I am 14 months into working on my new book, The Intellectual Investor, which is far from being finis...
View from Toronto: Trade Ideas for US, TSX This Week
08/15/2017 3:03 am EST
In U.S. markets, Materials/Mining and Energy face pressure from a rising USD mid-week onwards and weaken to end the week. In Canada, Materials (XMA-T) enjoy a weaker USD front end of the week but bearishly reverse mid-week onwards, says Ziad Jasani.
US Equity Market Outlook & Summary– Week of August 14-18:
For slide format use this link:
Implications (US): S&P 500 is tepidly holding at the support of 2,440-35, with better odds to hold above to start the week, but then reverse under mid-week-onwards – projecting down to 2,400. Growth-based spaces are likely to out-perform to start the week (Technology, Discretionaries, Industrials, Miners). Financials continue to face downside-pressure on yields being suppressed from August 11 CPI miss.
However, Materials/Mining and Energy are likely to face pressure from a rising USD mid-week onwards and weaken to end the week. Defensives (including Bonds, Inverse Plays) are not likely to deliver to start the week, but important as a hedge, and likely to out-perform to end the week.
SPDR S&P Biotech ETF (XBI)
SPDR S&P Pharmaceuticals ETF (XPH)
SPDR S&P Metals & Mining (XME)
Consumer Discretionary Select Sector SPDR Fund (XLY)
Technology Select Sector SPDR Fund (XLK)
iShares US Technology ETF (IYW)
Canadian Market Outlook & Summary – Week of August 14-18:
For slide format use this link:
Implications (Canada): TSX is tied to Oil which has “overheated.” All short-term technicals support a pull-back in Oil and the Commodity-Complex in general. However, to start the week, Oil is likely to continue hovering under $49.50.
While Oil hovers above $48.50 the TSX is likely to remain above support of 15,025-14,950 but watch out below if Oil breaks and sustains below $48.
The TSX is likely to face some downside pressure from Financials iShares S&P/TSX Capped Financials Index ETF (XFN-T) to start the week, but that is likely offset by Energy iShares S&P/TSX Capped Energy Index ETF (XEG-T) which implies a bounce off support at 15,025-14,950 at the front end of the week but Wednesday, August 16 onwards downside risk grows.
Materials iShares S&P/TSX Capped Materials Index ETF (XMA-T) enjoy a weaker USD front end of the week and rise, but bearishly reverse mid-week onwards. Defensives sectors shore up the front end of the week, but FOMC Meeting Minutes August 16 are likely to pressure them down to end the week.
Trade-able short-term front half of the week ↑ (CDN)
iShares S&P TSX Capped Composite Index (XIC-T)
iShares S&P/TSX Capped Energy Index ETF (XEG-T)
iShares S&P/TSX Capped Financials Index ETF (XFN-T)
BMO S&P/TSX Equal Weight Banks Index ETF (ZEB-T)
Weekly Video Market Strategy Session – August 14:
Related Articles on STRATEGIES
In my experience there is no such thing as a single indicator that catches exact bottoms and tops in...
Using our proprietary dividend screener, I found hat nearly 1,100 individual equities offer yields a...
History is a stern taskmaster and provides ample evidence that not only do corrections occur, bear m...