Technical Seasonalities - eResearch · combines technical, fundamental, and seasonality analysis....
Transcript of Technical Seasonalities - eResearch · combines technical, fundamental, and seasonality analysis....
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Technical Seasonalities
eResearch Corporation is pleased to provide technical opinions on the market from a
seasonality standpoint, courtesy of Equity Clock, a division of the Tech Talk Financial
Network.eResearch also posts, daily, the regular technical opinions provided by affiliate:
Tech Talk: TimingTheMarket.
Equity Clock (www.equityclock.com) is a market analysis company that provides,
completely FREE, technical, fundamental and seasonality analysis on a daily basis via
TimingTheMarkets.com and EquityClock.com. Equity Clock’s mission is to identify
periods of re-occurring strength among individual equities in the market using methodologies presented by some of the top analysts in the industry, including those of
Donald Vialoux, author of TimingTheMarkets.com.
Donald Vialoux, co-founder of Tech Talk, is a past president and director of the Canadian
Society of Technical Analysts (CSTA). He holds the designation of Chartered Market
Technician (CMT).
Mr. Vialoux has 45 years of experience in the investment industry, including prominent positions
held at Richardson Greenshields and RBC Investments. He is the author of a daily letter on
equity markets, which is available free at TimingTheMarket.ca.
Mr. Vialoux is also the author of a weekly column published at GlobeAndMail.com that
combines technical, fundamental, and seasonality analysis. He is a frequent presenter on
Business News Network (BNN) Television. Mr. Vialoux also offers advice to the Horizons
Seasonal Rotation ETF (HAC).
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Equity Clock: Seasonality Analysis July 27, 2015
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Stock Market Outlook for Monday, July 27, 2015
Headline: Gold ETF charting an outside reversal day as the period of seasonal strength for the miners gets set to begin.
The Markets
Stocks ended lower on Friday in a bout of profit taking following a lacklustre week for earnings in the US. According to FactSet, S&P 500 company earnings are set to post a year-over-year decline of 2.2% and revenue is set to decline 4.0% for the second
quarter, the first time companies in the large-cap benchmark have posted two consecutive quarters of year-over-year revenue declines since the height of the recession in 2009. Guidance has also been weak with 20 companies providing a warning
of things to come in the third quarter versus 7 that have issued positive guidance.
Overall, with stocks hovering around all-time highs and the earnings picture for the remainder of the year becoming clear, investors are now inclined to step back from the
equity market, a tendency that is typical in the last half of July. The S&P 500 Index is now testing minor support around 2075 with eyes set on more substantial support
around the July low at 2050. Below the July low, the technicals suggest a calculated move lower to around 1950. Seasonally, stocks remain in a period of seasonal weakness through to October.
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Typically, one of the beneficiaries of the seasonal weakness for stocks over the next nine weeks is Gold. Between July and October, as volatility rises in the equity market, the price of gold tends to gain, benefitting producers of the commodity; gold miners
seasonally gain between July 27th and October 1st, on average. The miners already appear to be responding, reversing heavy losses intraday on Friday to close positive on the session. The reversal followed an outside reversal session for the Gold ETF (GLD),
which opened below Thursday’s low and closed above Thursday’s high.
Outside reversal sessions typically mark a low point for an investment, indicating that selling pressures have been exhausted, leading to abrupt rebounds. Of course, this
reversal in the price of the gold miners is occurring on the eve of the average start of the period of seasonal strength for the industry, an appealing trigger to gain an entry into the seasonal trade.
Commodity prices, in general, will continue to face headwinds, particularly from a rising US Dollar, but, assuming currencies can find some stability around present levels, the seasonal gold trade does present appealing attributes at present levels. Both gold
bullion and gold miners charted a parabolic move lower over recent weeks, a technical setup that is typically unsustainable over the longer-term. A rebound to levels around major moving averages, particularly the 20 and 50-day, would be expected over the
near-term.
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On the economic front, a report on New Home Sales for June was released on Friday and the result was not encouraging. The headline print indicated that the seasonally adjusted annual rate of sales in June was 482,000, well below the consensus analyst
estimate of 550,000.
Stripping out seasonal adjustments, sales of new homes declined by 6.25%, exceeding the average decline for June of 2.9%. The year-to-date change hovers around 29%,
below the 41% average gain through the first half of the year. Sales of completed new homes were the largest drag, dipping into negative territory, in terms of the year-to-date change; over the past 50 years, completed new homes for June have averaged a
rise of 0.3%, however, declines have become commonplace for this summer month as sales peak into the middle of the year.
New home sales tend to decline through the back half of the year, a trend that seems
well underway. The price of the Dow Jones US Home Construction ETF (ITB) responded accordingly, declining over 2%, breaking support around the July lows.
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Put-Call Ratio Sentiment on Friday, as gauged by the put-call ratio, ended overly bearish at 1.41.
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Seasonal charts A. Sectors and Industries Entering Period of Seasonal Strength Today
^GOX Relative to the S&P 500
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B. Stocks Entering Period of Seasonal Strength Today
Netflix, Inc. (NASDAQ:NFLX) Seasonal Chart
Gilead Sciences, Inc. (NASDAQ:GILD) Seasonal Chart
Automatic Data Processing (NASDAQ:ADP) Seasonal Chart
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Denison Mines Corp. (TSE:DML) Seasonal Chart
Gold Fields Limited (ADR) (NYSE:GFI) Seasonal Chart
Tetra Tech, Inc. (NASDAQ:TTEK) Seasonal Chart
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IAMGOLD Corporation (TSE:IMG) Seasonal Chart
Eldorado Gold Corporation (TSE:ELD) Seasonal Chart
Autodesk, Inc. (NASDAQ:ADSK) Seasonal Chart
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C. Seasonal Charts of Companies Reporting Earnings Today
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S&P 500 Index
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TSE Composite
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Horizons Seasonal Rotation ETF (TSX: HAC) ● Closing Market Value: $16.40 (down 0.24%)
● Closing NAV/Unit: $16.40 (down 0.39%)
Performance*
2015
Year-to-Date
Since Inception
(Nov. 19, 2009)
HAC.TO 8.39% 64.0%
* performance calculated on Closing NAV/Unit as provided by custodian
Click Here to learn more about the proprietary, seasonal rotation investment strategy developed by research analysts Don Vialoux, Brooke Thackray, and Jon Vialoux.
Special Free Services Available through www.equityclock.com Equityclock.com is offering free access to a data base showing seasonal studies on individual stocks and sectors. The data base holds seasonality studies on over 1000 big
and moderate cap securities and indices. Notice that most of the seasonality charts have been updated recently.
To login, simply go to http://www.equityclock.com/charts/
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BW: Information on Equity Clock is provided on the ensuing page.
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Equity Clock is a division of the Tech Talk Financial Network, a market analysis
company that provides technical, fundamental, and seasonality analysis on a daily
basis via TimingTheMarkets.com and EquityClock.com.
Equity Clock’s mission is to identify periods of reoccurring strength among
individual equities in the market using methodologies presented by some of the top
analysts in the industry, including that of Don Vialoux, author of
TimingTheMarkets.com.
Feel free to use any of the content or seasonality studies (charts, timelines, or
otherwise) presented as long as a link-back to this site at EquityClock.com is
provided.
For further information on indicators used in reports presented on this site, please
visit our reference page.
Equity Clock Website:www.equityclock.com
Horizons AlphaPro Seasonal Rotation ETF (HAC)
Interested in the methodologies and strategies presented by Tech Talk? The
Horizons AlphaPro Seasonal Rotation ETF (trading on the Toronto Stock Exchange
under symbol HAC) uses a proprietary, seasonal rotation investment strategy
developed by research analysts Don Vialoux and Brooke Thackray. The strategy’s
core position consists of broad markets at seasonally favourable times of the year
and money market securities at seasonally unfavourable times of the year. The
strategy allocates from the core portfolio to various sectors when those sectors
offer favourable opportunities. Rotating a portfolio in anticipation of these
opportunities is designed to deliver returns that are superior to a static investment
in broad markets. As seasonal periods are never the same, this investment strategy
is supported by additional fundamental and technical analysis.
For more information, Click Here.
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