A Comment -- General Comments From an Expert (A Commentary)

Opinion on Canadian banks. Canadian banks are fine. Good dividends, reasonable valuations, well capitalized, earnings have grown rapidly. Only real issue is probably can't keep growth rate going. Growth rate in mortgages and consumer credit will be slower than historically. But it doesn't mean they're bad investments. Real estate valuations are reasonable, despite the big centres like Toronto and Vancouver.

Asset mix in a TFSA. Capital gains are the most useful tool in a TFSA. If you put 100% in equities, with a 5-year view or more, you'd do better than putting it in fixed income. Buy 2 or 3 stocks. Don't worry about the timing too much, as long as you can stay disciplined. Treat it as you would buying your house.

Strategy these days? If you're buying and selling day to day, you're going to get destroyed. The odds don't favour you over time. Take advantage of dips, buy quality companies, and don't get scared out of them.

Market Outlook Uber has gone public now and is trading without a hitch -- especially during the worst week in the market this year. Its market cap is already huge. For the market as a whole, trade fears with China have reemerged. The odds seem low that the trade delegation will have any major positive announcements this week. The markets appear to be taking it in stride, but we should expect to see some continued downward pressure. The US has a strong economy and the upper hand on China, he thinks. President Trump is also trying to pressure another rate cut.

Uber IPO. Opened up, and then down on the day. Despite the tariffs increase overnight, shows resilience of this market, as there was a massive reversal on the day. "Sell in May, go away" may not play out after all.

Outlook for the Dow? Tested upper limit 3 times. Triple top. Significant level of resistance. We have a lower low, but not a higher high. Could reignite further selling pressure. Until we break out higher or lower, we're in a consolidation phase.

MACD explanation. Stands for Moving Average Convergence Divergence. A momentum indicator. Want to see the convergence do better on different time scales. When momentum is trending higher, a crossover is a trigger to buy, a crossover below is a trigger to sell. He looks for divergences to see if there's waning buying or selling demand for a stock. Momentum negatively diverging from price is typically a precursor to a downturn.

Market. He radically cut equities over the last week from 100% to 25%. The market does not do well for the next 6 months: 'sell in May and go away'. The down drafts this time of year tend to be longer and deeper. On the S&P we are trading today below the 50 day moving average. The market might be losing momentum.

Recommendation on an inverse ETF for oil and gas in the US. He does not know of one. You should be careful of inverse ETFs. Watch out for your time period. It is okay for a short period. He has no US recommendation.

Canadian Banks. They are an interesting play because they are in everyone's portfolios. They have not really done very well. They have petered out. They are not in their seasonal period. They are probably not the best place to be. If it break down there is further weakness.

Forestry Stocks. Seasonality is the same as home builders and banks. They broke down to a key level and then broke that recently. It has fallen off sharply. This is not a sector to get into.

Trump has strong support across the board in America; China doesn't play by the rules. He doesn't agree with Trump's style of negotiation, but at least he is calling China on that issue. The markets are spooked by an America-China trade deal not happening tomorrow. No question: tariffs will hit both sides, though there's almost no inflation. We have the lowest unemployment since 1969, which is remarkable, yet we have no inflation--and this confuses central bankers around the world. How? We don't know. This is the most important long-term factor on markets. China has a 6% growth rate, but productivity has been falling for 15 years, yet also has little inflation. Meanwhile, the US is running a high deficit and some day it'll have to be paid back. Down the road, a dramatic melt-up could happen.

Is there enough liquidity and volatility to trade option on leveraged U.S. ETFs? Would there be enough volatility to make day trades? Buy options on the volatility index instead. This index is six times more volatile than the S&P 500. He thinks (not sure) that there are options on a 2x volatility index in the U.S. which means 12x the leverage.