PDN vs TSX

For GT blog June 27, 2008

In search of the ultimate technical indicator.

Over the course of a year I may conduct several technical analysis presentations in addition to my teaching duties for the Canadian Securities Institute.

It is during these sessions I can always count on someone asking me for the perfect indicator - something that works all the time - a true "stealth" indicator. One would think with all that computing power along with cheap and plentiful data some mathematical genus would have invented the ultimate technical study.

I confess now to have the perfect indicator - I have had it for years – I now have under much personal anguish personal guilt decided to come clean and share it with you.

The perfect indicator is ---- The Straight Line

No computer needed - just a straight edge and a pencil


Trend Lines in Action

Cycles

A few comments on cycles

The long cycle dominates the shorter cycle - we prefer the intermediate or weekly cycle for our work - the cycle can generate about two trades per 12-month window

In most markets there is a high degree of sector cyclic commonality - but sometimes we will enter a period when there is cyclic opposition

Currently the gold complex is operating in cyclic opposition to the broader stock indices.



Cyclic Opposition in Action - Gold Stocks & the S&P500

Two Bellwethers

Are you feeling lost - adrift and without focus?

If so, that is because you are - lost, adrift and without focus.

Perhaps you look too much at "fundamentals". A fundamental analyst will study what a stock SHOULD be doing - and a technical analyst will study what a stock IS doing.

(wisdom thanks to Merv Burak)

We let the markets talk to us - a good example is the important chart below

There is a very important Elliott Wave component in play here - can you spot it?


Two Bellwethers - Important Test of Lows

June 16th

For GT blog June 16, 2008

Our weekly Sector Rotation tables display the TSX Industrials in the top FIVE ranked sectors over the past several weeks

Some components
Company Name Symbol
ACE Aviation Holdings Inc. ACE.B
Aecon Group Inc. ARE
BFI Canada Income Fund BFC.UN
Bombardier Inc. BBD.B
CAE Inc. CAE
Canadian National Railway Co CNR
Canadian Pacific Railway Ltd CP
Finning International Inc. FTT
Jazz Air Income Fund JAZ.UN
Newalta Income Fund NAL.UN
Russel Metals Inc. RUS
SNC-Lavalin Group Inc. SNC
Stantec Inc. STN
Superior Plus Income Fund SPF.UN
Toromont Industries Ltd. TIH
Transat A.T. Inc. TRZ.B
Transcontinental Inc. TCL.A
TransForce Inc. TFI
WestJet Airlines Ltd. WJA
Westshore Terminals WTE.UN

Nortel

For GT blog June 11, 2008

This is a test for your advisor

A weak advisor will always recommend stocks that we all love to own.

So it is easy to pick the phone and say, "Mr. client I suggest that we buy some EnCana."

An easy sale because EnCana is now the biggest and greatest company ever in the history of Canadian investing

A strong advisor will suggest to buy the shares of a company that is hated and is thought to be owned by "uninformed" investors.

Nortel is one of the most hated stocks in Canada (well maybe Air Canada)



Be brave - Be a somebody

A New Idea

Sometimes an astute investor will accumulate stocks others love to hate

That is never easy - anyone can say I love EnCana the greatest Canadian stock of all time but if you say you just bought Air Canada - you will be scorned and not allowed onto some golf courses.

Your own dog may bite you

Some fundamentals for those CFA's out there - people have to use aircraft if they wish to fly.

OK now for the technical picture
Elliott Wave suggests that if the price stays above a prior low and the news and fundamentals are worse we have divergence between price and sentiment - a bullish event. Not the current price is still above the early 2008 low in spite of the current booming energy costs

Be brave - Be a somebody

Some Gold

For GT blog June 02, 2008

We are not Gold Bugs

The problem with gold bugs is their anger and nastiness to those who dare disagree with them

We think that gold stocks are excellent trading vehicles but for the most part crappy investments

Now for those of you who feel compelled to buy a gold stock we can suggest two names

Both names below have just completed a long term bear - mid 2006 to date and are now just signalling a new bull cycle - the leader is Eldorado (for the bold) and the laggard Gammon (for the shy).

The Gold Stock Selections - a leader and a laggard