Stocks & Equities

How to Time a Blue Chip Buy

Bob Hoye”Just looking at the Gold Shares now, we have an index in Gold Shares going back to 1900 and there has been only one other time were it has been this oversold and that was in 1924. So one could say that this is about the most oversold you can get, and our advice on Gold Shares a few weeks ago  is that people should be accumulating good quality Gold Shares into weakness. It might take another week to set the low in here, but then the performance out of this oversold should be rather good. I am content buying either good exploration stocks where you know the story, or some of the senior Golds or Gold share ETF’s”.

How to Time a Blue Chip Buy

When you’re ready to buy a stock for purely fundamental reasons, you need to pay the best possible price for your investment.

Technical analysis is a tool that can help you do just that. Today, we’ll put it to work to analyze one of the most popular names on the market…

….read the whole article HERE

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Seasonality in the month of June

The month of June is not a great month for performance for North American equity indices. According to Thackray’s 2012 Investor’s Guide, the month of June from 1950 to 2010 was the third worst month of the year producing an average return per period of -0.1% and was positive only 51% of the time. Returns for broadly based equity indices during the past ten periods were as follows:

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Best performing sectors during the past 20 periods were Health Care and Telecom. Worst performing sectors were Materials, Financials and Consumer Discretionary. Best performing sub-sectors during the past 20 years were Software & Services and Pharmaceuticals. Worst performing sectors were Banks, Transportation and Auto & Components.

Other indices, sector and commodities recorded the following average performance during the past 10 periods:

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….read more at Equityclock.com & Don Vialoux’s Interesting Charts HERE

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

Why the Recent Dow Theory Bear Signal is “Particularly Valid”

The one Dow Theorist who says a sell signal was generated by this oldest and most famous of stock market timing systems is none other than Richard Russell, the 89 year old editor of Dow Theory Letters. He wrote to clients over the weekend to deliver the bad news that it was a “textbook bear signal”. 

It should be noted that it was nearly two weeks ago when the two Dow Averages broke below their respective April lows. So Russell’s announcement over the weekend was not exactly breaking news.

But Russell nevertheless believes that the Dow Theory sell signal he now detects is all the more significant precisely because he missed it initially, along with virtually all other Dow Theorists he monitors. He writes that his interpretation is “particularly valid because nobody seemed to notice it [the Dow Theory sell signal], nor did any analyst appear to be aware of it. I know of no analyst or advisor who stated that we had seen a primary bear signal!”

….read more HERE

Growling Bear

Newspaper businesses are under attack. In this context, Warren Buffett’s decision to buy Media General, which owns 63 local papers in the US, may seem odd. Does he know something that everyone else doesn’t?

In both the US and UK circulation continues to plunge while readers – and advertisers – keep moving online. Meanwhile legal judgments are making it easier to sue the press for “breaches of privacy”. No wonder embattled media mogul Rupert Murdoch thinks print papers will only survive for another twenty years. Indeed, one American study reckons that within five years there may be only four papers left in the US.

….read moreHERE (scroll down for Newspaper company recommendations)

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The Bottom Line & Richard Russell Comment

North American equity markets are set up technically for a short term recovery. The lows set by major equity indices on Friday May 18th likely will hold. Look for volatility to escalate. A base building period lasting until the middle of July, when second quarter earnings reports begin to be released, has started. Gains between now and mid-July will be sparse except for very short term trades.

U.S. and Canadian equity markets have a history of moving higher during the week after the U.S. Memorial Day holiday. Many U.S. traders take an extended holiday this week. Volume on U.S. exchanges are expected to be lower than average.

U.S. and Canadian equity markets have a history of moving through a bottoming process during a U.S. election year. The following chart indicates completion of the bottoming process by the end of July.

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….be sure to check out Don’s briliant 45 chart monday chart and comment compilation HERE


Ed Note: Long Term, Richard Russell declared on the Memorial Day Weeend that because the D-J industrial Average high of 13,279.32 on May 1, 2012 was not confirmed by the Transports, and then when the two averages turned down and broke below their April lows “This action confirmed that a primary bear market is in progress — it was a textbook bear signal.”

Russell further thinks that the Bear Signal indicates that its likely Greece, then Spain, will leave the Euro and then whole Eurozone will likely crumble. Also that although Gold will probably be under pressure or awhile, a major bull market/move is to follow. 


Long Term Perspective & The Massive Dow Bear Market

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For some perspective on the long-term performance of the stock market, today’s chart presents the Dow priced in another global currency — gold (i.e. the Dow / gold ratio). For example, it currently takes less than a mere eight ounces of gold to ‘buy the Dow’ which is considerably less than the 44.8 ounces it took back in 1999. Priced in gold, the Dow has been in a massive 12-year bear market. Recently, the downtrend of the Dow (priced in gold) has slowed to its slowest pace since peaking at the end of the previous century. In fact, the Dow (priced in gold) is now testing resistance of its reduced downtrend channel thanks in part to a significant correction in gold itself.

Notes:

Will the Dow crash? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.