Technology
By · CommentsTechnology stocks have been doing well in accordance with their seasonal trends. Both the XLK, Technology Select Sector SPDR Fund, and SMH, Semiconductor HOLDRs Trust, holdings have been outperforming the market recently. The seasonal sector trade for these sectors ends on January 17th, but it is usually prudent to start lightening up on the sector before the Consumer Electronics Show in Las Vegas which takes place in the first week in January 2010.
Materials (Canada)
By · CommentsThe HAC fund has been well positioned in the market place to take advantage of outperforming trends in the market. The materials sector in the Canadian market has been performing well. One of the main sector holdings for HAC is XMA, iShares CDN S&P/TSX Capped Materials Index Fund. This ETF has benefi ted from strong performance in gold, fertilizer and metals and mining stocks. Approximately 60% of the fund is gold stocks, 18% fertilizer stocks and a sizeable portion of metals and mining stocks. Recently, all three of these sectors have been outperforming the market – gold has been rising and has crossed the $1,200 threshold, fertilizer stocks have done well as demand has increased for fertilizer, and the metals and mining stocks have been doing well in part as a result of the declining U.S. dollar.
Gold has its strongest seasonal strength from July 12th to October 9th. At that point it often corrects and then at the beginning of November it once again starts to rise. This year gold did not produce a gain from October 9th to October 30th. At the beginning of November once again started to increase. Gold very often will increase until approximately the end of the year, or even into February with strong momentum.
Based upon the seasonal trends it is prudent to consider lightening up on gold positions over the short to midterm. The same rational applies to XMA as it is mainly gold stocks.
Market Talk
By · CommentsDespite the debate of whether the economy is in trouble in the long-term, the economy has been showing signs of life once again. Investor’s confidence is up and the market has been doing well.
Although the market may be a bit pricey, and there may be some volatility ahead, there is still some room to grow. This is particularly true as we are in the favourable period of the year (October 28-May 5). Yes, there are times when the market goes down in this period, but the times are few and far between. Over the last sixty years, the S&P 500 has only lost 10% or more two times. Surprisingly, despite the volatility last year, the S&P 500 produced a 6.5% gain in the favourable period in 2008-2009.
S&P 500 – Last 3 Years
Black Friday = Dark and Gloomy Day for Markets
By · CommentsMy last post stated that the markets overall will do terrible on Black Friday because of Dubai’s disaster on not paying back their debts. You have to admit, $60 Billion Dollars is just a bit too much money for one city.
Gold as predicted fell to the low $1130.10. Traders, that is more than $65 down from $1195.00.
As for Oil, the low for today was $72.39, down from $77.94. Again another massive loss.
As for financials, it varies from different banks, but at the end result, they all did very bad today.
If you read my post for Wed, then you know that Shorting was the right option if you wanted to make a lot of money. Even if there is a downside in the markets, you can always be a winner.
Again have a Happy Gloomy Thanksgiving (for those who did not short their positions).
Cheers!
ATTENTION GOLD, OIL & BANK INVESTORS! <– URGENT NEWS!
By · CommentsI have studied the charts for Gold for some time now and I see Gold running into a big storm. Investors, Gold has been way overbought! As the saying goes, when everyone is buying, you should be preparing yourself to sell. India normally buys Gold during this season, but this time they are not. Gold is overbought and too expensive for them to afford which will definitely affect the prices of Gold.
I see Gold falling more than $60 by the end of Friday (Yes I SAID $60!). So don’t take your chances to buy gold, SHORT IT and SELL IT! In fact, I have bought the inverse etf of Gold, HGD.TO. It’s another way to Short Gold. Buy it, hold it, and make your profit.
I also know a few big guys in Dubai and I’m telling you the news in Dubai is not good. They are in debt and owe the government/banks more than $50 Billion Dollars. So watch the prices for Oil tumble as well by the end of Friday.
As for financials, because Dubai owes so much money, you’re also going to experience a big tumble for the financials. Black Friday will be really black for the markets.
Have a Happy Thanksgiving and please…Sell it all off!
Banks (Canadian) XFN.TO (ETF)
By · CommentsIn the past I have written about the U.S. financials having their seasonally strong period from December/January to April 13th. The Canadian bank sector is different than the U.S. bank sector in many ways. From a seasonal standpoint, Canadian banks have their year-end at the end of October and release their results in late November. In comparison, the U.S. banks have their year-end at the end of December and release their results mid-January. As a result, the seasonal period for Canadian banks tends to start earlier – October 28th.
The risk of entering the bank sector earlier is if the U.S. banks come out with disastrous news before their year-end, banking sectors around the world will be questioned and will perform poorly. Compared with banking sectors in other countries the Canadian sector is very healthy and should be able to weather U.S. negative news.
Consumer Discretionary (XLY)
By · CommentsThis sector trade is part of the pair trade with the consumer sector, rotating back and forth from one sector to another every six months. The favourable season tends to favour higher beta and therefore rewards discretionary over staples. We have just entered the time of the year when this strategy shifts from the staples sector to the discretionary sector. Investors should consider switching their consumer staples ETF for a discretionary ETF.
