by Don Vialoux, TechTalk
Upcoming US Events for Today:
- The Employment Situation Report for November will be released at 8:30am. The markets expects Non-Farm Payrolls to increase by 80,000, while Private Payrolls are expected to grow by 95,000. The Unemployment Rate is expected to tick higher from 7.9% to 8.0% previous.
- Consumer Sentiment for December will be released at 9:55am. The market expects 83.0 versus 82.7 previous.
- Consumer Credit for October will be released at 3:00pm. The market expects an increase of $10.0B versus an increase of $11.4B previous.
Upcoming International Events for Today:
- Great Britain Industrial Production for October will be released at 4:30am EST. The market expects a year-over-year decline of 0.5% versus a decline of 2.6% previous.
- German Industrial Production for October will be released at 6:00am EST. The market expects a year-over-year decline of 2.5% versus a decline of 1.2% previous.
- The Canadian Labour Force Survey for November will be released at 8:30am EST. The market expects an increase of 8,000 versus and increase of 1,800 previous. The Unemployment Rate is expected to hold steady at 7.4%.
The Markets
Markets pushed higher on Thursday, fueled by gains out of the Technology sector as Apple rebounded from Wednesday’s deep plunge. Shares of the tech titan ended higher by over 1.5%, recovering from a 3.6% loss at the open. The stock declined precisely to its long-term rising trendline prior to rebounding in what appears to be another reversal day. Recall that Apple had a significant reversal day mid-November, hitting a low of $505 before rebounding in the days to follow to close to $600. Should yesterday’s lows hold as support, the stock should continue along a gaining path. A break of trend could escalate selling pressures.
Today is jobs day with November’s Employment Situation report expected to dictate the market activity. A lot of cautious views have been released pertaining to this report as a result of the potential impacts of Hurricane Sandy. On Wednesday, ADP noted that 118,000 jobs were created last month, slightly below estimates. Friday’s report is expected to show that private payrolls grew by a less stellar 95,000 positions with the total payroll gain, including government positions, predicted to reveal 80,000. ADP recently revised their seasonal adjustment methodology to more closely align with the government report that is released two days later, so the number crunchers will be watching closely to see if a significant disconnect, as is currently being expected, still exits.
Despite two back-to-back winning sessions for the S&P 500, the large cap index continues to show resistance at its 50-day moving average. Friday’s activity following the employment report will be key to either cement this level as significant resistance or confirm a more significant bullish move.
Meanwhile, European and Japanese benchmarks are breaking out above recent ranges. The German DAX and French CAC charted new 52-week highs yesterday, while the Nikkei charted new multi-month highs. The hindrance of the fiscal cliff on equity markets in the US is becoming obvious, but news pertaining to the situation, either positive or negative, should be received fairly shortly as policy makers in Washington are expected to go on holidays in 7 days.
The push higher in equities on Thursday came despite a significant surge in the US Dollar index, which gained on the back of a weak Euro following a reduced Euro-Zone economic outlook for 2013 from ECB President Mario Draghi. A possible bear flag pattern for the US Dollar index could see lower values ahead should the currency index break below a rising trend channel with support presently indicated at 79.50. Conversely, the Euro is testing resistance at 131, a level which if broken could see the resumption of the intermediate positive trend. The activity in the currencies will be key for risk sentiment in equity and commodity markets moving forward; a negative trending dollar has generally correlated with equity and commodity market strength, and vice versa. Seasonal tendencies for the US Dollar index remain firmly negative during the month of December.
Sentiment on Thursday, as gauged by the put-call ratio, ended marginally bullish at 0.92.
S&P 500 Index
Chart Courtesy of StockCharts.com
TSE Composite
Chart Courtesy of StockCharts.com
Horizons Seasonal Rotation ETF (TSX:HAC)
- Closing Market Value: $12.53 (down 0.16%)
- Closing NAV/Unit: $12.54 (up 0.07%)
Performance*
| 2012 Year-to-Date | Since Inception (Nov 19, 2009) | |
| HAC.TO | 2.96% | 25.4% |
* performance calculated on Closing NAV/Unit as provided by custodian
Click Here to learn more about the proprietary, seasonal rotation investment strategy developed by research analysts Don Vialoux, Brooke Thackray, and Jon Vialoux.
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