DOW IN A BULL MARKET?
ARE BANK STOCKS A BUY? WE DON’T THINK SO!

We are reviving the Technical Scoop series. This will replace the WeekEnd Commentary. It will free up a bit of extra time on weekends, which we found were being given over almost entirely to writing and editing.

We will still be offering some commentary on global economic and geopolitical events and their impact on investments and the markets. But we will be returning a bit to our roots with this resurrection of the Technical Scoop, where we used to comment on companies, their charts, and their relationship to what was being said in the markets or the news. So this will be more chartoriented than was the WeekEnd Commentary. We hope to publish at least two issues a month. [read more…]

S&P 500 STRATEGY: STAND ASIDE (for definitions of terms see end of report)

How things can change in a week. Last week the market was getting increasingly bullish with all the Fed’s manoeuvrings to save the world. This week reality came back into the market. GE failed to come anywhere near their profit picture, the same-store sales for March were generally abysmal and consumer confidence slipped badly. The market said “Oops, I did it again,” and promptly sank.

We outlined last week how we expected a top this past week and then how the market was going to be choppy for the next couple of months. We were basing this off our observations of the 1938 cycle (70 years) which showed a very choppy market through May, a final low in May, then up and more chopping around into July followed by a final burst of a rally from August to October or so for a top. While nothing is a given thus far we are following the script. Given the elections this November and the fact that the markets tend to be somewhat strong going into an election, that outlook may hold. We have not seen enough yet to dissuade us from this scenario. [read more…]

TSX INDICES

The TSX Composite was up on the week but barely. We broke above the 40 week MA but we were left with a negative sign with the week close at the end of week and closing below the opening levels for the week well off the highs. This is actually a negative going forward. There was a similar pattern on the TSX 60 but it gave us a better indication to at least buy the group or buy within the group selectively.

It was a mixed bag week with energy being one of the best gainers and an area definitely to buy as we broke out to new highs. Other strong areas were materials and metals and mining. We will look at the metals and mining group for buys for next week. Utilities were barely up as were the income trusts. The energy trusts are the best buys in that sector. All other sectors were down on the week reflecting a return to the downtrends that have been in place. No buy signals were ever seen for those sectors. [read more…]

S&P 500 STRATEGY: STAND ASIDE (for definitions of terms see end of report)

The S&P 500 enjoyed a big up week this past week, thanks to the huge 48-point gain on Tuesday. It was an interesting day and we suddenly learned and read about “9 to 1” days. We admit we don’t know everything so learning about this one was interesting.

So what is the 9 to 1 indicator? It was developed by Martin Zweig, a market guru. (He lives in a $70 million house. I don’t. Nor do I know anyone who does.) How does it work? You take all the volume of all the NYSE listed stocks and figure out what percentage of that volume came from stocks that rose that day. When that volume hits 90 per cent, it is a 9 to 1 day and is very bullish.[read more…]

TSX INDICES

The TSX Composite jumped 3.3% this past week and is now at or approaching the 40 week MA resistance. As long as the TSX or any of the sub indices are below their 40 week MA we do not wish to buy them. All sub indices were up this past week except for Gold and Health Care and both were only off small.

The Income Trust sector is flashing some buy signals and can be purchased selectively. We have a number of income trusts in our picks below and more are in the list of TSX Composite stocks below as well. Many of the sub indices are coming off very oversold levels but as we note they remain well below their 40 week MA so buying them is purely speculative. But we do have a number of buys below in stocks but examine them carefully before plunging in. [read more…]