ShareThisEditor’s Note: The next Tech Talk report appears on Tuesday September 7th
Pre-opening Comments for Friday September 3rd
U.S. equity index futures are higher this morning. S& P 500 futures are up 12 points following release of a better than expected August employment report. Consensus for August Non-farm Payrolls was a drop of 100,000. Actual was a drop of 54,000. Consensus for the August unemployment rate was an increase of 0.1% to 9.6%. Actual was an increase of 0.1% to 9.6%. Consensus for private company employment was an increase of 41,000. Actual was an increase of 67,000.
Following release of the report, U.S. bond prices eased, the U.S. Dollar strengthened and metal prices weakened.
President Obama is scheduled to make a statement on the economy at 10:00 AM EDT. Traders are guessing that he will recommend additional fiscal stimulus.
Campbell Soup was unchanged after reporting fiscal fourth quarter earnings in line with consensus.
Google gained 2% after reporting plans to launch a music download service before the end of the year.
H&R Block gained 7% after reporting a narrower than consensus fiscal first quarter loss.
Tech Talk and EquityClock’s Financial Post Column
(To be published tomorrow and available at www.nationalpost.com)
Topic is Seasonality 101: Back to Basics of Seasonal Investing
Technical Action Yesterday
Technical action by S&P 500 stocks remained bullish yesterday. Twenty one S&P 500 stocks broke resistance (AvalonBay, Boston Properties,
CB Richard Ellis, Darden Restaurants, Eastman Chemicals, Equity Residential Properties, Expedia, Forest Labs, FMC Tech., Freeport McMoran Copper & Gold, Fortune Brands, Home Depot, Masco, Mead Johnson, Philip Morris, Progressive, Sempra Energy, Simon Properties, United Parcels, Vornado REIT and Watson Pharmaceutical. No S&P 500 stocks broke support. The Up/Down ratio increased from 0.63 to (173/240=) 0.72.
Technical action by TSX Composite Index stocks also was bullish. Another four TSX stocks broke resistance (Astral, Pengrowth, Sherritt and Toromont) and none broke support. The Up/Down ratio improved from 1.64 to (112/67=) 1.67.
Interesting Charts
Nice breakout by Silver to a three month high. Technical action by precious metals, related stocks and ETFs remains positive.
U.S. REITs were notable on the list of stocks that broke resistance yesterday.
FP Trading Desk Headlines
FP Trading Desk headline reads, “Utilities, Staples and Telecom to become new market leaders”. Following is a link to the report:
FP Trading Desk headline reads, “Equities expected to rally as soon as late September”. Following is a link to the report:
http://business.financialpost.com/2010/09/02/equities-expected-to-rally-as-soon-as-late-september/
FP Trading Desk headline reads, “Seven stocks qualified to join the S&)/TSX Composite Index”. Following is a link to the report:
http://business.financialpost.com/2010/09/02/seven-stocks-qualified-to-join-sptsx-composite-index/
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
HAC Seasonal Rotation ETF HAC $11.06 September 3rd 2010
· Open 11.05
· Close 11.06 ( Down $0.01)
· High 11.07
· Low 11.05
· Bid 11.05 x22
· Ask 11.06 x82
· Volume 21,089
· 52-week High 11.37 06/03
· 52-week Low 9.44 02/05
· Beta 2.31
· Net Asset Value per Unit: $11.04 (Unchanged)
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Discussions from the Tech Talk Forum:
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September 3rd, 2010 at 4:36 am
Don, can you please comment on the anticipated September correction. The head and shoulder pattern has borken on most markets and the TSX is near the top of it’s 1 year trading range (12300). I don’t think this correction will be as severe has projected in the pre-election trading chart. When this pattern breaks where does the market revert to on the bottom end (back to were it reverted course)? Has with all trading, when to many people are on one side of the trade the market throughs you a curve ball and changes direction.
September 3rd, 2010 at 6:13 am
Hi Don
Your opinion on RIM-T would be appreciated.
Thanks
Marlene
September 3rd, 2010 at 6:42 am
Hi Ron/BC
I am using $BPGDM together with RSI 14 and MACD to identify buy/sell signal on gold mining stocks. I wonder if this is valid for Canadian gold mining stocks? Also is there any bullish percent that I can use for Canadian agricultural stocks.
Thanks for your help and info
Reza
September 3rd, 2010 at 7:02 am
Reza: Stockcharts has a variety of indicators with the Gold Miners Bullish Percent Indicator. I don’t subscribe but do see their free weekly email with some charts. They also use Williams %R for signals as well as CCI 12. These are all good signals that tend to work. I have also seen using an 8 Day Simple Moving Average (SMA) on the Daily chart of this BPGDM for buy and sell signals which has a good track record as well. When you get down to low moving average numbers a simple moving average is preferable to an Exponential Moving Average (EMA) as a quicker response is not needed with such a short period of time and tends to whiplash too much. As far as the difference between Canadian based and U.S.based stocks it shouldn’t make much if any difference. I haven’t seen anything unique used on the AG stocks but they tend to be erratic basket cases with high betas and are either soaring or plunging. I would contact Stockcharts with that question. Perhaps using the same indicators would work just as well on the AG stocks. Might have to increase the numbers used to balance out the higher beta factor.
September 3rd, 2010 at 7:33 am
I think I spoke to soon. Based on what’s happening this morning it seems like it’s starting.
September 3rd, 2010 at 7:46 am
Andean Res AND.TO up 40% today, believe possible Goldcorp T/O anyone can confirm.
September 3rd, 2010 at 8:01 am
Hi Cesare. Early gains is September by equity markets are not unusual. See Thackray’s 2010 Investor’s Guide for background. Interesting how the recovery during the past three days has returned major U.S. equity indices to just below their 200 day moving averages where a band of resistance is expected. In addition, Stochastics for U.S. equity indices already have recovered to overbought levels. Several well respected technical analysts are talking about the likelihood that U.S. and most other world equity indices bottomed at the beginning of July and currently are in a base building pattern with one last test of their July lows. Intermediate technical signals are moving that way. The charts will let us know.
September 3rd, 2010 at 8:23 am
I suspect we’ve seen the lows for the year… way too many people are bearish therefore the risk must be to the upside.
However until the S&P 500 breaks above its 200 DMA on good volume… a defensive posture is warranted.
One can see a possible bullish “inverted head and shoulders” pattern on the S&P 500 chart, with the head @ 1010.91 in early July; the left shoulder in May @ 1040.78; and the right shoulder a few days ago @ 1039.70… very symmetrical which is good. Now for the break above the neckline around 1129-31ish…on good volume.
We will see…
September 3rd, 2010 at 8:23 am
Don,
What’s the seasonality of Uranium and Uranium stocks like PDN.to?
September 3rd, 2010 at 8:58 am
Hi Nicholas:
I don’t know the seasonality of uranium but I here is a good website about uranium technicals:
http://techuranium.blogspot.com/
September 3rd, 2010 at 10:40 am
Good afternoon Don! Canadian financial’s have been performing well and I have a nice modest gain. Would it be prudent to take my profits now and buy back on weakness in the early fall? I see on your educational section the financial are seasonally strong from the end of Oct to the end of May.
September 3rd, 2010 at 10:41 am
I’ve been burned too many times in September to accept any indicators, short, medium or long term. I’m inclined to wait until at least mid to late October.
September 3rd, 2010 at 11:26 am
Ron and others,
If I have a long position in TCK (still slighly down from when I originally purchased the shares), don’t want to sell it, yet want to hedge the downside risk, is it a good idea to buy HMD (double short on TSX Global base metals producers)? Thank you
September 3rd, 2010 at 11:51 am
Jan.M and GB: Guess that GAS-TO did short enough NG like HNU… Happy Hunting!
September 3rd, 2010 at 2:22 pm
Slava: NYSE:TCK just broke out above significant price resistance. This was the June and Aug high channel top at 37. Price closed today at 38.20 +1.35. Support now is the breakout point at 37. Would not want to see price drop below this level into the old channel. (you must be up with this stock). As far as hedging it I’m not sure how you’d do this. Normally options are the best insurance policy with the lowest cost and little capital used up. Plus there is no volume to speak of with HMD like most everything else on the TSX. Next time CD pokes its nose up to 97-98 cents I’m switching to U.S.$. Just can’t deal with shopping at the TSX corner grocery store anymore. The NYSE and NASDAQ are like shopping at Costco.
September 3rd, 2010 at 3:17 pm
REZA: I hope this helps
semi-mechanical system for trading gold stock
BPGDM System Chart with 8 day MA and Stochastics:
Semi-mechanical system for trading gold stocks; triggers are from the BPGDM crossing over the 8 day MA. Also note extreme price levels: When BPBDM is 80% and above, it’s dangerous to go long gold stocks. Extreme oversold conditions are below 30%
BPGDM System Chat, Renko Style – An alternate view, Renko charts tend to be cleaner, but can also give later signals. The Williams % Indicator is useful as well as the CCI.
September 3rd, 2010 at 3:19 pm
REZA: see gold Charts here, and many more
http://breakpointtrades.com/controls/preview.php?la_id=878
September 3rd, 2010 at 4:29 pm
Freddebuoy
I just tighted my stops and keep defensive names….but I’ve been burned before…lol…many many times. I guess I never learn.
As long as we don’t have another “flash crash” should be fine.
September 3rd, 2010 at 8:05 pm
I doubt very much the TSE will be breaking 12300 in September. For that to happen more substantial growth is warranted and the economy is still very weak. This market is still in a trading range and I believe a correction is still coming. The strong US jobs report will strengthen the USD$. The same event happened in December and this started the USD$ on a up trend. The strength of the USD will make commodities more expensive and weaken the price.
September 3rd, 2010 at 9:00 pm
Ron/BC thanks for the info on gold mining stock. And how to read related charts
September 3rd, 2010 at 9:03 pm
GB thanks for the info and the link. Both are very useful.
September 4th, 2010 at 1:54 pm
speculators are not in the general market (sp500) … they are up to there armpits in gold mining stocks and US TBonds …. larger picture 10 year time cycle says the sp500 early july low is the low for the year … sentiment says there are no sellers left ….. those who are still bearish are hoping for one more retest of the lows … hope always brings failure … it will not happen … it is straight up from here … once sp500 at 1131 is broken on the upside it will be a melt-up … gold mining stocks and US TBonds will crash
September 4th, 2010 at 5:08 pm
Here is a link to a long list of ETFs both Index and Sector with a lot of other links to specific markets.
http://www.leavittbrothers.com/etf/
September 4th, 2010 at 9:59 pm
Ron/BC: Thank you very much for the information. Have a great holidays.
September 5th, 2010 at 12:49 pm
Hi Dan. Confirming that Canadian Financials have two sweet spots. The next one is from late October to the end of December. Look for additional comments and data in Thackray’s 2011 book.
September 5th, 2010 at 12:57 pm
Watch for NGas to weaken, but watch for Gaston could effect price.