Light at the End of the Tunnel?
July 26th, 2010This past week was one of those that could be interpreted as either mildly positive or excitingly positive. I’ll take you through the evidence for both sides below, but first the basic stats.
WEEKLY REVIEW… The S&P/TSX Composite Index rose +1.2% last week, which by itself is good but not outstanding. The S&P/TSX Venture Index was up about the same amount (+1.1%).
For a change the US indexes outperformed over the week by quite a wide margin. The Dow Industrials, up +3.2%. S&P500, +3.5%. Nasdaq, +4.1%.
Eight of our ten sector indexes now have positive trend values, with HEALTH CARE, CONSUMER STAPLES, INDUSTRIALS,UTILITIES, CONSUMER DISCRETIONARY, and TELECOMMUNICATION SERVICES all rising from +0.5% to +1.0% per week. The laggards are MATERIALS and FINANCIAL SERVICES.
The percentage of S&P/TSX Composite Index stocks leaped to 69% from 48% the previous week. That is exactly what we were hoping for, and a sustained +60% for a couple more weeks would be a definite flag to start buying stocks as their uptrends get back underway in full force. The only thing holding us back right now is that the size of the trend and consistency values for individual stocks are not high enough yet for there to be a lot of opportunities for better than average profits. The median uptrend values among the S&P/TSX Composite Index stocks is currently +0.5%… respectable, but not great.
MILDLY POSITIVE OR GREAT?… While this is starting to look like a turnaround from our May through July doldrums, a little bit of caution is still indicated.
Caution…
- As mentioned, very few individual stocks or indexes have trend and consistency values that are high enough to put on a “potential buy” list. Hopefully, that will change soon.
- A +1% move on the S&P/TSX Composite Index isn’t really much to write home about.
- The “basic 10” sector index results were mixed for the week in a -2% to +2% range. The only stand-outs were in the S&P/TSX specialty mining-related indexes. There are four of them, and they all rose from +6% to +10%, after a depressed showing over the past few weeks. Perhaps that’s a place to start looking for individual stocks that might outperform.
Optimism…
- We do have close to 70% of S&P/TSX Composite Index stocks with positive trend values, if only small ones.
- We follow the global equity front through country equity ETFs… 95% are now trending higher. This is a good top-down metric.
- 78% of all North American ETFs are now trending higher. Since these are diversified investments that carries more weight than looking at individual stocks.
So there you have it folks! Not definitive one way or the other, but something to think about!
REFERRAL REWARDS… You may already know that we’ve extended the monthly draw based on your referrals until the end of the year.
Here’s how it works…
To encourage you to refer friends and acquaintances to take advantage of this free newsletter, we’re offering you a chance to win a one-year subscription to one of our premium service subscriptions (your choice of which one… but that’s up to a $299 value).
Just send us an email. Include your full name, plus the full names and email addresses of people that you think might benefit from reading TSX TrendWatch Weekly. We’ll then send them an invitation to sign up, if they are so inclined.
For each new person that you’ve recommended who signs up for email delivery of the newsletter, you’ll get one entry in the contest. There will be one winner selected each month through December 2010. We ask that you please use your best judgment in selecting your referrals. We aren’t looking for spam lists.
Thanks in advance and good luck! Your odds of winning (given the small number of referrals from the previous two months) are quite good!
VIDEOS… Whenever we find videos on various investment topics that may be of interest here, we add them to our video jukebox. Be sure to check that page now and then to take in an interview or commentary from some knowledgeable analysts. Several new entries this week.
MICROBLOGS… Follow us on Twitter if you’re so-inclined… http://twitter.com/TSXtrendwatch You’ll receive numerous updates between these TSX TrendWatch Weekly editions and can comment on or forward (re-tweet) them to others. If Twitter isn’t your thing, the same regular intra-week updates are fed into a “badge” at the web site in the margin. It’s a little info box with the most recent posts, but you can link to the full list from there.
If you’d prefer that approach, visit http://TSX.ProfiTrend.com often.
BOOK STORE… don’t forget that we have a recommended book section in the form of an Amazon mini-book store. We’ve pruned out a few out-dated books recently and added some new ones over the past few weeks.