Tech Talk for Wednesday January 30th 2013

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Pre-opening Comments for Wednesday January 30th

U.S. equity index futures are lower this morning prior to news from the FOMC meeting this afternoon. S&P 500 futures are down 3 points in pre-opening trade. Futures were helped in early trading by stronger than consensus quarterly earnings from Boeing, Amazon.com and Northrop Grumman. However, futures quickly lost ground on release of economic news.

The January ADP Employment Report released at 8:15 AM EST slipped to 192,000 from 215,000 in December. However, the report exceeded consensus at 175,000.

Consensus for first estimate of real fourth quarter Gross Domestic Product was growth at 1.0% versus 3.1% in the third quarter. Actual was a decline of 0.1%.

Viacom added $0.31 to $59.07 after Cowen upgraded the stock from Neutral to Outperform.

Canadian Pacific (CP $116.20) is expected to open lower after Stiffel Nicolaus downgraded the stock from Buy to Hold.

Yum Brands fell $0.74 to $63.50 after Bernstein downgraded the stock from Outperform to Market Perform.

Ford fell $0.08 to $13.06 after CLSA downgraded the stock from Outperform to Under Perform. In addition, Craig Hallum downgraded the stock from Buy to Hold.

Harley Davidson dropped $0.50 to $54.02 after Goldman Sachs downgraded the stock from Buy to Neutral.

 

Interesting Charts

Weakness in the U.S. Dollar is having a positive impact on commodity prices.

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The CRB Index moved to a three month high.

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Strength in the CRB Index was led by higher base metal, precious metal and energy prices.

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Palladium broke to an 18 month high. ‘Tis the season!

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The Gasoline ETN broke to a five year high.

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Higher gasoline prices triggered strength in crude oil prices.

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The Philadelphia Oil Services Index broke to a 10 month high. ‘Tis the season!

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The S&P Energy Index broke to an 18 month high. ‘Tis the season!

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U.S. Treasuries remain under price pressure prior to results from the FOMC meeting today.. The long term Treasury bond ETF broke support at $117.06 and established an intermediate downtrend.

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Thackray’s 2013 Investment Guide

Thackray’s 2013 Investor’s Guide is here. Order through www.alphamountain.com , Amazon, Chapters or Books on Business.

 

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:

Energy Sector 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 January 29th 2013

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35 Responses to “Tech Talk for Wednesday January 30th 2013”

  1. tony Says:

    Ch, red steve and al.

    I have posted a few notes on pot, slv and other maters of trading.

  2. Nirmal Ghosh Says:

    Hi All
    Please note-RIM has a new name-BACKBERRY-TICKER-BB.TO
    NASDAQ-BBRY.
    CHEERS

  3. canuck2004 Says:

    YESTERDAY’S answer to #52-Neil AB

    The Keystone Pipeline is extremely important for the future price of Alberta oil (mostly oil sands oil) as it will move this “landlocked” oil to the US Gulf Coast and consequently raise the price of the West Texas Intermediate Crude, currently at 97ish per barrel to the world benchmark Brent oil of 114ish.

    “The proposed pipeline would relieve a glut of crude oil backing up in the Midwest and redirect those barrels to Gulf of Mexico ports. From there they could be shipped to world markets and repriced at higher global prices.”

    http://www.nbcnews.com/business/why-keystone-pipeline-would-boost-pump-prices-223667

    Since oil sands is extremely costly to produce, as the tar sand is cooked with NG to release the oil locked in the tar (more of a mining process really), any increase in the price of the end product (oil) will go directly to the bottom line…. this will raise stocks prices as Oil Sand producers will become WAY more profitable.

    The market always anticipates future profits, so it will move prior to the Keystone project being approved….once operational, it will be already priced into the stocks.

    The possibility of the Keystone project being approved quite soon in combination with the current timing of the normal seasonality trade makes it a good bet.

    Crude oil seasonality chart:

    http://www.seasonal-charts.com/classics_rohoel.html

    Note the Feb. to May trend

    so:

    #1- doesn’t matter when the pipeline moves the product, stocks will move before project is approved…in anticipation of future profits.

    #2- if approved the price of WTIC @ 97ish, which the current price of Alberta oil sands oil, will jump up to meet the Brent world benchmark @ 114ish. Instant profit.

  4. Jeremy LP Says:

    What to make of uranium price moves…?
    http://www.uxc.com/review/uxc_Prices.aspx

  5. canuck2004 Says:

    CNQ, to recap….

    Note the rising OBV on both the CNQ and WTIC charts, this underlines accumulation going on…. and a rising OBV always precedes a rising stock or commodity price.

    Also note the rising MACD since Nov. elections in anticipation of the Keystone project approval.

    Rep. would have approved it immediately, but now sentiment dictates that Rep. will force Obama’s hand into approving it sooner rather than later. TRP is actively manipulating public opinion and lobbying for rerouting of pipeline in order to get it built. They are already building the Southern route…I’m sure the other oil companies are at it too as there’s plenty of profits to be made on approval as per the WTIC price vs Brent differential.

    Both CNQ and WTIC charts are in sync., which would be an expectation supporting this thesis:

    http://stockcharts.com/h-sc/ui?s=$WTIC&p=D&b=5&g=0&id=p77602651736

    http://stockcharts.com/h-sc/ui?s=CNQ.TO&p=D&yr=0&mn=6&dy=0&id=p81558587839

    OBV explained;

    “OBV attempts to detect when a financial instrument (stock, bond, etc.) is being accumulated by a large number of buyers or sold by many sellers. Traders will use an upward sloping OBV to confirm an uptrend, while a downward sloping OBV is used to confirm a downtrend. Finding a downward sloping OBV while the price of an asset is trending upward can be used to suggest that the “smart” traders are starting to exit their positions and that a shift in trend may be coming. ”

    Read more: http://www.investopedia.com/terms/o/onbalancevolume.asp#ixzz2JTkfwuiH

  6. canuck2004 Says:

    Valero Looking at Rail, Barges to Ship Canadian Crude to Gulf
    By Dan Murtaugh & Barbara Powell – Jan 29, 2013 12:07 PM PT

    http://www.bloomberg.com/news/2013-01-29/valero-looking-at-rail-barges-to-ship-canadian-crude-to-gulf.html

  7. Tawny Says:

    Tech Talk or anyone

    Just wondering as money is coming out of bonds, is it still possible for the market to have a correction but bond prices still continue lower? This is happening right now as TLT is lower and so is the S&P – can it actually continue this way?

  8. Freddebuoy Says:

    Canuck2004, I monitor OBV daily along with raw volume. It is developed by simply adding the volume on up days and subtracting volume on down days thereby providing a running total. It is useful for spotting divergences.

    For those of us who use indicators as well as prices on charts, it is very important to consider more than just momentum indicators such as MACD, RSI and Stochastics as these provide the same info only slower or faster. Volume and OBV fills in some of the blanks.

    I like watching MACD which is very useful for divergences, less useful for overbought/oversold. RSI, on the other hand, is most useful for indicating overbought/oversold levels. Stochastics is also useful as an overbought/oversold indicator but only as an early warning as it is very fast – use RSI as comfirmation.

    Raw volume is useful as almost nothing happens with prices that is not communicated in volume first – but these signals are fleeting so are useful in the short term mostly. OBV provides a longer term look and provides a trend of volume. But it isn’t particularly sensitive. It’s nice to see OBV and MACD agreeing but you won’t always see that.

  9. CJ Says:

    Freddebuoy #8

    Thanks for that; I have a hard time figuring how the various indicators work together apart from pointing up or down :)

  10. Freddebuoy Says:

    Tawny, How astute of you. Money is definately coming out of bonds as we speak.

    Rules of thumbs:
    1. Equities move in opposite direction to bond prices.
    2. Equities move in the same direction as bond yields.
    3. While 1 and 2 are true, on a day to day basis, not necessarily. Generally, bond traders are smarter (and the bond market is much, much bigger) – bond prices and yields will frequently move before equities do.

    Note in the following charts that there has been a disconnect between the 20 year yields and the SPX since July of 2011. When one sees that, one can usually conclude there is something seriously amiss in the financial markets. That will someday correct itself – and you can take that to the bank. Perhaps it is happening now – yields appear to be trending back up. What seems remarkable to my untrained eye is how long that disconnect has lasted. But in the grand scheme of things, maybe yields are predicting a serious correction in equities. Many technical analysts see that coming in the next three or four months.

    In answer to your question – No it can’t continue, not for long. Generally, money sloshes around between fixed income and equities. Risk-off is when money flows into fixed income. Risk-on is when money flows into equities.

    http://stockcharts.com/h-sc/ui?s=$UST20Y&p=D&yr=6&mn=0&dy=0&id=p78409188684&a=274002873

    http://stockcharts.com/h-sc/ui?s=TLT&p=D&yr=6&mn=0&dy=0&id=p92988059557

    http://stockcharts.com/h-sc/ui?s=TLT&p=D&yr=6&mn=0&dy=0&id=p73249383780

  11. still_learning Says:

    Freddebuoy #8,
    Thanks for the info. I’m currently looking at the Accumulation/Distribution indicator. Same idea re volume, a little more responsive than OBV?
    Still

  12. Lee Says:

    @Freddebuoy

    RSI can remain oversold and overbought far longer than we can imagine. I find RSI more reliable on a 5min chart (for day trades) versus a daily chart. The MACD is better for the daily chart over the 5min chart.

    Good point on OBV.

  13. Teresa Says:

    Tawny:

    I bought some FNV.to yesterday. Also TMV last week. Did you buy TMV?

  14. Tawny Says:

    Teresa

    Hi. Nice to find you here… miss you! Re TMV, just bought a little only today… I had been wanting to buy it if it broke $60… which it did. My post #7 is because I want to buy more TMV if it makes sense. Wish you had advised me of your purchase earlier. Oh well. Any minute we will find out more about the markets as Fed speaks.
    Did you take a full position in TMV? Plan to buy mroe?

  15. Brian K Says:

    Canuck 2004 and all

    I see your point. Enbridge’s new Seaway pipeline has already boosted western Canadian prices in the last month. But, these companies including Suncor,CNQ, Cenovus etc have peaked in late Feb/Mar each of the last 2 years at lower highs.

    Crescent Point is already shipping by rail as are many others.

    One of the biggest railways shipping oil is Burlington Northern Santa Fe owned by none other than Obama’s best rich friend Warren Buffett. It’s in Buffett’s best interest to have Keystone delayed or cancelled. Check out their site;

    http://www.bnsf.com/customers/bakken-shale/outbound-advantages.html

    Under the bullet “A Strong Presence …” they state “And we are positioned to act as a gateway to the Canadian Oil Sands.”

    Buffett also owns Union Tank Car which is building rail tankers as fast as they can. Keystone XL’s capacity is supposed to be 700,000 b/d which Burlington hopes to reach by year end.

    http://www.businessweek.com/news/2013-01-08/buffett-railroad-sees-crude-cargo-climbing-40-percent

    What is ironic is the environmentalists want to stop Keystone to shut in oil sands oil. Instead they will drive it to rail shipping which is far worse for the environment than a pipeline. To bad CN and CP are trading at all time highs.

  16. Teresa Says:

    Tawny:

    I have took my full position on TMV. I thought you bought it earlier than I, when you ask about the chart.

    I just bought some TZA. What do you think?

  17. Tawny Says:

    Teresa

    Interesting reaction. TLT going straight up… money back into bonds… down with TMV this is immediate response. And markets coming down. But, I have seen reactions reverse quickly in the past… need more time. TZA – well your have your reasons, I will look at chart… maybe you have one to share?

  18. canuck2004 Says:

    #8-Freddebuoy

    OBV Interpretation:

    “Granville theorized that volume precedes price. OBV rises when volume on up days outpaces volume on down days. OBV falls when volume on down days is stronger. A rising OBV reflects positive volume pressure that can lead to higher prices. Conversely, falling OBV reflects negative volume pressure that can foreshadow lower prices. Granville noted in his research that OBV would often move before price. Expect prices to move higher if OBV is rising while prices are either flat or moving down. Expect prices to move lower if OBV is falling while prices are either flat or moving up.

    The absolute value of OBV is not important. Chartists should instead focus on the characteristics of the OBV line. First define the trend for OBV. Second, determine if the current trend matches the trend for the underlying security. Third, look for potential support or resistance levels. Once broken, the trend for OBV will change and these breaks can be used to generate signals. Also notice that OBV is based on closing prices. Therefore, closing prices should be considered when looking for divergences or support/resistance breaks. And finally, volume spikes can sometimes throw off the indicator by causing a sharp move that will require a settling period.”

    http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:on_balance_volume

    I use RSI,STO,MACD and OBV; plus 50 DMA, 200DMA and Keltner Channel. But bottom line, if your stock is moving UP at a 45% degree angle from left to right, you’re making money….lol

    As you point out, divergences are most important.

  19. Tawny Says:

    Teresa

    Re #16. Plugged TZA into one of your charts I have saved. I know Tony would not buy until price is above 18 dma… but it certainly is overbought and small caps have been weak. Also an excellent hedge. I have been raising cash as I expect we might have a pullback. But we are at month end — a time when markets move up short term. Being RRSP season, I would not be surprised if market holds until about Feb. 5. All, very unscientific… time will tell.

  20. Tawny Says:

    Teresa

    Quite a roller coaster ride with TLT / TMV

  21. redsteve138 Says:

    thanks tony. slv looking alright so far.

  22. Tawny Says:

    Just checked out RIM, soon to be BB (b BB !) Up on rumour, down on news. -8.7%

  23. StagDeflation Says:

    Im not so sure Keystone is a sure bet. The figures from the US are showing a quickly declining oil import picture due Im guessing to the Bakken and Shale Oil. The US may not need dirty Oilsands oil and so the story is to diversify to overseas markets. It would be better to do the conversion in Canada and sell the value-added products, firstly to Canadians, instead of importing gasoline etc from the US. I dont know how much is imported, but given the lack of capacity here, Im guessing there is some. The other idea I was thinking was the currency change, it use to be that the USD bought what C$0.67, ie if oil is priced in USD, oilsands producers were getting 1.3 times the price, back then. So we have a confluence of issues.

  24. StagDeflation Says:

    So the XLE across the border is breaking out and theres nothing much happening here.
    The Canadian oil/gas suppliers are trapped behind the border. The better bet must be in the US with growing local supplies. Maybe we should forget XEG and go for XLE.

  25. Teresa Says:

    Tawny:

    Funny. The change is so fast. My TMV is down ~1%, but still 2.5% up and TZA is up 1.6% for me, so total is not changed that much :-).

    Here is the tza chart. But I don’t think chart works well for this kind of stock. I just thought that Feb is a bad mounth in general, so bet on it.

    http://stockcharts.com/h-sc/ui?s=TZA&p=D&yr=1&mn=0&dy=0&id=p91920124690&a=286754341&listNum=19

  26. Tawny Says:

    Freddebuoy

    Re#10. Thanks for your interest and your charts…(saved one) – guess we all have seen something here. Money is definitely coming out of bonds and will likely continue to do so and it could be a slow slide. But, as you point out, not truly sustainable to go against the normal movement of equities up and bond prices down and v.v.. TLT all over the place since Fed Speak… will know by end of day and even more over the next few days. S&P down now, but I would not be surprised to see it head back up for the end-of-month trade. But I am expecting it will go down for a February correction.
    Personally, I would feel better if it did as everything I want to buy is overbought.

  27. Tawny Says:

    Teresa re #25

    Thanks for the chart. I think these charts still work. I think there will be an opp. to buy TZA, but personally I will wait to see the end of month/early month buying over with. Being RRSP season there will be more than avg money flowing through.

    As for TMV, incredible volatility today. After a pullback would be a better time to buy this too. A breakout well above $60. might be a better time to buy??

  28. Tawny Says:

    Teresa

    Well! Markets down on the day but money did not pour back into TLT!
    I am holding my small entry into TMV – down only pennies.

  29. Neil AB Says:

    Canuck 2004
    Ok, so now this just kind of becoming fun. And please, let’s keep it as fun. I totally respect your opinion.

    But, let’s look at CNQ. The downtrend line from Feb/12 is broken. However, the longer downtrend line from Feb/11 is not yet broken. Until such a downtrend is broken, I’m not intereested. Too many whipsaws, too many false breakouts.

    As you say, the higher double bottom is positive, and it is, however, if you look further you will see that the double bottom on the RSI is actually lower. There is no confirmation of the price double bottom rising.

    You suggest that light oil prices in some way represent what heavy oil is going to do. I would suggest they are totally different. Heavy oil (cn

  30. Neil AB Says:

    Canuck
    Sorry, don’t know what happened there…

    Anyway, to continue, Heavy oil (cnq) requires way more refinement and, of course, this is a part of the source of the current backlog. One cannot, in my HO compare light and heavy at this point. They have become and will for the short term at least be totally different commodities.

    Once the differential gets dealt with, (most suggest second half of the year) then I can see a case for CNQ but not until then. Why deal with so many uncertanties?

    Thanks for providing the def. for OBV – much appreciated, though, as have most on this site i’m sure, given it consideration for many years. While OBV is higher of late re: cnq, did you notice the argueable negative divergence between it and price?

    In sum, it is probably just a time line issue that we have. I stand by the resistance levels I outlined yesterday, however, as a value play over the long term, I agree CNQ is a great company with a lot of upside from here. The issue is “how long”.
    N

  31. canuck2004 Says:

    S&P 500, P&F chart target: 1703.52

    http://stockcharts.com/def/servlet/SC.pnf?chart=$SPX,PLAADANRBOPADF1!3!1.0!!2!20]&pref=G

  32. Brian/ON Says:

    Neil

    I’m not sure what you’re getting at here, but a good debate is always good, I think.

    However, it seems to me you are using arguments which may be looking at a buy and hold, when you are looking at a long term trend from Feb 11. I think most people here are trading. I’m not sure where CNQ is going, no one does. However, I do know where it’s been. I bought mid december, and am up about 10% currently. With a quick move back, I may not end up there, but it’s a good start. Point is, downtrend since Feb 11 notwithstanding, I’m up 10% in 6 weeks, so there is good money to be made here, or has been.

    Hopefully more to come. If it does drop, like many of the oil stocks have done in the last couple of years in early Feb or March, well, sell it and take the profit.

  33. Muntazir Says:

    Hi Rami,
    Eve’s email is
    tatrader11@yahoo.com

  34. canuck2004 Says:

    29- Neil

    1) Oil gleaned from oil sands is refined into WTIC light oil, no problem. CNQ oil is priced as per current WTCI benchmark…. read up the articles I posted, as they explain in detail what I’m talking about. You need to scroll down to the bottom of the pages. CNQ = WTIC it’s that simple. Don’t argue with me, read up on it… listen to the experts.

    2) By the way, WTIC is a grade of oil used as THE benchmark for all US oil pricing.

    3) Heavy oil is used for asphalt only, not really pertinent to fuel. Lots of it in Saskatchewan.

    3) if one looks at the CNQ RSI, one will note that since last November the RSI, stock price, MACD, and OBV has been rising in unison confirming each other… the WTIC follows the same pattern. They are all in sync. Good confirmation on upward momentum.

    http://stockcharts.com/h-sc/ui?s=CNQ.TO&p=D&yr=0&mn=6&dy=0&id=p23513257723

    4) if one draws a line on the CNQ chart from the bottom last Nov. 2012 at 26.88, one will note a continuing series of higher lows. This is bullish. Whatever happened before this low and CHANGE in trend is totally immaterial. Feb. 2012? who cares… not relevant to todays move or story. Once a change in trend is apparent, previous charts are meaningless…. we are in NEW territory….one has to go by recent metrics. It’s all about current trending.

    3) The 50 DMA is curling up and is about to cross the 200 DMA thereby forming a “Golden Cross”, once formed it is a bullish confirmation of previously mentioned metrics. Too many confirmations to ignore in my book.

    4) there is NO guarantees that the Keystone pipeline will be completed in its entirety, but the Southern end is being built as we speak… the North end tying up North central US and Alberta where most of the new oil is coming from is still being fought over by tree huggers. But like I said, the oil lobby is huge… and very very powerful….they usually get their way. I’m trying to make money so I’ll bet on the one that has a greater chance of winning…what I think personally is meaningless. In any case, the stock and commodity will move on ANTICIPATION of a Keystone deal… as per the old saying: “buy on rumor, sell on news” which applies here.

    Another old saying: “don’t fight the tape”. In other words, as long as it is trending upwards, it’s all that matters. Anything else is academic.

    WELL….This is it on this subject for me, otherwise I am just repeating myself over and over again. People are going to believe what they want to believe, regardless of what I say….or whatever proof I provide. I’m not going to waste my time trying to convince them otherwise…

    I’m just trying to explain my position on the matter as clearly as I can. I think I was quite clear.

    If I’m wrong, well too bad, just one bad bet out 80. I got a stop. No worries here.

    I got to pack for Scottsdale, AZ… leaving early Friday morning.

    Cheers

  35. Rami/AB Says:

    Muntazir,
    Thanks alot.

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