ShareThisPre-opening Comments for Thursday March 11th
U.S. equity index futures are slightly lower this morning. S&P 500 futures slipped 4 points in pre-opening trade. Index futures moved lower following release of economic reports at 8:30 AM EST. Weekly jobless claims eased 6,000 to 462,000. The January U.S. Trade Deficit narrowed to $37.3 billion. Consensus was a deficit of $41 billion. The January Canadian Trade Surplus rose to $799 million. Consensus was a surplus of $100 million.
Pengrowth Energy Trust was downgraded to Hold from Buy at Canaccord.
Collins Stewart initiated coverage on the technology manufacturing sector with Buy recommendations on Jabil, Flextronics and Celestica.
Dr. Pepper/Snapple was upgraded by UBS from Neutral to Buy.
Imax gained 2% on news that “Alice in Wonderland” attracted North American sales in of $116 million over the weekend.
Technical Action Yesterday
Technical action by S&P 500 stocks remains bullish. Another 13 S&P 500 stocks broke resistance (AFLAC, AIG, Bank of America, Broadcom, Dominion Resources, Huntington Bank, Leggett & Platt, Marshall & Isley, Sun Trust Banks, Tellabs and Wells Fargo) and none broke support. The Up/Down ratio rose from 3.00 to (325/102=) 3.19.
Technical action by TSX Composite stocks also remains bullish. Five TSX stocks broke resistance (Canadian Western Bank, Davis & Henderson, Laurentian Bank, Lundin Mining and Methanex) and none broke support. The Up/Down ratio increased from 2.48 to (130/49=) 2.65.
Thackray’s March Market Letter
Highlights in the letter include:
- An equity market comment. Brooke says, “March will probably produce more volatility, but the seasonal odds are that it will end in positive territory once again”.
- A summary of all transactions completed in HAC in February plus an explanation for each trade.
- An outlook for the Canadian Dollar including a seasonal chart from www.equityclock.com
Brooke’s monthly newsletter is free. Please subscribe 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.
Changes in content in the TSX Composite Index
Standard & Poor’s is expected to announce quarterly changes in content in the TSX Composite Index this Friday. Changes are effective Monday March 22nd. Likely candidates for additions to the Index include Bankers Petroleum (BNK), Eastern Platinum (ELR), Jaguar Mining (JAG), NovaGold Resources (NG) and Northgate Minerals (NGX). All have strengthened recently in anticipation of index buying upon entry into the Index.
Interesting Charts
Canadian energy sector remains attractive. They already have recovered significantly from their lows on February 5th, but have significant intermediate upside potential from current levels. The sector recently entered its period of seasonal strength lasting until May. The sector could receive a boost later today on news that the Alberta Government plans to improve its royalty regime.
Chart courtesy of StockCharts.com www.stockcharts.com
Canadian Energy Seasonality from 1995 to 2009
Chart courtesy of Brooke Thackray
Technical on the Metals and Mining sector continue to improve. More stocks in the sector are breaking above key resistance levels.
Chart courtesy of StockCharts.com www.stockcharts.com
U.S. Bank stocks were prominent on the list of U.S. stocks breaking resistance.
Chart courtesy of StockCharts.com www.stockcharts.com
Charts courtesy of StockCharts.com www.stockcharts.com
THE CASTLEMOORE INVESTMENT COMMENTARY
Flush with Pride?
We began last week’s column by congratulating Canada’s metal winners, in particular the gold-medal winning hockey team, for making proud a hockey-obsessed nation.
How obsessed? While we held our collective breaths for most of the gold medal game, apparently that’s not all we held:
And from Air Canada we learned they "incurred a flight delay for a reason Air Canada had not yet encountered in over 72 years of existence," chief executive Calin Rovinescu told a business gathering. They had to repeatedly ask passengers who were glued to tv’s in the waiting area to board!
How nice it would be if stock patterns were this predictable.
An interesting study done by Credit Suisse shows that, of the 60 stocks that comprised the S&P/TSX 60 index a decade ago (specifically January 1, 2000), 32 of them—more than half—are no longer constituent members as at January 1, 2010.
At the beginning of 2000, Nortel held an astounding 22.68% of the index, and no portfolio manager would have been expected to justify his or her holding the stock in a client portfolio. NT combined with its then parent corporation, BCE Inc., to give the Information Technology and Telecommunications sectors a greater than 42% weighting in Canada’s most widely used benchmark. An outside observer could have excused for thinking that Canada’s was a tech-dependent economy, and this was even before the emergence of Research in Motion and Open Text, to name but two.
Today, Energy and Materials have a combined weighting on the TSX of about half and Financials about a third. In other words, the TSX now more accurately reflects the real drivers of Canada’s core sectors.
Nice, but what’s the point?
The point is that many investors invest in equity index products thinking them to represent the ultimate passive, buy-and-hold, investment strategy. But are they? Each time a constituent stock drops from the index, and that seems to happen quite regularly, an active decision must be about what to replace it with.
Well, at least we didn’t have GM, AIG….. (The Dow 30 had 7 changes, or 23%, over the same time period).
And minor observation on shipping rates….
If we look at the chart of Dry Ships as an example of international shipping activity it doesn’t appear that things are so rosy. Anecdotally, we know that many larger container and tankers were being (and still are) prior to the financial crisis. This would reduce prices, but as far as we can tell from this “indicator” there’s no explosive growth imminent in global trade. At best this looks like a decent basing pattern.
—————————————————————————————
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.
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
FP Trading Desk Headline
Headline reads, “Year 2: What to Expect”. The report examines returns during the second year after a stock market recovery. Following is a link to the report: http://network.nationalpost.com/NP/blogs/tradingdesk/archive/2010/03/10/year-two-what-to-expect.aspx
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, U.S. Energy 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 $10.53 March 10 2010
· High 10.53
· Low 10.44
· Bid 10.44×5 lots
· Ask 10.53×19 lots
· Volume 6,499
· Open 10.44
· Previous Close 10.53
· 52-week High 10.65 on Jan 18
· 52-week Low 9.44 on Feb 5
· Beta 2.31
· Net Asset Value per unit: $10.51
| Sponsored By... |
|
|
|
Discussions from the Tech Talk Forum:
An error has occurred, which probably means the feed is down. Try again later.
|
March 11th, 2010 at 6:28 am
Equity Clock is great – well done
A few thoughts
1. Could you identify in the charts section the Cdn and US ETFs that most nearly align with the individual seasonality charts?
2. Is there an archive for the ‘recently mentioned stocks seasonal charts’3. Will you be adding the seasonal charts for the Cdn ETFs (where data permits)?
March 11th, 2010 at 10:31 am
Thanks for the comments David. The goal is to establish a database containing seasonality studies of all stocks I can get data for, so 2000+ from both US and Canadian markets. I can certainly include ETFs in this bunch. We would be charging a modest monthly login fee to this database to cover the costs of running it, however.
One of the key benefits would the up-to-date seasonal data, rather than some websites that continue to show charts 2 or 3 years out of date, especially since we’ve had some fairly significant events during this time frame.
In order to move forward with this we are seeking a robust database that is user friendly that the audience may easily access and that we may present all the info we desire. Stay tuned!