Category: US & Canada

Posted on

Fed Weighs ‘Sterilized’ Bond Buying if It Acts – WSJ.com

JON HILSENRATH: Federal Reserve officials are considering a new type of bond-buying program designed to subdue worries about future inflation if they decide to take new steps to boost the economy in the months ahead. Under the new approach, the Fed would print new money to buy long-term mortgage or Treasury bonds but effectively tie up that money by borrowing it back for short periods at low rates. The aim of such an approach would be to relieve anxieties that money printing could fuel inflation later, a fear widely expressed by critics of the Fed’s previous efforts to aid the recovery.

Transactions like those under the third scenario are called “reverse repos.” A related program called “term deposits” also ties up short-term money held by banks. The effect of this approach is the same as Operation Twist: The Fed would hold more long-term bonds and investors and banks would get more short-term holdings in exchange.

via Fed Weighs ‘Sterilized’ Bond Buying if It Acts – WSJ.com.

Posted on

US Momentum stocks to watch

I set up a stock screen for strong Momentum stocks on Incredible Charts Shared tab (#49419) to run every weekend. Here is a list of the most promising:

  • Arctic Cat [ACAT]

Arctic Cat [ACAT]

  • Cheniere Energy [LNG]
  • DXP Enterprises [DXPE]

DXP Enterprises [DXPE]

  • Healthstream [HSTM]

Healthstream [HSTM]

  • Lion’s Gate Entertainment [LGF]
  • Liz Claiborne [LIZ]
  • Pharmacyclics [PCYC]
  • Regeneron Pharm [REGN]
  • Select Comfort [SCSS]
  • Sourcefire [FIRE]
  • United Rentals [URI]
  • Vocaltec Comm [CALL]

Bear in mind that the market is starting a correction and suitable entry opportunities may only present themselves in 3 to 6 weeks, but I have added them to my watchlist and will re-visit weekly.

Posted on

S&P 500 retreats

Jeffrey Hirsch of the Stock Trader’s Almanac predicted that we would see an adjustment in the second half of the month. It looks like it may have started a few days early.

Failure of short-term support at 1350 on the S&P 500 index indicates retracement to test medium-term support at 1300. Declining 21-day Twiggs Money Flow indicates medium-term selling pressure but this is not mirrored on the long-term (13-week) indicator. Respect of support at 1300 would confirm the primary up-trend — presenting a buying opportunity. Target for the advance is 1450*.

S&P 500 Index

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

Posted on

Canada: TSX 60

Canada’s TSX60 index is headed for another test of support at 700. Respect of support would present a buying opportunity, with confirmation from recovery above 720.

TSX60 Index

* Target calculation: 720 + ( 720 – 650 ) = 790

Posted on

Trader’s Almanac’s Hirsh says “more of the same”

Jeffrey Hirsch, president of the Hirsch Organization and editor of the “Stock Trader’s Almanac,” sees “more of the same” for U.S. stocks markets, with solid performance for the year. But first expect an adjustment (of 5 to 15 percent) starting in the second half of March because of:

  • tax season;
  • end of quarter sell-off; and
  • triple witching.

That should present buying opportunities for investors.

The outlook for 2013 is not as good. The first two years of a new presidential term are when bear markets are prevalent. They try to do the hard stuff in the first two years and then prime the pump in the two years leading up to the next election.

http://www.bloomberg.com/video/87510666/

Posted on

Morgan Stanley Still Expects QE3 This Year – WSJ

“For some time, our call has been that the Federal Reserve will undertake additional balance-sheet action in the first half of 2012,” writes Vincent Reinhart, an economist with the bank and a former top-level Fed staffer.

He argues it’s most likely the Fed will act to expand its balance sheet via Treasury and mortgage bond buying — in market parlance, QE3 — at either the April or June Federal Open Market Committee, and that the ultimate size of the program could tack on $500 billion to $700 billion onto what is currently a $2.9 trillion balance sheet. There’s also a chance they will put in place a modified version of the current effort to sell short-dated bonds to buy longer-dated securities.

Why act? Reinhart says the second half of the year will box the Fed in politically. Officials won’t wish to be seen starting a high-profile action in the thick of the presidential campaign. Also, he reckons growth will still be too weak, and inflation will be falling short of the Fed’s 2% target.

via Morgan Stanley Still Expects QE3 This Year – Real Time Economics – WSJ.

Posted on

Economic Data Shows Signs of a Slowdown – NYTimes.com

WASHINGTON (Reuters) — Manufacturing slowed in February and consumer spending was flat for a third straight month in January, new economic data showed on Thursday, suggesting the economy lost more momentum than expected early this year.

……the spending and factory data cut into the optimism generated by a recent decline in the unemployment rate, and suggested rising energy prices were taking a toll.

via Economic Data Shows Signs of a Slowdown – NYTimes.com.

Posted on

Canada TSX: Momentum trades

Bullish:

New Zealand Energy: Reversal above support at $3.00.

New Zealand Energy

Rio Alto Mining: Respected support at $4.25.

Rio Alto Mining

Roxgold: Strong recovery above $1.90/$2.00 support band.

Roxgold

Watch for breakout:

Tri-Oil Resources A: Narrow consolidation suggests upward breakout.

Tri-Oil Resources A

Argonaut Gold: Bearish divergence on 21-day Twiggs Money Flow indicates selling pressure at $10.00, but narrow consolidation suggests upward breakout.

Argonaut Gold

Atna Resources: Narrow consolidation below $1.50 suggests upward breakout.

Atna Resources
Northern Graphite: Bearish divergence (21-day Twiggs Money Flow) indicates selling pressure at $2.00, but respect of $1.80/breakout above $2.20 would signal another advance.

Northern Graphite

Watch:

Pretium Resources: Short candles suggest more resistance at $18.00.

Pretium Resources

Negative watch:

Silvercrest Mines: Strong bearish divergence on 21-day Twiggs Money Flow suggests reversal.

Silvercrest Mines
Madalena Ventures: Breach of rising trendline and bearish divergence on 21-day Twiggs Money Flow suggest another test of $1.00.

Madalena Ventures

Posted on

US stocks bullish

Dow Jones Industrial Average consolidating in a narrow range below resistance at 13,000 suggests an upward breakout and continuation of the primary up-trend. Strong values on 21-day Twiggs Money Flow indicate buying pressure.

Dow Jones Industrial Average

* Target calculation: 12200 + ( 12200 – 11200 ) = 13200

The S&P 500 displays a strong primary up-trend on 63-day Twiggs Momentum. Breakout above 1370 would complete the picture, offering a medium-term target of 1450*.

S&P 500 Index

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

The Nasdaq 100 is building up a head of froth and is due for a correction to test support at 2400. Breach of the secondary rising trendline would give an early warning. Bearish divergence on 13-week Twiggs Money Flow continues to warn of long-term weakness.
Nasdaq 100 Index

* Target calculation: 2400 + ( 2400 – 2150 ) = 2650

Bellwether transport stock Fedex continues in a primary up-trend, though rising oil prices could spoil the party. Respect of the rising trendline would reinforce the up-trend.

Fedex

Bear in mind that we are experiencing a lot of window-dressing ahead of the November election. The Fed is suppressing long-term interest rates, making stocks a more attractive alternative (the lesser of two evils). While ECRI’s Lakshman Achuthan points out that retail sales, the true driver of economic recovery, remain soft. There are some positive signs, however, so follow the rally by all means — but with caution. This is not another massive bull market like the 1990s. Not without a strong rise in debt levels — which is most unlikely. Markets will remain risk-averse for most of this decade — as long as it takes to clean up the mess.

Posted on

Canada: TSX 60 tests support

The TSX 60 Index is testing the new support level at 720 on the weekly chart. Failure would indicate a test of 700, while respect would confirm the primary up-trend. Breach of 700 is unlikely but would warn of a correction to primary support at 650. 63-Day Twiggs Momentum above zero continues to favor a primary up-trend.

TSX 60 Index

* Target calculation: 720 + ( 720 – 650 ) = 790

Powered by WordPress / WordPress Maintenance Service By Website Helper