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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 9, 2015
Equity Clock Stock Market Outlook
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Stock Market Outlook for Monday, March 9, 2015
Headline: Stronger than average retail employment figures supporting the retail sector within period of seasonal strength..
The Markets Stocks plunged on Friday following the release of a better than expected employment report for February. Nonfarm payrolls increased by a seasonally adjusted 295,000 last
month, exceeding estimates calling for an increase of only 230,000. The Unemployment Rate declined to a new recovery low of 5.5%, down from the 5.7% reported previously. The report raised speculation that the Fed would be enticed to raise rates sooner than
later, sparking the shock selloff in stocks.
Major equity benchmarks all ended lower by over one percent, giving back a sizable share of February’s gains. The S&P 500 Index lost 1.58% on the week, falling below its
20-day moving average to test potential support at its 50-day average. As highlighted in a previous report, the levels of support below this market are many. In addition to the significant moving averages, horizontal support can be found at the short-term
highs and lows charted over the past few months. Next significant level of horizontal support can be found around 2065, which previously marked resistance back in January. Levels below 1972 would raise concern of a more substantial topping pattern
that could lead to a correction of 10% or more from the previous peak.
For now, the short, intermediate, and long-term trend of the equity market remains positive, as gauged by the direction of the major moving averages, as well as the series
of higher-highs and higher-lows across multiple timescales. A number of industries enter their period of seasonal strength around this time of year (industries identified later in this report), influencing broad equity indices higher through March and April.
Typically, it would take a fairly substantial negative catalyst to offset the positive seasonal influences that are common into the spring.
<chart follows>
Equity Clock Stock Market Outlook
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Stripping out seasonal adjustments, nonfarm payrolls increased by a healthy 903,000
last month, helped by the seasonal uptick in educational services. Above average numbers in the Food Services and Retail Trade employment helped the overall result to show a larger than average gain in payrolls, setting the stage for another strong year
for employment gains in the US. The above average retail employment statistics helped support the retail sector ETF (XRT), which outperformed the market during Friday’s session. Retail industry stocks remain in a period of seasonal strength through to mid-
April.
<charts follow>
Equity Clock Stock Market Outlook
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Equity Clock Stock Market Outlook
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Equity Clock Stock Market Outlook
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Equity Clock Stock Market Outlook
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Aside from the strength in the US Dollar, no asset class was immune from weakness during Friday’s session. The anticipation of a rate hike pressured bond prices lower (yields jumped higher) and the US dollar gain following the strong fundamental data-
point put pressure on commodities priced in the domestic currency. However, amidst the sea of red, the equity market internals suggested a risk-on session; defensive sectors led the market decline, while cyclical sectors outperformed the market return.
Utilities were an obvious victim to the jump in treasury yields; consumer staples and health care also took a hit larger than the market decline.
The fact that investors are more willing to hold riskier, cyclical stocks amidst a broad
market panic has positive implications on the overall strength of the equity market. Increased risk sentiment is often conducive to higher equity values, particularly if investors start to rotate from risk averse assets, such as bonds. Ultimately, investors
will be forced to buy something; they can’t stay short for long periods of time, options have a time element, and cash yields nothing; stocks may be the only game in town, at least until the bond market stabilizes. Cyclical equity sectors remain seasonally strong
through to May, after which defensives tend to come back into favour.
Sector % Change
Utilities ETF -3.00%
Health Care ETF -1.96%
Consumer Staples ETF -1.95%
Energy ETF -1.79%
Industrial ETF -1.36%
Materials ETF -1.35%
Technology ETF -1.23%
Consumer Discretionary ETF -1.19%
Financial ETF -0.74%
<charts follow>
Equity Clock Stock Market Outlook
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Equity Clock Stock Market Outlook
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Put-Call Ratio Sentiment on Friday, as gauged by the put-call ratio, ended overly bearish at 1.28. As
the market sold off, investors ran to the protection of put options in order to mitigate portfolio losses. Friday’s bearish put-call ratio matches the highest level recorded since mid October, which we now know represented a significant low in equity markets within
the positive long-term trend. While investors remain fearful, the present dip may give investors an opportunity to take advantage of equity market weakness.
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Equity Clock Stock Market Outlook
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Seasonal charts A. Sectors and Industries Entering Period of Seasonal Strength Today
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Equity Clock Stock Market Outlook
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B. Stocks Entering Period of Seasonal Strength Today
FirstService Corporation (TSE:FSV) Seasonal Chart
Hartford Financial Services (NYSE:HIG) Seasonal Chart
Huntington Bancshares Incorporated (NASDAQ:HBAN) Seasonal Chart
Equity Clock Stock Market Outlook
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Eastman Chemical Company (NYSE:EMN) Seasonal Chart
The Allstate Corporation (NYSE:ALL) Seasonal Chart
Bed Bath & Beyond Inc. (NASDAQ:BBBY) Seasonal Chart
BB&T Corporation (NYSE:BBT) Seasonal Chart
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Bank of America Corporation (NYSE:BAC) Seasonal Chart
Lululemon Athletica inc. (NASDAQ:LULU) Seasonal Chart
Tupperware Brands Corporation (NYSE:TUP) Seasonal Chart
PetSmart, Inc. (NASDAQ:PETM) Seasonal Chart
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American Eagle Outfitters (NYSE:AEO) Seasonal Chart
Emera Inc. (TSE:EMA) Seasonal Chart
XL Capital Ltd. (NYSE:XL) Seasonal Chart
KEMET Corporation (NYSE:KEM) Seasonal Chart
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Sun Life Financial Inc. (NYSE:SLF, TSE:SLF) Seasonal Chart
ARC Resources (TSE:ARX) Seasonal Chart
George Weston Limited (TSE:WN) Seasonal Chart
General Electric Company (NYSE:GE) Seasonal Chart
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C. Seasonal Charts of Companies Reporting Earnings Today
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Equity Clock Stock Market Outlook
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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: $15.84 (down 0.94%)
● Closing NAV/Unit: $15.86 (down 0.61%)
Performance*
2015
Year-to-Date
Since Inception
(Nov. 19, 2009)
HAC.TO 4.82% 58.6%
* 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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