mining, Real Estate, Financials. Worst: Gold, Telecom, Consumer Staples
Weeklies – Best: Info Tech, Real Estate, Consumer Discretionary. Worst: Gold, Materials, Metals Mining (which is top on the monthlies. Correction or trend reversal?)
Sector ETFs (US):
Monthlies- Best: Financial, Internet, Industrial. Worst: Biotech, Telecom, Utilities.
Weeklies-Best: Biotech (consolidation after steep decline?), Health Care (ObamaCare on the ropes), and Utilities.
If you would like the complete list of the relative strength rankings send us an e-mail to info@castlemoore.com and we’ll send them out to you free!
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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.
WEBINARS/SEMINARS
If you would also be interested in participating in a CastleMoore online webinar please send an e-mail to info@castlemoore.com after registering above.
If you live in southern On area and would be interested in attending an upcoming CastleMoore seminar, send an email to info@castlemoore.com after registering above
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 directly at Amazon.ca and Amazon.com. Following are links to these book stores:
Seasonal trades in the book that currently are active include Consumer Discretionary, Small Cap, Platinum, U.S. Materials, U.S. Oil Exploration & Production 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 $10.05 February 3 2010
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Open |
10.100 |
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- |
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High |
10.100 |
- |
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Low |
9.970 |
- |
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Bid x12 |
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- |
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Ask x12 |
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- |
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Volume |
7,100 |
- |
||
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52-wk High 01/18 |
10.650 |
- |
||
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52-wk Low 01/29 |
9.750 |
- |
Net Asset Value: $9.99 per unit.
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February 4th, 2010 at 6:46 am
First rate job on BNN last night Don. Very informative & enjoyable!
February 4th, 2010 at 7:28 am
Mr. Vialoux I looked forward to seeing you on Market Call last night – Feb 3. I have used your seasonality analysis recently to buy ELR. I made a nice profit, and will get back in soon, and hold longer.
I was dismayed at the treatment you received from Michael Hainsworth, as I thought he thought he was the technical analyst. He could barely hide the disdain he seems to have for your methods, and threw in a few sarcastic comments disguised as jokes. Well, that is his loss. You did make a bit of a remark about other people’s opinions towards the end of the program. Right on!, but I am sure you are too much of a gentleman to let his badgering bother you, and show it on the show. Perhaps you could come back when another host is on. I have also bought Brooke Thackray’s book.
Thank you very much for the information I have access to because of you and your site. I would call myself a ’short’ term momentum trader, putting my profits into dividend paying stocks. Like you say, you can have one primary method, but you have to be aware of all the information you can get.
February 4th, 2010 at 8:14 am
Hi Don,
Great job on BNN last night Don! I was wondering if you could give me your opinion on Gran Tierra. It has been declining quite a bit lately and I am wondering if this would be a hold or a sell at this point. Bought it at $5.62 now $4.71.
Thank you
Monica
February 4th, 2010 at 8:26 am
Fred,
“# Fred Says: Richard .. Don goes on Market Call when it’s strategically interesting. Like yesterday to tell the energy and base metals story. Been following his pick for years now … he is a god.”
Do you mean his top picks ? I like the PPLT story, but it might be too pricey for my blood.
-R
February 4th, 2010 at 8:31 am
On BNN last night you made a statement I found to be particularly intriguing. This is no doubt badly paraphrased but you said something like, “if all the technical signals are saying a breakout is coming, you don’t have to wait for the breakout”. Most technical analysts say to wait for the price breakout and it should be confirmed by abnormal volume. Can you elaborate on your statement as to how you interpret that the technicals are giving an early buy signal.
ps great recommendation to buy Thackray’s Investor’s Guide – I refer to it often.
You provide a superior service!
February 4th, 2010 at 8:45 am
Well Im down the hole with Pan American Silver so far ….
February 4th, 2010 at 9:04 am
Don,
Been a while since we’ve seen you on BNN, great to see you on.
Between PAA, SLW or SSO, which one do you feel is a safer bet based on fundamentals and TA ? Which one has the most potential upside within the period of seasonality for silver ? The fundamentals for SSO did not look too good to me, but I’m no expert. On BNN, you commented about waiting for a buy signal for SLW. Stoch crossed 20, but maybe MacD was’nt favourable ?
Regards,
Richard
February 4th, 2010 at 10:16 am
Hello and thank you for your interesting analysis on Bnn last night. I have two questions that I actually sent in to BNN yesterday but were not answered. The first is it o.k. to buy the ZEO or the metals etf on a down day or if this market slips into a Correction? I was all set to purchase until I checked the market this morning! 2.Do you like Painted Pony PPY.A today? Finally where can we find out about your fund HAC?
Kind Regards,
Rena
February 4th, 2010 at 10:24 am
Hi Don,
once again a great show last night !!
I agree with Liz’s comments ! although i like Micahel as a host but last night his attitude towards you was, are you sure, do you know what you are talking about ??
i have already bought 2 of your 3 picks, pplt is a bit too expensive for me to buy, can you recommend an alternative to that.
once again thank you for all the great work.
February 4th, 2010 at 10:38 am
Stagdeflation,
I am quite a bit in the hole with PAA, too. I thought this was the season for Silver. It would be nice to hear Don’s comment on PAA.
Jerry
February 4th, 2010 at 10:47 am
Hi Don, you have mentioned your preference for PPLT both here in your blog and on your BNN appearance. But I am wondering why an ETF would open its trading at so high a price – its in the range of exlusivity. Wouldn’t that limit its volumes?
I, as a somewhat “little guy” find it expensive, expecially to take baby steps into the seasonal trade (which, considering the volatility right now, seems prudent).
February 4th, 2010 at 12:49 pm
Don,
You indicated that you prefer PPLT last night. Do you feel PPLT has more potential upside than PGM ?
Could you please comment on Nucor(NUE) with regard to TA, seasonality and a good entry point ? Also, which do you prefer or think is a better buy, MT, NUE or something else for Steel?
Thanks again,
Joe
February 4th, 2010 at 3:53 pm
I just understand that what seasonal mean is in NA market. Thank you very much. Don.
February 4th, 2010 at 4:54 pm
I am looking for a single stock or etf to buy. I just like to make around 5 to 10% in a short period. Can you recommend me one?
February 4th, 2010 at 6:19 pm
Hey Don… saw you on BNN yesternight.. you were awesome as always. I been a big fan and follower of yours for a while but am posting a question on here for the first time so i hope i get a reply. My question how do i get exposure to Platinum through Canadian equities or ETF’s. Since i don’t want to own US equities or be holding too many US dollars. Thanks
February 4th, 2010 at 6:24 pm
Silver Guys…………US$ is driving commodities now,wait til March and you should see silver ,gold ,oil come back as the US$ weakens.
Don,t forget that seasonality is just one factor when investing/trading.
This PIGS (Portugal,Iceland,Grease,Spain) concern over a potential financial crisis will push the US$ higher for a while.
George
February 4th, 2010 at 8:19 pm
Hi Bob. Some technical indicators are useful for predicting a break out or break down with a high degree of reliability. A good example is on balance volume. If on balance volume breaks out showing strong accumulation, chances are high that a price break out is imminent.
February 4th, 2010 at 8:30 pm
Hi Richard. Technicals for PAA, SLW and SSO are deeply oversold, but have yet to show sufficient technical evidence of a bottom yet. All yet new recent lows today. Best to be patient before buying/adding.
February 4th, 2010 at 8:34 pm
Hi Joe. Prefer PPLT over PGM because of liquidity and structure. PGM is based on a futures contact that occassionally can run into problems due to contango.
February 4th, 2010 at 8:36 pm
Hi Joe. Prefer MT over NUE at present. MT has a better medium term technical profile (e.g. trading above its 50 and 200 day moving averages.
February 5th, 2010 at 7:01 am
Richard … “picks”. You are correct sir. The comments section of this site should have an edit function before submission. Just a suggestion. Stan Wong likened Don’s analysis to reading the “farmer’s almanac” last night. Hainesworth’s interviewing of guests is excellent .. nothing wrong with probing questioning. Notice Don always has an answer to the advocacy.
February 16th, 2010 at 10:03 pm
Liz and Mills, just reviewing the Q&As for this day now and so you are unlikely to even see this comment but Michael did exactly what he was supposed to do as a good financial commentator. I just looked at the full video and he asked all the right questions so that anybody who does not follow technical analysis would have an appreciation of Don’s responses. Michael quite rightly played the devil’s advocate so that all the right information came out.