Market musings

August 27, 20186 Comments

Sometimes, we have to just “muse” on the markets rather than make prognostications. Particularly, if things are at an inflection point. I feel that both the US and Canadian markets may be at such a point right now. The US and Canadian indices are attempting to bust their highs – although not in synchronicity. Will this be a spike, or is this the “real thing”? Ponder on that question today, as I present you with a few of my musings! No answers here, just insight. I’d love to hear your two cents worth on where things might go  – post a response below.

 

SPX

 

The S&P500 is finally through its January high. My rule of thumb is to wait for a 3-bar break before getting too excited. Three bars on a weekly chart is best—and we are in “week one” of the break. Two more to go. Meanwhile, note the two panes directly below the price chart. They hold the stochastics and RSI momentum studies. Both are just now moving into the overbought zones. So, while the breakout is encouraging – it may be short lived.

However, the key indications for trend –that is, the 200 day SMA, the higher high on the weekly chart and the upsloping Accumulation/ distribution line (bottom pane) indicate that trend and moneyflow is bullish. Will the market ignore its overbought conditions and continue to mark higher? Hmmmmmmmmm….

 

NYSE Average

Meanwhile, back at the ranch….the broader based NYSE composite is NOT making new highs. A narrow market, indeed. Does this indicate that he breakout by the S&P 500 is false? Not necessarily. If the market leaders (FANG’s, tech…you know the drill) continue to perform, the uneven distribution, as reflected in the more heavily front loaded S&P500, will continue. If the leaders fail, then…whole new ballgame. Hmmmmmmmm……

 

TSX

The TSX made a new high in June. Since then, its followed the traditional seasonal pattern of underperformance. Underneath the price chart, we have:

First pane (stochastics)—rounding over

Next pane down (RSI) –moving down

Middle pane (Relative performance vs. SPX)—the dogs breakfast

Second from bottom (MACD)—possibly about to hook down

Bottom pane—moneyflow—long termed positive trend.

The TSX continues to underperform the US. Don’t blame it on oil – its holding out just fine, although the producers are not reaping that upside so much.

Perhaps the inevitable finalization of signing the trade agreements by the USA with virtually every major world trading partner EXCEPT Canada will force our side to finally negotiate around the supply-management issues.  These are the key issues in Canada/US trade disputes. That agreement, or lack thereof, could push the TSX sharply in either direction –depending on the outcome. Meanwhile, the TSX looks to be sideways for the time being. Until something interesting happens. Hmmmmmmm…..

 

Full BNN / Bloomberg MarketCall episode with Keith Richards from Friday

Click here to watch the show.

 

ValueTrend wins Canadian Excellence Award for second time

 

We are honored to have been selected for the Canadian Small Business Excellence Award in 2019, having also been chosen in 2017. Thank You for to our clients and my blog followers for your support!

 

Excellence Canada announces the
2018-19 Canadian Business Excellence Award for Private Businesses Recipients

TORONTO, ON – Excellence Canada is pleased to announce that, at the third annual Canadian Business Excellence Awards for Private Businesses, 37 Canadian organizations will be receiving the Canadian Businesses Excellence Awards for clearly demonstrating a strategic approach to successfully improving business performance and achieving goals, with a focus on the following three key performance areas: Delighted Customers; Engaged Employees; and Innovation.

 

Excellence Canada’s mission is to help improve organizational performance and recognize excellence, with a vision to promote and enable excellence in every organization in Canada.  Excellence Canada recognizes organizations that continually improve performance; are innovative, competitive, and customer focused; are healthy, inclusive, and sustainable; and that are economically, socially, and environmentally responsible.

 

The Canadian Business Excellence Awards is an annual awards program that recognizes outstanding achievements by organizations in the private sector, from coast-to-coast across Canada.

We are pleased to announce the recipients of the 2018-19 Canadian Business Excellence Awards for Private Businesses:

 

AppCentrica, Inc. – Toronto, ON

Arrow Engineering Inc. – Edmonton, AB

Avenue Road Arts School – Toronto, ON

Beauleigh Retail Leasing Consultants Inc. – Mississauga, ON

BeaverTails Canada Inc. –  Montreal, QC

Blackstone Energy Services Toronto, ON

Brainworks Huntsville, ON

Candybox Marketing Inc. – Toronto, ON

Childventures Early Learning Academy – Burlington, ON

CIMA+ – Laval, QC

CoreHealth Technologies Inc. – Kelowna, BC

Cority Software Inc. Toronto, ON

Desired Smiles – Burlington, ON

Denesoline Corporation – Yellowknife, NT

Diff – Montreal, QC

DOCUdavit Solutions Inc. Toronto, ON

Fervent Events Inc. Toronto, ON

Giatec Scientific Inc. Ottawa, ON

Glutenull – Coquitlam, BC

Graham Muir Sales – Mississauga, ON

Integracare Inc. Toronto, ON

Interwork Technologies Inc. Toronto, ON

ISU Corp – Kitchener, ON

Overlap Associates – Kitchener, ON

Procurify – Vancouver, BC

Quartet Service Inc. – Toronto, ON

Khanuja Dentistry – Brampton, ON

Riva CRM Integration – Edmonton, AB

Sourced Group Inc. Toronto, ON

Stanhope Simpson Insurance Limited – Halifax, NS

StoneShare Inc. Gatineau, QC

T&T Power Group Wellesley, ON

Three Point Turn Inc. Toronto, ON

Traction on Demand – Burnaby, BC

United Van Lines (Canada) Ltd. – Mississauga, ON

ValueTrend Wealth Management – Barrie, ON

Weston Forest – Mississauga, ON

 

6 Comments

    • Flags are continuation patterns–so they indicate the trend is still in place

      Reply
    • Statistically dangerous, anyway. Stats are stats–they are a probability, not an absolute. But for that reason, we hold some cash in the equity platform. Nothing may happen, but its always best to buckle up for insurance!

      Reply
    • Hi Art
      While I see the formation on the weekly chart you are looking at (assuming its the very big H&S with the bottom of the head in early 2016), I might differ in interpretation. Typically, a H&S (top or bottom) is considered a consolidation & reversal pattern that occurs AFTER a trend. So, if the market had been in a downtrend, and you see a bottom H&S – you can predict a move up – measured via neckline to head. The TSX had not been downtrending prior to that formation…it had and has been in a choppy uptrend (higher highs and lows on long termed monthly chart) since 2008.

      You could argue this point, and its really up to you to form your own interpretation…but I have found this to be true with most such reversal/consolidation patterns…H&S, Cup & Handle, Double bottom/top, etc. they all tend to take place, and offer the most reliable predictability when indicating a trend reversal.

      The exceptions are with triangles, which are consolidations, but not necessarily signalling an end to a trend. They tend to be predictive in direction or amplitude AFTER the breakout–you can trade in the direction of the breakout whether up or bottom – and are usually best to wait until such a breakout before making your move.
      If I may suggest – my book Sideways goes into all of this stuff. Hope that helps–Keith

      Reply

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