ShareThisPre-opening Comments for Thursday September 9th
U.S. equity index futures are higher this morning. S&P 500 futures are up 7 points in pre-opening trade. Index futures responded to better than expected economic data released at 8:30 AM EDT. Consensus for the July U.S. Trade Deficit was $47 billion versus $49.9 billion in June. Actual was $42.8 billion. Consensus for weekly jobless claims was 472,000. Actual was 451,000.
Economic data in Canada was less encouraging. Consensus for Canada’s July Trade Balance was a deficit of $800,000 versus a deficit of $1.1 billion in June. Actual was a deficit of $2.7 billion. Consensus for August housing starts was 185,000 versus 189,000 in July. Actual was 183,300.
The Bank of England maintained its overnight lending rate at a record 0.5%.
Apple gained 1.0% following news that it is relaxing restrictions for developing apps for its consumer electronic products. The biggest winner on the news was Adobe Systems. Adobe offers software that now has been approved by Apple to develop apps on Apple’s system. Adobe gained 8% in pre-opening trade.
McDonalds fell 2% after reporting less than expected sales in August.
Goldman Sachs upgraded Temple Inland from Neutral to Buy.
BGC Financial initiated coverage on Research in Motion with a Sell recommendation.
Technical Action Yesterday
Technical action by S&P 500 stocks was quietly bullish yesterday. Five S&P 500 stocks broke resistance (Bristol Myers, CSX, DirectTV, Network Appliances and VeriSign) and none broke support. The Up/Down ratio improved from 0.84 to (192/226=) 0.85.
Technical action by TSX Composite stocks was quiet. One TSX stock broke resistance (CAE) and none broke support. The Up/Down ratio was unchanged at (118/63=) 1.87
ETF News
|
|
PowerShares Plans Financial, REIT ETFsInvesco PowerShares, the Lisle, Ill.-based fund sponsor known for its QQQ ETF (NasdaqGM:QQQQ), filed with the Securities and Exchange Commission to launch four new funds based on so-called FIRE indexes targeting the financial, insurance and real estate sectors. |
Source: www.ETF.com
|
|
iShares launches first euro high-yield bond ETFiShares, the exchange-traded funds (ETF) operator owned by BlackRock (BLK.N), said on Monday it has launched a new European high-yield bond marketfund |
![clip_image002[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2010/09/clip_image0021.jpg "clip_image002[1]")
Source: www.ETF.com
|
|
iShares MSCI New Zealand Investable Market Index FundBlackRock, Inc. (NYSE: BLK) today announced that the iShares Exchange Traded Funds (ETFs) business, the world’s largest provider of ETFs, launched the iShares MSCI New Zealand Investable Market Index Fund (ENZL) on the NYSE Arca today. |
![clip_image002[2]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2010/09/clip_image0022.jpg "clip_image002[2]")
Source: www.ETF.com
Adrienne Toghraie’s Trader’s Coach Column
|
Flat Markets
By Adrienne Toghraie, Trader’s Coach
One of the major trader complaints about the markets is that they are flat and because of this lack of movement they cannot see opportunities. While it might be true that the markets they are trading are flat for their particular strategy, the fact is that there are always opportunities for making money in the markets. It is important to note that traders should not force opportunity when it is not in alignment with their rules.
Strategies working in other markets
One of my clients, who was an equities trader, was telling me about books he read authored by a commodities trader who just happened to be a friend of mine. He said that the same principles the author used for commodities applied to trading equities. It was not long before my client convinced me to introduce him to my friend. This meeting led to a collaborative rewrite of all of the commodity trader’s books for the equities market.
One of the first things I ask traders with whom I come in contact is about the market they trade. Very often traders will answer, “I trade anything that moves.” This means that their strategy is compatible with most markets. Having a flexible strategy gives them an advantage because it is less likely that they will have to deal with flat opportunity times.
If your strategy is limited to working with the one market you have been trading, you should consider developing another strategy for the lean times.
To be prepared for the less active days in the markets, here are a few suggestions:
· Make sure that everything in your life and in yourself is working at your optimal level. There are times you might not see opportunity when you are not in the right mental or physical state.
· Contingency plan for slow times. When you plan for flat markets, they will not blindside you into stagnation when they do occur.
· Invest with traders who do not trade the same markets. Diversification of trading capital with other traders and investors can be a good way for those that have the means to hedge their capital.
· Use the slow time to do a periodical review for refining your strategy. Slow times can be a blessing in disguise. These times give you an opportunity to improve on your strategy for when opportunity becomes available again.
· Work on improving your psychology to improve your discipline. You will be able to create and find more opportunity when you clear the tool (you) that makes trading work.
· Plan to take a vacation during the times of year that your strategy is not as active. It is better to use slow times as times for refreshing yourself. A trader needs at least four vacations a year to de-stress.
· Learn to trade a different market or a timeframe that is more active.
· Know others who are trading a similar strategy to your own so you can compare notes. Be careful that this does not become an agreement session on what is bad in the world of trading.
Flowing with the fundamentals
So how do you know when you are about to experience a flat market? One of the ways is to keep up with news events. While I do not believe that following the fundamentals of the markets is a good choice for most traders, they can be for determining opportune times. The more dramatic news items are in the world, the more likely that you will find moving markets.
Always remember that when people are thinking about holidays and going on vacation the markets tend to stagnate.
Conclusion
Planning for flat times in the markets and initiating positive action will give you an edge for more opportune times in your trading.
Adrienne’s Calendar of Events
www.TradingOnTarget.com
|
9/12-9/15 |
Live Expo |
TraderBambu Expo in Budapest, Hungary September 12 – 15 Adrienne presents Recognizing 15 Sabotage Traps & Traders’ Secrets Workshops September 14 Call now – 919-851-8288 for details |
Adrienne |
Fee |
|
11/17- |
Live Expo |
The Traders Expo Las Vegas November 17 – 20 Adrienne presents Recognizing 15 Sabotage Traps Workshop Saturday, November 20 – 8am-9am www.TradersExpo.com |
Adrienne |
|
|
|
|
|
|
|
Go to www.TradingOnTarget.com or email: Adrienne@TradingOnTarget.com for more information
FP Trading Desk Headline
FP Trading Desk headline reads, “Lofty earnings estimates attainable”. Following is a link to the report:
http://business.financialpost.com/2010/09/08/lofty-earnings-estimates-attainable/#more-9871
Tech Talk comment: The author of this report misses the point. Earnings estimates for the third quarter are high following strong second quarter results. Unless earnings estimates are met, stock prices are vulnerable when third quarter results are released.
FP Trading Desk headline reads, “Increased demand and higher prices bode well for fertilizer stocks”. Following is a link to the report:
Tech Talk comment: ‘Tis the season for agriculture (including fertilizer) stocks to move higher!
FP Trading Desk headline reads, “Inverse head and shoulder formation points to stock market climb”. Following is a link to the report:
Tech Talk comment: Bullish Technical Analysts are talking about the following chart:
Tech Talk is expecting that the pattern eventually will be completed and equity markets will move significantly higher. However, a word of caution! The pattern continues to evolve and is not close to completion yet. Likely timing for completion is in October. The market will let us know. Opportunities to enter equity markets at lower levels remain. Technical parameters will help us to fine tune the entry point for the next important annual seasonal trade from October to April. Please be patient!
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 $11.10 September 8th
2010
· Open 11.12
· Close 11.10 (Up $0.01)
· High 11.12
· Low 11.10
· Bid 11.10 x2
· Ask 11.11 x17
· Volume 6,912
· 52-week High 11.37 06/03
· 52-week Low 9.44 02/05
· Beta 2.26
· Net Asset Value per unit: $11.07 (Unchanged)
| Sponsored By... |
|
|
|
Discussions from the Tech Talk Forum:
An error has occurred, which probably means the feed is down. Try again later.
|
September 9th, 2010 at 6:20 am
Hello Don,
Is there a “sweet spot” for REITs ? Thanks.
September 9th, 2010 at 6:52 am
Just another thought on the market’s direction: With the high bearish sentiment in the stock markets there has been heavy buying of put options and much money into Bonds and just not long the markets by any significant group of traders. Every one and his dog has been predicting a major sell off. Not the sentiment typically seen when markets sell off hard. Just look at the imbalance of put buying on SPY and other market ETFs. Sept 17th is option expiration and odds heavily favour the majority of puts will expire worthless as that will cause the most financial damage to option holders. It would be typical for the market to hold the majority of its recent gains through Sept 17th just to accomplish this with a rally even to the 1131 neckline of the multi month Inverse Head and Shoulder pattern. Then “after” Sept 17th option expiration where the bears get flushed again a massive sell off and failure of a multi month Inverse Head and Shoulder pattern to break out. A failure of a bullish pattern is very bearish and market reactions tend to be very harsh on bullish pattern failures. At that point sentiment would have improved greatly setting up longs for a sell off. The news media at that point would be posting positive news as well. That’s the only way all the ducks could line up from what I see. I think this market is safe to Sept 17th and very dangerous after that date.
September 9th, 2010 at 7:38 am
Thanks for the report Don and thanks for the comment above Ron/BC.
I see the potential for SPX eventually retreating to a level that its yield equalizes with 10 year yields. 10 year yields are 2.63%. SPX is 1.99% so the implied level of SPX to equal the 10 year is 837 or 24% lower than today.
10 year yields may continue to fall however.
September 9th, 2010 at 7:55 am
Ron/BC,
Thanks for your thoughts on a potential sell off after Sept.17th.
Do options always expire around the 17th of each month? Can you tell me where I can find the number of call vs. put options on a daily basis? What is SPY?
Thanks for your time with these noob questions….
Regards,
Dean
September 9th, 2010 at 9:02 am
Well HENRY,S very bearish this AM, so is WTIC, all the way to EL BANCO with HND and HOD.
September 9th, 2010 at 9:10 am
Hi Don.
We now seem to be correcting on XGD. Would the 50 day MA be a good entry point? What are the chances that we correct down to the 200 day MA? Thanks for your help. I’ve been following you for more than two years now and you are one of the few whose assessments I trust.
Regards
Larry
September 9th, 2010 at 11:06 am
long time reader of this blog….. thanks Don for all the great
analysis, that just keeps coming…….
Congrats to Jan M today, on hod and hnd……..
just wondering Jan…..why did you do it? did you think
that they were oversold yesterday & due for a bounce, as they
tend to do from time to time?
well, hnd was trending up from tuesday, but hod is just volatile
and was bearish yesterday – ie, trending down itself.
just trying to figure out from the charts,
why did you buy these in the first place
i did see your “buy” post a couple days ago…
and when will you cash in? or have you done that today?
anyways, way to go!!!
September 9th, 2010 at 12:51 pm
Hello Ron, do you think it’s a good idea to pick up barrick or goldcorp on a day like today? Thank you.
September 9th, 2010 at 1:25 pm
Hi Don,
Took a bit of a hit on gold today. Is the party over or should I buy on the dip? I’ve been holding onto the Sept. 25 date to exit the gold trade. Thanks for all your advice.
September 9th, 2010 at 1:38 pm
Don,
What do you think about natural gas seasonality this year?
September 9th, 2010 at 1:47 pm
Ron Lew,to me i play with both and normally close out sometime each day. Today I stayed with HOD as the 5 min graph showed a good S/T down trend, HND was good, but I saw a trend change, sold HND and bought HNU, you get a 6th sense of the S/T direction and if I am wrong I get out fast with a market order.Guess I am lucky.
September 9th, 2010 at 3:35 pm
Hi Larry. A retreat to XGD’s 50 day moving average ($22.88)is a reasonable expectation. That’s the top of a previous trading range where a band of support is likely. Look at the correction as an opportunity to add to positions for the seasonal trade lasting until December.
September 9th, 2010 at 3:45 pm
Hi Sunny. The seasonal trade in Canadian and U.S. natural gas technically was triggered at the beginning of September. The trade continues until mid October. This trade is not for the “faint at heart”. It is the most volatile of seasonal trades that have been identified. In particular, be careful with leveraged ETFs. Day to day volatility requiring daily rebalancing plus contango can be hazardous for your financial health. There are lots of other ways to play the trade.
September 9th, 2010 at 4:51 pm
DMP: I’ve been working these days so haven’t been around during the day. Be glad when that’s over with. But options expire on stock ETFs on the 3rd Friday of each month. SPY is an ETF that mirrors the S&P500. Just like QQQQ mirrors the NASDAQ and there is also one for the Russel 2000 small cap. In fact there are many ETFs that represent ta variety of Indexes so you can buy the ETFs just like a stock. Lots of places to get option quotes and open interest. Big Charts is one that is free. I would think Stockcharts would have them too. But tomorrow or during the weekend I usually get a report on what next week’s market action is likely with the thought that the market will close on option expiration day (Sept 17th) at a level that will do the most financial damage to option holders. I’ll be interested to see this report. From what I have heard stock fund outflows have occurred for 18 consecutive weeks with last week the heaviest since May with 9.5 billion dollars in funds sold. Very bearish stock traders out there. They tend to be wrong when sentiment is on one side of the market and the market mentality has been very bearish. As I said I think the market is safe til Sept 17th option expiration day. After that perhaps “KABOOM”….We’ll see when that time comes and goes. Could be a new ball game after that…….This report I mentioned should shed some light on things.
September 9th, 2010 at 5:07 pm
Slava: Goldcorp has sold off heavily and has retraced a perfect Fib 61.8% retracement of its entire rally from the July lows to late Aug highs. While this 42.57 low today may hold the old $42.00 I mentioned as resistance back in July is now close by and major support. Perhaps now one can see why I don’t marry these things. Profits don’t stick around forever. That was a lot to give back. But technically $42 should hold being major support and the breakout pt in August.Or even today’s lows. And ABX retraced just over 50% of its July/August rally and also closed near the lows of the day at 45.60 -1.51. Low closes always trouble me. No real support for ABX until around 44-45. I’ve never liked the volatility of ABX as it whiplashes around a lot. And these support levels are based on the “assumption” that Gold will hold up and continue to rally. I don’t like to assume anything but the trend is your friend so buying major support in an uptrend tends to pay off. As far as RIM goes it is not acting well in the face of a rallying market. Very scary picture. If it breaks below 45 on a close and holds below there is little support all the way down to 35. Not trying to spook you but thought I should mention the poor price action recently at major support of 45 which was the bear market lows in March/09. Price just can’t get off this bottom so on a market sell off it is likely to break down. That’s just my opinion fwiw………….
September 9th, 2010 at 5:55 pm
Don,
What’s going on with aerospace sector? Bombardier and CAE have been very strong lately.
Thanks.