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Latest Stock Buy or Sell?

Today, Larry Berman CFA, CMT, CTA commented about whether ITEQ-US, ENF-T, ARX-T, FTN-T, ZWU-T, ZDM-T, ZSP-T, XSP-T, VSP-T are stocks to buy or sell.

COMMENT

General Market Comment. The next rate hearing meeting will be a big one. Expectations are a 25 basis point rate hike and this is fully priced in the market. The question is what is the outlook -- hawkish or dovish? He is also watching Facebook closely. There were 50 million people who had a data breach. There is a zone of support around $165-$170 for the stock, if this news causes a breach of this level it would be a really bad sign that the market feels this is bad news and will impact earnings going forward. He is also concerned about China and the threat the US will put tariffs in place. He thinks Kudlow will be pro-tariff against China.

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COMMENT

Canadian Bond ETFs. The current rate increases are still in the early cycle in the US and Canada will continue to lag behind. There will be some inflation pressures and bonds will sell off a bit. He expects US long bonds to yield 3.25% or higher, US 10 year 3% or higher. He does not like the yields here, he will wait a while. ZFL-T is the best ETF to play this, but be patient and wait for the yields to hit his targets.

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COMMENT

Canadian Insurance Companies. He prefers the diversification an ETF offers rather than holding individual stocks. When yields are rising, the profitability of lifecos goes up. The next recession will likely cause interest rates to fall, even go negative, and this is a real risk to this sector. This is a trade – don’t get married to it.

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COMMENT

VSP-T vs XSP-T vs ZSP-T. These all have exposure to the US Large Cap market, yet have different returns thus far this year. You have to be careful on these – some are currency hedged and others are not.

E.T.F.'s
COMMENT

VSP-T vs XSP-T vs ZSP-T. These all have exposure to the US Large Cap market, yet have different returns thus far this year. You have to be careful on these – some are currency hedged and others are not.

E.T.F.'s
COMMENT

VSP-T vs XSP-T vs ZSP-T. These all have exposure to the US Large Cap market, yet have different returns thus far this year. You have to be careful on these – some are currency hedged and others are not.

E.T.F.'s
COMMENT

Educational Segment. Richard Arms, technical expert passing. He was a legendary mentor for technicians. The Arms Index was designed by him. It looks at the number of stocks advancing and declining relative to their trading volume in a ratio. When the Index exceeds 1 it implies more selling volume. The current market action is telling us we are getting selling into strength. He applied candlestick patterns to trading volume -- the width of the candlestick shows significance based on volume. The sell-off of the S&P in early February indicated a potential reversal pattern. Now, the sell-offs on recent highs are confirming we are seeing more selling into the up-tick rather than buying into the pullbacks.

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