MY JOURNAL FOR MONDAY MORNING – NOVEMBER 4, 2019
NEWS, BREAKOUTS, MOMENTUM PLAYS, & BOTTOMS
Canada’s Financial Sector’s Correlation To The US Market – GregSchnell.com 📝
These stocks are widely held in Canada, but less so in the USA. However, for US investors they make a nice dividend payment and have a solid investor base that does not move much. If you are trying to outperform the market, these stocks move with the US index so that is a more difficult task, as they correlate similarly.
The good news is they have large asset bases and behave similar to each other. Call it an oligopoly of the 5 majors. Out of country investors have tried to short Canadian financials for years on the basis that Canadian property markets are overvalued.
Somehow these banking charts hold up, year after year. The lack of competitors is a big hurdle and you also will not be able to get Canadian portfolio managers to sell their Canadian banks out of a portfolio. They are stable, they reduce the risk profile and generate average returns.
Let’s take a look at a couple of the charts to look for clues from the correlation table and then investigate the differences in the chart.
As you can see on the purple shaded area and the fine scale on the right, RY trades pretty much in line with the $SPX. Recently the bank pushed to new highs slightly ahead of the $SPX, but this chart also includes dividends in what is called a ‘total return’ chart. – READ MORE (click here to see charts)
Greg Schnell, CMT, MFTA
Senior Technical Analyst, StockCharts.com
Author, Stock Charts For Dummies
Stock Market Outlook for November 1, 2019 – EquityClock.com 📊
For the month of October, the S&P 500 Index failed to show the volatility that is typical to start the last quarter of the year. The large-cap benchmark added 2.04% in October, beating the historical average that calls for a 0.9% return during the autumn month. The benchmark remains supported by its rising 20-month moving average; investors have been reluctant to allow the index to drift too far from this level of safety that has supported prices during bouts of volatility since the year began. The 20-month moving average currently sits at 2810.
As for seasonal tendencies in the month ahead, November is the first full month of the best six months for stocks. The S&P 500 Index has gained 1.2%, on average, in this second to last month of the year with 68% of periods over the past 50 years showing gains. Returns in this month have ranged from a loss of 11.4% in November of 1973 to a gain of 10.2% in November of 1980. To receive insight on how to position your portfolio for the month ahead, subscribe to our service and we’ll send you our monthly outlook for November.
Tech Talk is a free stock market letter service available at TimingTheMarkets.com and EquityClock.com. Ask us about the Seasonal Advantage Portfolio.
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BREAKOUTS, MOMENTUM PLAYS, & BOTTOMS 📈
Xebec Adsorption (TSXV:XBC)
Dream Hard Asset Alternatives Trust (TSX:DRA.UN)
Russel Metals (TSX:RUS)
ATS Automation Tooling Systems (TSX:ATA)
MOMENTUM ALERT SIGNALS 📡
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