BMO EQUAL WEIGHT BANKS INDEX ETF (ZEB.TO)

(Top Pick Oct 5/12, Up 7.83%) Loves the formation. He sold about 2 or 3 weeks ago. Sees some weakness in the banks right now – just starting to happen.

This is equal weight banks, which is really the health of the financial services sector, specifically banks. Cdn banks remain sound.

Canadian Banks: We are at a 52 week high for a lot of the banks so it is not a great time to put new money in. But if we grind higher then the banks will participate. If you are interested in protecting downside and there is a risk of downside in the next two months, then wait for the correction to get in.

Is this a good ETF to play banks or would you recommend a single bank? He has owned this one in the past but is now moving away from Canadian banks. If you want to be in Canadian banks, there is nothing wrong with that and you might consider iShares S&P/TSX Capped Financials (XFN-T). Individually, the 2 banks that you would want to own are Bank of Nova Scotia (BNS-T) and TD (TD-T) because they have game plans.

(A Top Pick Oct 5/12. Up 1.92%.) Got sold out at $18.10. Banks tend to peak out in the 4^th quarter of earnings season and then there tends to be a bit of a weakness into the new year.

Seasonality for banks is different in Canada than it is in the US. US banks year end is December 31 and ours is right now. From October 10 to December 31, on average, this has gone up about 5.5% about 86% of the time.

(Top Pick Nov 4/11, Up 13.56%) Still likes it but is transitioning to ZWB-T (covered call version) because he likes the income stream.

(A Top Pick Aug 17/12. Up 2.88%.) Banks in general had made a beautiful bottoming formation. He sees $18-$19. You are also earning almost a 3% dividend. Seasonality is good until around the end of the year.

Good time seasonably for the banks. Chart shows a good strong trend line but there is a little bit of noise at around $18. You’ll see a bit of consolidation around $18-$19 so start watching it at that time with $19 being a Sell trigger.

If there is a continual rally in a bull market then financials have to be one of the leaders. Also, you don’t want to be 100% invested in hard assets. Also, if the yields start to increase, that is beneficial to the banks.

(A Top Pick Sept 16/11. Up 10.67%.) Has all 6 banks in it. Lately he has been using the BMO Covered Call Cdn Banks (ZWB-T) which is the covered call on this ETF.

Risk with this is that you are highly concentrated in just the Canadian banks so he would caution not to make it your sole holding or even a primary holding. 25% is about as far as he would want to go because it is a sector play and not a broadly diversified play. It will be relatively stable.

(Past Pick Jun 29/12, Up 3.43%) He is a bit early getting into it but it is breaking out and you collect a dividend. Breaking seasonal rules because banks don’t usually break until October but he likes the breakout and the consolidation. Good dividend and will be worth much more by December.

(A Top Pick Sept 16/11. Up 6.94%.) Thinks it is a good time to be doing Covered Calls on some of the banks now.