Crash Course — Remembering October 19, 1987 (30th Year Anniversary Edition)

SYNOPSIS

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This cartoon may be too scary to make you laugh out loud, but it is worth considering. How are the “make America great again (MAGA)” voters assimilating the fact that their president has done absolutely nothing in almost a year now to improve their financial situation? In fact he’s accomplished nothing at all on any front! But I understand that he’s still golfing regularly. There are still reasons for the stock markets to continue higher, but that’s in spite of the worst president in American history, not because of him. Meanwhile most of the stock markets worldwide are outperforming US equities. We worry that the MAGA folks won’t accept the fact that they were wrong, and seek violent means to express themselves instead. We’re not sure the markets would shrug that off.

PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) improved again to 123% from 86% a week earlier. The S&P 500 APAR and the S&P/TSX Composite Index APAR both dropped a few points from where they were last week.

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Last Week in the Major Indexes… The Russell 2000 Index finally pulled back a bit on a one-week basis, but still leads the other major indexes on trend. All other major indexes had modest one-week gains last week.

Last Week in the Sectors… The bottom line is to avoid Telecommunication Services, Consumer Staples and Utilities within both the S&P/TSX Composite Index and S&P 500. Beyond that you’ll need to look at the differences between sector preferences in Canada vs the USA.

PTA Perspective… Crash Course — Remembering October 19, 1987 (30th Year Anniversary Edition)

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This is indeed the 30th anniversary of the worst crash in stock market history. On October 19th, yes, a single day, the DJIA plunged 23%. If you thought 2008 was a stock market, crash you have absolutely no idea what a stock market crash is. And I doubt if any of our readers were active investors in 1929. If so, we congratulate you on trading well into 100+ years of age. So, for all practical purposes, there really was only one stock market crash, and we walk you through it. All investors need to know what a real market crash is like; and hope that you’ll never, ever see one for real in your lifetime.

2017 Q3 Review – Global Perspective

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It’s totally hilarious how so many are attributing the continuing stream of new highs in the major American stock indexes to Donald Trump’s presidency. I can understand how this delusional president would make that claim himself, but why would anyone intelligent do that? As you’ll learn today, the vast majority of stock markets around the world are outperforming the major US indexes, since his election. It’s a “Trump Curse”, not a “Trump Trade.. But then, the US biz media never look beyond US borders. End of story.

PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) shot up to 86% from 55% a week earlier. The S&P 500 APAR and the S&P/TSX Composite Index APAR both stayed within a few points of where they were last week.

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Last Week in the Major Indexes… The Russell 2000 Index has been the trend leader for the past few weeks. US small caps are apparently back in vogue. Small caps generally offer higher returns, albeit with higher risk. Perhaps that’s exactly what investors want right now.

Last Week in the Sectors… Among S&P/TSX Composite Index stocks, Consumer Discretionary and Health Care stocks are now the leading groups. Among the S&P 500 sectors Energy, Financial Services, Industrials, Materials and Information Technology are almost tied for leading performance.

PTA Perspective… 2017 Q3 Review – Global Perspective

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The second part of our Q3 2017 review takes a global perspective. We introduce you to the largest stock markets in the world, then provide a tour of the best performing markets regardless of size… year-to-date, and based on current trend values. And, finally, we remind you how to profit from foreign markets with the ETF and ADR trend data in our Data & Charts Workbooks.

2017 Q3 Review – North America – Major Indexes & Sectors

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Well, we’re now ¾’s of the way through 2017. How are your profits stacking up? If you’ve been following our ProfiTrend Advantage strategy, perhaps combined with your own trading tactics, you’ve probably done quite well. If you went with the financial advisor in the cartoon above, probably not! And yet thousands of people every year entrust their money to a financial advisor just like that one!

PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) improved to 55% from 41% a week earlier. The S&P 500 APAR and the S&P/TSX Composite Index APAR both rose as well… about 5% each.

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Last Week in the Major Indexes… The Russell 2000 Index has been the star for the past couple weeks. US small caps are back in vogue; even as Canadian small caps wither on the vine. Small caps generally offer higher returns, albeit with higher risk. Perhaps that’s exactly what investors want right now.

Last Week in the Sectors… Energy stocks continued to improve trend-wise, including both US and Canadian stocks in that sector. Among S&P/TSX Composite Index stocks, the Consumer Discretionary group is also starting to look interesting.

PTA Perspective… 2017 Q3 Review – North America – Major Indexes & Sectors

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Yes, another quarter of the year has passed, and we have the first of our two part coverage. Generally speaking there were improvements in all major indexes, relative to the year-to-date figures at the end of June. Look for more details in the main body of TrendWatch Weekly.

Investor Confidence… The September results for the State Street Investor Confidence Index have just been released this week. The small dip was mainly due to a large decline in confidence in North American equities.

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As usual we provide more detail on the regional ICI’s in the full edition of TrendWatch Weekly.

Are Stocks Over-Priced? If Yes/No, Does It Matter?

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We’ll be happy to get September over with once and for all. After all, it is historically the worst month of the year to be invested in stocks in the S&P 500, Dow Jones Industrial Average, Nasdaq Composite Index or the S&P/TSX Composite Index. This September it has been a see-saw of up and down weeks, occasionally punctuated with new record highs and geopolitical nonsense. Bring on October. It’s #6 or #7 for most major indexes. Then we have the best months of the year… November, December and January. Does that make “complete sense” so far?

PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) declined to 41% from 50% a week earlier. The S&P 500 APAR and the S&P/TSX Composite Index APAR both rose to 20%+.

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Last Week in the Major Indexes… Almost all of the major North American indexes that we track rose again this past week. Nasdaq Composite Index and S&P/TSX Venture Index experienced small losses.

Last Week in the Sectors… Energy stocks continued to improve trend-wise, including both US and Canadian stocks in that sector. Among S&P/TSX Composite Index stocks, the Consumer Discretionary group is starting to look interesting.

PTA Perspective… Are Stocks Over-Priced? If Yes/No, Does It Matter?

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Everyone seems to be concerned these days about whether stocks may be “too expensive” to jump in now; or conversely, whether it might be a good time to take some money off the table, before there’s correction or market crash. As usual, most of this is the business media just filling space and air time, and keeping people tuned in instead of tuning out. Nonetheless, we take a look this week into how value is assigned to stocks and whether it makes any sense. Hint: The share price of a stock has almost nothing to do with its value. We run through a number of valuation metrics, and draw some conclusions about which ones you should be paying attention to, if any! Enjoy!

Trades between Trends

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In spite of a number of North American indexes still near record highs, our analysis of the broader market is telling us that we’re moving sideways to moderately down. It’s a stand-off between bulls and bears; and it’s very annoying! We’re still beating the market benchmarks with our own investments, but not by as wide a margin as we’d like.

PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) retreated again to 18% from 32% a week ago. The S&P 500 APAR and the S&P/TSX Composite Index APAR also declined to 6% and 3% respectively.

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Last Week in the Major Indexes… Most of the major North American indexes that we track fell quite a bit last week… many in the -1% to -1.5% range.

Last Week in the Sectors… We’re still seeing reasonably good performance among Health Care stocks in the US, while Materials (mining stocks) are the only sector of interest in Canada. Keep in mind though, that while the seasonally attractive period for Health Care extends well into October, the positive period for the media-embellishing segments of Health Care — Biotech and Pharmaceuticals — ends September 13.

PTA Perspective… Trades between Trends
Since, markets can move sideways for extended periods of time, our minds start wandering to how we can make money when, well, the markets are going nowhere. We discuss two of those this week… a relatively safe conservative ploy, and a highly experimental exercise, where our money is on the line!

Seasonality Effects Heading into Fall 2017

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As August rolls into September, there is a feeling in the air that fall may be coming soon… which is true by the calendar, but not always by the weather. So this week, our coverage leans toward seasonality in trading. August is always a low volume month with people enjoying the end of summer before kids head back to school, and summer work hours (for those who have them) come to an end. It’s time to get back to heavy duty investing again!

PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) revived from 3% a week ago to 32% now. The S&P 500 APAR and the S&P/TSX Composite Index APAR improved also to 9% and 14% respectively from near zero levels a week before.

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Last Week in the Major Indexes… Most of the major North American indexes that we track rose quite a bit last week… several by 2.5%+.

Last Week in the Sectors… There was definitely some sector rotation happening last week, as Utilities lost it’s spot at the top of the trend rankings. We now have Information Technology, Health Care and Materials in the lead. Not in a big way yet, but a definite improvement.

Featured Chart… Seasonality Effects Heading into Fall 2017
This week we’re once again updating our coverage of the best calendar effects to keep in mind for the next six weeks or so.

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These are just three of them… 13 more in the full edition of TrendWatch Weekly. While our buy/sell decisions are still primarily based on the current results from our relative trend analysis™ (RTA) methodology, we continue to believe that seasonal patterns can be relevant to keep trend data in a broader historical context.

Ratio Charting for Index Comparisons

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Generally speaking, the markets are still in a “neutral zone” with no clear message about whether the next big move will be up or down. In spite of some wild swings week-over-week, we basically have 50% of all stocks trending lower and 50% trending higher. Those climbing are climbing without much conviction (few have large trend values), and the same is true on the downside. Sitting on cash may not be a bad idea right now, or look for opportunities outside of North America via ETFs or ADRs.

PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) shrunk from 57% a week ago to 3% now. The S&P 500 APAR is pretty close to zero, and the S&P/TSX Composite Index APAR improved from +1% the previous week to +2%.

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Last Week in the Major Indexes… Most of the major North American indexes that we track rose last week… about as much as they fell the week before (a little less than 1% in most cases).

Last Week in the Sectors… There are still no “stand out” sectors, other than Utilities… hardly something to get excited about!

PTA Perspective… Ratio Charting for Index Comparisons
This week’s perspective piece is a short discussion of ratio charting for comparing two indexes or a stock vs an index. (There are also numerous other applications.) For longer term historical data, this can be a better approach than plotting separate lines with separate vertical scales.

Investor Confidence… The August results for the State Street Investor Confidence Index have just been released. The Global Investor Confidence Index decreased to 106.8, down 2.1 points from July’s revised reading of 108.9. The small decline was mainly due to declining interest in European stocks.

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As usual we provide more detail on the regional ICI’s in the full edition of TrendWatch Weekly.

Marijuana Stocks Update

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North American stock prices declined again last week, after a sharp decline the week before. Volatility spiked up again to about 16, before settling back to 14 by the end of Friday trading. While we’ve been waiting for more evidence of either a serious bear move, or a rebound to new highs again, we’ll be covering the marijuana stocks theme again this week. While waiting for official legalization of cannabis for recreational use in Canada next July (tentatively), we may actually be seeing an oversupply of the product short-term; and the stock prices of the publicly-traded major growers seem to be reflecting this (on average).

PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) jumped to 57%. The S&P 500 APAR turned more negative, and the S&P/TSX Composite Index APAR improved from a negative -7% the previous week to +1%.

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Last Week in the Major Indexes… All of the major North American indexes that we track fell last week, except for the S&P/TSX Venture Index, which rose almost 1%.

Last Week in the Sectors… Once again only the Utilities group have a positive trend value of any significance among both S&P 500 and S&P/TSX Composite Index stocks.

PTA Perspective… Marijuana Stocks Update
We promised that we wouldn’t bombard you with a lot pot stocks reporting, when we first introduced that theme to our web site last November. We decided to offer coverage on that niche market at that time as an experiment in following an equity marketplace in its early stages. (You have access to our weekly marijuana stock trend updates in the Data & Charts Workbooks.) We provided a minor update in early June to discuss the Horizons BetaPro Marijuana stocks ETF (HMMJ)… the first of its kind in the world. This week we provide a bit more background on what’s been happening with HMMJ, and the pot stocks market overall. We also caution you about the get-rich-quick fraudsters out there, and let you know more about the reality of cannabis stocks as an investment.

Market Trends over Time

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Well… we finally got some volatility last week, but not in a good way! The markets shrugged off Kim Jong-Un’s anti-US rhetoric earlier in the week, but took notice when the orange menace threaten nuclear annihilation. Stocks took a plunge, and VIX spiked as high as 16.3 on Friday. It didn’t help when Trump failed to criticize a significant part of his voter base (the KKK and neo-Nazis) in the Charlottesville incident. As I finish this edition of TrendWatch Weekly on Monday, it appears that sanity has prevailed (for now) and the markets are rebounding. VIX is back down to 12.4.

PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) fell to 15%, while both the the S&P 500 APAR, and the S&P/TSX Composite Index APAR turned negative.

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Last Week in the Major Indexes… All of the major North American indexes that we track fell last week… from -0.4% (Venture Exchange) to -2.7% (Russell 2000). The “major majors” all fell -1.1% to -1.6%. Even the S&P 1200 Global Index was off -1.6%.

Last Week in the Sectors… Just one sector (Utilities) still has a positive trend value among both S&P 500 and S&P/TSX Composite Index stocks.

PTA Perspective… Market Trends over Time
This week we take a closer look at our “trends of trends” charts that we update every weekend in the S&P 500 and S&P/TSX Composite Index Data & Charts Workbooks in the member web site. While the contents of those charts are basically self-evident, there are patterns in the charts that you might be overlooking. You will also look at the charts differently if you want to know the odds that it’s good to be invested in stocks (vs cash) or looking to see how fast you can expect to make money short-term.

Do New Highs on the Dow Mean Anything?

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It was another lacklustre week, historically low on volatility… what many call the summer doldrums. And yet more new highs on the Dow Industrial Average. Trading volume was low, and we’ve been relying on quarterly earnings reports for any spark of life in the markets. Apple Inc (AAPL), for instance, had a nice one-day price boost of 6% the day after it reported its latest earnings last week. Now, let’s put that 6% in perspective. That’s an extra $48 billion added to Apple’s market cap in one day! And that $48 billion increase alone is larger than the entire market cap of Ford Motor, and 390 other companies in the S&P 500! Apple is poised to become the world’s first trillion dollar company, perhaps within the next year. That’s big!

PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) dropped to 55% from 73% a week earlier. That’s still ahead of the S&P 500 APAR at 13%, and the S&P/TSX Composite Index APAR which turned negative again at -1%.

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Last Week in the Sectors… Just 5 of 10 sectors have positive trend values among the S&P 500 companies. It’s 5 of 11 for the S&P/TSX Composite Index. All trend values in both markets are disappointingly close to zero right now. It’s a stretch to recommend one sector over another.

wpid-url-2017-08-8-14-23.png PTA Trend/Consistency Lookup Console Now Available! Last week we announced a new item to the submenu of Toolbox at the (members only) ProfiTrend Advantage web site. It’s labelled T/C Console in the submenu, and it takes you to a page where you can look up the trend & consistency values for a subset of all of the Premium Services Databases without paying the Premium Service fees. 10,000+ equities! We hope that you’ve tried it out, and find it useful. We could definitely use some feedback, so try it soon, if you haven’t already. If popular, the platform that we’ve used for the T/C Console may also pave the way for us to add other interactive tools at the web site… the kind that we currently use on our premises on stand-alone computers.

PTA Perspective… Do New Highs on the Dow Mean Anything?
With the latest streak of all time highs, especially in the Dow Jones Industrial Average, we’ve decided to have a look at whether this should be a reason to worry or rejoice or neither.. because it could be coincidental. The best evidence we share with you today suggests more profits ahead!