ShareThisPre-opening Comments for Friday March 22nd
U.S. equity index futures are higher this morning. S&P 500 futures are up 3 points in pre-opening trade.
Nike added $4.24 to $57.84 after reporting higher than consensus fiscal third quarter earnings.
Tiffany improved $2.74 to $70.65 after reporting higher than consensus fiscal fourth quarter earnings.
Micron added $0.75 to $9.82 after reporting higher than consensus fiscal second quarter sales.
Blackberry added $0.17 to $16.33 .Today the company launches its Z10 model in the U.S.
Lululemon fell $0.39 to $64.31 after CLSA downgraded the stock from Underperform to Sell.
Kohl’s (KSS $45.56) is expected to open lower after Deutsche Bank downgraded the stock from Hold to Sell.
Family Dollar Stores added $0.64 to $60.49 after Deutsche Bank upgraded the stock from Hold to Buy.
Interesting Charts
Gold equity ETFs on both sides of the border are breaking above short term trading ranges and are starting to show positive performance relative to gold.
First Quarter Earnings Expectations for the TSX 60 Companies
Consensus estimate for first quarter earnings shows a mixed picture relative to the same period last year. Average (median) for Canada’s top 60 companies shows no change on a year-over-year basis. Twenty five companies are expected to report lower earnings, four companies are expected to report no change and thirty companies are expected to report gains. Companies expected to report the highest percent gains included Agrium, Canadian Pacific, Gildan and George Weston.
Consensus estimates courtesy of Zacks Investment Research
Updates on Sector Seasonal Trades
Seasonal trades optimally have a technical score of 3 based on (1) uptrend, (2) trading above their 20 day moving average and (3) outperforming the market (S&P 500 for U.S. holdings, TSX for Canadian holdings). Scores moving lower than 3 are warnings signs. A score of 0-0.5 is a sell signal. The following seasonal trades have a technical score of 1.0 or higher and are in their period of seasonal strength. Their retention is recommended.
Technical score for Industrial SPDRs remains at 2.5. Seasonal influences are positive until early May.
Technical score for Consumer Discretionary SPDRs remains at 3.0. Seasonal influences are positive until mid-April.
Technical score for Retail SPDRs remains at 3.0. Seasonal influences are positive until mid-April.
Technical score for Palladium remains at 2.5. Seasonal influences are positive until the end of April.
Technical score for the U.S. Oil and Gas Exploration & Development SPDR remains at 3.0. Seasonal influences are positive until mid-April.
Technical score for Energy SPDRs slipped to 2.0 from 2.5 when strength relative to the S&P 500 Index changed from neutral to negative.
Technical score for Materials SPDRs changed from 3.0 to 2.5 when strength relative to the S&P 500 Index changed from positive to neutral. Seasonal influences are positive until early May.
Technical score for Gasoline fell from 1.0 to 0.0 when units fell below support at $60.66. This is a failed seasonal trade. Better opportunities exist elsewhere.
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. Notice that most of the seasonality charts have been updated recently.
To login, simply go to http://www.equityclock.com/charts/
Following is an example:
NASDAQ Composite Seasonal Chart
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^IXIC Relative to the S&P 500 |
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 March 21st 2013
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March 22nd, 2013 at 9:24 am
Pat
thx for reminding about china not being able to sustain their ways of spending here’s a nice chart explaining exactly that.
http://scharts.co/Yw1dMd
March 22nd, 2013 at 9:32 am
FreddeB usually high volume at the close or near the close is usually sign the trend is about to change.
March 22nd, 2013 at 9:37 am
oops should have continued my taught,
we have seen this pattern in the past if there is no big price movement when volume is high then we are clearly near a reversal. If we have a spike in price as volume increases then the trend should continue.
March 22nd, 2013 at 9:47 am
Sometimes i think one can read too much into a chart, I think the best is to follow the trend, it can take awhile for that to change.
March 22nd, 2013 at 9:52 am
Mick
I totally agree at times we asre so focused on the small picture that we don’t see the big picture.
March 22nd, 2013 at 10:33 am
It appears that most of the gold stocks I follow, ABX, YRI, K,OSK, have broken their 18D MA. Maybe they have finally bottomed. They were really on a (losing) roll for the last few months.
I dont think they are seasonal though.
March 22nd, 2013 at 11:05 am
Re:golds
Most of the gold stocks still trading below their 100/150ma , may be awhile before they get above those levels.
March 22nd, 2013 at 11:14 am
This is very interesting:
BB.to
http://www.bloomberg.com/news/2013-03-19/blackberry-inventor-starts-fund-to-make-star-trek-device-reality.html
March 22nd, 2013 at 12:02 pm
I would avoid golds, the play is done, the US economy is on the mend.
Got to focus on what is moving at this point in the cycle….
March 22nd, 2013 at 12:04 pm
Sector Outperformance Over The Business Cycle – The Conventional Sector Rotation Model
http://marketscalpel.com/approach/rotation/sectorRotationConventionGraphic.htm
http://marketscalpel.com/approach/rotation/sectorRotationConventionTable.htm
March 22nd, 2013 at 12:57 pm
Tawny, re your post yesterday, #57, I don’t overly worry about liquidity or units traded in ETFs, especially if I am dealing in relatively small amounts. These funds are “open-ended” meaning that the number of units available are constantly changing depending on the demand at the moment. The market makers, that is usually the sponsors of the fund(s), will pick up your units should you place a sell order, and create the units should you place a buy. This is subject to some size limits and you would have to check with the sponsor on those limits (I don’t know them since mostly, I wouldn’t be trading that big) if you wanted to trade a particularly large order.
March 22nd, 2013 at 1:08 pm
ALL,
Been out of gold for a while. What are you all th iking about gold next 3-6 months. In/out?
GDS
March 22nd, 2013 at 2:00 pm
canuck 2004
re business cycle.
Now you have me confused. I thought I had a handle (somewhat) on the sector rotation idea but if gold – presumably precious metals a stage 2 – expansion stage item is over, that would mean we have proceeded from Early expansion/sliding back into late recession stage (this comments section – november 30, 2012) through to Late Expansion in 4 months.
Am I getting Macro/micro cycles confused? Or maybe are the discussions different for the US and Canadian markets?
March 22nd, 2013 at 2:03 pm
#10. canuck2004
Is there a definite determiner to find out exactly where we are in the rotation?
March 22nd, 2013 at 2:53 pm
Sector Rotation Cycles are a matter of interpretation, many analysts have slighly different patterns to present.
HOWEVER:
AS a general rule, fincancials always lead on the way out of a recession, as they were the ones who financed the excess in the first place… therefore they tank going into a recession, and when they recover, it announces a recovery. All has to do with the “YIELD CURVE”. Automotive, industrials, transportation, Real Estate, etc. follow….
AS a general rule, recessions last 6 months or so, but not always.
AS a general rule, all metals, Gold, O&G and commodities, tend to peak when the economy is running full out. These are “deep cyclicals”, which means, one buys them when they are bleeding red ink, and sells them when they report record earnings. They always come back.
At this point in time, we are TRYING to get out of a deep deep deep recession…. 1939 type of depression we barely avoided….and we are still wavering back and forth between Late Recession and Early Expantion…tires are slipping around in the mud trying to get traction.
Nothing is FIXED, these are “GENERAL” guidelines only… you have to be kinda sloppy with interpreting these things, they’re not the gospel, they are rough guidelines, otherwise we’d all be billionaires….lol…it would be too easy.
Don’t get caught up with details… it’s the big picture that matters. Got to see the forest in spite of the trees, type of thing.
March 22nd, 2013 at 3:47 pm
this sampling of gold stocks reflects (i think) what many of them are doing, going sideways or a little bit up, for march.
http://stockcharts.com/freecharts/candleglance.html?ABX,yri.to,k.to,osk.to,GDX,GFI,MUX,IAG,BTO.TO,NG,ANV.TO,HMY,PG.TO,HGU.TO,SEA.TO|B
So if you have a trading approach to be used in a sideways to up market, this is the time to use it.
all of these stocks had trading volumes today, so many traders are trying to make thes stocks work – they can’t all be wrong.
March 22nd, 2013 at 3:59 pm
BlackBerry faces crucial test with U.S. launch of Z10
http://www.bnn.ca/News/2013/3/22/BlackBerry-faces-crucial-test-with-US-launch-of-Z10.aspx
March 22nd, 2013 at 4:08 pm
#16- All very negative charts… no place to be if you want to make money going long. I would avoid… small pops are meaningless…birds of a feather as Corrigan says….they are all going the same direction.
As Ron Meizel is fond of saying, stocks that are making 52 week highs daily have a tendency to keep making 52 week highs daily… that where you look if you want to buy a stock.
March 22nd, 2013 at 4:11 pm
the world of copper, on the other hand, is still trending mostly down, not sideways-to-up
http://stockcharts.com/freecharts/candleglance.html?IMN.TO,TCK,VALE,HKU.TO,CPER,RIO,BHP,SCCO,JJC,TRQ,lcc.v,FM.TO|C|A12,26,9
some of them have had volume spikes this month… scco, rio, bhp….I wonder what those traders are doing.
March 22nd, 2013 at 4:14 pm
Re : #16
Yes, they can all be wrong. How many of these know it alls have said the markets are going to crash, I believe they have been saying that since Jan, yet it still keeps going up. I expect at some point the market will drop and the stocks that have dropped alot may turn around but until then, why fight the tape.
March 22nd, 2013 at 4:25 pm
I think caution is a good idea when the markets are up this much YTD. Big fund managers could go completely conservative, hold these gains, and end year above average. Why take the risk?
Plus that old saying Sell in May and Go away looks good this year, since the markets have risen so much YTD.
March 22nd, 2013 at 4:32 pm
According to Thackray, Gold season is from July 12 to October 9 each year. Here is the Equity Clock seasonal chart on gold futures. It has worked out in 9 of the last 10 years. That’s good enough to keep a watch on it at that time regardless of any fundamentals you can think of. Doesn’t mean it will work this year of course. But if you like to get in on the ground floor and don’t mind a little volatility, you might have seen the low for 2013 year in mid February. I own some bullion and some XGD.
http://www.equityclock.com/charts/gold-futures-gc-seasonal-chart/
March 22nd, 2013 at 4:50 pm
XGD rates a 3 on the Vialoux Technology Rating: 1. Short term trending up, 2. Above the 20 MA and 3. Above the $SPX. Only one thing missing – this is not considered the gold stock season.
http://stockcharts.com/h-sc/ui?s=XGD.TO&p=D&b=5&g=0&id=p93653489718&a=243440967
March 22nd, 2013 at 5:09 pm
re: #23
I am not sure that 2 days above the 20ma would give it a 1 out of 3, it looks like it did the same in Jan, only to fall along ways. Maybe I am reading your chart wrong, but doesn’t it show xgd.to below the $spx? I still see this chart showing lower lows and lower highs, who knows, maybe it will move above the 16.61 high point in Feb. then not pull back to another low. Still well below the 100/150ma, though I suppose you can still trade it. Thanks for the chart.
March 22nd, 2013 at 5:10 pm
http://e.businessinsider.com/public/1536014
Proof that you stink at investing. hmm!
March 22nd, 2013 at 5:56 pm
Tawny
The same can be said about most money managers!
March 23rd, 2013 at 12:37 pm
Re gold – (just saw the above post – still behind in reading the blog.)
Here is Rn/BC chart which he has been updating:
http://stockcharts.com/h-sc/ui?s=$BPGDM&p=D&yr=2&mn=0&dy=0&id=p61862383409&a=241497573
March 23rd, 2013 at 4:35 pm
http://blogs.stockcharts.com/canada/2013/03/why-gold-and-the-miners-are-so-interesting-right-here-.html#more
March 24th, 2013 at 12:13 am
http://seekingalpha.com/article/1295731-three-reasons-why-you-can-beat-the-professional-investors
So, there is no need really, for all of this gloom & doom. You can make good returns for yourself – with or without the help of others.
March 24th, 2013 at 12:16 am
Tawny,
Thx for Ron’s gold miner’s chart.
I know this is not the season for them,
but………
March 24th, 2013 at 1:49 pm
Here is a chart which shows at least one of the reasons I am bearish on the broad markets. $GOLD and $SPX are normally positively correlated but sometimes are not. Look at what happens to the $SPX when they become negatively correlated. And look how negatively correlated they are right now. It’s early yet but…
NOTE: This is NOT a buy or sell signal. The buy and sell signal should always be – in my mind – dictated by the charts. This is just an interesting indication of what may (or may not) be in store.
But speaking of the charts, there has been at least three attempts to break through the 1550 level (five if you include the three time in 2000 and the two times in 2007). There could be another kick at the can but I think the easy money has been made.
I am also watching HDGE. It hasn’t been around long enough so I haven’t included it. But it is starting to turn up; a contrarian signal? I’ve also included a chart of $COPPER. Not as definitive but it also shows a divergence in the $SPX and $COPPER prices.
http://stockcharts.com/h-sc/ui?s=$GOLD&p=W&yr=15&mn=0&dy=0&id=p88792456671
http://stockcharts.com/h-sc/ui?s=$COPPER&p=W&yr=20&mn=0&dy=0&id=p12856812131
March 24th, 2013 at 1:51 pm
Tawny, I like that chart from Ron/BC. Where did you get it?
March 24th, 2013 at 1:59 pm
A quote from Robert Prechter: “In 40 years of watching markets closely, I have never seen more dangerous conditions than exist in the stock market today. It is natural yet amazing that so many analysts are saying the current juncture is the start of a major bull market and that conditions are historically bullish. It is natural because increasing optimism propels markets upward; that’s why optimism is high at tops. It is amazing because even some technicians are calling for Dow 20,000, while some economists are saying they have never been more bullish in their entire lives. Our technical analysis leads to the opposite conclusion. So do the economic analyses of some brilliant, maverick thinkers as featured in this issue.”
March 24th, 2013 at 2:36 pm
My 5 cents to # 33;
11:16 AM EST – Bank of Nova Scotia (BNS): Richard Waugh purchased 2,552 shares at $59.5395 on 03-22-13 — bringing his total stake to 254,644 shares.
11:24 AM EST – Magna International Inc. (MG): Donald Walker purchased 100,000 shares at $16.55 on 03-22-13 — bringing his total stake to 256,217 shares.
11:25 AM EST – Maple Leaf Foods Inc. (MFI): Michael McCain purchased 225,000 shares at $10.91 on 03-22-13 — bringing his total stake to 45,998,783 shares.
11:33 AM EST – Power Financial Corporation (PWF): Robert Gratton purchased 302,900 shares at $30.08 on 03-22-13 — bringing his total stake to 5,062,409 shares.
11:40 AM EST – Royal Bank of Canada (RY): Morten Friis purchased 1,642 shares at $60.6597 on 03-22-13 — bringing his total stake to 76,353 shares.
11:58 AM EST – Thomson Reuters Corporation (TRI): The Woodbridge Company Limited purchased 182,700 shares at $32.90 on 03-22-13 — bringing his total stake to 455,284,218 shares.
From # 33; “It is natural because increasing optimism propels markets upward; that’s why optimism is high at tops.” …. ??
March 24th, 2013 at 4:03 pm
Relax & hold the course for the time being.
But if TLT comes up to hit SPY, it will be deja vu
all over again.
http://stockcharts.com/h-sc/ui?s=SPY&p=D&st=2012-02-01&en=(today)&id=p02299323474
March 24th, 2013 at 4:13 pm
Same for EDV & SPY.
April & Sept seem to be favourite times.
http://stockcharts.com/h-sc/ui?s=SPY&p=D&st=2012-02-01&en=(today)&id=p86769399697
I am sitting here wondering if there is anything I could do right now,like, a sort of contingency plan, in case lightening strikes again in April?
March 24th, 2013 at 8:56 pm
I find it difficult to be bearish on the spx at the moment. It does have the look of topping but there is a clearly defined uptrend channel from the Nov. lows and it would seem that only a break below 1535 or so would represent a break of that uptrend. Thus, risk/reward hard to go short at this point.
The TSX is a bit of a different story. Obviously, it is in a bit of a consolidation phase. Tried to break 12900 a short while ago and couldn’t (the late january high)and the attempt was with major negative divergence on both MACD and RSI. Now, we have MACD negatively crossing the signal line; possible bearish engulfing candle last thursday, bearish doji candle on friday and, more importantly to my mind, the 8ema poised to cross below the 20sma. Thus, as it is hard to find negative technicals for the spx, it is just as hard to find positive techs for the tsx.
It would appear that major caution on the tsx is in order at the moment. I have a small inverse hedge in place at the moment to protect a bit the possible downside. I am looking to increase the position, but would not do so until the technicals are a bit more definitive.
March 24th, 2013 at 9:40 pm
Tawny Re: #25,
I often like to see these graphs saying things like “average returns by investors”. I wonder how they get this data?
Also, I often see this coming from interested parties, who have a stake. I think this info came from Blackrock? I’m sure most of the financial services, who of course, are selling the service, can provide tonnes of data on how the individual investor is far outperformed by their wonderful (pay for) services.
There is no doubt that many individual investors don’t do well, but i think many do just great. Hard to miss beating the stock market over the ten year span from 2000 to 2010, where return was 0. Or again, over the last 5 years, where we are again at pretty much 0 on many of the markets out there.
March 25th, 2013 at 12:11 am
Rol Lew
thank for the chart I decided to post my own chart of the spy.
I would advise people to either start taking their profits as MACD is diverging from the price action or at least draw your support lines and exit if price breaks below. you can also decide to put on stop losses.
http://scharts.co/ZNTQlW
All companies aren’t created equally, AAPL for instance its MACD has diverged from price and now price is creeping up its even broken the 50MA.
March 25th, 2013 at 12:42 am
brian
problem is not the SnP the problem is how much risk and did you choose the right sector, If you compare snp to a TCK whos beta is about 2.3 times the SnP so if SnP moves 1% Tck should move 2.3% problem is that miners have been in a rut recently, so problem is where did you invest and was it the right time?
then again if you’ve chose a tck vs a JPM well you went from 3 to 30 vs 14 to 51 so tck was clearly a winner, but tck has also been a loser since its high as jpm kept its value as for tck has been struggling as it was as high as 60$ after 09.
recall the tech bubble, well here is two anecdotes from that era all about nortel,
One colleague was telling me to buy into it at 110-120 as it was said it was going to 200, but being green in the investment world (As I use to play the GICs back then yeah you heard me I was scalping .25 to .3% a month, my bank advisor was freaking out as I had accumulated more paper in 3yrs then any mutual fund investors)
I told him he was crazy if it goes up it can only come in crashing harder.
then another colleague was telling me a few months later that is father in law had bought nortel before the bubble when it was worth 10$, and sold out at 100-105 and regretted his choice but is son in law told him not to worry there would come other opportunities, and being a retired electrician with only one daughter he didn’t have to worry about it. we know what NTel held in its future.
So I’m happy not listening to someone telling me how to invest my money as his source were Bank analyst.
you must be the judge of your own portfolio, and listen to the signals the markets are sending you. if you omit in doing so you will be caught off guard like those I warned not to buy into BBRY when it was trading in the 30s.
If you’re wrong and its moving up you can always make up for it, but if your wrong and its moving down you may not make it up for it.