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

It's excellent to see today's sharp move up. He was caught off-guard with how ferocious the sell-off was the last four months. There was a laundry list of worries. There needed to be a shake-out on valuation, like Netflix. This correction was simply a correction. We're still in a bull market and that was a blip. These bad bear market don't happen much, like 11 years ago. We'll see a little consolidation now, but we'll see a rip-roaring rally if US and China sign a trade deal. He's bullish and optimistic. He'd rather pick stocks than buy ETFs in this market.

If China and the US sign a trade agreement, what sectors here would benefit? Cars will skyrocket. Canadian financials, no.

The use of stop losses. They detatch you emotionally from a stock, so you don't cling to one. Stop losses are more art than science.

Sector allocation when the yield curve changes and the effect of U.S. interest rate moves on Canada. Canadians pay too much attention to American news so that we think that what happens there, happens here. No. Canada has its own problems, like high debt. Also, our economy relies so heavily on our banks. We see-saw between Western oil and Ontario manufacturing. Buy quality companies that buy a decent dividends, and be a contrarion.

Market. He is attending 'Inside ETFs', the largest ETF conference in the world. Active vs. passive is a trend being talked about there. The fastest growing area in the ETF space is the active management ETFs. China: We saw last week the market got up to important technical levels on the S&P. There were questionable comments about would we get a China deal done. The markets are hyper sensitive to this deal. Tax rates were high once upon a time for the wealthy. It did not have a detriment to the economy. We really need policies today to lift the bottom half. Taxing wealth is not the right solution, however.

ETF of ETFs. VCNS-T, VBAL-T, and VGRO-T are good examples. He would have a look at them.

Non-FANG tech stocks. IGV-A and FNX-N? There are lots of great tech ETFs. Those two are great but he prefers ITEQ-N. See his educational segment today.

Real Estate as an investment. He is not an expert but prices fluctuate for many reasons. Interest rates will stay low for decades to come. Regulations will curb a lot of the speculative nature of the market. He sees a cooling period. In a recession would see potentially a bigger hit.

TFSA Investment of a Tech Fund for new ventures. TDEC is a disruptive technologies ETF. There are a lot of great names and it has great long term potential.

Educational Segment. 5 ETFs he has discovered at his conference in Florida: DTEC is a disruptive technologies ETF. ULBR is a Long Libor ETN, playing the short term interest rate market. POCT uses a bunch of swaps and derivatives to track S&P on the upside but protects on the downside. PUTW is an S&P put write strategy and COMB is a broad commodity ETF.

Market. The gong show continues in Washington but the companies he owns are showing good earnings. FB-Q had a great turnaround. He is convinced that the market is still in good shape. China: Its growth is slowing but the standard of living is rising. New entrants into the labor force will be slowing due to the one child policy. The growth rate is slowing to a pace where the rest of world wishes they could get up to. The ugly correction in the fourth quarter last year was just fear. There was a lot of panic selling.

The U.S. Fed almost did this halt in interest rate hikes out of the blue. It was sudden. Also, quantitative easing is back on the table, perhaps for a long time. What on Earth has crossed Powell's desk to reverse course? Also, China-US trade concerns remain. Nobody can trust Washington or Beijing. In Canada, SNC Lavalin's problems have been coming for a while. When problems erupt, get out of the way of the stock. Who knows what'll happen to SNC? Whatever it is it will create a lot of bad feeling.

Will the S&P reach 2,000 as you predicted before? 2,000 is twice its book and a beautiful support level. The market is pricey, the FAANG's are overvalued and oil has troubles, he expects it to his this level in the coming year.

Market Outlook He thinks the US dollar is going to go a lot higher. The 2018 returns of Canadian investors benefited by about 7-8% he thinks, if you invested in US holdings. On US equities, he is cautious right now. After the big decline in December, he thinks it is a precursor of what is yet to come. 2019 will be a year of the Central Banks, who will have to maneuver to keep things going. This will make the equity market fraught with explosions and collapses. Last year the Trump tax incentive lead to massive earnings increases and he wonders how that can be followed.

Now is a logical point that the major markets should be pausing after pulling back from the TSX's and S&P's 200-day moving average yesterday. In a bull market trend, the 200-day moving average acts as a level of support where buyers take advantage of the dip and support the market for the next leg higher. We've been below the 200-day for over a month, so this level acts as resistance. Is this the final resistance? Who knows? We've had an impressive run-up since late-December of 16%. We've seen tremendous sentiment swings in the past year. December had the highest put-call ratio he's ever seen. Now, we're neutral with even split between the bulls and bears. The price of gold and REITs are still flying high. Trump won't meet China before the March 1 deadline. China wants something recipricol in this trade deal while Trump feels that the current trade situation favours China. He's not surprised to see caution among investors.