Friday, September 14, 2012

Francis Horodelski is a bear

One of my favourite BNN personalities is Frances Horodelski who according to BNN has been following markets for over 30 years, including 25 years with two of Canada's largest investment dealers. Her career has spanned research, portfolio advice, investment banking and international strategy. She also holds the designation of Chartered Financial Analyst.

Anyway aside from all that I just like her common sense delivery – but I think the bearish guests have seduced her into the bearish camp. I do know Francis respects technical analysis and so I am posting two important charts that clearly deliver a bullish spin.

The first chart is the weekly iShares TLT which is a measure of fear – the higher the price, the greater the fear and so we need to see the TLT to roll over to confirm a shift to equities. Our chart displays a bearish rising wedge or diagonal triangle. The rising wedge is rare and very deadly – this is the only pattern that when identified I will sell into. 

The second chart needs little explanation – the NYSE advance / decline line which is a measure the breadth of a stock market advance or decline. The AD line tracks the net difference between advancing and declining issues. This study has been around for generations and like point & figure is ignored by the younger technical analysts who prefer the flashy MACD and Stochastic lines. However this little used study usually leads the price and so when the A/D line beaks to all time highs – I get impressed



Piazzi said...

bill, a single division of corp bonds to treasuries has been a good indicator of market appetite for or against risk for a long time ;-)

Piazzi said...

now, if rates are really, secularly on the rise

then, those life insurers who have just left the dog house will become very interesting, n'est pas?

dh12 said...

There is also a longer term wedge pattern in teh S&P 500 starting in 07/09/2011 so which triangle are we to believe that one or the TLT one. Both contradict each other said...

Hi Piazzi

It is for that reason I do like the lifeco's Bill C

Hi dh12

Good observation in wedges - but there is a difference between the TLT & the S&P500 - I should do a post on this - Bill C