Red Hot Agriculture & The Bottom Line

Posted by Don Valiloux Interviewed by Michael Campbell

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The Agriculture ETF gained $4.13 (9.33%) last weekThe fertilizer ETF gained $1.04 (8.43%). Short term momentum indicators are trending higher. ‘Tis the season for the sector and the subsector to move higher!

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Agriculture seasonality Fertilizer Seasonality
More Seasonality Charts HERE – Market sector & Indices HERE
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The Bottom Line

Technical, fundamental and seasonal influences point to another volatile period for equity markets around the world this week. Economically sensitive sectors are following their seasonal patterns. However, most currently are short term overbought after huge moves since October 4th Preferred strategy is to accumulate economically sensitive equities and related ETFs on short term weakness, particularly if they benefit from favourable seasonal influences.

(Ed Note: This article will be updated later today with Don’s comments to Michael Campbell this weekend on Money Talks when the transcript comes in.)

Brooke Thackray, is Don’s subadvisor for the Horizons AlphaPro Seasonal Rotation ETF HAC.TO which is up 23% since inception 19/11/2009 and 12% in the past 12 months to 14/10/2011. You can sign up for Brooke Thackray’s Free Monthly Thackray Market Letter HERE

The TSX Composite Index gained 493.37 points (4.26%) last week on declining volume. Intermediate trend is down. Support is at 10,848.19. Resistance is at 12,798.53. The Index trades below its 50 and 200 day moving averages. Short term momentum indicators are trending higher. Stochastics already are overbought, but have yet to show signs of peaking. Strength relative to the S&P 500 Index remains negative.

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The U.S.Dollar Index fell 2.11 last week. The Index dropped to the top of a previous trading range where support is expected to emerge. Its 50 and 200 day moving averages near 76.00 also are likely support levels. Short term momentum indicators are trending down. Stochastics already are oversold, but have yet to show signs of bottoming.

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Gold gained another $38.20 U.S. per ounce (2.35%) last week on weakness in the U.S.Dollar. Short term momentum indicators continue to trend higher. Stochastics already are overbought, but have yet to show signs of peaking. Support is at 1,535.00. Resistance is at its all-time high at 1,923.70. Seasonal influences turn positive once again near the end of October

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Don’s Monday Report has 45+ charts analysed plus he addresses Macro Issues, Third Quarter Earnings Reports, Economic news that could help the markets, Technical signs in the Long Bond Market, Seasonal Influences for a wide variety of sectors, the Vix dropping below key support and Short Term Momentum Indicators. Just go to Don’s Timingthemarket.ca and scroll down.

Don Vialoux and his co-subadvisors Brooke Thackray & Jon Vialoux run the Seasonal Rotation ETF HAC.TO

Don Vialoux

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.