Pre-opening Comments for Tuesday February 9^th

U.S. equity index futures are higher this morning. S&P 500 futures are up 10 points in pre-opening trade. Weakness in the U.S. Dollar contributed to strength. Commodities priced in U.S. Dollars including gold, silver, copper and crude oil traded higher.

Crude oil was notably higher, up $0.92 per barrel. Another major winter storm has entered into the U.S. Mid-west and North East states.

China’s economy continues to boom. January auto sales in China rose 116% to 1.3 million units from the same period in 2009. That’s good news for commodities such as platinum that are used in autos.

Several companies reported higher than expected fourth quarter earnings overnight including Teck Resources, Molson Coors,Agrium and Electronic Arts. Teck and Agrium moved higher in overnight trading, but Electronic Arts moved lower after offering negative guidance. Several U.S. investment dealers downgraded the stock this morning.

Coca Cola added 1% after reporting fourth quarter earnings in line with expectations. Revenues exceeded expectations.

Caterpillar added 4% after Morgan Stanley raised its rating on the stock from Underperform to Outperform. Target price was raised from $51 to $70. Infrastructure spending this spring is expected to increase demand for Caterpillar’s products.

Monsanto added 2% after Bank of America/Merrill upgraded the stock from Neutral to Buy. Target was raised from $94 to $96. Demand for agricultural chemicals has started to recover.

McDonalds added 1% after announcing that global, same store sales rose 2.6% in January.

Canadian National Railway added 1% after Stifel Nicolaus upgraded the stock from Hold to Buy. Target price is $60.

Technical Action Yesterday

Technical action by S&P 500 stocks was quiet yesterday. One S&P 500 stock broke resistance (Hasbro) and one stock broke support (Genuine Parts). The Up/Down ratio slipped from 1.96 to ((267/137=) 1.95.

Technical action by TSX Composite stocks was non-existent despite weakness in the Index. No TSX stocks broke resistance or support. The Up/Down ratio was unchanged at (126/57=) 2.21.

Setting Up for the Seasonal Trade in the Canadian Energy Sector

Seasonal influences

The TSX Energy Index has a period of seasonal strength from February 25^th to May 9^th. The trade has been profitable in 14 of the past 15 periods. Average return per period was 13.7%. Following is a seasonal chart on the sector recently developed by Brooke Thackray:

The period of seasonal strength in the TSX Energy Index coincides with the period of seasonal strength in North American gasoline and crude oil prices. Other annual recurring events that favourably influence the sector during this period include fourth quarter results, results from the winter drilling season, annual reports, annual meetings and annual revisions to reserves.

Technical Influences

The TSX Energy Index currently does not have an attractive intermediate technical profile. The Index recently broke support at 273.30 and established an intermediate downtrend. In addition, the Index closed below its 200 day moving average yesterday. Strength relative to the TSX Composite has been negative during the past month.

Chart courtesy of StockCharts.com www.stockcharts.com

The TSX Energy Index is short term oversold on the charts. MACD is oversold, but continues to trend down. RSI at 32.52% also continues to trend lower, but is more oversold now than last February. It is near the 30% level where a bottom frequently occurs. Stochastics recently fell below 20% and are showing early signs of bottoming.

In conclusion, the technicals are lining up at an oversold level for the seasonal trade, but are not sufficient yet to trigger the trade.

Fundamental influences

Fourth quarter reports released by companies in the sector to date have not been greeted favourably by the market. Stock prices quickly moved lower on news. Cash flow and earnings by companies such as Imperial Oil and Suncor were significantly lower in the fourth quarter compared to the same period last year and compared to consensus estimates. Other major Canadian companies are scheduled to release fourth quarter results later this week and into next week.

And now the good news! Cash flow and earnings by the sector resume a strong upward trend beginning in the first quarter of 2010 thanks to a year-over-year increase in crude oil prices. Crude oil prices have more than doubled since December 2008.

Chart courtesy of StockCharts.com www.stockcharts.com

Seasonality in key energy equities in the sector

Seasonality by key stocks in the sector varies significantly. The following table shows the frequency of profitable trades and average return per period from February 25^th to May 9^th based on the past 10 periods:

Stock                         Frequency of                 Average Return

                                 Profit out of 10                Per Period (%)

Nexen                                  7                                 12.3

Imperial Oil                            8                                  6.7

Penn West Energy                  8                                  8.8

Husky                                   8                                 11.1

Suncor                                 9                                 15.5

Cdn. Natural Res.                   9                                 19.4

Encana                                 8                                 14.8

Talisman                               8                                 12.7

Cdn. Oil Sands                       8                                 16.0

The Bottom Line

The seasonal trade is lining up, but its not there yet. Please be patient. Stay tuned.

Possible ETF Candidates for the trade:

They include iShares TSX Energy Index (XEG), Claymore Oil Sand Sector (CLO), BMO TSX Equally Weighted Oil Index (ZEO) and Horizons BetaPro TSX Bull + ETF (HEU)

Adrienne Toghraie’s “Trader’s Coach” Column

Breaking the Trend
By Adrienne Toghraie, Trader’s Coach

www.TradingOnTarget.com

Notice how predictable most people are in the way they live their lives. Very seldom do they surprise you. For traders this is also true in their trading. Now, if the predictability in a trader’s actions is, “Steady profits as she goes,” then this is a trend he wants to follow. But what if a trader is following a pattern of making profits and then losing them or even worse never making profits at all? When will he finally notice this trend and take the actions necessary to change it? What I have seen over the years are the many traders who put bandages on their psychological issues that cause these bad trends when there needs to be surgery.

Not Asking for Directions

Tom would rather drive around for hours rather than ask directions from anyone. This was a major complaint of his wife until she finally gave him a GPS. But even with the GPS he has been known to argue with “the voice” and change direction. His frustrated wife now has to hear “Recalculating” over and over.

Tom has been breaking even or having losses in his trading results for the last ten years. He cannot understand why his wife is not more supportive of his dream. When Tom started trading he received advice from someone who claimed to be a trader who earned substantial profits. In following his lead to the letter Tom lost several thousand dollars. From then on Tom believed that he could give himself just as good advice as the trader who taught him how to lose money. He has been right ever since, resulting in steady losses. The only difference now is that his losses are smaller.

I met Tom’s wife at a Trader’s Expo and it is from his wife that I learned about him. She dragged him into one of my workshops and then convinced him to purchase my Home Study Course. Later, I went and had coffee with the couple. Within the conversation, I directed Tom to hear one of the other speakers who I knew to be not only a good trader, but also a good teacher. Tom thanked me after listening to him. Then I could not help myself in leaving him with, “If you listen to his advice the way you listen to the directions on your GPS, you will continue along the same trend.” His wife and I laughed as he scowled away.

Trading Teacher

I was speaking to a trading teacher the other day that is known to have an exceptional record for bringing out the best in many of his students. He was seeking me out to present Webinars for his group because he said, “More than half of them cannot or will not follow his advice.” He continued, “If they just monitored the room for a while they would see that everyone that follows my strategy is making money. These people just can’t pull the trigger or they get out too soon.”

I have since spoken to several of the better traders this individual has trained as well as a few who have not been able to follow his advice. They were seeking me out to improve their trading results. I am happy to report that their performance has improved. The others that continue to lose money will either get a wake up call someday, or fade into trading oblivion.

Evaluation for Those Who Want to Improve Their Outcome

1. What have been your overall trading profits since you started to trade?

2. What have been your trading profits since you started the strategy that you are currently using?

3. Do you notice time patterns in your losses? For example, are you losing money in the markets at a certain time of the day, week month, year?

4. What is the percentage of profit your strategy should bring in if you followed it after costs?

5. What have you already done to make your trading profitable, and what are you willing to do to earn more profits?

The answers to these questions will hopefully give you a wake-up call as to where you are in your trading. Remember, there is always a life-line available for those who are

truly committed and willing to invest in themselves to improve their trading.

Conclusion

Changes are not easy for most people. Taking advice and/or admitting you’re wrong is difficult for many. It is those who are willing to go beyond these self imposed limitations that become top traders. (Just as an aside: My GPS does not always give me the best directions).

Adrienne’s Calendar of Events

www.TradingOnTarget.com

DATE	EVENT	TITLE	PRESENTER	FEE
2/11	Live in NY	Overcoming Sabotage Traps	Adrienne	FREE
2/14	Live NY Expo	Recognizing 15 Sabotage Traps	Adrienne	FREE
3/9	Webinar	Time Price & Patterns	E-mini Junkie	FREE

Registration for Time Price & Patterns URL: http://tradingontarget.omnovia.com/registration/pid=96851264535889

3/20	½ Day Webinar	Master Class for Traders *	Adrienne	$500 *
3/27-28	Live Seminar	Top Performance Seminar *	Adrienne	$2,500 *

Go to www.TradingOnTarget.com or email: Adrienne@TradingOnTarget.com for more information

* Ask for early enrollment special

Weekly Relative Strength Review of Sector SPDRs

(Following the seasonal U.S. equity index entry point on November 5^th)

Highlights during the past week included:

• Improving performance by the Technology sector.
• Continuing strength in economically sensitive sectors including Consumer Discretionary and Industrial sectors.
• Continuing strength in Health Care and Consumer Staples
• Continuing weakness in Energy, Utilities and Financial Services
• Early signs of bottoming by Materials

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

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

Chart courtesy of StockCharts.com www.stockcharts.com

ETF News

Fidelity Makes a Bold Move with ETF Partnership

February 4, 2010 at 2:54 pm by ETF.com

Although a late bloomer in the ETF scene, Fidelity is partnering with BlackRock in an effort to grab its share of the ETF space without reinventing the wheel. The firm will give investors free trades on 25 of iShares broad-based index funds.

The deal was a direct response to Charles Schwab’s decision to give its own customers free access to its new line of ETFs. Charles Schwab offers free trades on a total of 8 funds, while the newest deal between Fidelity and BlackRock allows for commission-free trades on 25 funds, including four international funds and five fixed-income products, The Street reports.

Charles Schwab’s mutual funds are in direct competition with Fidelity, which is currently the third largest mutual fund manager by assets. The details of the agreement have largely been kept secret, though it appears Fidelity is interested in utilizing the commission-free ETFs as a marketing strategy after recently reducing the commission on all trades to $7.95.

iShares Starts Land Grab in Country-Specific ETFs

February 4, 2010 at 2:47 pm by ETF.com

The race to dominate country specific funds is in full swing. iShares recently filed with the SEC to create another six country-specific ETFs.

The six new funds are:

1. iShares MSCI Brazil Small Cap Index Fund

2. iShares MSCI Egypt Capped Investable Market Index Fund

3. iShares MSCI Ireland Capped Investable Market Index Fund

4. iShares MSCI Philippines Investable Market Index Fund

5. iShares MSCI Russia Capped Index Fund

6. iShares MSCI USA Index Fund

Similar to previous country-specific funds from iShares, all will track an MSCI index to generate returns for investors. iShares’ entry into Brazil is interesting, as the firm already operates a broad based fund that invests in the largest Brazilian companies. The small-cap blend will compete directly with Van Eck’s Market Vectors Brazil Small-Cap Fund (BRF: Quote, Profile, Advanced Chart, News), which took the markets by storm in 2009 and attracted more than $700 million in assets.

iShares will be the first ETF sponsor to track Egyptian and Irish stocks, two areas that are currently under-represented with ETF investors. Neither ticket symbols nor annual expense ratios have been released.

Global X Ups the Ante in Metal Funds

February 4, 2010 at 2:38 pm by ETF.com

Tapping into the current investment trends, Global X thinks there is room for a few more precious metal funds. The company has filed with the SEC to create four new funds, which will track companies involved in silver, gold, platinum and copper mining.

The four new funds are:

1. Global X Copper Miners ETF

2. Global X Gold Miners ETF

3. Global X Platinum Miners ETF

4. Global X Silver Miners ETF

The ETFs will be broad-based, encompassing a large basket of stocks in one of four Structured Solutions AG metals products. Mining company ETFs have proven themselves to be popular with investors due to their tendency to trade more like stock than metals. By tracking the miners, instead of the metals themselves, investors open themselves to a type of “natural leverage,” wherein each change in metal prices has a larger impact on the stock of the companies that produce it.

The new funds will trade on the NYSE Arca, according to the SEC filing; however, annual expenses and ticker symbols are not yet public. Global X’s filing comes just one week after the announcement of a copper and platinum ETF product from First Trust.

PIMCO Debuts Third Actively-Managed Bond ETF

February 4, 2010 at 2:30 pm by ETF.com

In strengthening its market niche, PIMCO has launched the third addition to its family of actively-managed bond funds. The fund will select top municipal bonds to cater to investors seeking tax-free returns.

The PIMCO Short Term Municipal Bond Strategy Fund (SMMU: Quote, Profile, Advanced Chart, News) will track the Barclays Capital 1-3 Year Municipal Bond Index, an index already in use by iShares, Van Eck, and SPDR. The fund is actively managed, however, in an effort to avoid the issue of front-running trading manipulating the market before the ETF is adjusted each day. PIMCO brought the issue to the forefront of bond ETF investing after it found bond investors were paying substantially higher costs due to the industry’s practice.

The newest ETF contains 26 different bond investments, with nearly $8 million in assets, according to the prospectus. The fund will trade for a reasonable .35% annual expense.

iShares Traverses Four New Regional ETFs

February 2, 2010 at 2:22 pm by ETF.com

Continuing to play on the popularity of regional investments, iShares is expanding its line of MSCI-tracking products with the addition of four new country-specific offerings. The funds target popular investment destinations, including Poland, China, Indonesia, and New Zealand.

The four new funds are as follows:

1. iShares MSCI China Small-Cap Index Fund

2. iShares MSCI Poland Investable Market Index Fund

3. iShares MSCI Indonesia Investable Market Index Fund

4. iShares MSCI New Zealand Investable Market Index Fund

The iShares China Small-Cap Index Fund will invest in the bottom 14% of stocks by market cap, according to an SEC filing, and the ETF will include more than 200 stocks in a number of industries. The iShares MSCI Poland Investable Market Index Fund will track a benchmark of 63 stocks in the top level of market capitalization.

The two new Indonesia and New Zealand funds will invest in the largest stocks by market cap in each respective country, with the Indonesia fund including 41 stocks, followed by 22 for New Zealand. The iShares MSCI New Zealand Investable Market Index Fund will be the first country-specific fund with a focus on New Zealand based equities. No tickers or annual fees have been announced.

New S&P ETN Shines with a Golden Twist

February 2, 2010 at 1:14 pm by ETF.com

Taking advantage of two popular investment choices, UBS has released a new ETN centered on two products: index funds and gold. The fund will combine 100% long positions in both the S&P 500 index, as well as gold.

The UBS E-TRACS S&P500 Gold Hedged Index ETN (SPGH: Quote, Profile, Advanced Chart, News) seeks to track the returns of both the S&P 500 index and gold futures contracts. The fund is essentially leveraged by the process of tracking 100% of the return of the S&P and 100% of the return of gold, creating full 100% long exposure. For each $1 invested, an investor will have exposure to $1 worth of S&P500 futures and $1 of long gold contracts.

Since the fund is leveraged, it could theoretically lose 100% of its value should the S&P500 and gold dip more than 50%. To protect investors, UBS has included an Early Termination Clause that would end the fund should it break through the $5 per share threshold, Yahoo Finance reports.

WisdomTree Uproots 10 ETFs

February 2, 2010 at 1:07 pm by ETF.com

WisdomTree has announced it will close 10 exchange-traded funds, which have been unable to garner significant volume from investors. The 10 funds announced for closure currently contain less than $180 million in assets.

The WisdomTree funds slated for closure are:

-WisdomTree International Financial Sector Fund (DRF)

-WisdomTree International Health Care Sector Fund (DBR)

-WisdomTree International Consumer Staples Sector Fund (DPN)

-WisdomTree International Consumer Discretionary Sector Fund (DPC)

-WisdomTree International Industrial Sector Fund (DDI)

-WisdomTree International Communications Sector Fund (DGG)

-WisdomTree Europe Total Dividend Fund (DEB)

-WisdomTree Earnings Top 100 Fund (EEZ)

-WisdomTree U.S. Short Term Government Income Fund (USY)

WisdomTree was unable to make the economies of scale work for some of its fund offerings. Razor-thin profit margins and cut-throat competition in the ETF industry have pushed a total of 96 funds to close their doors, and six firms have exited the business entirely, MarketWatch reports.

The funds will continue to trade until March 24, 2010, and shareholders who have not sold their shares will be automatically liquidated on March 29, 2010.

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:

U.S. Customers: Thackray’s 2010 Investor’s Guide: How to Profit from Seasonal Market Trends (Thackray’s Investor’s Guide)

Seasonal trades in the book that currently are active include Consumer Discretionary, Small Cap, Platinum, U.S. Materials, U.S. Retail, 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 $9.67 February 8 2010

Open	9.650			-
High	9.700		-
Low	9.650		-
Bid x10	9.560		-
Ask x10	9.640		-
Volume	2,000		-
52-wk High 01/18	10.650		-
52-wk Low 02/05	9.440		-

Net Asset Value: $9.57 per unit

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