(Editor’s Note: Tech Talk’s daily reports resumes in late August. Occasionally (approximately once a week) a shortened update report will be available.

Pre-opening Comments for Friday July 30^th

U.S. equity index futures continued to move lower this morning. S&P 500 futures were down 10 points in pre-opening trade. Traders responded to a lower than expected annualized U.S. second quarter real GDP report. Consensus was growth at a 2.6% rate versus 3.7% in the first quarter. Actual growth was 2.4%. Weakness was attributed mostly to weaker than anticipated consumer spending.

Canadian real GDP growth also was slower than expected. Consensus for May GDP growth was 0.2%. Actual was 0.1%.

More “sell on news” reactions to second quarter reports this morning! Chevron and Merck reported higher than consensus operating earnings. Merck fell 2.5%. Chevron slipped 0.5%.

Canadian Pacific was unchanged after BB&T upgraded the stock from Hold to Buy. Target is $70.

Potash Corp of Saskatchewan was unchanged after Citigroup upgraded the stock from Hold to Buy. Target price was raised from $96 to $124.

Colgate Palmolive slipped 0.5% after Goldman Sachs downgraded the stock from Conviction Buy to Neutral and Janney Montgomery upgraded the stock from Neutral to Buy.

WWW.EquityClock.com seasonality chart of the day

Canadian Pacific Railway has a history of reaching a seasonal peak in early August.

Technical Action Yesterday

Technical action turned bearish yesterday. Two S&P 500 stocks broke resistance (Ameriprise Financial and Interpublic Group) and ten stocks broke support (Akamai, Kellogg, Life Technologies, Micron Technologies, Eastman Kodak, Ratheon and Symantec. Most of the stocks breaking support came under pressure after reporting second quarter results. All broke support levels set on July 1^st. The Up/Down ratio remained unchanged at (175/246=) 0.71.

Technical action by TSX Composite stocks was quietly bullish. Three TSX stocks broke resistance (Transforce, Viterra and Osisko Exploration and none broke support. The Up/Down ratio improved from 1.11 to (90/79=) 1.14.

Interesting Charts

U.S. broadly based equity indices continue to find significant resistance at or just below their June 21^st highs. Momentum related to release of second quarter earnings reports has been waning. Stochastics for broadly based equity indices are rolling over. Some have fallen below the 80% level, a technical sign that short term momentum is turning from positive to either neutral or negative.

Ditto for the TSX Composite Index!

Gold stocks once again are showing early technical signs of bottoming. Don’t give up on the seasonal trade!

Seasonality in the month of August

Performance by U.S. equity markets in the month of August has been mildly positive during the past 10 periods. The S&P 500 Index gained an average of 0.96% per period, fourth best performing month of the year. The Dow Jones Industrial Average gained an average of 0.70%. The NASDAQ Composite Index rose 2.78%. The Russell 2000 Index improved 1.74%. However, not all indices had positive performance. Weakest index was the Dow Jones Transportation Average. August was its weakest month in the year with an average drop per period of 4.36%.

Best performing sectors in August during the past 20 year according to Thackray’s 2010 Investor’s Guide were Utilities, Consumer Staples and Information Technology. Worst performing sectors were Consumer Discretionary, Materials and Telecom.

Best performing subsectors during the past 10 periods were biotech (3.86%) and semi-conductors (3.29%).

The TSX Composite Index has had surprisingly positive performance during the past 10 periods. Average gain was 1.65%, second best performing month of the year. The Index moved higher in seven of the past 10 periods.

Performance by international equity indices was mixed. The Nikkei Average gained 0.45%, the London FT Index added 1.10%, the Frankfurt DAX Index slipped 0.92%, the Paris CAC Index improved 0.21% the Australia All Ordinaries Composite Index improved 1.99% and the Shanghai Composite Index lost 1.93%.

Precious metal prices tended to move slightly lower in August. Gold slipped 0.55%, Silver fell 3.22% and platinum dropped 1.78%. However, precious metal equity indices showed positive performance as they started into their period of seasonal strength. The Philadelphia Gold and Silver Index gained 1.55% and the AMEX Gold Bug Index improved 1.21%.

Other commodities struggled. Crude Oil added 0.10%. Lumber added 0.08%. Copper fell 1.72%.

The Canadian Dollar and the U.S. Dollar Index tend to be trendless in August.

A word of caution! September historically has been the weakest month for equity indices around the world.

FP Trading Desk Headlines

FP Trading Desk headline reads, “Raymond James releases its mid year update on best stock picks for 2010”. Following is a link to the report:

http://business.financialpost.com/2010/07/29/raymond-james-releases-its-mid-year-update-on-best-stock-picks-for-2010/

Special Free Services available through www.equityclock.com for a limited time only

Equityclock.com is offering free access to a data base showing seasonal studies on individual stocks and sectors. The data base holds seasonality studies on over 1000 big and moderate cap securities and indices. Free services are available for this summer only. Enjoy while available!
To login, simply go to http://www.equityclock.com/charts/ and enter the
following details:
Username: equityclock.com
Password: equityclock.com

Also, please take advantage of Google ads and other ads available in the data base.

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 $10.88 July 29^th 2010

· Open 10.88 (Down $0.01)

· Previous Close 10.88

· High 10.88

· Low 10.85

· Bid 10.85 x13

· Ask 10.88 x3

· Volume 6,650

· 52-week High 11.37 06/03

· 52-week Low 9.44 02/05

· Beta 2.28

· Net Asset Value per unit: $10.83 (Down $0.01)

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