Latest Stock Buy or Sell? Make More Informed Decisions!

Markets. The correction came earlier than expected and the worst is probably over. The lows on Canadian and US markets hit August 25. There is a perception that the month of September is a terrible month for equity markets, but that is probably more of a myth than anything else. The S&P 500 and the Dow, for the last 10 Septembers, have actually gone higher. TSE composite has gone up 6 of the last 10 periods. However, the caveat is that when the markets do well in September, they go way down. This year, we have hit the low and we are going to go through a volatile period of base building. 14 times, when the Fed as been about to increase interest rates for the 1^st time, the stock market has gone down. On average it has gone down 10%, and already this year on the S&P 500, it has gone down 12%, so we have already seen the correction prior to the 1^st increase in interest rates. We are going into a period of volatility and you can expect these big moves one way or the other, but ultimately when you get a test of the previous low, it is an opportunity to start buying.

Gas. Watch the gassy stocks, both Canada and the US, as they are starting to significantly outperform the market and we are just entering a period of seasonal strength. This normally bottoms right around the 1^st week of September and moves higher right through until the 3^rd week of December. Starting to look very interesting. (See Top Picks.)

This has been under a huge amount of downside pressure in the last little while. The chart shows it has recently been in a downward trend. The key is that seasonality tends to start moving higher around October and continues moving higher right through to the end of the year. Wait until about the middle of October, but between now and then, watch for any weakness as an opportunity to accumulate.

This has very, very strong seasonality. It tends to bottom around the middle to the end of October, and then tends to move higher. It doesn’t work all the time. This year the stock is starting to show early signs of support. This is probably reaching a very important low in the next 2-3 weeks, and that will be the opportunity to accumulate.

Oily stocks tend not to do too well this time of year. Their period of seasonal strength is actually from January right through until May. We are currently outside of the period of seasonal strength.

Lumber Stocks? These tend to bottom around the middle of October and then move up strongly, normally through to April of each year. Then from April to October they go strongly on the downside. These have, what he calls, double seasonality. They don’t just go up, they go up and down and up and down during both periods of seasonal strength.

This is a classic seasonal trade that happens most years. Historically, the sector does very well from around the middle of October right through until the beginning of January, except for a bit of a break in February, and then goes higher right through until April. First of all look at the technicals to see that they are starting to line up for a move for a seasonal trade. Technically, right now the stock is underperforming the market, which is not a good sign. It is also trading below its 20 day moving average. Short-term momentum indicators are also trending down.

REITs. These have a tendency to do very well in the summertime. This is because interest rates tend to move in their favour. Right now the sector is still in a downward trend, but there are early signs of bottoming here, which could mean that we might be going into a period of seasonal strength. He would like to see more evidence. Usually if you start to see interest rates move lower, that has a positive impact on the REIT sector. This year it is not acting like it normally does, so he would be very cautious right now.

Not sure of the seasonality on this, but technicals are starting to show some signs of bottoming. It is probably trading very close to its 20 day moving average. Strength, relative to the market, it is slightly positive. Indicators are starting to look okay, but they are mixed. Wait until you have more confirmation from the technical indicators.

Junior golds? Gold bullion actually bottomed around the middle of July, as you would expect for seasonal trade, and then would take you right through to the end of September. Gold stocks actually bottomed at the time as well, but recently they have been underperforming gold itself. He has become concerned that the seasonal trade for precious metals stocks in general is not working the way it normally does at this time of year. The end of the seasonal trade is right around October 1, so you are starting to run out of time, so it is a question of when you sell these securities.

Silver? This has 2 periods of seasonal strength, one now until the end of September and then it comes back in January until February. Silver has been disappointing this year.

Copper? This has seasonality usually from around the middle of October right through until April of each year.

(A Top Pick July 23/15. Up 0.11%.) The silver trade this year has come into a period of seasonal strength from around the beginning of July and goes through to the end of September. This year the trade has not worked that well.

(A Top Pick July 23/15. Down 3.81%.) This has been a disappointment, because typically we get seasonal strength for the silver equities during this time. If there is any kind of strength between now and the end of the month, that will be an opportunity to take your position off.

(A Top Pick July 23/15. Down 7.77%.) The seasonality trade in the fertilizer sector is still positive. During the last week or so it has started showing signs of outperforming the market. If you own, continue to Hold, and in fact you can add to your position in the next 6 weeks or so. (See Top Picks.)