Editor Note: Money Talks highly recommends that you make a regular trip to this monday morning site to this Don Vailoux monday report where he analyses an astonishing 40 to 50 Stocks, Commodities and Index charts and, provides a “Bottom Line” and some very interesting commentary.
– a few of the 40+ charts and commentary below. Full site HERE
The Bottom Line
North American equity markets historically have been “choppy” in the second week in December followed by significant gains in the second half of December. Look for history to repeat. Weakness, if it occurs, will provide an opportunity to accumulate equities and ETFs that benefit from seasonal influences.
The S&P 500 Index added 18.71 points (1.72%) last week. Intermediate trend remains up. The Index remains above its 50 and 200 day moving averages. Its 50 day moving average has proven to be a reliable support level in recent months. The Index bounced above that level again last week. Short term momentum indicators are neutral to slightly overbought. Seasonal influences remain positive. Support is indicated at 1029.38.
The TSX Composite Index added 46.39 points (0.40%) last week despite weakness on Friday. Intermediate trend is up. The Index remains above its 50 and 200 day moving averages. Short term momentum indicators remain slightly overbought. Strength relative to the S&P 500 Index has turned neutral recently. Support is indicated at 10,745.25. Seasonal influences are positive.
The U.S. Dollar closed above its 50 day moving average on Friday, a significant technical event. Its 50 day moving average had proven to be resistance in recent months. Additional weakness early this week could trigger a significant short cover. Intermediate trend remains down and the reasons for the downward trend have not changed (e.g. growing fiscal deficit, lack of control over government spending, loose monetary policy). Short term momentum indicators are recovering from oversold levels. A recovery to resistance at 76.82 is possible. A move above resistance needs to be watched because it implies a change in intermediate trend. Seasonal influences are strongly negative until the end of the year due to year-end transactions by U.S. based international companies. Seasonal influences turn strongly positive from the beginning of January to the middle of April.
The Canadian Dollar managed to record a 0.27 cent U.S. gain last week despite weakness on Friday triggered by U.S. Dollar strength. It remains in a two month trading range between 92.16 and 97.69 cents U.S. Short term momentum indicators are neutral.
Gold quickly responded to strength in the U.S. Dollar on Friday following the better than expected U.S. employment report. MACD, RSI and Stochastics recorded short term sell signals (Negative cross over by MACD, RSI falling below 70%, Stochastics falling below 80%). Downside risk is to its 50 day moving average currently at $1,090.65.
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.