Ed Note: a small selection of the 41 Charts Analysed on Don Vialoux’s Tuesday Morning comment HERE.
The Bottom Line
The seasonal trade in the Canadian Energy sector is approaching. Be prepared to enter the trade when short term technical indicators turn positive. Possible Exchange Traded Fund candidates for the trade include iShares TSX Energy Index (XEG), Claymore Oil Sand Sector (CLO), BMO TSX Equally Weighted Oil Index (ZEO) and Horizons BetaPro TSX Bull + ETF (HEU)
The U.S. Dollar weakened and the Euro strengthened in anticipation of a bail out of Greece by European central banks. Commodities priced in U.S. Dollars including copper, gold, silver, platinum and crude oil are trading higher. Short term momentum indicators for the U.S. Dollar are rolling over from an overbought level.
The S&P 500 Index added 9.32 points (0.87%) last week. Intermediate trend remain up. Resistance has formed at 1,150.45. Support at 1,029.38 held. The Index bounced last week from just above its 200 day moving average currently at 1,024.07. Short term momentum indicators have bottomed. Stochastics rose above the 20% level (A Stochastics buy signal) and RSI is recovering from just above the 30% level. MACD has bottomed at a short term oversold level and is about to trigger a MACD buy signal on a cross over of its moving averages. Seasonal influences remain positive.
The TSX Composite Index gained 246.69 points (2.20%) last week. Intermediate trend remains up. Resistance has formed at 12,070.20. Support held at 10,915.86. The Index bounced nicely from its 200 day moving average currently at 10,963.86. Short term momentum indicators have bottomed. Stochastics already have recovered to an overbought level, but continues to trend higher. RSI continues to recover from below the 30% level. MACD recorded a buy signal on Thursday. Strength relative to the S&P 500 Index has turned positive. Seasonal influences remain positive.
The Canadian Dollar improved 1.78 cents U.S. last week. It bounced nicely from near support and its 200 day moving average at 92.16. On Friday, the Canadian Dollar closed above its 50 day moving average. Resistance is at 97.79. Short term momentum indicators have bottomed. Stochastics already have recovered to a short term overbought level, but continue to move higher. RSI is recovering from just above the 30% level. A MACD Buy signal was recorded on Thursday.
Gold added $27.70 (2.60%) last week despite no change in the U.S. Dollar. Short term momentum indictors have bottomed. A MACD buy signal was recorded on Friday. A word of caution! Seasonal influences currently are random.
41 Charts Analysed on Don Vialoux’s Tuesday Morning comment HERE.
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. Don earned his Chartered Market Technician (CMT) designation from the Market Technician Association in 1995. His CMT paper entitled “Seasonality in Canadian Equity Markets” was published in the Spring-Summer 1996 edition of the MTA Journal. Don also has extensive experience with Exchange Traded Funds (also know as Index Participation Units) as well as conservative option strategies. In 1990 he wrote a report that was released in the International Federation of Technical Analyst Journal entitled “Profiting from a Combination of Technical and Fundamental Analysis”. The report introduced ” The Eight Phases of the Stock Market Cycle”, an investment concept that continues to identify profitable entry and exit points for North American equity markets. He is currently a member of the Toronto Society of Fundamental Analyst’s Derivatives Committee. 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.