Editor Note: Highly recommend that you take a visit monday morning visit to Don Vailoux’s monday report where he analyses an astonishing 40 plus Stocks, Commodities and Indexes. 

Technical Action Yesterday

Technical action by S&P 500 stocks remains bullish. Another 32 companies broke resistance and two stocks broke support (Lockheed and Monsanto). Most stocks breaking resistance continued existing uptrends. The Up/Down ratio for S&P 500 stocks increased from 9.50 to (404/42=) 9.62%. Major U.S. equity indices closed at 11 month highs.

Technical action by TSX Composite stocks was quiet once again. One TSX stock broke resistance (Sino Forest). The Up/Down ratio for TSX stocks was unchanged at (112/25=) 4.48.

Interesting Charts

The exceptionally high inverse correlation between the U.S. Dollar and the S&P 500 Index has dominated the trend for U.S. equity markets since the beginning of the year. The U.S. Dollar weakened again yesterday. Short term momentum indicators show that the U.S. Dollar is oversold, but has yet to show signs of bottoming.

Yesterday natural gas recorded its largest daily percentage gain in five years. Short term momentum indicators bottomed earlier this week. Natural gas already has recovered to the bottom of a range of resistance. Seasonal influences for Canadian natural gas is positive from the end of August to the end of December.

Bullish Percent indices for all sectors remain intermediate overbought. Nine indices increased slightly, one index (Telecom) was unchanged and one index slipped slightly (Utilities). Four indices remain below their 15 day moving average (Consumer Discretionary, Utilities, Industrials and Materials). The remainders are close to breaking below their 15 day moving average. Following are the charts:

Don Vialoux has 37 years of experience in the Investment Industry. He is a past president of the Canadian Society of Technical Analysts (www.csta.org) and a former technical analyst at RBC Investments.  Now he is the author of a daily letter on equity markets available free on the internet. The reports can be accessed daily right here at www.dvtechtalk.com.

Impossible! That’s what institutional investors say about “Timing the Market”. Mr. Vialoux will explain that, indeed, it can be done with the appropriate analysis. He also will explain why timing the market will be important during the next decade. Buy and Hold strategies are not working anymore; Investors are looking for alternatives. Mr. Vialoux will demonstrate four techniques that can be used to time intermediate stock market swings lasting 5-15 months. The preferred investment vehicles for investing in intermediate stock market swings are Exchange Traded Funds.

Comments in Tech Talk reports are the opinion of Mr. Vialoux. They are based on technical, fundamental and/or seasonal data that is believed to be accurate. The comments are free. Mr. Vialoux receives no remuneration from any source for these services. Comments should not be considered as advice to buy or to sell a security. Investors, who respond to comments in Tech Talk, are financially responsible for their own transactions.