Pre-opening Comments for Monday August 23^rd

U.S. equity index futures are higher this morning. S&P 500 futures are up 3 points in pre-opening trade. Index futures are responding to mergers and acquisition news. Potash Corp. rejected BHP Billiton’s take over offer and is actively seeking a white knight. Possible suitors include Sinochem and Vale. In addition, Hewlett Packard bid $24 per share for 3PAR. Dell previously bid $18 per share for 3PAR.

The Australia All Ordinaries Composite Index slipped 0.36% following news that the election in Australia did not arrive at a majority. The Labour party and the Liberal/National coalition each won 73 seats out of the available150 seats. The remaining four seats were won by independents. Negotiations and recounts will determine the victor in due time. BHP Billiton and Rio Tinto rallied in anticipation of a scrapping of the extra 30% tax on the profits of Australian iron ore and coal production.

Lowe’s added 2% after Goldman Sachs raised its rating on the stock from Neutral to Buy. Target price is $24.

Genuine Parts slipped 0.5% after Goldman Sachs lowered its rating on the stock from Buy to Hold. Target price is $48.

Economic News This Week

The focuses this week are on the second revision of second quarter U.S. GDP and Federal Reserve Chairman Bernanke’s response to the report.

June Canadian Retail Sales to be released at 8:30 AM EDT on Tuesday are expected to improve 0.4% versus a decline of 0.2% in May.

July Existing Home Sales to be released at 10:00 AM EDT on Tuesday are expected to fall to 4.75 million units from 5.37 million units in June.

July Durable Goods Orders to be released at 8:30 AM EDT on Wednesday are expected to improve by 3.1% versus a 1.2% decline in June.

July New Home Sales to be released at 10:00 AM EDT on Wednesday are expected to remain unchanged at 330,000 recorded in June.

Weekly Initial Jobless Claims to be released at 8:30 AM EDT on Thursday are expected to slip to 475,000 from 500,000 in the previous week.

The second estimate of annualized U.S. real GDP growth to be released at 8:30 AM EDT on Thursday is expected to fall to 1.4% from the first estimate at 2.4%.

Federal Reserve Chairman Ben Bernanke is scheduled to speak on the economy and monetary policy on Friday.

Earnings News This Week

The focus is second quarter earnings released by Canada’s major banks.

Tuesday sees Bank of Montreal and Medtronic

Wednesday sees Commerce Bank and Toll Brothers

Thursday sees National Bank and Royal Bank.

Equity Trends

The ratio of stocks in an uptrend to a downtrend (i.e. the Up/Down ratio) increased from 0.60 on July 23^rd to (163/236=) 0.69.

Bullish Percent Index for S&P 500 stocks slipped from 55.00% to 54.00% last week. The Index moved below its 15 day moving average and appears to be returning to an intermediate downtrend.

The Up/Down ratio for TSX Composite stocks rose from 1.06 on July 26^th to (102/66=) 1.55 thanks to strength in precious metal stocks.

Bullish Percent Index for TSX Composite stocks increased last week from 61.62% to 62.12% and moved below its 15 day moving average. Intermediate trend remains down.

The S&P 500 Index fell 7.56 points (0.70%) last week. Intermediate trend remains down. Support is at 1,010.91. Resistance is forming at 1,129.24. The Index once again found resistance near its 200 day moving average and fell last week below its 50 day moving average. Short term momentum indicators are trending down. Stochastics already are oversold, but have yet to show signs of bottoming.

Percent of S&P 500 stocks trading above their 50 day moving average fell last week from 43.00% to 38.00%. Percent continues to move in an intermediate downtrend and has yet to show signs of bottoming.

Percent of S&P 500 stocks trading above their 200 day moving average fell last week from 46.20% to 43.00%. Percent remains in an intermediate downtrend and has yet to show signs of bottoming.

The Dow Jones Industrial Average fell 89.53 points (0.87%) last week. Intermediate trend remains down. Support is at 9,614.32. Resistance is forming at 10,719.94. Strength relative to the S&P 500 Index remains positive. The Index once again has moved below its 50 and 200 day moving averages. Short term momentum indicators are trending lower. Stochastics already are oversold, but have yet to show signs of bottoming.

Bullish Percent Index for Dow Jones Industrial Average stocks was unchanged at 60.00% and moved below its 15 day moving average last week. The Index remains intermediate overbought

Bullish Percent Index for NASDAQ Composite Index stocks was unchanged at 46.70% and moved below its 15 day moving average. The Index remains in an intermediate downtrend.

The NASDAQ Composite Index added 6.28 points (0.29%) last week. Intermediate trend remains down. Support is at 2,061.14. Resistance is forming at 2,309.43. The Index fell once again below its 50 and 200 day moving averages. Short term momentum indicators are trending lower. Stochastics are oversold, but have yet to show signs of bottoming. Strength relative to the S&P 500 Index remains negative.

The Russell 2000 Index fell 9.09 points (1.49%) last week. Intermediate trend remains down. The Index fell below its 50 and 200 day moving averages once again. Support is at 587.67. Resistance is at 672.16. Strength relative to the S&P 500 Index remains negative. Short term momentum indicators are trending lower. Stochastics already are oversold, but have yet to show signs of bottoming.

The Dow Jones Transportation Average added 7.47 points (0.18%) last week. Intermediate trend remains down. Support is at 3,872.64. Resistance is forming at 4,524.78. The Average fell below its 50 and 200 day moving averages last week. Short term momentum indicators are trending lower. Stochastics already are oversold, but have yet to show signs of bottoming. Strength relative to the S&P 500 Index is neutral, but showing early signs of turning negative. ‘Tis the season for the Transportation sector to move lower!

The TSX Composite Index added 193.82 points (1.68%) last week. Intermediate trend remains down. Support is at 11,065.53. Resistance is forming at 11,878.35. The Index is bouncing back and forth around its 50 and 200 day moving averages. Short term momentum indictors are neutral. Strength relative to the S&P 500 currently is undetermined.

Percent of TSX stocks trading above their 50 day moving average increased last week from 47.98% to 50.51%. Percent is at a neutral level.

Percent of TSX stocks trading above their 200 day moving average increased from 44.95% to 46.46% last week. Percent remains in an intermediate downtrend.

The Australia All Ordinaries Index slipped 18.80 points (0.42%) last week. Intermediate trend remains down. Support is at 4,213.00. Resistance is forming at 4,618.80. Short term momentum indicators are trending lower. Strength relative to the S&P 500 Index currently is neutral. The Index remains below its 200 day moving average and fell below its 50 day moving average on Friday.

The Nikkei Average fell 74.08 points (0.80%) last week. Intermediate trend is down. Support is forming at 9,065.94. Resistance is at 9,807.36. Strength relative to the S&P 500 Index remains negative. The Average remains well below its 50 and 200 day moving averages. Short term momentum indicators are trending lower. Stochastics already are oversold, but have yet to show signs of bottoming.

The Shanghai Composite Index added 36.20 points (1.39%) last week. Intermediate trend changed from down to neutral last week when the Index moved above resistance at 2,686.54. Short term momentum indicators are trending higher. Stochastics already are overbought, but have yet to show signs of peaking. Strength relative to the S&P 500 Index recently changed from negative to positive.

The London FT Index fell 80.16 points (1.52%), the Frankfurt DAX Index lost 105.25 points (1.78%) and the Paris CAC Index gave up 34.79 points (0.96%) last week.

Greece’s Athens Index dropped 36.25 points (2.23%) last week and has returned to the top of a previous trading range where support is likely. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. Support is at 1,383.01. Resistance is at 1,793.37. Short term momentum indicators are trending down. Stochastics already are oversold, but have yet to show signs of bottoming.

Currencies

The U.S. Dollar Index added 0.10 last week and currently is testing its 50 day moving average. Support is at 80.80. Resistance and short term upside potential is to 85.03. Short term momentum indicators continue to trend higher. Stochastics already are short term overbought, but have yet to show signs of peaking.

The Euro slipped 0.43 last week. Support starts at the top of a previous trading range near 124. Resistance is at 133.34. Short term momentum indicators are trending down. Stochastics already are oversold, but have yet to show significant technical evidence of bottoming.

The Canadian Dollar fell 0.66 U.S. last week. Most of the weakness occurred late last week despite news on the proposed takeover of Potash Corp. Support is at 92.18. Resistance is at 98.70. Short term momentum indictors are neutral.

Commodities

The CRB Index slipped 1.78 points (0.66%) last week despite strength in gold and the Shanghai Composite Index. Weakness was notable in the energy sector.

Crude oil dropped $1.76 U.S. per barrel (2.33%) last week. Support is at $67.15. Resistance is forming at $83.05. Crude fell below its 50 and 200 day moving average again last week. Short term momentum indicators are trending lower.

Gasoline fell $2.76 per gallon last week. It broke below support at $1.89 and established an intermediate downtrend. Short term momentum indicators are trending down.

Natural gas fell 20.90 cents (4.82%) last week. Short term momentum indicators are trending lower.

Seasonal influences turn positive near the end of August. Ditto for gold bullion!

Natural Gas Futures (NG) Seasonal Chart

Gold Futures (GC) Seasonal Chart

At least one analyst is talking about a possible short squeeze in natural gas. Following is a link to the report:

http://www.cnbc.com/id/38786744

Gold gained $12.30 U.S. per ounce last week. Support is at $1,155.90. Resistance is at all time high at $1,265.00. Intermediate trend remains up. Short term momentum indicators are trending up. Stochastics are overbought, but have yet to show technical signs of peaking. A break above resistance implies technical upside to 1,384.

Market Vectors Gold Miners ETF added 3.10% last week. Support is at $46.80. Resistance is at $54.83. Short term momentum indicators are trending higher. Stochastics are overbought, but have yet to show technical signs of peaking. The ETF is outperforming gold, an encouraging technical sign for both. The Philadelphia Gold and Silver Index gained an average of 8.3% per period during the past 17 Septembers. History is set to repeat.

Silver, as more of an economic commodity, slipped 0.13 per ounce last week. It remains in a four month trading range. Momentum indicators are neutral.

Platinum dropped $9.00 U.S. per ounce last week. It remains in a tight four month range between $1,491 and $1,606.

Copper added 3.90 cents per lb. last week in response to strength in the Shanghai Composite Index. Short term momentum indicators have rolled over.

The grains ETN slipped 0.82% last week. Intermediate trend remains up. Short term momentum indicators are overbought.

Lumber gained $17.50 (8.66%) last week

Interest Rates

The yield on long term U.S. bonds continues to trend lower thanks to buying of Treasuries by the Federal Reserve. The yield on 10 year Treasuries fell another 0.076% last week.

Conversely, the long term Treasury Bond ETF gained $3.75 last week (3.67%).

Other Factors

The Baltic Dry Index gained another 288 (14.0%) last week.

The VIX Index slipped 2.86% last week but appears to be bottoming.

This chart is scary. U.S. markets are tracking closely their mid term election year trend

Economic news is unlikely to help equity markets this week.

Traders were buzzing about the Hindenburg Omen late last week. Background on the phenomenon is available at http://markostake.blogspot.com/2010/07/hindenburg-omen-foretells-coming-market.html . The Hindenburg Omen is a precise technical indicator that calls for a significant intermediate decline by U.S. equity markets. Analysts debated the significance of trading activity last Thursday. Some claimed requirement for the technical indicator were confirmed on Thursday. Others said no.

Short term momentum indicators continue to trend lower.

Intermediate technical indicators continue to trend lower.

The Bottom Line

Short term caution is appropriate. An important low for equity markets in late September/October continues to line up.

Tom Rogers’ “Elliott Wave” Blog

http://www.tomrogers.net/signpost.htm

BMO InvestorLine and Horizons AlphaPro Presents: A Conversation with Don Vialoux
Join us for a conversation with Don Vialoux, Research Analyst for the Horizons AlphaPro Seasonal Rotation ETF, for a discussion around the current investment landscape, with a focus on using exchange traded funds to take advantage of certain seasonal investing cycles. Mr. Vialoux is a financial professional, regularly quoted in the financial press as well as a frequent guest on BNN. Ken McCord, President of AlphaPro Management Inc., will begin the evening with an introduction to actively managed exchange traded funds, and highlight some new and innovative products from Horizons AlphaPro. Mr. McCord will then introduce Mr.Vialoux for an enlightening investment presentation. When Thursday August 26, 2010 Cocktails at 5:00pm Presentation starts at 5:30pm Where York Room First Canadian Place, 68th Floor Toronto, ON Please RSVP by sending an email to rsvp@hapetfs.com or call us at (866)641-5739.

Tech Talk’s Next appearance on BNN’s Market Call Tonight

Next appearance is on Friday August 27^th at 7:00 PM EDT

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 ETF HAC $11.07 August 20^th 2010

· Open 11.07

· Close 11.07

· High 11.07

· Low 11.03

· Bid 11.06 x0

· Ask 11.14 x0

· Volume 10,970

· 52-week High 11.37 06/03

· 52-week Low 9.44 02/05

· Beta 2.30

· Net Asset Value per Unit: $11.01

Sponsored By...

More from the network: Stock Market Outlook for February 9, 2012 Stock Market Outlook for February 8, 2012 Stock Market Outlook for February 7, 2012 Stock Market Outlook for February 6, 2012 Next Report on Monday, February 6th

Discussions from the Tech Talk Forum: An error has occurred, which probably means the feed is down. Try again later.