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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (51283)	1/30/2015 10:54:19 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 67751

Market Call: For video, market analysis and more click here Greg Newsman, director and associate portfolio manager at ScotiaMcLeod. FOCUS: Canadian Dividend Stocks & Protection Strategies Market outlook: A higher U.S. dollar, falling oil and concerns regarding the outcome of Greece may continue the volatility and uncertainty we have recently seen and may ultimately last long enough for investors to question whether the bull market is still intact. But eventually the compounding net positives of European Quantitative easing, lower oil, a higher U.S. dollar and low interest rates should drive most global [UTF-8?]marketsâ€Ž higher in 2015 as stocks are still more compelling than bonds. A strong U.S. dollar will continue to be a tail wind for stocks that benefit from its strength and a head wind for those hurt by it. Buy dividend stocks that are beneficiaries of this and other themes that are not fully priced for the opportunity.. Top picks: Hudsonâ€™s Bay Company (HBC.TO) Manulife Financial (MFC.TO) Shaw Communications (SJRb.TO) Click here for more information on Greg Newman's top and past picks questtrade Market Call Tonight: For video, market analysis and more click here Keith Richards, portfolio manager, ValueTrend Wealth Management of Worldsource Securities FOCUS: Technical Analysis Market outlook: At a few of my recent speaking engagements, [UTF-8?]Iâ€™ve been asked the following two questions: 1. Where is the loonie going to land? The lonnie has been pretty tied to the direction of oil recently. If we examine a chart of the Canadian dollar vs. the U.S. dollar, we will see that our dollar peaked in June of 2008 at around $1.10 [UTF-8?]â€“ right along with the peak price in oil of around $145/barrel. As oil plunged, so did the lonnie, where it found support at just under $0.77. I would expect a similar washout for the loonie this time around, followed by support at that level. A base will likely occur, comprising of a series of rallies and failures, before the Canadian dollar will be back on its feet again. This should be a similar pattern to oil, as I will describe below. 2. When is the timing going to be right to take advantage of [UTF-8?]oilâ€™s plunge? As always, I will refer to history (aka the charts), to offer clues to when we should buy oil. Oil has experienced 3 major crashes in the past 35 years: the [UTF-8?]mid-80â€™s, the [UTF-8?]late-90â€™s, and 2008. In December 1985, Saudi Arabia declared its intention to regain market share [UTF-8?]â€“ oil prices began to decline, sinking to as low as $10.42 a barrel in March 1986 from a November 1985 peak of $31.72. Sound familiar? Oil producers by the dozen folded tent, and a complex process of bottoming occurred as oil formed a double bottom through 1987. The years 1998-99 saw another near-$10 / barrel test of oil prices during the [UTF-8?]â€œAsian [UTF-8?]Contagion.â€ WTI Oil was finding support at the prior [UTF-8?]decadeâ€™s low point, near $10/barrel. I was a stockbroker with Merrill Lynch at the time, and I recall the default by Russia on its bonds, and the near collapse of its economy (again, sound like a familiar setup?). As a younger broker, I recall wondering if I should buy oil in the $10-$12 range during the 1998-99 collapse. I [UTF-8?]didnâ€™t, but I did learn an interesting lesson by observing the bottoming process. Although the chart [UTF-8?]Iâ€™ve provided is only a line chart, you will note that the bottom took a good 2 years to complete its process through a series of volatile moves. Like the drop in late [UTF-8?]1980â€™s, this was a complex bottom. The drop in oil prices in 2008 from their peak of $140 to around $35/barrel looks fairly v-shaped on this longer termed chart. However, it you will take a look at the shorter termed chart, you will see that the bottoming process took the entire winter of 2008 - well into the spring of 2009. I [UTF-8?]donâ€™t care what formation you wish to call that period of basing (head and shoulders bottom, perhaps?)- but I do care to note that it was a complex bottom. Once again, the bottoming process took many months to complete [UTF-8?]â€“ just as the last two oil collapse bottoms did. I expect the same will occur this time around. Perhaps oil will find support at $35-$40/barrel before the summer. But it will be a choppy, complex series of peaks and troughs before it regains its glory. I expect to be legging in as this process proves to be taking place. By the way, I am happy to say that I learned my lesson from missing the 1999 drop [UTF-8?]â€“ I bought oil during the spring of 2009 in the mid-high [UTF-8?]$40â€™s. Top picks: SPDR Consumer Discretionary ETF (XLY) Walt Disney (DIS.N) BMO Equal Weight U.S. Banks Hedged to CAD Index ETF (ZUB.TO) Click here for more information on Keith Richards' top and past picks Follow us on Twitter: @marketcall