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Technical Seasonalities
eResearch Corporation is pleased to provide technical opinions on the market from a
seasonality standpoint, courtesy of Equity Clock, a division of the Tech Talk Financial
Network.eResearch also posts, daily, the regular technical opinions provided by affiliate:
Tech Talk: TimingTheMarket.
Equity Clock (www.equityclock.com) is a market analysis company that provides,
completely FREE, technical, fundamental and seasonality analysis on a daily basis via
TimingTheMarkets.com and EquityClock.com.Equity Clock’s mission is to identify
periods of re-occurring strength among individual equities in the market using methodologies presented by some of the top analysts in the industry, including those of
Donald Vialoux, author of TimingTheMarkets.com.
Donald Vialoux, co-founder of Tech Talk, is a past president and director of the Canadian
Society of Technical Analysts (CSTA). He holds the designation of Chartered Market
Technician (CMT).
Mr. Vialoux has 45 years of experience in the investment industry, including prominent positions
held at Richardson Greenshields and RBC Investments. He is the author of a daily letter on
equity markets, which is available free at TimingTheMarket.ca.
Mr. Vialoux is also the author of a weekly column published at GlobeAndMail.com that
combines technical, fundamental, and seasonality analysis. He is a frequent presenter on
Business News Network (BNN) Television. Mr. Vialoux also offers advice to the Horizons
Seasonal Rotation ETF (HAC).
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Equity Clock: Seasonality Analysis March 16, 2015
Equity Clock Stock Market Outlook
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Stock Market Outlook for Monday, March 16, 2015
Headline: Small Cap Russell 2000 Index benefiting from the strength in the US Dollar, but the forecast calls for headwinds ahead.
The Markets
Stocks drifted lower on Friday as investors jockey for position ahead of this week’s FOMC meeting. The US Dollar Index touched a new multi-year high as investors lean towards a more hawkish tone from the Fed, perhaps removing the “patient” language,
when the monetary policy announcement is released on Wednesday afternoon; the Fed Chair will hold a quarterly press conference shortly following the announcement release.
FOMC meetings where a quarterly press conference has followed are thought to be the
most probable time for the Fed to announce its first rate increase; the next opportunity won’t be until June 17, therefore it is no wonder that investors have been reacting in the equity, currency, and treasury markets much more significantly than past meetings.
In addition to the important FOMC meeting , which has a high likelihood of being a market mover, the week ahead is also quadruple witching, which sees the expiration of
option and futures contracts for stocks and indices. The event tends to act as a turning point for the market direction as old positions are closed out and new positions initiated. For the March expiration, the tendency is typically positive, leading to gains
through the month of April.
With two significant events ahead of us, this week is bound to be an important one in determining the market direction over the intermediate-term.
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The US Dollar ended off of the high of the day on Friday, allowing for stocks to bounce from the lows of the session. Turning to the S&P 500 Index, the benchmark bounced from the lows of the week around 2040, indicating a short-term double bottom. Positive
momentum divergences on the hourly chart suggest waning selling pressures following the week of losses for equity indices. A break above 2066.41 would suggest a new short-term positive trend, potentially bringing an end to the weakness that has plagued
the month of March.
Aside from some of the lacklustre economic data as of recent, arguably as a result of the colder and snowier than average winter weather in the US north-east over the past couple of months, the reason the Fed might abstain from any rate increase is the
stubbornly low rate of inflation, an aspect of the economy that has become even worse with plunging commodity prices over the past many months.
On Friday, a report on Producer Prices for the month of February significantly missed
expectations. The headline print showed the index declined by 0.5% on the month, missing forecasts calling for an increase of 0.3%. Stripping out the more volatile components of food and energy, the index still recorded the same 0.5% decline,
pushing the year-over-year increase down to 1.0%, from 1.5% previous.
Declining inflation provides little incentive for the Fed to potentially temper the rise in prices even further through an increase in rates. Looking at the 5-Year Breakeven
Inflation, a statistic that Fed officials often cite as a gauge of inflation expectations, the rate presently sits at 1.41%, well below the Fed’s target inflation rate of 2%. The rate has fallen significantly since last summer, declining from around 2% to a low of around
1% by the middle of January.
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At present, the positive trend stemming from the mid-January low is showing signs of turning lower once again; the longer-term trend is implied to be negative given the consecutive significant lower-highs and lower-lows on a yearly basis. Seasonally,
inflation, according to the 5-year breakeven inflation rate, tends to rise through the first couple of months of the year before plateauing into the month of March.
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Put-Call Ratio Sentiment on Friday, as gauged by the put-call ratio, ended bearish at 1.21. Typically,
when the put-call ratio becomes bearish, like this, bullish price action in equity markets typically follows.
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Seasonal charts A. Sectors and Industries Entering Period of Seasonal Strength Today
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B. Stocks Entering Period of Seasonal Strength Today
Fortis Incorporated (TSE:FTS) Seasonal Chart
SCANA Corporation (NYSE:SCG) Seasonal Chart
PPL Corporation (NYSE:PPL) Seasonal Chart
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Pfizer Inc. (NYSE:PFE) Seasonal Chart
ConAgra Foods, Inc. (NYSE:CAG) Seasonal Chart
Canadian Pacific Railway Limited (USA) (NYSE:CP) Seasonal Chart
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Bank of Montreal (TSE:BMO) Seasonal Chart
Union Pacific Corporation (NYSE:UNP) Seasonal Chart
TECO Energy, Inc. (NYSE:TE) Seasonal Chart
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Pepco Holdings, Inc. (NYSE:POM) Seasonal Chart
Norfolk Southern Corp. (NYSE:NSC) Seasonal Chart
FirstEnergy Corp. (NYSE:FE) Seasonal Chart
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CSX Corporation (NYSE:CSX) Seasonal Chart
The Boeing Company (NYSE:BA) Seasonal Chart
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C. Seasonal Charts of Companies Reporting Earnings Today
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S&P 500 Index
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TSE Composite
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Horizons Seasonal Rotation ETF (TSX: HAC) ● Closing Market Value: $15.75 (down 1.07%)
● Closing NAV/Unit: $15.85 (down 0.25%)
Performance*
2015
Year-to-Date
Since Inception
(Nov. 19, 2009)
HAC.TO 4.76% 58.5%
* performance calculated on Closing NAV/Unit as provided by custodian
Click Here to learn more about the proprietary, seasonal rotation investment strategy developed by research analysts Don Vialoux, Brooke Thackray, and Jon Vialoux.
Special Free Services Available through www.equityclock.com Equityclock.com is offering free access to a data base showing seasonal studies on individual stocks and sectors. The data base holds seasonality studies on over 1000 big
and moderate cap securities and indices. Notice that most of the seasonality charts have been updated recently.
To login, simply go to http://www.equityclock.com/charts/
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BW: Information on Equity Clock is provided on the ensuing page.
Equity Clock Stock Market Outlook
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Equity Clock is a division of the Tech Talk Financial Network, a market analysis
company that provides technical, fundamental, and seasonality analysis on a daily
basis via TimingTheMarkets.com and EquityClock.com.
Equity Clock’s mission is to identify periods of reoccurring strength among
individual equities in the market using methodologies presented by some of the top
analysts in the industry, including that of Don Vialoux, author of
TimingTheMarkets.com.
Feel free to use any of the content or seasonality studies (charts, timelines, or
otherwise) presented as long as a link-back to this site at EquityClock.com is
provided.
For further information on indicators used in reports presented on this site, please
visit our reference page.
Equity Clock Website:www.equityclock.com
Horizons AlphaPro Seasonal Rotation ETF (HAC)
Interested in the methodologies and strategies presented by Tech Talk? The
Horizons AlphaPro Seasonal Rotation ETF (trading on the Toronto Stock Exchange
under symbol HAC) uses a proprietary, seasonal rotation investment strategy
developed by research analysts Don Vialoux and Brooke Thackray. The strategy’s
core position consists of broad markets at seasonally favourable times of the year
and money market securities at seasonally unfavourable times of the year. The
strategy allocates from the core portfolio to various sectors when those sectors
offer favourable opportunities. Rotating a portfolio in anticipation of these
opportunities is designed to deliver returns that are superior to a static investment
in broad markets. As seasonal periods are never the same, this investment strategy
is supported by additional fundamental and technical analysis.
For more information, Click Here.
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