A Seasonal Calendar with Probabilistic Expectations

SYNOPSIS

It’s so good to see major US stock indexes performing near record highs, but we’re kind of just hovering at those levels. Each new high isn’t a big leap forward, it’s a snail’s pace increase. That’s OK, but we’d rather ignore the “record highs” and see market advance substantially on a weekly basis, as would be the case in a robust bull market.

PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) moved up to 69% from 50% a week earlier. That’s still ahead of the S&P 500 APAR which dropped a point to 21%, and the S&P/TSX Composite Index APAR which (while still negative) has moved up to -2%.
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Last Week in the Sectors… S&P 500 sectors Information Technology and Health Care continue to advance at 0.7% per week. Only two Canadian sectors have positive trend values worth noting, and they’re small… Health Care and Telecommunication Services.

Feature… A Seasonal Calendar with Probabilistic Expectations
You no doubt already know that we include data and information on seasonality (aka calendar effects) fairly regularly. We draw our input from a Canadian source, mainly because BrookeThackray has more info on calendar effects for both Canadian and American markets than other sources we’ve found… through his annually updated book and newsletter and occasional videos. We certainly don’t believe that any investor could be highly profitable using solely seasonal stats, but yet it’s still a decent probabilistic source of information. Every investor should be playing probabilities which work in their favour. This week we introduce a big chart that illustrates at least 80% of what’s in Thackray’s book. We tell you all about it this week, and demonstrate how we’ll be zooming into subsets (sub-charts) every now and then to keep you up to date. We’ll also provide some probabilistic expectation data that are derived from, but not available in anything Thackray has published to date. That’s the most important part!

A Little-Known Predictor for Equities: The Gold/Platinum Ratio

SYNOPSIS

Nasdaq bounced back 2.6% last week, as tech stocks regained some of the ground they lost in June and early July. In fact all of the indexes rose on a one-week basis, although Canadian stocks continue to trend lower.

PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) moved up a little further to 50% from 44% a week earlier. That’s still ahead of the S&P 500 APAR which rose to 22%, and the S&P/TSX Composite Index APAR which is still negative.

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Last Week in the Sectors… S&P 500 Financial Services, Information Technology, Health Care and Industrials are close to on par now as the sectors to watch for stock selection opportunities.

Featured Charts… A Little-Known Predictor for Equities: The Gold/Platinum Ratio
We all know that gold (aside from it’s jewelry use) is often treated as a currency. It’s often purchased as a hedge against inflation, and other forms of economic and geopolitical risk. When stock markets plunge, the price of gold rises and vice versa. Currently gold is struggling, while stocks are still hanging in there near record highs. But this relationship is not all that reliable; and Cornell University finance professor, Darien Huang, has research to support the notion that the gold/platinum ratio is a far better predictor of future stock market moves in both one and five year horizons. We have a closer look at that this week.

2017 First Half Review – Global Indexes via ETFs

SYNOPSIS

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One thing that should be totally obvious by now is that any media attributions of stock market gains to Trump’s election are foolish and unfounded. Stock markets almost always rise in November/December/January, so that’s just a seasonal effect. Since then, the markets have mostly been moving sideways, so no tip-of-the-hat to Trump for that. And finally, the business media haven’t noticed that just about every stock market in the world has outperformed US markets this year (except sadly Canada, which has fared worse). Lot’s more on that in this week’s edition.

PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) gained a bit to 44% from 41% a week earlier. That’s still ahead of the S&P 500 APAR which edged up to to 11%, and the S&P/TSX Composite Index APAR which turned decidedly negative.

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Last Week in the Major Indexes… Nasdaq recovered a bit after a previously disastrous week. All index trend values are below or just slightly above zero.

Last Week in the Sectors… US Financial Services have shown some signs of improvement, but only a few sector trend values are positive right now.

Featured Charts… 2017 First Half Review – Global Indexes via ETFs
We continue our first half 2017 coverage with a look at the global context. As with our Q1 report, we’ve found that a huge majority of the world’s stock markets are still outperforming those in the US and Canada. Investing abroad via foreign ETFs or ADRs is definitely something to consider.

2017 First Half Review – North America – Major Indexes & Sectors

SYNOPSIS

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If you have plenty of tech stocks in your portfolio, this may have been you last week… definitely not sure that you want another ride like that! In fairness, we did warn you several times that June is the worst month of the year for Information Technology stocks. Did we follow our own advice on that? Not entirely, unfortunately. Some of those juicy trend values were too hard to resist. The good news is that July’s gains in Information Technology equities typically offset June losses. Let’s hope that it’s a typical July in that respect.

PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) plunged to 41% from 104% a week earlier. Mind you, that’s still ahead of the S&P 500 APAR which pulled back to 11%, and the S&P/TSX Composite Index APAR which dropped from 5% to zero.

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Last Week in the Major Indexes… Nasdaq took a -2.0% hit last week, and VIX actually spiked above 15% briefly. The S&P/TSX Small Cap Index was the only major index that we track that had a reasonable 1-week gain of 0.6%
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Last Week in the Sectors… Forget tech! Health Care and (US-) Financial Services are better places to look for profits right now.

Featured Charts… 2017 First Half Review – North America – Major Indexes & Sectors
It’s hard to believe that we’re half way through the year already, but it’s true. Q2 wrapped up on Friday, and the final week was anything but calm! After running through the best bets based on trend, we take a look back at what’s happened so far during the first six months of 2017.

Investor Confidence… The June results for the State Street Investor Confidence Index were released this past week. The Global Investor Confidence Index declined slightly in June. The Index now stands at 101.0, down from May’s revised reading of 102.6.

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