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Sigh! You’ve heard this from us many times before. It’s good to have a cartoonist visualize an ongoing (perpetual?) problem for investors… hysterical media!
PTP… Our PTP Score (profit speedometer) has taken a breather again… down to 202% from 390% previously. Meanwhile, the S&P/TSX Composite Index APAR turned positive again at +6%, while the S&P 500 APAR retreated to +8% from +23% the previous week.
Last Week in the Major Indexes… In a bit of an about face. the major US indexes fell on a one-week basis (1.0-1.5%) while the Canadian indexes were modestly to the upside. Nasdaq continues to lead on a trend basis, and only the S&P/TSX Small Cap Index has a negative trend value.
PTA Perspective… Maximizing the Motion Metaphor!
All too many investors look at their gains and losses without a second thought to the time frame. Meanwhile, so many analysts pick price targets with only the vaguest reference to when the target will be achieved, because they know that no one will remember what they said in the distant future. Typical remark… “XYZ could reach $200 in the long term.” So this week we simply want to remind you of the many advantages of always looking at the velocity of your portfolio and the velocity of the stocks that you might consider buying. We also look at the fun aspects of investing this way. As an investor you can actually picture yourself as a race car driver, not someone running in a hamster wheel.
Tariffs continued to be a big part of media coverage last week. If Trump manages to set off a worldwide trade war, everyone loses, but the US in particular.
PTP… Our PTP Score (profit speedometer) is on the move again… up to 390% from 101% previously. Meanwhile, the two benchmark APARs improved too. The S&P/TSX Composite APAR is still slightly negative, but the S&P 500 score turned positive to +23% from -9% a week earlier.
Last Week in the Major Indexes… In the week-over-week tug of war, the numbers were mostly positive again last week. Gains ranged from zero to +4.2% on the week. We now have 4 major indexes with positive trend values again.
PTA Perspective… 9th Anniversary of the Latest Bull Market! Or is it?
Friday was supposedly the 9th Anniversary of the beginning of the current bull market, which began on March 9, 2009. There was a steady stream of stories on the topic from all the major Biz News outlets all day Friday and continuing into the weekend. So, we thought that we would weigh in on the event too; in spite of our mixed feelings about these magical numbers.
The pendulum swings both ways, and while there’s practically zero evidence that Trump had anything to do with a continuing bull market that was in place for eight years before he was elected, there is abundant evidence that investors are running scared now… entirely due to his policies and threats. His tax cuts for the wealthy had minimal positive impact on the equities markets, but his attempts to launch an international trade war are quite reminiscent of Herbert Hoover’s similar tactics that took the US and most of the rest of the world into the 12 year long Great Depression starting in 1929.
PTP… Our PTP Score dropped a bit to 101% from 130% previously. The two benchmarks fell quite a bit too, with the S&P 500 APAR dropping from +12% to -9%, and the S&P/TSX Composite counterpart dropping to -20% from -7%.
Last Week in the Major Indexes… Essentially all the one-week numbers were negative or unchanged across the major indexes. Many of the declines were -2% to -3% over the week.
PTA Perspective… NEO: a Quick First Look at Canada’s Newest Stock Exchange
If you can get over the horrific logo, we want to introduce you to Aequitas NEO… Canada’s newest securities exchange. Given that we ignored the Canadian Securities Exchange for years, before it became an epicentre for entrepreneurial startups, we want to make sure that doesn’t happen again. We’ll tell you what NEO is all about, and what it might mean to you. Spoiler alert… don’t get your hopes up just yet!
It’s a pity that bribery runs rampant in American politics. OK… so they call it lobbying, but it’s the same thing. Anyway, while the gun issues are front and centre in the media, the equities markets are slowly coming back from that nasty “correction” a few weeks ago. We still need another 100+ S&P points to get back to the latest highs of late January.
PTP… Our PTP Score gained a bit more to 130% from 125% previously. The two benchmarks improved too, with the S&P 500 APAR up to 12%, while its S&P/TSX Composite counterpart remains on the negative side at -7%.
Last Week in the Major Indexes… We had some reasonable improvements over the past week, but we still have some major indexes with negative trend values. You can see the specifics in this week’s full-edition of TrendWatch Weekly.
Investor Confidence… The February 2018 results for the State Street Investor Confidence Index have just been posted. This is not an opinion poll. The SSICI is a measure of actual money flows between equities (higher numbers) and safer income securities among institutional investors (the “smart” money). The Global Investor Confidence Index increased to 107.4, up 4.4 points from January’s revised reading of 103.0.
As usual we provide more detail on the regional ICI’s in the Investor Confidence section of TrendWatch Weekly.
PTA Perspective… Coping with Trend-Less Markets!
After a stock market “correction” (decline of 10% or more from recent highs), a whole lot of equities with nice consistent trend values lost those. We’re left in limbo, until there is a significant recovery or the confirmation of a further decline into a long term bear market. There’s very little to suggest that a bear market is just around the corner, but we may be a few weeks away from starting to see new highs in the major indexes again. So, what do you do in “limbo-land”. We offer some suggestions this week. Everything from creating short-term income opportunities to wild and crazy research projects. Sitting on cash for a while is OK. Not making the best use of this time to increase your profit potential is not.
Winter Stock Olympics anyone? Freestyle version! Some stability has come back to the markets, but this isn’t likely to be a so-called “V-Bottom” where stocks bounce back as fast as they fell. Those a very rare occurrences. Like any sharp, sudden, painful wound, it takes time to heal.
PTP… After two weeks of losses, our portfolio has stabilized a bit, and the PTP Score actually gained to 125% from 81% previously. The two benchmarks improved too, with the S&P 500 APAR turning positive, while its S&P/TSX Composite counterpart remained on the negative side.
Last Week in the Major Indexes… We had some nice improvements over the past week, but they were only large enough to nudge a few major indexes back to the positive side. You see the specifics in this weeks full-edition of TrendWatch Weekly.
PTA Perspective… Twits Who Trade Using Social Media
In this context we don’t intend to use the term “twit” in the original pejorative sense of “idiot”; because there is already an established term “StockTwit” that refers to an investor who publishes, reads and digests opinions about stocks via Twitter. These opinions and short bits of information are widely shared, as you’ll learn in this week’s edition of TrendWatch Weekly. We also explore numerous other financial services that exploit Twitter, Facebook, LinkedIn, and even social investment services that predate the Internet.
Yes, we’re still “really high” with respect to recent all-time highs, but a set-back like last week can make things feel that we’re in a downward spiral. It’s time to pause and reflect, instead of rushing for the exit doors.
PTP… For a second week, we took losses just like everyone else. This time though we took major losses on a minority VIX inverse play that has been incredibly profitable in the past. This past week we lost 90% before we could hit the sell button. We’ll say more about that later, but our ProfiTrend Portfolio APAR (annualized price appreciation rate) was chopped way down to 81% from 329% a week earlier. But you can still compare our results with the S&P 500 stocks, now to -38% from 16% a week earlier, and the S&P/TSX Composite stocks APAR, at -50% from -30% last time.
Last Week in the Major Indexes… It was negative signs across the board for the major North American indexes once again. The Russell 2000 at an unchanged at 0.0% trend and 0.0% weekly performance was the leader of the pack.
PTA Perspective… CORRECTION! What That Means & What To Do About It
They say that a “healthy correction” is a fall of 10-15% from recent highs. Because it’s “healthy”, that means stocks will charge higher again. But then they say that a decline of 20% is a “bear market”, and stocks will continue to fall for an indefinite period of time… perhaps years. Hmm! Just 5% difference? We help you unravel this total nonsense this week, and remind you how media-induced hysteria could be exaggerating all negative moves in the equities markets.
It’s not that the stock markets are always a roller coaster ride. It’s just that a plunge like last week’s after an amazing run up earlier in January can be a little unnerving. After all we tend to remember shocks to the system, better than mundane steady gains. And we experience and remember losses more than similar-sized profits. Don’t panic. Many analysts have been predicting (or hoping for?) a “healthy correction”, before the markets can take another run upward.
PTP… Naturally, we took losses last week just like everyone else. We had some sell signals early in the week, and acted on them. Our ProfiTrend Portfolio APAR (annualized price appreciation rate) was chopped in half over the week, but, hey, compare our performance with the S&P 500 stocks, now at 16% from 66% a week earlier, and the S&P/TSX Composite stocks APAR, a -30% now from +14% last time.
Last Week in the Major Indexes… It was negative signs across the board for the major North American indexes, with the exception of the unchanged Russell 2000.
PTA Perspective… CSE – The Exchange for Entrepreneurs
Hidden in the shadows behind the Toronto Stock Exchange and the TSX Venture Exchange is another small independent competitor called the Canadian Securities Exchange. It may be small but its growing rapidly. Since it’s largely ignored by the business media, we introduced it to you back in a December 2016 edition of TrendWatch Weekly. Billing itself as the “Exchange for Entrepreneurs”, it mainly provides a trading home for startup companies seeking public capital. In the world of large, medium and small caps, most of these companies would be considered micro-caps. Nonetheless, for investors willing to take a chance on speculative ventures, the CSE deserves more of your attention. We extend our coverage of the CSE this week, noting the progress that has been made in the past year or so.
PTA Perspective… Momentum ETFs – Go with the Flow!
Our mathematical framework, relative trend analysis™ (RTA), is within the category of the momentum investing. Stocks on a winning streak often continue that winning streak relative to stocks that do not. It’s simple and academic research proven. So, it’s interesting to start to see ETFs appearing based on momentum investing. That means that the underlying index starts with a constituent list where all stocks are trending upward. We investigate what that means in terms finding better ETFs, if you’re thus inclined, and being better informed of the implications overall.
PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) pulled back to 733% this past week from a record 828% a week earlier. The S&P/TSX Composite Index APAR fell even further to 14%, while the S&P 500 APAR is up to 66% from 58% a week earlier.
Last Week in the Major Indexes… It was a great week for one-week gains on most of the major indexes with numerous gains of 2% or higher over the week. The laggards continue to be the S&P/TSX Small Cap Index, the S&P/TSX Composite Index and the Russell 2000.
Investor Confidence… The January 2018 results for the State Street Investor Confidence Index have just been posted. This is not an opinion poll. The SSICI is a measure of actual money flows between equities (higher numbers) and safer income securities among institutional investors (the “smart” money). The Global Investor Confidence Index increased to 102.1, up 6.4 points from December’s revised reading of 95.7.
As usual we provide more detail on the regional ICI’s in the Investor Confidence section of TrendWatch Weekly.
The cartoon is a little dated, in that the DJIA is now above 25,000, and shows no sign of retreating. Other major US indexes are falling suit. Is this worrisome? Perhaps, but as the old expression goes, “investors climb a wall of worry”! It’s when most investors are overconfident and belief that the bull market will last forever that one should really worry.
PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) rebounded to a new record high of 828% this past week from 306% a week earlier. How did that happen? Well, you’ll need to read the full edition of TrendWatch Weekly to find out! The S&P/TSX Composite Index APAR dropped a percentage point to 19%, while the S&P 500 APAR is up to 58% from 51% a week earlier.
Last Week in the Major Indexes… The S&P/TSX Venture Index has been displaced from its top position in the rankings by the Dow Industrials by a tiny margin. The Russell 2000 (US small caps) continues to be the laggard, even though we’re supposed to be in a seasonably favourable period for that index until early March.
PTA Perspective… The S&P/TSX Specialty Indexes — Worth Following?
Although rarely discussed by the business media, the Toronto Stock Exchange maintains some “specialty” indexes beyond the indexes based on the GICS top-level categories that we discuss in our sector analysis. Every now and then we like to have at look at what’s going on with those, and this is one of those times. Have you been thinking about base metals lately? Maybe you should!
Well, we’re two weeks into 2018, and so far so good. The especially good news is that there are signs of economic strength worldwide. We’ll explore the impact on global equities in this week’s edition of TrendWatch Weekly.
PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) declined abruptly to 306% from 443% a week earlier. The S&P/TSX Composite Index APAR nudged up a percentage point to 20%, while the S&P 500 APAR is up 10% to 51%.
Last Week in the Major Indexes… The S&P/TSX Venture Index is still at the top of the trend list, after being at the bottom for a long time. Meanwhile US small caps (as determined via the Russell 2000) are the worst performers. All major indexes (aside from Russell 2000) gained last week, and all trend values are positive).
PTA Perspective… 2017 Year End Review – Global Perspective
We turn our attention this week to the worldwide equities markets during 2017. Among other things, we show you that the long string of new highs in DJI, S&P 500 and Nasdaq during 2017 mean almost nothing in a global context. Blame Trump for that!