by Don Vialoux, EquityClock.com
Pre-opening Comments for Tuesday November 25th
U.S. equity index futures were higher this morning. S&P 500 futures were up 4 points in pre-opening trade.
Index futures moved higher following release of the second estimate of third quarter real GDP. Consensus was growth at a 3.3% rate versus the first estimate of 3.5%. Actual was growth at a 3.9% rate.
The Canadian Dollar was unchanged following release of Canadian September Retail Sales. Consensus was an increase of 0.5% versus a decline of 0.3% in August. Actual was an increase of 0.8%.
General Electric added $0.05 to $27.05 after RBC Capital initiated coverage with an Outperform rating. Target is $30.
MMM (MMM $159.88) is expected to open lower after RBC initiated coverage with an Underperform rating. Target is $154.
TJX added $0.89 to $64.40 after JP Morgan upgraded the stock from Neutral to Overweight. Target is $75.
United Technologies gained $0.95 to $64.40 after Wells Fargo upgraded the stock from Market Perform to Outperform.
Netflix eased $3.02 to$353.45 after Stifel Nicolaus downgraded the stock from Buy to Hold.
EquityClock’s Daily Market Comment
Following is a link:
http://www.equityclock.com/2014/11/24/stock-market-outlook-for-november-25-2014/
Note comments on the Russell 2000 Index and Canadian banks
Interesting Chart
European equity markets and related ETFs continue to show improving technical profiles.
StockTwit Released Yesterday @equityclock
Technical action by S&P 500 stocks to 10:15 AM: Bullish. Breakouts: $BWA, $URBN, $VNO, $WFC, $WY, $CELG, $TMO, $NVDA. Breakdowns: Nil.
Technical Action by Individual Equities Yesterday
After 10:15 AM, another six S&P 500 stocks broke resistance: Gannett, Scripps Network, CBRE Group, Applied Materials, Juniper, Avery Dennison. No S&P 500 stocks broke support.
Tech Talk/Horizons ETFs Market Sector Technical Scorecard
Released early yesterday. Following is a link:
Adrienne Toghraie’s “Trader’s Coach” Column
Editor’s Note: Please note the invitation at the end of this report
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The Miracle Trader
By Adrienne Toghraie, Trader’s Success Coach
When people purchase a lottery ticket they believe there is a chance of winning a huge amount of money. Over the years I have found the same thing to be true about many traders believing that they will find the Holy Grail of Trading. I believe that it is important to understand the reality of what the odds are for making a killing in the markets. And, I also believe that focusing on those odds can limit success.
Beliefs, whether realistic or not can be useful to our lives:
· It is an advantage to children to believe that the Tooth Fairy exists because they are more likely to get a dollar under their pillow when they let their belief be known
· It is an advantage to retailers to believe that Santa Claus is alive and well during Christmas if they expect to make 30 – 50% of their profit during that time of year
· Traders who allow for miracles or believe that they can create and follow the optimal trading system for themselves are more likely to be one of the few that do
In my twenty-year history coaching traders I have been fortunate to work with several traders that defy the odds and create what looks like a miracle in their profits. These miracle traders come from various backgrounds, which many would think would not be the foundation necessary for this level of success.
· A gardener’s son who only had a high school education
· The son of a factory worker who became an institutional trader
· A self-educated man who learned trading on his father’s farm
· The son of a poor immigrant who worked in his family business from the age of five
· And yes, there were those who were born with a golden spoon in their mouth
I ask each trader in my seminars based upon their testing, what percentage of profits should they expect to receive if they followed their rules. In one of my groups the percentages expected ranged from 100 to 300 percent. When you stop laughing, I want to report that one of the participants is now earning over 100% on his trading capital.
Here is some of the background of this trader who we will call Brett.
· His parents demonstrated a strong work ethic and believed that education was the path to a good life
· He was a school leader, a sportsman and a high achiever in the corporate world
· He came into trading after having a substantial amount of net worth
· And most important, he believed that if others could create miraculous results, there was no reason that he should not be able to get just as good or better results if he did all the right things
While Brett’s background sounds like he had the winning formula for success, it was not without its challenges:
· He had polio when he was a child
· His parents lost all of their possessions from a hurricane
· When he was a teenager, he lost his twin sister to a car crash
While these are tragic events, there are some issues that I cannot share that were even more traumatic in his life.
When Brett came to me, he was already a successful trader by my standards bringing in over 35% profit on his trading capital. For him it was not about the money, it was about living up to the high standard that he expected from himself. Six months after I worked with him privately and attended the seminar, he reported to me that his profits were more than 100% since I saw him last.
There are many reasons why someone like Brett defies the odds. One that stands out to me to be true for not only him, but also others who reach this caliber is True Grit.
True Grit
This is the ability to overcome adversity and come out of it stronger, wiser and more determined. It is also the willingness to commit to whatever it will take.
Conclusion
You can believe in the odds and you can believe in miracles. The wonderful thing is that it is your choice.
Adrienne’s Free Webinars
Join Adrienne on Tuesday, November 25th at 4:30 pm ET
Evening with Adrienne – an opportunity to ask questions on the discipline of trading
Email Adrienne@TradingOnTarget.com to register
Visit www.TradingOnTarget.com
INVESTMENT COMMENTARY
Tuesday, November 25, 2014
If you like to receive our bi-monthly newsletter or know more about our model portfolios and investment philosophy and what areas we are invested in now for clients please complete the form at: http://www.castlemoore.com/investorcentre/signup.php
TOP ASSET 5 CLASSES, SECTORS AND COUNTRY HEAT MAPPING
Comments:
This being an inter-month report there is no change in the monthly rankings. We will have that for readers next week upon the close of the month. In the weekly data for Asset Classes the top ranking remain the same. Just below what’s shown here gold bullion moved up from 10th into 7th place.
In the TSX the top three remained the same, but income trusts and healthcare fell out, replaced by utilities and consumer discretionary. When mentioning healthcare one should always be reminded that it only has a few constituents, and thus, susceptible to big swings. While it’s usually Valeant that wags the dog, this past few weeks its been Extendicare dropping from the $8.00 range to the high $6.00’s. There is no ETF for the sector – go figure.
In the S&P the top 5 continued to be the top 5 with only their ordering changing; utilities moved to first and biotech to second.
The same persistence is seen in the country rankings. The top three are the same; India and Hong Kong swapped places
CHARTS of the WEEK
SHANGHAI
The Shanghai market has been in a downtrend for several years, something counterintuitive considering the global weight the Chinese economy carries now. At present the market is slightly over-bought though it has passed two year resistance. We currently own this market on one portfolio and expect to expand it to more.
TSX Composite Index
The TSX bounced off of 2011 support. Acceleration in the TSX will be significantly impacted by the direction of the USD as commodities have become cheaper due to the strength of the greenback. An early notice for us will be seen in the weekly heat-mapping tables above.
S&P 500 Index
At present there is no pending catalyst that would indicate any trend change. As Don notes here in these pages of late, the US market is very overbought short-term. However, securities can work off such a condition through price or time, or a combination of both. Any weakness looks to be bound by 1800 on the downside.
US Dollar
As mentioned above the USD has a great impact on the TSX and resources in particular. The dollar is now meeting resistance (weekly) between 88 and 92 on the DXY. While not as extreme, the monthly chart shows an overbought condition as well. That said CastleMoore has adapted its model decisions over the last two years to reduce the weighting overbought or oversold conditions have on security selection as such conditions may remain for very, very long periods.
George Weston
George Weston, a core holding in the FOCUS portfolios, has recently broken out of a 4½ year cup and handle pattern. Expectations are for much higher prices. Weston’s has been a consistent top pick of Portfolio Manager, Robert “Hap” Sneddon, on BNN”s Market Call. We expect any weakness to be bought.
US Consumer Staples
This shorter term look at the US consumer staples sector is very similar to Weston’s above. Near term is it slightly overbought, but the sector is inherently strong, something that does not square with substantial pro-cyclical move being just around the corner. In addition to this sector ETF in Focus portfolios, we also hold Wal-Mart, Altria and P&G.
Fortis Inc.
Fortis (a client holding across several portfolios) has moved strongly out of a multi-year base and is currently overbought. Expectations are that it will come off in the near term. New clients coming to CastleMoore would not automatically purchase this or any other extended and profitable stock unless the risk to reward was below 6-7% though clients gains in Fortis are 29% in the last year.
If you like to receive our bi-monthly newsletter or know more about our model portfolios and investment philosophy and what areas we are invested in now for clients please complete the form at: http://www.castlemoore.com/investorcentre/signup.php
CastleMoore Inc. uses a proprietary Risk/Reward Matrix that places clients with minimum portfolios of $500,000 within one of 12 discretionary portfolios based on risk tolerance, investment objectives, income, net worth and investing experience. For more information on our methodology please contact us.
CastleMoore Inc.
Buy, Hold…and Know When to Sell
This commentary is not to be considered as offering investment advice on any particular security or market. Please consult a professional or if you invest on your own do your homework and get a good plan, before risking any of your hard earned money. The information provided in CastleMoore Investment Commentary or News, a publication for clients and friends of CastleMoore Inc., is intended to provide a broad look at investing wisdom, and in particular, investment methodologies or techniques. We avoid recommending specific securities due to the inherent risk any one security poses to ones’ overall investment success. Our advice to our clients is based on their risk tolerance, investment objectives, previous market experience, net worth and current income. Please contact CastleMoore Inc. if you require further clarification on this disclaimer.
Special Free Services available through www.equityclock.com
Equityclock.com is offering free access to a data base showing seasonal studies on individual stocks and sectors. The data base holds seasonality studies on over 1000 big and moderate cap securities and indices. To login, simply go to http://www.equityclock.com/charts/
Following is an example:
Monitored List of Technical/Seasonal Ideas
Green: Increased score
Red: Decreased score
A score of 1.5 or higher is needed to maintain a position
Disclaimer: Comments, charts and opinions offered in this report by www.timingthemarket.ca and www.equityclock.com are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed. Don and Jon Vialoux are Research Analysts with Horizons ETFs Management (Canada) Inc. All of the views expressed herein are the personal views of the authors and are not necessarily the views of Horizons ETFs Management (Canada) Inc., although any of the recommendations found herein may be reflected in positions or transactions in the various client portfolios managed by Horizons ETFs Management (Canada) Inc.
Individual equities mentioned in StockTwits are not held personally or in HAC.
Horizons Seasonal Rotation ETF HAC November 24th 2014
