- Page 1/3
- Next Page
Markets. Historically, in the last 80 years during US presidential election years, markets have tended to peak right around the beginning of September and go in a corrective mode right through until usually around the end of October, prior to the actual election itself. Then you get a very strong upward move. In the last 50 years, rather than 80 years, market peaks in the middle of August and then moves lower until the end of October. When you have very close elections, like the current one, there tends to be a more prominent direction.
Stock has a tendency to bottom at around the end of July and tends to move higher into September at least. Also has a period of seasonal strength later in the year as well. Chart indicates the stock is finally showing signs of bottoming. Gold stocks are really oversold this year and are due for a bit of a move on the upside. Gold stocks have started to outperform gold itself.
Gold. How do you incorporate “policy action” into your technical analysis when it could clearly break down the charts before we even see it technically? He looks at technicals and seasonality but also he looks at fundamentals. Some of these that have impacted the sector would include earnings reports. 2nd quarter earnings reports for a lot of gold companies have been a disaster. However, once the earnings reports were finished at around the end of July, gold and gold stocks started to show some nice recovery. Also, more and more central banks have started to move into the gold area. China and India are obvious choices and Russia is another one. Technically, chart shows a flag formation. Gold bottomed mid-May and slowly but surely we are getting higher highs. Magic number is $1,642, which would be very bullish and if it breaks above this, he could see a technical target of over $1725 level.
Bank stocks have a very important role, usually right around the end of September when they move significantly higher right through until the end of December. Has a lot to do with expectation for good news to be released at report time, usually around the end of December. Caution: usually in the month of August and into early September bank stocks have a tendency to go down and actually underperform. He could see this one going down to the $50 level, which would be an opportunity to accumulate.
Chart shows a long-term upward trend from the middle of 2010. Recently there has been an accelerated move on a break above the consolidation pattern at around $43. As a rule of thumb, you can take the move that you had from early 2012 up to the $43 and look for as similar percentage move upwards to possibly $55 so it does have additional upside potential, but remember you also had a huge move already.
Now is a negative period of seasonal strength for stocks like this. Tend to be under a lot of pressure this time of year. Mining and metal stocks tend to move higher, normally from around the end of November right through until the end of May each year. Chart shows a very long downward trend from the beginning of 2011 with an accelerated downward trend in 2012. Watch the technical action for coal in Market Vectors Coal ETF (KOL-N). It has come down a long ways but hasn’t shown any signs of bottoming yet. Probably November will be a better time.
(A Top Pick Jun22/12. Down 1.86%.) (Actually bought this around July 23rd.) Gold stocks should now take off because of seasonal factors. Seasonality will last at least until the beginning of October. In order to go into a seasonal trade like this, it has to be outperforming the market and also has to move above its 20 day moving average, which it did at around the end of July. Will probably add to this on any kind of weakness. You could use the Canadian equivalent iShares S&P/TSX Global Gold (XGD-T). The whole sector looks interesting from the end of July until the end of September.
(A Top Pick Jun22/12. Up 0.33%.) Usually from the end of June until the end of August this has a period of seasonal strength. This year looked particularly interesting as gasoline prices were coming down at the end of June which meant more money for the consumer. Also the opportunity to see really good movies in the summertime attracted a lot of audience. However, gasoline prices this year at the end of June went way up. If you are in this, now is the time to look for better opportunities.
(A Top Pick Jun22/12. Up 13.11%.) Normally from the end of June until the end of August usually, this sector does very well. Then takes a break and goes higher until the end of the year. Works best in the summer time when grain prices are moving higher. Grain prices have had a huge run and are starting to roll over.
Loves to trade gold stocks as a seasonal trade, going in and out of them, especially this one which is a classic example. If you bought this and held it for a long time, you are not a happy camper. The key is to play the seasonal trade. This company recently had some internal changes so the 2nd quarter report basically had everything bad thrown into it. Now that all the bad is gone, look for some good. On a seasonal basis, it has been a good stock to buy late in July for a move right through until the end of September. This is now happening again. The 1st target is getting back to its breakdown point at about $38. If there is a real good move on gold, this could reach around $42 but he is not looking for this kind of a move.
This one has very strong seasonality, usually from October each year right through until as long as April. There is a fundamental reason to believe that this will work again this year. Steel prices have started to show increases indicating demand has started to recover. There will be an opportunity to buy the stock at lower prices.
Recently a number of US brokers have indicated that this has gone down too far and have started to add some value to it. Chart indicates early signs of bottoming but he would like to see a lot more. Hasn’t been around long enough for a seasonal study. If market conditions are weak between now and October, you may be able to Buy at lower than current prices. He prefers stocks that have well-defined values.
