A 5 chart sampling and the Bottom Line taken from the comment plus 45 Charts Don Vialoux analyses in this great Monday comment HERE
The Bottom Line
Use weakness into November as an opportunity to acquire attractive equities and ETFs. Please be patient and wait until technical indicators are showing signs of bottoming following a short term correction. Waiting until four major stock market moving events are over appears prudent unless you want to “roll the dice”. Preferred selections are economically sensitive sectors such as China, technology, consumer discretionary, materials, Canadian financial services, lumber and industrials.
Large cash positions held by individuals and corporations remain on the sidelines and are likely to remain there until at least yearend. When the cash starts to move into equity markets, intermediate upside potential is significant.
Seasonal influences between now and at least next May are positive. The current quarter and the first two quarters of next year historically are the strongest three quarters in the U.S. Presidential cycle. In addition, November historically is a good month for equity markets.
The recovery in China is significant and important for the recovery in world equity markets during the next 12 months.
A selection of 5 Charts from Don’s
The Dow Jones Industrial Average slipped 14.07 points (0.13%) last week. Intermediate trend remain up. Support is at 9.936.62. Resistance at 11,258.01 was unsuccessfully tested last week. The Average is well above its 50 and 200 day moving averages. Short term momentum indicators are overbought, have peaked and are trending lower. Strength relative to the S&P 500 Index remains mixed. Intermediate downside risk during a correction is to its 50 day moving average currently at 10,702.86.
The TSX Composite Index added 75.06 points (0.60%) last week. Intermediate trend remains up. Support is at 11,065.53. Resistance may be forming at 12,710.19. The Index remains above its 50 and 200 day moving averages. Short term momentum indicators are overbought, have peaked and are trending down. Strength relative to the S&P 500 Index is mixed. Intermediate downside risk during a correction is to its 50 day moving average currently at 12,250.57.
The U.S. Dollar slipped 0.29 last week. Importance of the outside reversal on October 15th remains intact. Support is developing at 76.14. Short term momentum indicators continue to recover from oversold levels. Short term upside potential is to the breakdown level and its 50 day moving average near 80. Intermediate trend remains down.
Crude oil slipped $0.24 per barrel last week. Resistance has formed at $84.62. Short term momentum indicators have peaked at overbought levels and are trending down. ‘Tis the season for crude oil to move lower.
Gold added $30 U.S. (2.3%) last week. Short term momentum indicators have changed from overbought to neutral. Gold has a history of recovering near the beginning of November and moving higher until the end of December.
…read more of the 45 plus Charts Don Vialoux analyses in this great Monday comment HERE