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Pre-opening Comments for Friday March 12th
U.S. equity index futures are higher this morning. S&P 500 futures are up 5 points in pre-opening trade. Index futures are responding partially to weakness in the U.S. Dollar. Commodities priced in U.S. Dollars including crude oil, gasoline, copper, gold, silver and platinum are trading higher.
Crude oil prices also were helped by news that the International Energy Agency has increased its estimate for global demand. Crude oil gained $0.80 per barrel. Energy stocks are expected to open significantly higher this morning. Tis the season for crude oil prices to move higher!
Index futures moved higher following release of February retail sales. Consensus was a gain of 0.2%. Actual was a gain of 0.3% despite two major snow storms during the month that curtailed sales. Excluding autos, retail sales gained 0.8%. Consensus was a gain of 0.6%.
Good news for Canada’s economy this morning! February employment rose 20,900. Of greater importance, the number of permanent positions rose 60,000.
The Canadian Dollar responded strongly on the employment report. The Canadian dollar rose .80 to 98.43 cents U.S. to reach a 20 month high.
Higher commodity prices set the stage for the TSX Composite Index to break above its January high at 12,070.20. Current intermediate upside potential on a break above resistance is to 13,250.
Chart courtesy of StockCharts.com www.stockcharts.com
Potash Corp gained 8% after guiding first quarter estimates 50% higher than previous.
Agrium gained 5% after announcing withdrawal of its offer to purchase CF Industries. CF Industries fell 7%. Agrium is poised to break above resistance at $73.40 U.S.
Chart courtesy of StockCharts.com www.stockcharts.com
Piper Jaffray initiated coverage of the Biotech sector with a series of Overweight stock recommendations including Rigel Pharmaceutical, Adrea Biosciences, Human Genome, Gilead, Alexion Pharmaceuticals and Affymax.
Deutsche Bank upgraded Southern Copper from Hold to Buy and raised its target price from $35 to $38. ‘Tis the season for copper stocks to move higher!
Society General initiated coverage of Goldman Sachs with a Buy recommendation.
Jefferies initiated coverage on Eli Lilly with a Buy recommendation.
Technical Action Yesterday
Technical action by S&P 500 stocks remains bullish. Ten S&P 500 stocks broke resistance (BB&T Bank, Cintas, Danaher, Host Hotels, Key Banks, Lowes, M&T Banks, Viacom, Western Union and Zion) and none broke support. The Up/Down ratio increased from 3.19 to (327/98=) 3.34.
Technical action by TSX Composite stocks also remains bullish. Three TSX stocks broke resistance (Crew Energy, Trican Oil Services and Capital Power) and none broke support. The Up/Down ratio increased from 2.65 to (131/48=) 2.73.
Interesting Charts
The S&P 500 Index closed at an 18 month closing high yesterday and just below its January inter-day high at 1,150.45. Current intermediate upside potential is to 1,220.
Chart courtesy of StockCharts.com www.stockcharts.com
Energy stocks on both sides of the border continue to show improving technical action.
Chart courtesy of StockCharts.com www.stockcharts.com
Canadian oil service stocks were notably stronger in anticipation of an improvement in the Alberta royalty regime.
Chart courtesy of StockCharts.com www.stockcharts.com
U.S. bank stocks continue to dominate the list of S&P 500 stocks breaking resistance.
Chart courtesy of StockCharts.com www.stockcharts.com
Chart courtesy of StockCharts.com www.stockcharts.com
ETFs for the major and regional banks have broken resistance to reach 18 month highs
Chart courtesy of StockCharts.com www.stockcharts.com
Chart courtesy of StockCharts.com www.stockcharts.com
Short term momentum indicators for the Euro continue to improve implying that an intermediate low has been reached. A continuing recovery in the Euro and corresponding weakness in the U.S Dollar is positive for commodities priced in U.S. Dollars.
Chart courtesy of StockCharts.com www.stockcharts.com
‘Tis the season for the Euro to move higher!
Euro FX Futures (EC) Seasonal Chart
Chart courtesy of www.equityclock.com
The Canadian Dollar finally broke above its six month trading range between 92.16 cents U.S. and 97.79 U.S. cents to reach a 20 month high. Current intermediate upside potential is to 103.75 cents U.S.
Chart courtesy of StockCharts.com www.stockcharts.com
News released after the close last night could be sufficient to trigger a move by the TSX 60 Index above resistance at 709.73 to reach an 18 month high.
Chart courtesy of StockCharts.com www.stockcharts.com
Potash Corp. with a weight of 3.5% in the TSX 60 Index announced positive first quarter earnings guidance after the close last night. Previous guidance was $0.70-$1.00 per share. New guidance is $1.30-$1.50 per share. Gains are coming from higher than expected volumes and prices. The stock gained 8% following the news and is poised to move above resistance at $126.36 U.S.
Chart courtesy of StockCharts.com www.stockcharts.com
The news is likely to spill into other fertilizer stocks including Agrium and Mosaic.
Tech Talk’s Financial Post Column this Saturday
(Available in hard copy or at www.nationalpost.com )
The column updates the seasonal strategy on the Small Cap sector.
FP Trading Desk Headline
Headline reads, “Earnings surprises and stocks”. Following is a link to the report:
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 electronically or directly at Chapters, Amazon.ca, Barnes & Noble and Amazon.com. Following are links to most of these book stores:
http://www.chapters.indigo.ca/books/Thackrays-2010-Investors-Guide-Brooke-Thackray/9780978220037-item.html?ref=Search+Books:+%27thackray%27s%27
http://search.barnesandnoble.com/Thackrays-2010-Investors-Guide/Brooke-Thackray/e/9780978220037/?itm=1
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 $10.54 March 11 2010
· High 10.54
· Low 10.45
· Bid 10.52×10 lots
· Ask 10.54×4 lots
· Volume 2,600
· Open 10.45
· Previous Close 10.54
· 52-week High 10.65 on Jan 18
· 52-week Low 9.44 on Feb 5
· Beta 2.30
· Net Asset Value per unit: $10.55
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Discussions from the Tech Talk Forum:
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March 12th, 2010 at 7:50 am
Hi Don,
You spoke of EQN-T breaking resistance on a recent Tech Talk report. Where do you see the next resistance level?thanks
March 12th, 2010 at 8:05 am
Apologies for the occasional lack of connectivity to the site during the past two days. The problem has been reported to our server. Part of the problem is believed to have come from a surge of new interest in the site as well as in the related http://www.equityclock.com site.
March 12th, 2010 at 8:32 am
Hello Don,
Taken note about your comments on CCO.to However, is it below its 50 and 200 dma ? Is there also the possibility of a death cross occuring ? If this is true, in your opinion, do these negatives only apply for the intermediate or long term after June ?
Thanks,
KC
March 12th, 2010 at 9:11 am
Hello Don,
In the past week or so, are we seeing a short weakness in JJC ? Is this a good buying opportunity ? Can you please comment on the thinning MacD, Stochastics crossing below 80 and not sure how to interpret RSI. Should we expect it to drop a bit more next week or bounce up from here ?
Thank you,
Richard
March 12th, 2010 at 9:15 am
Hi Don. Is there any seasonality for Biovail? The technicals look decent, though it seems unable to break above the $16 level. Thanks.
March 12th, 2010 at 9:26 am
Don, can you tell me of any ETF’s in Canada or the US that track soft commodities?
March 12th, 2010 at 9:32 am
Hey Don,
as per my previous post about DWI, could you provide some TA and thoughts? it’s fallen from 13ish to 9ish in a month! it looks like we are nearing the 200 day MA. do you think it will bounce off that?
March 12th, 2010 at 9:44 am
I just got stopped out of a trade with DWI. It lost a contract with AT and T.
March 12th, 2010 at 11:18 am
Hi Don,
Now that AGU.TO has broken resistance today, where do you see this stock going to before it pulls back significantly?
Is this time of year into June, that a seasonal buy on the fertilizer stocks like AGU and POT, takes place due to it being Spring planting season for farmers? I’ve seen on the charts that AGU tends to move up during these months, so I was wondering if this is a yearly occurrence or if it just occurred during the past years I’ve viewed of 2007 to 2009.
Thanks Don!
Eve
March 12th, 2010 at 11:39 am
friday march 12th
Gold and US dollar fall in same way. I think is the first step for gold correction ??? What is your opinion about that.
Yvan
March 14th, 2010 at 1:11 pm
Hi George. Next resistance for EQN is at $4.68
March 14th, 2010 at 1:13 pm
Hi KC. Sorry history shows that the golden cross and death cross tend to record random performance after six months. I do not use them as a reliable indicator of intermediate trend.
March 14th, 2010 at 1:14 pm
Hi Richard. I too am concerned about the short term technicals for copper and its ETN (JJC). Additional comments are offered in tomorrow’s Tech Talk.
March 14th, 2010 at 1:16 pm
Hi Michael. Biovail has a period of seasonal strength from the end of July to the end of February.
March 14th, 2010 at 1:21 pm
Hi Jason. Sorry, there are no Exchange Traded Funds (ETFs)in North America that track soft commodities. There are several Exchange Traded Notes (ETNs)that trade on U.S. exchanges based on commodity futures contracts. Recent efforts by the CFTC have reduced the availability of soft commodity ETNs.
March 14th, 2010 at 1:24 pm
Hi Eve. The period of seasonal strength in Agrium is from mid July to the first week in January. Outside of its period of seasonal strength, performance is random: some periods higher, some periods lower.
March 14th, 2010 at 1:30 pm
Hi Yvan. Check out http://www.equityclock.com/charts/gold-futures-gc-seasonal-chart/. Gold currently is outside of its period of seasonal strength. Favourable seasonal influences return in August when annual recurring events once again will propell gold and gold stocks higher. The current preferred focus in the precious metal sector is on platinum with a period of seasonal strength from late December until the beginning of June.
March 14th, 2010 at 1:38 pm
Hi Don,
What is your opinion on these two stocks AGXM.OB and RA.V.
Thank you
March 14th, 2010 at 5:46 pm
Hello, We would like your opinion on Pacific Rubialis PRE and PPY.A. Painted Pony if you don’t mind.