Tech Talk for Tuesday December 4th 2012

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Pre-opening Comments for Tuesday December 4th

U.S. equity index futures are mixed this morning. S&P 500 futures are unchanged in pre-opening trade. Traders are waiting for news on settlement of the Fiscal Cliff.

The Bank of Canada maintained its overnight lending rate at 1.0%. The Canadian Dollar strengthened slightly on the news.

Bank of Montreal (BMO $52.29) is expected to open higher after reporting higher than consensus fiscal fourth quarter earnings.

Citigroup initiated coverage on the Canadian bank sector. Toronto Dominion and Royal Bank were rated a Buy. Bank of Nova Scotia was rated Neutral.

Toll Brothers gained $1.57 to $34.00 after reporting higher than consensus fiscal fourth quarter earnings

Darden Restaurants fell $4.62 to $47.80 after lowering fiscal second quarter earnings guidance.

Autozone dropped $6.02 to $371.97 after reporting lower than consensus fiscal first quarter earnings.

Tim Hortons (THI $45.97) and Starbucks (SBUX $51.80) are expected to open higher after Longbow initiated coverage with a Buy rating

Cott Corp (COT $8.60) is expected to open lower after Stiffel Nicolaus downgraded the stock from Buy to Hold.

 

Technical Watch

Bank of Montreal (TSE:BMO) – $59.29 is expected to open higher after reporting higher than consensus fiscal fourth quarter earnings. The stock has an improving technical profile. Intermediate trend is neutral. However, trend turns positive on a break above resistance at $59.96. The stock trades above its 20, 50 and 200 day moving averages. Short term momentum indicators are overbought, but continue to trend up. Strength relative to the TSX Composite turned positive in mid-September. Preferred strategy is to accumulate the stock at current or lower prices.

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Interesting Charts

U.S. equity indices stalled as they approached the bottom of a previous trading range. Fiscal Cliff news and views continue to have an impact.

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Commodity prices continue to creep higher. Weakness in the U.S. Dollar contributed.

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The TSX Financial Services Index and its related ETFs continue to strengthen in anticipation of fiscal fourth quarter results by Canada’s largest banks to be released this week.

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Seasonality in the Month of December

Thackray’s 2012 Investor’s guide notes that December is one of the best months of the year for equity markets. “Although the month tends to be positive, it’s the second half of the month that tends to produce the biggest returns. The best method of participating in the Christmas rally has been to enter the stock market on December 15th “.

Performance by broadly based North American equity indices during the past 10 Decembers is as follows:

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Best performing sectors during the past 20 Decembers were Industrials, Materials and Utilities. Best performing sub-sectors during the past 20 Decembers were Biotech, Metals & Mining, Gold equities and Agriculture Products. Worst performing sub-sectors was Airlines

Following is a summary of performance for other markets based on the past 10 Decembers


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Prairie Crop Charts

Following is a link to Prairie Crop Charts with technical comments by Harold Davis:

http://www.prairiecropcharts.com/

 

clip_image010 INVESTMENT COMMENTARY

Tuesday, December 4, 2012

NEWSLETTER

Do you need to look at the big picture at times to figure out where you are at? Our latest issue of the CastleMoore Investment News is out. http://www.castlemoore.com/investorcentre/signup.php. Sign up and we’ll send it out, no obligations.

TOP ASSET CLASSES AND SECTORS: HEAT MAPPING

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Comments:

With a new month started (really an old one ending) we see changes in the longer-term, the investible rankings of asset class, sector and countries. Across all three we see a clear shift towards a defensive theme including a big jump in the bonds, the US dollar (weekly) and preferred shares (weekly) with within the first grouping. Within CDN and US sectors the trend is fairly obvious with the only real stand-outs being info. tech and metals and mining. They buck the trend of a defensive shift as a result of exceptional individual stock movements in RIM and Inmet Mining with the sectors. While Turkey has been a stalwart for some time now, the move by Switzerland is in keeping with the theme of stability and safety.

CHARTS of the WEEK

US Long Bonds

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This daily look at US bonds (ETF TLT) shows a consolidation on the short term. A weekly close above $125 confirms an intermediate term re-acceleration.

S&P 500

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This daily S&P chart shows rising sentiment, though an upside is still in the cards to 1450. A longer term chart (not shown) reveals significant resistance overhead near 1545 that goes back to 2000 and 2007

TSX Composite

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This weekly look at the TSX shows investor indecision. Indicators are in the middle of their bands but rolling over. A day or two closes at these levels suggests that 12,100, then 11,800 will be tested. Corrective phases can begin with price action being flat.

Switzerland

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Switzerland is looks strong on the country rankings and maintains a buy signal (for disclosure CMI owns it in client portfolios) The ETF is dominated by Nestle, Novartis and Roche, companies in strong sectors discussed above.

Gold Bullion

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Gold bullion is in a 10 year bull market, and working off near term over-bought conditions. Rumour has it there was a big, individual (company or country) seller in the market in the last two weeks owing to some of the weakness. We currently own 10% of portfolios in gold, with one half in USD. We are awaiting pre-established conditions to add another 5% as part of our 15% original trade allocation.

If you like to receive bi-monthly newsletter, know more about our model portfolios or access an audio file of our investment philosophy, “Modern Financial Fiascos”, click on the link

http://www.castlemoore.com/investorcentre/signup.php.

CastleMoore Inc. uses a proprietary Risk/Reward Matrix that places clients with minimum portfolios of $500,000 within one of 12 discretionary portfolios based on risk tolerance, investment objectives, income, net worth and investing experience. For more information on our methodology please contact us.

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CastleMoore Inc.

Buy, Hold…and Know When to Sell

www.castlemoore.com

This commentary is not to be considered as offering investment advice on any particular security or market. Please consult a professional or if you invest on your own do your homework and get a good plan, before risking any of your hard earned money. The information provided in CastleMoore Investment Commentary or News, a publication for clients and friends of CastleMoore Inc., is intended to provide a broad look at investing wisdom, and in particular, investment methodologies or techniques. We avoid recommending specific securities due to the inherent risk any one security poses to ones’ overall investment success. Our advice to our clients is based on their risk tolerance, investment objectives, previous market experience, net worth and current income. Please contact CastleMoore Inc. if you require further clarification on this disclaimer.

 

Special Free Services available through www.equityclock.com

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.

To login, simply go to http://www.equityclock.com/charts/

Following is an example:

 

Platinum Futures (PL) Seasonal Chart

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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 and Jon Vialoux are research analysts for Horizons Investment Management Inc. All of the views expressed herein are the personal views of the authors and are not necessarily the views of Horizons Investment Management Inc., although any of the recommendations found herein may be reflected in positions or transactions in the various client portfolios managed by Horizons Investment Management Inc

Horizons Seasonal Rotation ETF HAC December 3rd 2012

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Sponsored By...



45 Responses to “Tech Talk for Tuesday December 4th 2012”

  1. Muntazir Says:

    Cannuck,
    Thanks for your response last week.
    RolLew/Rick,
    Thanks for the discussion. keeping ey on puts of tza/uvxy.
    BTW you can buy puts/calls & sell covered calls in RRSP

    Tony,
    I share similar frustrations for mx. I tried clicking “market review dec 3″ towards the ens of page & took me to another page where on right side shows top 10 but can not get details. Will try to play around later. If you find 1st would appreciate if you share here.

    Ana,
    If you communicate with Eve, would appreciate you sharing her market views
    Eve,
    Am thinking of emailing you

    Have a nice trading day

  2. Tawny Says:

    tony

    Too funny… CBOE has take off due to a recommendation, GMCR declining (went up too fast) Will hold both for now.

  3. Wayne Says:

    Neil,
    Gap closed – out NUGT – $ 600.00.

  4. neil Says:

    Wayne,

    I was not quick enough to sell this morning…. not taking into consideration the gap up for DUST. Do you think after the gap was closed, DUST will resume?

  5. neil Says:

    Wayne,

    Gap up – Rookie mistake… should have known better, should have sold at the open. Shoulda, woulda, coulda….

  6. Wayne Says:

    Neil,
    There’s a good chance that will happen. The index is pulling back – usually on a gap -after it’s filled – I do a stop and reverse – went back into Dust at 32.60. Still a bit to go on the downside – reaction to the gap retracement –

    Best!

  7. Wayne Says:

    Neil,
    Just got filled at 33.60 – got my $ 1.00 – out for the day – ( $1,600.00).
    Nice to get both sides of the trade before lunch!!

    Best!

  8. Eve Says:

    Muntazir,

    You are welcome to!

    eve

  9. neil Says:

    Wayne,

    Very nice and efficient! I’m sure lunch is going to taste that much better.
    I saw you had posted Peter Brandt’s website a while ago, I just purchased his book “Diary of a Professional Commodity Trader”, after going to his website. Its an insightful book on trade execution and money/risk management, I’m enjoying it and its teaching me quite a bit within just the first 3 chapters. Can’t beat real trading experience!

  10. tony Says:

    Muntazir,

    I agree, If you change something change the colors but not the format as you don’t want people to search for hours.

    if you are looking for the most active during the course of the day, on the home page you have news on the left hand side and on the right hand side you have trading activity

    underneath you have a chart with tabs located just above the chart select Most Active Options tab and you’ll see the 10 most active options as we speak these are the contracts with more then 1000. osk 2000+ BMO 1700+ and G 1400+

  11. Wayne Says:

    Neil,
    I got his book last January. He is in for the long haul. He trades standard, reliable patterns. But, his trades take months, sometimes years to develop – not my style of trading. I picked up a few of his indicators – especially the “Last Day Rule”, that I use in my partner’s account. But, the rest of it is not useful to me.
    His web page is interesting – but he has been batting a zero average in my books. I read him for entertainment – not serious trading. His latest post is a rant on the stupidity of buying comm etf’s as opposed to buying the futures outright. He didn’t point out the disadvatages of getting locked in a limit up or limit down market where you can be trapped for days without being able to get out. OR, the sudden WTF moments when the CFTC increases the margins to cool off a market. That blew a hole in the silver market last year. Leverage in futures does far more damage to an account than any ETF can do.
    But, he is a straight shooter – he describes his losses as well as his wins – and how emotion can overpower your trading.
    I trade like a bot – once you have confidence in your trading strategy, you can trade mechanically. I save the emotion for the movies…..

    Best!

  12. Freddebuoy Says:

    Tawny, I just read yesterday that you wonder why your holdings are exhibiting low volume. I don’t know what you hold but generally, low volume mean investor indecision and low conviction. When low volume accompanied by upward prices or downward prices, a bull or bear flag may be taking place.

    Here is a chart of SPY as a representative of the market in general. There is a lot of negativity going on but from what I see in this chart, we’re not in trouble. I note volumes, at least in the last few days, has been decreasing and the 100 day MA of volume is sloping down (it’s too early to say if we have any flag). The BB width is flattening at a relatively high volatility; as you don’t usually see a reversal at this level. Prices are still well above the 20 dMA but could come off to that level for a slight “correction”. MACD shows signs of less strength and while Stoch is overbought and shows signs of reversing. But, unless we get a spike in volume, these are only indications, not trading signals.

    http://stockcharts.com/h-sc/ui?s=SPY&p=D&yr=1&mn=0&dy=0&id=p29699368146&a=225008471

  13. Ana Says:

    tony,
    Thank you for your comment on the market yesterday. Now where, I did not think that the market would bounce as much as it did today.

    Muntazir,
    I think you should contact Eve with your questions. I am sure she would welcome them as she has always welcomed your questions on this blog.
    I only trade certain things due to my limited funds. I trade HOD and HOU, HND and HNU and HVU and HVI. So, I am always watching the SPX for direction. I got out of my position in HOD first thing this moring, with a good profit. I will probably enter HOD again, at some time today.

  14. tony Says:

    Tawny

    cbou up +4.45% and gmcr is also up 4.1% today so not a bad bet,

    btw thx as I purchased gmcr after I saw your question on cbou

  15. tony Says:

    Ana

    you’re welcome

    yesterday I sold tck for a little 2.5% profit and now I am looking into it but not sure if I should pick it up again, as there is uncertainty in direction.

  16. tony Says:

    Ana

    An extra few minutes and decision is to stay out for now, as its having problems moving above 50MA on 15min chart. so will look into it in the next few days.

  17. Ana Says:

    tony,
    Looking at the 5 Hour chart, looks like the MACD is crossing.

  18. tony Says:

    Ana

    I’ll wait til I see any evidence of real positive action.

  19. tony Says:

    I finally got taken out of National bank NA.to

    same as tck its been trading sideways and has made a 18/50 bear cross on my 15min chart.

  20. Tawny Says:

    Tony

    Hi

    Glad you joined my coffee club! ARe you going to sell your GMRC now – it is flowing out of the cup. could buy back cheaper tomorrow?.

  21. tony Says:

    I took a slight loss on ppl.to and taking profits on slf.

  22. tony Says:

    Tawny

    funny felling tomorrow it will be a sell in the first 20min of trading.
    so I just booked 7% profit

  23. Ana Says:

    tony,
    No, I meant that it was crossing down. I wish someone could confirm this.

    Wayne,
    Will you look at the 5 hour spx 500 streaming chart to confirm or not confirm this?

  24. tony Says:

    Sorry Ana

    what made a bearish MACD cross, spx because I taught you were giving me advice

  25. Tawny Says:

    tony – I sold half of mine… expect it to go higher yet but hope to buy my half back cheaper tomorrow. You owe me a coffee ! LOL

    My silver is taking a beating – I have not been selling as i am in for the longer haul. Definitely get gold and silver before end of year!

  26. tony Says:

    Ana

    SPX
    on a 1min chart we have been in a battle between the 1410 and 200MA area, seems like no one wants to conceed

    on a 15min chart 50MA is at 1410 and both the 18 and 200MAs are at 1407 price is dancing its way in this space so I think its better for us to let them decide the direction to take and then help them out and profit from the easy money.

  27. tony Says:

    Tawny

    Well I think you owe me at least a gallon of coffee ;) cbou is up 5.7 while my gmcr is up 7.9% since yesterday

    I’ll take two sugars and 1 milk with that.

  28. Tawny Says:

    Tony

    You sold Tck – what do you think of S-to.. What do your charts say – I am learning T.A. is helpful but not the whole picture…. but would like your input.

    I own cPG and ala Canuck have been holding, now down 13.8% it is a slightly less than 5% holding so I will not suffer and will not sell as it is approaching bottom. Now or soon a buying opp.

  29. Ana Says:

    #24.

    That was your first mistake, thinking that I was giving advice to you or to anyone!

    I was looking for either a yes or a no on the 5 hour spx 500 5 hour chart. This is what I use as a major trend change.

  30. Tawny Says:

    tony

    RE #27 – well I owe you perhaps a gallon of coffee but not because of GMCR as you would not have looked into it if I had not brought it up – anyway I am making money on both. :) I owe you lots of vino for all your help all around tho’.

  31. Tawny Says:

    Freddebuoy

    Re low volumes – yesterday I noticed that SPY was Below Average (RBC declares volume on each stock)… which was why I was wondering why volumes are low. Maybe Christmas season is lower activity in markets.

  32. tony Says:

    Tawny

    Do you have access to intraday charts? if so I would recommend you look at a 15min chart.
    with the 18/50/200MAs

    on the daily chart there maybe some upside potential, but before this could happen I want to see what will happen on the 200MA and if it fails I want to see how it reacts on the 50MA

    The 50MA was resistance from april til september it broke out but not long enough for my taste now we are just above the 200MA if we fail 50MA has to hold otherwise the rally was short lived.

    here is what I would do I would buy 25% position here and 75% if it bounces off the 50MA. if instead it decides to move north from here I would simply buy my full position. and go for the glory but make sure to watch the 50MA for support.

  33. Tawny Says:

    Ana
    NTR
    How was thanksgiving with your children? Hope you had a lovely relaxing time.

  34. Tawny Says:

    Tony

    Re Sherritt – I already own about half position. I am not subscribing to stockcharts for now, so thanks for your T.A. This stock has been showing a lot of strength lately IMHO… and this is the season it moves. Avg move for Dec. is 4.5% then in April big move of over 7%. o I am looking for my Dec. to Jan move here… I hope… I will watch the 50MA and add, so thank you and cheers – lift that glass of virtual wine I just bought for you!

  35. tony Says:

    Tawny

    I never completed my analysis on 15min chart.

    15min chart s.to crossed below the 200MA and couldn’t get back up, the 200MA is the area where it picked up steam to move north.

    CPG

    Good gooly miss molly, this is an ugly chart no matter the way you look at it on the daily chart I think it will retest 32-33 area(lower tail)

    15min chart its having problems pulling above the 18MA so I would be out of this one and move once above it.

  36. Tawny Says:

    Tony

    One more thing (feel like Columbo here – haha) what do you think of TNA now. It moved ahead a little today.

  37. tony Says:

    tawny

    usually a unusual low volume is a sign of a change in direction, just like high volume

  38. tony Says:

    Tawny

    I am dazed and confused,

    tna is up and spx is up but spx pulled lower once it got to resistance. but since small cap tend to outperform large cap in the first months of the new year is this a warning we are headed up in small caps?

    lets wait and see what happens on the 18MA

  39. Tawny Says:

    Tony

    I think today’s seasonals for Dec. says that the Russell outperforms – may be why. I will watch for your confirmation of a buy. thanks again.

  40. Teresa Says:

    LRCX – Seems going to pop soon.

  41. Muntazir Says:

    Hi Tony,
    I played with mx. Just now on the home page I cicked on Most active options under trading activity & gives you 10 highest traded option. As a matter of fact I liked it.
    I saw 2 stcks yri saw 715 contracts traded for dec20 & 274 for jan 18. Does this mean yri will gravitate to 20 for dec & 18 for Jan. If yes then thats how I expect seasonaly.
    Also on Ry highest volume is 3055 contract on Apr 58. Is this too far out to predict anything??
    Thanks in advance

  42. tony Says:

    Teresa

    lrcx

    in may LRCX encoutered the 50MA as resistance it moved lower until it finally broke above it in late october, but on the move up it got to the 200MA and has pulled back to the 50MA so we either break support or resistance I would rather wait and see it break resistance before commiting.

  43. tony Says:

    Muntazir

    RY.to

    its currently at 58$ by april they are letting us know it will be worth more my indicators are telling me its going to pull back, tho the 15min price wise its trading on its 200MA which is 58.32 and we are now just 12 cents shy of this support. I would wait and see if we move higher before moving into it

  44. tony Says:

    Muntazir

    follow up to Royal Bk you could buy it here but flush it if it breaks below 2% below 58.32 thats my advice to you.

    YRI.to on a daily support is currently near the 200MA you probably want to take a little piece near the 17$ range but on a 15min time we have a different scenario we seem to have made a support as we moved above the 18MA but the 50MA has been resistance on its way down so I would wait for price to break above this to make my move. buying it here? as we are above the 18MA hummm 18MA is currently at 18.04 and the 50MA is at 18.34 is not to risky to wait for a push above the 18.34 if it moves lower you already know where I think this one should stop on its tracks.

    to reach 20$ in the near at most 7weeks break above the 18.34 and you’ll get it easily otherwise you’ll have to content yourself at a lower price but maybe a few extra % points.

  45. Ana Says:

    Futures up big time?

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