Pre-opening Comments for Tuesday December 18th
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 continuing negotiations to resolve the Fiscal Cliff.
Hewlett Packard (HPQ $14.23) is expected to open lower after Topeka downgraded the stock from Hold to Sell.
Goldman Sachs added $1.05 to $124.54 after Susquehanna upgraded the stock from Neutral to Positive.
Goldman Sachs Group (NYSE: GS) – $124.54 added 0.9% after Susquehanna upgraded the stock from Neutral to Positive. The stock has a positive technical profile. Intermediate trend is up. Support is at $113.36 and resistance at $126.19. The stock trades above its 20, 50 and 200 day moving averages. Short term momentum indicators are overbought, but have yet to show signs of peaking. Strength relative to the S&P 500 Index has been positive since mid-July. Preferred strategy is to accumulate the stock at current or lower prices.
Encouraging news about a possible resolution of the Fiscal Cliff triggered nice bounces by broadly based U.S. equity indices from near their 50 day moving average. ‘Tis the season!
The Financial Service sector led the advance following upgrades of the sector by Meredith Whitney and following positive comments by Dick Bove.
Strongest subsector in the financial services sector was the financial services industry (i.e. big banks with big brokerage, ETF and mutual fund operations).
The Uranium stocks “came alive” yesterday. Nice breakout by the Uranium Miners and Nuclear ETFs on technical signs of outperformance!
Cameco, the largest uranium producer in the world led the move. Nice breakout on increasing volume!
Seasonal influences on Cameco recently turned positive
Cameco Corporation (TSE:CCO) Seasonal Chart
The FTC has approved JP Morgan’s proposal to launch a physically backed copper ETF. Blackrock’s iShares also has applied for approval and likely will receive a green light. When launched, the ETFs are expected eventually to tie up as much as 70% of the physical copper currently held at the London Metal Exchange. Prior to launch of the silver, platinum and palladium physically backed ETF, prices moved smartly higher in anticipation of declining available supply. Look for the same scenario for copper. Copper already has a positive technical profile and has just entered its period of seasonal strength.
The Homebuilder ETF moved smartly higher yesterday on rumors that the mortgage interest deduction in Fiscal Cliff negotiations is “off the table”. Call option activity in XHB spiked.
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Copper Futures (HG) Seasonal Chart
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 17th 2012