Trader View from Toronto: SPX Aims for 2,487

07/17/2017 2:57 am EST

Focus: STRATEGIES

Ziad Jasani

Managing Director and Partner, Independent Investor Institute

S&P 500 projects up to 2,487 with better odds of pausing at 2,470 and softening to end the week, but remaining above 2,445. Growth out-performs (Technology), asserts Ziad Jasani, of the Independent Investor Institute, Toronto, in his weekly video.

Strategic summary week of July 17– 21:  

• Global Equity Markets bounced back to all-time-highs and surpassed: US, iShares MSCI Emerging Markets Index ETF (EEM), Growth-led.
• Global Bond Markets still relatively expensive, and rising yields likely persist.
• Global Commodity Markets have bounced (weak) and need USD to continue (less likely).
• Broad-Decisions: Hold for mid-to-longer-term equity positions but get your stop-losses in, look-long (Buy) short-term with a focus on US Technology, Energy, Materials, Industrials.
• Risks for the week: Chinese data (Sunday, July 16) sets the tone to start the week. (We see it being bullish.) BOJ and ECB Monetary Policy press conference (Thursday, July 20) sets the tone to end the week. (We see them as bearish.)

• Implications (US): S&P 500 (SPX) projects up to 2,487 with better odds of pausing at 2,470 and softening to end the week, but remaining above 2,445. Growth out-performs (Technology), Financials stagnate at highs but hold up, Materials/Mining favorable front end of the week only, Defensives (including Bonds) hold up the front end of the week but under-perform to end. Energy makes it over down-trends but then goes range bound.

• Trade-able Short-Term ↑ (US):

SPDR S&P 500 ETF Trust (SPY)
PowerShares QQQ (QQQ)
Technology Select Sector SPDR Fund (XLK)
iShares Dow Jones US Technology ETF (IYW)
iShares S&P 500 Growth Index ETF (IVW)
Real Estate Select Sector SPDR Fund (XLRE)
Utilities Select SPDR Fund (XLU)
iShares MSCI Emerging Markets Index ETF  (EEM)
iShares MSCI Russia Capped ETF (ERUS)
iShares MSCI Brazil Index (EWZ)
SPDR DJ Euro STOXX 50 ETF (FEZ)
iShares MSCI Germany Index Fund ETF (EWG)
iShares 20+Year Treasury Bond ETF (TLT)
Energy Select Sector SPDR Fund (XLE)

• Implications (Canada): Toronto Stock Exchange (TSX) bounces up off support at 15,175-110 and attempts another test of its 200-Day Average (15,299). Financials hold-up with a better chance for a limp-out above resistance. Energy attempts a bounce. Materials enjoy front of week out-performance with Defensives but are weak to the end the week.

• Trade-able Short-Term ↑ (CDN):

iShares S&P/TSX Capped Consumer Staples Index ETF (XST-T)
BCE Inc. (BCE-T)
iShares Core S&P/TSX Capped Composite ETF (XIC-T)
iShares S&P/TSX 60 Index Fund ETF (XIU-T)
iShares S&P/TSX Capped Energy Index Fund (XEG-T)
iShares S&P/TSX Capped Financials Index Fund (XFN-T)
BMO S&P/TSX Equal Weight Banks Index ETF (ZEB-T)
iShares S&P/TSX Global Gold Index ETF (XGD-T)

View the Independent Investor Institute trading ideas and strategies videos here

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