Today, Larry Berman CFA, CMT, CTA and James Dutkiewicz commented about whether PKI-T, BAC-N, WFC-N, S-T, MEG-T, CSCGY-OTC, LYG-N, BBD.B-T, ZFH-T, IFP-T, XTR-T, BA-N, CM-T are stocks to buy or sell.
Over the last year we are seeing some distribution coming in. The highs this year are going to be tough to take out. In the next year or two they will come back to test it. It is a $120 to $140 trading range. If it goes below $120 it could go to $80. Internally the stock is starting to weaken relative to major stock indices. Tighten up stops.
Has a lot to do with what the Canadian dollar does. They have done well recently as the Canadian dollar has done well. The Canadian dollar has done the best of its rally for now. There is decent support around $14ish, but rallies will be limited. You are trading-range bound. He is a bit cautious about the prospects for the US housing market.
Markets. Rates: They are looking for lower for longer. The US economy should do better in the second half. Longer data rates should inch higher in the next year. As data from the markets comes in stronger, the Fed should be pushed a little. Jobs data coming out later this week should be mild. There should be no rate adjustment in Canada in the next while and the economy should lag the US in growth. Play a bit defensive, overweight good quality corporations. Get some US dollar exposure. Maintain a short duration portfolio.
Educational Segment. Does Rally Have More Room to Run? Divergence readings continue to build and sentiment indicators are not extremely bearish or bullish. Market breadth lets you see what’s going on under the market. Advance/decline lines show how many stocks go up vs. down. NYSE A/D line has made higher highs whereas the NASDAQ has not. Russell 2000 stocks corrected 10% this year and other small caps corrected up to 20%. The large cap market did not correct during this time. Last week the R2000 came very close to a high. The NASDAQ has not made a new high. History tells us that the Large Caps should follow suit, but he is only looking for a 5-10% correction. There is no reason for a bigger correction at this point.
Convertible Debentures. Tricky security. Make a lot of sense in theory. If the stock does really well you have upside participation. The strike price is usually 25-50% above the current price of the issue, and the paper is subordinate. You want to be careful about where you are in the capital structure.
Markets. Target Date funds in the US. You buy a retirement package that matures late in your life. Dropped in 2008 even though it was designed not to. They don’t eliminate volatility, but over the long run they do well. The growth of this sector is fantastic and they are now coming to ETFs. You can buy target date ETFs. 17 basis points cost. A robo-advisor is a program on the Internet that spits out a portfolio when you put in your risk tolerance, etc. There will be a correction at some point. This is when you need your advisor.