S&P 500 STRATEGY: STAND ASIDE (for definitions of terms see end of report)
It’s official. It is a bear market. I am not sure how these things get decided but they use this arbitrary measurement: if a market falls 20 per cent from its highs it is a bear market. The S&P 500 has fallen 20.6 per cent (from 1,576 to 1,252) the Dow Jones Industrials 22.2 per cent (14,280 to 11,106) and the NASDAQ 24.7 per cent (from 2,861 to 2,155). Ah, but there is one major difference. The S&P 500 and the DJI made their lows this past week. The NASDAQ made its low in March and now is making a higher low.
A divergence? Of course we could just keep on going. But Thursday’s action was interesting as the markets plunged to new lows and then reversed. The DJI closed up on the day, the S&P 500 eked out a gain, but the NASDAQ still managed to close slightly lower. We saw a fair degree of rotation going on as the market sold oils and materials and bought banks. Seems they can’t stand the sight of $145 oil and they suspect it won’t hold (see oil & gas commentary below). [read more…]
The TSX Composite fell 2.4 per cent this past week with all sectors down except Telecommunications. The only reason that sector was up was because of the big leap in BCE Inc. (BCE-TSX) this past week when a deal finally seemed possible. Still it remains below the supposed closing price but it is a lot closer. For those who wish to speculate it still might be a buy. Remember that there is no dividend being paid right now.
With everyone else down it is no surprise to have received sell signals for Industrials, Information Technology and Utilities. Golds were down on the week but with the big up week the previous week we have issued a buy. The CDNX or TSX Canadian Venture Exchange continues to struggle here but we continue to issue an accumulate signal. [read more…]
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