ShareThisPre-opening Comments for Thursday February 11th
U.S. equity index futures are higher this morning. S&P 500 futures added 1 point in pre-opening trade. Index futures moved higher following news that the European Union has reached an agreement to bail out Greece. Details have yet to be released.
Index futures briefly moved slightly higher following release at 8:30 AM of the weekly jobless claims report, but slipped lower prior to the opening. Jobless claims fell a surprising 43,000 to 440,000.
Crude oil added another $0.21 per barrel after the International Energy Agency raised its estimate for world crude oil demand in 2010 by 1.6 million barrels per day.
First Energy has offered to acquire Allegheny Energy in an all stock deal valued at $4.7 billion.
Several Canadian companies reported lower than expected fourth quarter earnings including Canadian Tire, Encana and SunLife.
Pepsico is slightly higher after reporting fourth quarter earnings in line with expectations. Revenues exceeded expectations.
Bernstein upgraded 3M from Market Perform to Outperform. Target price was raised from $90 to $99.
Analysts are taking a more positive stance on the U.S. Oil Service sector. ‘Tis the season for the sector to move higher! This morning HSBC raised its rating on Cameron International from Neutral to Outperform. Target price is $49.
Technical Action Yesterday
Technical action by S&P 500 stocks was quietly bearish yesterday. No S&P 500 stocks broke resistance and three stocks broke support (Dean Foods, Coca Cola Enterprises and Fidelity). The Up/Down ratio dipped from 1.94 to 263/138=) 1.91.
Technical action by TSX Composite Index also was quiet. One TSX stock broke resistance (Northland Power Trust) and one TSX stock broke support (Talisman). The Up/Down ratio slipped from 2.19 to 124/57= 2.18.
Thackray’s Market Letter for February
Brooke released his monthly newsletter yesterday. Highlights include:
- An overview on U.S. equity markets as well as a projection for prospects into spring.
- An update on changes in the Horizons AlphaPro Seasonal Rotation ETF (HAC) during the month of January including a summary of what has been working and what hasn’t been working
- Sectors on the horizon for seasonal trades with a focus on the energy sector.
Brooke’s monthly newsletter is free. Subscribe to the newsletter by sending an email to Subscribe@alphamountain.com with SUBSCRIBE in the subject line. Also, please state your first and last name, city and country.
Headline from the FP Trading Desk
Headline reads, “U.S. will import inflation, rate hike coming in August”. Following is a link to the report:
Seasonality in Crude Oil
Seasonal influences for crude oil have appeared slightly earlier than usual this year. Colder that average weather and stormy conditions in the mid western and north eastern U.S. have triggered the advance. Short term momentum indicators already have bottomed.
Chart courtesy of StockCharts.com www.stockcharts.com
Chart courtesy of SeasonalCharts.com www.seasonalcharts.com
Lou Schizas’ Blog
Lou offers an interesting comment on Alcoa, a base metal stock that usually outperforms the market at this time of year. Following is a link to his blog:
http://www.happycapitalism.com/2010/02/the-most-wonderful-time-of-the-year-for-aa/#respond
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. 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 $9.80 February 10 2010
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Open |
9.840 |
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- |
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High |
9.840 |
- |
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Low |
9.610 |
- |
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Bid x11 |
9.750 |
- |
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Ask x50 |
9.800 |
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Volume |
14,700 |
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52-wk High 01/18 |
10.650 |
- |
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52-wk Low 02/05 |
9.440 |
- |
Net Asset Value: $9.77 per unit
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Discussions from the Tech Talk Forum:
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February 11th, 2010 at 5:47 am
Hi Don:
What about the influence of the US$ on the XLE XME XLB OIH …in terms of the seasonal sweet spot of these commodities?
Thanks
February 11th, 2010 at 6:21 am
Good morning Don
Do you think JJG-N has bottomed and will start an uptrend soon?
Thanks
Jeff
February 11th, 2010 at 6:42 am
Good Morning Don,
I noticed that HAC does not hold any Silver, Platinum or Palladium play components. Is there a reason why or is the strategy just to hold XME to cover that sector ?
Regards,
Richard
February 11th, 2010 at 7:32 am
I am looking to the oil WTIC chart . You place the blue arrows indicating a good technical signal to buy . But last week you have the same conditions . Recovering MACD, RSI , Stochastics .Why you did not place the blue arrows last weeks ?
February 11th, 2010 at 8:05 am
Hi Richard. HAC has yet to receive permission to include Silver, Platinum and Palladium in its portfolio. An application has been made.
February 11th, 2010 at 8:10 am
Hi Jeff. JJG has an improving technical profile. Short term momentum indicators have bottomed and are moving higher. Strength is closely correlated with weakness in the U.S. Dollar. Seasonal influences are random at this time of year.
February 11th, 2010 at 8:19 am
Hi Don,
I was wondering what your TA on CBQ is.
Thanks
February 11th, 2010 at 8:45 am
Don,
You mentioned a short while ago to limp in on the seasonal energy trades. What are you looking for the next move?
Thanks
February 11th, 2010 at 8:50 am
Does mean we should start adding Energy stocks at this time? ?XEG?
February 11th, 2010 at 8:56 am
Hi Rick Smith. The period of seasonal strength in crude oil starts on average in the third week in February. Tech Talk uses the average date plus or minus 10 trading days(two trading weeks) when fine tuning entry and exit points using short term technical indicators. The two week period prior to the third week in February has just arrived.
February 11th, 2010 at 9:00 am
Hi Annette. Short term momentum indicators for CBQ have just turned positive. Stochastics have recovered above the 20% level, RSI have recovered above the 30% level. MACD has just recorded a positive cross over from a short term oversold level. Seasonal influences for the BRIC nations are positive until the end of April.
February 11th, 2010 at 9:05 am
Hello Don
Whats TA for EWZ.N? Thanks
February 11th, 2010 at 9:06 am
Hi Greg DS. Reasonable upside potential by the TSX Energy Index is to resistance at 309 by mid May, up about 12% from current levels. Reasonable upside potential by the S&P Energy Index by mid May it to resistance at 456, up 11% from current levels. Gains of this magnitude during the period of seasonal strength are in line with gains by these indices during the past 15 periods.
February 11th, 2010 at 9:09 am
Hi MTD. XEG is one of several choices among Canadian energy ETFs (but not the best due to its high concentrations in companies with the weakest technical and fundamental outlooks in the sector). A full list is offered in a Financial Post article to be released this Saturday.
February 11th, 2010 at 9:13 am
Hi Roy. EWZ has an improving short term technical profile. Stochastics have recovered from below the 20% level. RSI is recovering from below the 30% level. MACD is about to record a buy signal when moving averages cross in a short term oversold level. Strength relative to the S&P 500 has turned positive during the past few days. Seasonal influences are positive until the end of April.
February 11th, 2010 at 9:27 am
Hey Don,
When looking at energy seasonal plays you mentioned (XEG, CLO, HEU etc) should we focus on oil etfs only such as HOU or energy in general such as HEU because as mentioned before, suncor hasn’t performed well and it is a major holding in the energy etfs
February 11th, 2010 at 10:18 am
Don, I am curious why you have chosen XIU vs XIC for HAC. Short term, XIU seem to be in a downtrend vs XIC. Longer term XIU is more positive but has been incicating a downtrend since about November. The Perf Chart shows a clear benefit to XIC over the past year and a near wash over the past few years.
Another question, this morning, $TSX was in the green while XIC was red. (It corrected quite quickly – probably too quickly for a trade when I spotted it). Would that be a sort of arbitrage and a good opportunity? I would have taken advantage if I could have.
February 11th, 2010 at 10:44 am
Don, re my question above, I have just found another anomaly. $SPM is trading down today while XLB is up – the fund statement for XLB states “The fund invests at least 95% of assets in companies of the materials sector…”. Just how does one interpret this?
February 11th, 2010 at 11:10 am
About Bill Carrigan: I think he is a good analyst. Yet I am not sure it is necessary for him to throw mud at this site for last few weeks. Would it be a better continuous improvement process by absorbing others’ strength into own strength? Would it be more constructive to focus on others’ strength rather than just being critical?
February 11th, 2010 at 11:20 am
Hi Don,
Thanks in advance for your help.
I wonder if it is time to buy zeo.to now or you are expecting a pull back.
Thanks
February 11th, 2010 at 11:34 am
Don,
What are the other choices for Canadian Energy ETFs besides XEG please ?
Richard
February 11th, 2010 at 12:25 pm
Hi Don,
Could you please give me TA for RIM.TO? Do you see it having a bit more potential upside between now and May? Thank you!
Joe
February 12th, 2010 at 12:10 am
Can anyone who is knowledgeable on taxation issues tell me whether its better to hold an ETF inside or outside a TFSA ? For example, XLB, XES and so on.
Cheers,
Joe
February 12th, 2010 at 5:47 am
Hi Don – I’ve been watching the Presidential Chart. I’m curious about two things. 1) Is there a way to calculate percentages, for example the gain from Mar31 to July 31; and 2) I’m surprised it runs so strongly in June and July? Also it would be interesting to overview the current DJIA against it. Excellent Site…Thanks!!