So, here we have it. It does appear that the beginning of the stock market correction (that I began calling for last week) may have arrived. I continue to believe that we will see the S&P hit levels of around 1360 – 1300 before the end of October. I’m sure there will be lots of up/down gyration to enhance the fun in between. The TSX may display high comparative strength vs. U.S. markets due to the gold and energy weightings in that index. But, it will nevertheless likely experience some pain over the coming weeks. I covered this on BNN on Thursday morning.
While I continue to hold cash, gold, energy and low-beta stocks as suggested last week, I’d also like you to see the chart of the TLT (iShares US long treasury). In a flight to safety, money may rotate out of stocks and back into bonds. The chart shows a classic bounce off of support (old resistance). TLT should be bought as close to the low-$120’s as possible. Resistance comes in at $130. I am not in this position right now, but may initiate a position shortly for my model equity portfolio run on behalf of my clients.
No blog will be posted next week due to holidays, but I will start September off with a new initiative for this blogspace. I plan to write 2 blogs a week starting in September, vs. the current weekly entry. I will likely focus one entry on the macro picture (broad NA markets), and one on sectors. I’d encourage you to post comments with sectors that you’d like covered – I’m trying to keep to interesting looking charts, so if something stands out, I will cover it. Further, I will continue to post on the broader trades I am examining or have entered for the models I run. As always, I continue to look for your feedback and comments on my analysis. Back in a week!