Pre-opening Comments for Wednesday September 8^th

U.S. equity index futures are higher this morning. S&P 500 futures are up 4 points in pre-opening trade. Index futures recovered shortly after Portugal successfully completed a sovereign debt offering. Also helping index futures was news from Germany that an agreement on world bank capital requirements to be announced this weekend has been reached. The agreement includes an extended time for banks to comply.

Economic news from Canada was mixed this morning. July Building Permits fell 3.3%, but they bear consensus expecting a 4.9% decline.

The Bank of Canada increased its overnight lending rate by 0.25% to 1.00%. The Bank of Canada’s comment following release of news implied that rates likely will not be increased again any time soon.

Altria gained 1% after raising guidance for third quarter earnings.

Apple added 1% after UBS raised its third quarter earnings estimate and increased its target price from $340 to $350.

Magna International slipped 1% after JP Morgan downgraded the stock from Overweight to Neutral.

Encana was unchanged after Citigroup upgraded the stock from Sector Perform to Outperform. Target is $37.

Hewlett Packard lost 1.0% after UBS downgraded the stock from Buy to Neutral. Target was reduced from $54 to $44.

Intel slipped 0.5% after UBS downgraded the stock from Buy to Neutral. Target was reduced from $28 to $19.50,

Baxter International was unchanged after Citigroup downgraded the stock from Hold to Sell. Target was reduced from $46 to $41.

Costco added 1.5% after Goldman Sachs raised its rating from Neutral to Buy. Target price was increased from $62 to $68.

Staples gained 3% after Goldman Sachs raised its rating from Neutral to Buy. Target price was increased from $22 to $23

Technical Action Yesterday

Technical action by S&P 500 stocks was quiet yesterday. Three S&P 500 stocks broke resistance (Amphenol, Allegheny Energy and Coca Cola Enterprises). None broke support. The Up/Down ratio was unchanged at (192/227=) 0.84.

Technical action by TSX Composite stocks was bullish yesterday thanks mainly to breakouts by midcap gold stocks. Six TSX stocks broke resistance (Alamos Gold, Gabriel Resources, Semafo, TMX Group, Transat and Westshore Terminals) and none broke support. The Up/Down ratio increased from 1.83 to (118/63=) 1.87.

Seasonality in the Shanghai Composite Index

Tech Talk noted yesterday that a technical recovery by the Shanghai Composite Index is a likely trigger for the next significant intermediate uptrend in world equity markets. Technicals are not there yet. The seasonality study below suggests that likely timing of an intermediate bottom is near the end of October. Between now and the end of October, the Index has a history of moving lower. Seasonality in the Shanghai Composite Index is remarkably similar to seasonality in most developed nation markets. Stay tuned for an entry point as the end of October approaches.

Interesting Charts

Midcap gold stocks dominated the list of TSX stocks breaking resistance yesterday. ‘Tis the season for the sector to move higher!

Notably weak yesterday were financial service stocks around the world. Traders are jittery prior to news from the Basil 3 Accord expected to be announced this Sunday. Basil 3 will set the reserve requirements that banks will need to follow in future. Concerns have been raised that many banks will not meet the requirements and will need to raise significant equity capital in order to reach the requirement. Canadian banks are least affected. Leverage European and U.S. banks are on the radar screen. Generally, banks have been reluctant to expand credit lines until they know what their reserve requirements will be and how they will need to adjust. Zombie banks such as Citigroup and Bank of America remain under significant intermediate downside pressure.

Weekly Technical Review of Sector SPDRs

(Assuming that U.S. equity markets recorded a significant intermediate low on July 1^st)

Sectors trading above their early August high: Utilities. All others are trading below their early August high.

Sectors trading above their 200 day moving average: Consumer Staples, Consumer Discretionary, Industrials, Utilities, Materials.

Sectors trading below their 200 day moving average and their 200 day moving average is trending down: Technology, Financial Services, Energy, Health Care

Sectors with positive performance since July 1^st: Materials, Utilities, Consumer Discretionary, Industrials, Energy. Sector with neutral performance since July 1^st: Consumer Staples. Underperforming sectors since July 1^st: Technology, Financial Services and Health Care.

Sectors with positive performance last week: Materials, Industrials and Technology. Sectors with market performance last week: Consumer Discretionary, Financial Services. Sectors with under performance last week: Energy, Utilities, Health Care, Consumer Staples.

MACD and RSI for all sectors recovered from oversold levels last week.

Stochastics for all sectors continued to recover last week. Most already are above the 80% level (i.e. short term overbought).

Major U.S. equity indices and their 200 day moving average

The Dow Jones Industrial Average, S&P 500 Index and the NASDAQ Composite Index recently saw their 200 day moving average moving lower. Not an encouraging sign! At best, significant short term resistance near 200 day moving averages is implied.

Discover How to Survive and Thrive in Today’s Unpredictable Markets In today’s unique market conditions, it is more important than ever for you to have the most comprehensive investing and trading education to position your portfolio for safety and profitability in 2011 and beyond. And the best place to receive this guidance is at The World MoneyShow Toronto, October 20-22, 2010, at The Metro Toronto Convention Centre. Investors can hear the world’s greatest analysts and advisors share their expert guidance, while traders will have the opportunity to meet and hear from the world-class talent in their field, both in the vital hum on the exhibit floor and in the workshops held in every corner of the Convention Centre. In addition to the unmatched opportunity to ask questions of the world’s foremost financial experts face to face, the conference provides an environment to share with fellow attendees and learn their best investment ideas for the current environment and their strategies for trading various markets. Please join me, Donald Vialoux, for the following presentation at The World MoneyShow Toronto: Timing the Market Using a Combination of Technical, Fundamental, and Seasonal Analysis Wednesday, October 20 1:00pm – 1:45pm The World MoneyShow Toronto provides an unprecedented opportunity for you to grow your assets and learn what is working in today’s tumultuous investing and trading marketplace. Whatever your experience, portfolio size, or risk posture, you simply cannot afford to miss it.  Your no-cost, three-day pass will give you unlimited access to an exciting array of topics and world-class insights to fit your investing and trading needs, including keynote presentations, interactive workshops, live trading demonstrations, and spirited panel discussion. With over 75 topics to choose from, you’ll come away with the knowledge you need to become more skillful and confident the minute you return home. The one event this fall that will be your most comprehensive resource for relevant education, germane research, and valuable advice is at The World MoneyShow Toronto, October 20-22, 2010. I look forward to meeting and connecting personally with you there. Sincerely, Donald Vialoux Founder, Tech Talk Discover complete Show details, learn how to attend, and register FREE online. Or call 800/970-4355 and mention priority code 020152.

FP Trading Desk Headlines

FP Trading Desk headline reads, “Extension of Bush tax cuts short term gain for stocks”. Following is a link to the report:

http://business.financialpost.com/2010/09/07/extension-of-bush-tax-cuts-short-term-gain-for-stocks/

Lou Schizas’ Blog

Lou says, “Four out of five Canadian banks stocks forming descending triangles”. Following is a link to his report:

http://www.happycapitalism.com/2010/09/four-out-of-five-canadian-bank-stocks-forming-descending-triangles/

Keith Richards’ Blog

Keith says, “Statistically speaking …” Following is a link to his blog:

http://www.smartbounce.ca/Smartbounce/Blog/Entries/2010/9/5_Statistically_speaking%E2%80%A6..html

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
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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 $11.09 September 7^th 2010

· Open 11.11

· Close 11.09 (Up $0.03)

· High 11.12

· Low 11.09

· Bid 11.08 x20

· Ask 11.10 x64

· Volume 818

· 52-week High 11.37 06/03

· 52-week Low 9.44 02/05

· Beta 2.27

· Net Asset Value per unit:$11.07 (All time high)

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