U.S. Sector Topping Phase

These are some extracts from a recent Getting Technical Market letter

“The Equity Markets: Now Range Bound”

“We are now cautions through year-end due to investor confusion over the U.S. fiscal issues. There is also a big contrarian concern due to a broad based belief among too many investors that a period of seasonal strength in the equity markets runs from November through March. Another major concern is the topping momentum phase of many of the Canadian and U.S. sectors – see the sector tables on page 2 and page 3

The TSX Composite could be range bound through Q1 2013.

See chart top left.

Risk Avoiders - LONG TERM new for Q4 of 2012 – we see the U.S. sectors sorted by monthly change at Oct 31, 2012. The expansion of the Stationary Topping sectors suggests a topping phase in the broader indices through Q1 2013.”

Most of these comments are from different pages and so are out of context – but I am sure you get the message

More Useless ETFs

According to SHIRLEY WON INVESTMENT FUNDS REPORTER — The Globe and Mail Last updated Friday, Sep. 14 2012, a record number of ETFs are shutting down

I quote - Some delisted ETFs came from providers “throwing spaghetti on the wall to see what is going to stick,” said John Gabriel, an ETF strategist with Morningstar Inc. “They learned the hard way that it is not so easy.”

I guess she was correct, in a press release TORONTO, Nov. 16, 2012 /CNW/ - Horizons Exchange Traded Funds Inc. ("Horizons ETFs") and its affiliate Horizons ETFs Management (Canada) Inc. (the "Manager") announced today that they will be terminating certain exchange traded funds ("ETFs") effective at the close of business on Friday, January 18, 2013 (the "Termination Date").  The ETFs being terminated (collectively, the "Terminated ETFs") are as follows:

ETF                                                                                                     Ticker

Horizons BetaPro S&P/TSX Capped Financials TM Inverse ETF     HIF

Horizons BetaPro S&P/TSX Capped Energy TM Inverse ETF          HIE

Horizons BetaPro S&P/TSX Global Gold TM Inverse ETF                HIG

Horizons COMEX® Copper ETF                                                        HUK

It was only a week weeks ago these classics were closed

Horizons BetaPro NYMEX® Natural Gas Inverse ETF                      HIN

Horizons BetaPro NYMEX® Crude Oil Inverse ETF                          HIO

Horizons BetaPro NYMEX® Long Natural Gas/Short Crude Oil Spread       HNO

Horizons BetaPro NYMEX® Long Crude Oil/Short Natural Gas Spread       HON

Here are a few other gems that should be put down – they can’t be charted for lack of volume due to zero investor interest – the volume to-day on each was ZERO

Horizons Active North American Growth                                HAW

Horizons S&P/TSX 60 130/30 Index                                       HAH

Horizons Active North American Value                                   HAV

Horizons Universa Canadian Black Swan                              HUT

Horizons BetaPro S&P/TSX Capped Energy Inverse            HIE

Here is clip from the Horizon’s web site – I had to read it twice and I quote “Canadian Dollar Exposed Assets” and “Horizons Seasonal Rotation ETF (HAC :TSX) Portfolio Exposure as of October 31st, 2012”

Name                                                                       Portfolio weight

ZEB BMO S&P/TSX Equal Weight Banks Index (ZEB)          2.0%

BNS Bank of Nova Scotia (BNS)                                            2.0%

BMO Bank of Montreal (BMO)                                                2.0%

TD Toronto-Dominion Bank/The (TD)                                    2.0%

Canadian Imperial Bank of Commerce (CM)                         1.0%

RY Royal Bank of Canada (RY)                                             1.0%

Can it be the fund acquired the BMO S&P/TSX Equal Weight Banks Index ETF (ZEB) which holds an equal weight in six Canadian banks also bought directly five of the same holdings?

Is that not like getting married twice to the same person?

Last but not least is the Horizons BetaPro S&P 500 VIX Short-Term Futures Bull Plus ETF (HVU) which according to the TSX just posted a new 52-week low of $5.36 down from a 52-week high of $355.80.

According to Horizons Exchange Traded Funds the “Horizons BetaPro S&P 500 VIX Short-Term Futures™ Bull Plus ETF (the “HBP Double VIX ETF”) is designed to provide daily investment results, before fees, expenses, distributions, brokerage commissions and other transaction costs, that endeavour to correspond to twice the daily performance of the S&P 500 VIX Short-Term Futures Index™. Any U.S. dollar gains or losses as a result of the HBP Double VIX ETF’s investment will be hedged back to the Canadian dollar to the best of its ability”

Our chart displays the success of this “thing” or whatever you wish to call it. 

Lumber is the next big thing

Sometimes the next big thing doesn’t work out. Nobody made a buck on green energy such as solar, uranium and turbines. Food is now disappointing along with the transportation and infrastructure plays generating nixed returns.

The lumber stocks are on fire (bad joke)

Plum Creek Timber (PCL)  

Canfor Corporation (CFP)

Norbord Inc.(NBD)

Acadian Timber Corp (ADN)

West Fraser Timber Co. Ltd. (WFT)

Weyerhaeuser Co. (WY)

The chart of Norbord is typical of the group. Norbord almost went bust in 2008 and is just beginning a 2nd up leg advance – or an Elliot Wave (3) advance. Anyway a picture is worth a thousand words.