The Canadian Technician

Betting On Insurance Companies? - The Fed Kickstarts The Charts

Since the Federal Reserve minutes last week, some investors are modifying their expectations for at least a 0.25% increase. Looking on the homepage today, it was also clear that some of the Canadian insurance companies were starting to show up on the most active list in early trading.

A good example is the Manulife (MFC.TO) chart. The SCTR is hitting a 5-month high. This is still weak, but accompanied by a pattern breakout, this probably has more room to run. The SPURS ( This is my acronym for the S&P 500 Relative Strength comparison shown in purple on my charts) is breaking out of the 6-month downtrend. This breakout started on the release of the Fed minutes. $19.00 was a support level on the price plot for most of 2015. Since the start of the year 2016, it has been trapped below. Now that resistance level of $19.00 has been broken, we can use it for support to trade with a stop just below there. The price is also breaking above the 200 DMA today for the first time since early December. The volume was above average breaking through resistance which is what we want to see. In the final panel, the StockCharts PMO is breaking to 2016 highs after making a cross above the signal line while above zero. That's very bullish. All in all, a great chart. 

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Archer Daniel Midland (ADM) Sprouts A New Uptrend

Archer Daniels Midland (ADM) is a big player in the Agriculture Industry. ADM revenues are 64 Billion. So the 64 Billion dollar question is : Can this stock start to outperform? Let's look into the chart.

The stock has been trending down for a year. This week, the SCTR finally went back above 75 for the first time in a year. The Relative Strength shown in purple is at new 6-month highs which is bullish. The price has recently moved above the 200 DMA for the first time since last summer. After a small pullback, today showed a renewed interest as the ADM stock surged higher. The volume was 80% higher than normal which is very nice with the surge in price.

Lastly, the MACD is also turning higher from above zero which is very bullish. This chart is setting up nicely. With $37 as support, this looks like a nice uptrend to participate in. There are some other factors that make this chart interesting.

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Markets Continue to Align Defensively - Webinar Skim 2016-05-17

One sector that moved to new 52 week highs in price and relative strength was the REITs this week.  I covered those off in this week's Canadian Technician Webinar.

"The Canadian Technician LIVE!" with Greg Schnell - 2016-05-17 17:00 from on Vimeo.

Webinar // Breadth // Crude Oil 7:00 // Currencies 14:00 // $TSX 17:00 // $TSX Relative Strength - Important 21:00 // Canadian Sectors 30:00 // Wrap Up 50:00 //

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Currencies Are Trying To Tell Us Something Part 3: Aussie, Loonie and Pound

This is part three of a three-part article on the currencies. Click here to link to the first article on the $USD. Here is the link to part 2: Euro and Yen. For this article, we'll review the Aussie, the Loonie, and the Pound.

First, let's start down under. Here is the daily for the Australian Dollar (nicknamed the Aussie - $XAD). I like to think of Australia as the commodity supplier to the Far East. We can see a pretty good correlation between the Aussie above the 65-period MA and a rising Australian Stock Market. Notice the failed break down (it reversed and went back up) in January on the currency marked an important change in trend. This also coincided with the bottom in crude oil ($BRENT, $WTIC a week later). The Aussie dollar reversal was a few weeks after $GOLD broke out. It is very clear to me that the Aussie Dollar is breaking down after going through the uptrend line and breaking below the 65 MA. Commodity-owners should be cautious here.

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Currencies Are Trying To Tell Us Something Part 2: Euro and Yen

This article continues the key discussion of currencies. Here is a link to Part 1: The $USD.

The Euro. Here is the short view. The major point is that this appears to have been rejected at the 115 level one more time. The spike in August 2015 was the highest intraday high. One of the major points about this chart is the breaking of the $DAX, the $XEU and the $SPX trendlines. 

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Currencies Are Trying To Tell Us Something Part 1 of 3: The $USD

On the Commodities Countdown Webinar, I implied that there were lots of interesting currency setups currently and I would try to write an article about them this weekend. Here is the first article in that effort. 

Currencies occasionally help to spot changes in market sentiment or weighting of international/domestic for equities traders.  While the correlation of the $USD to the $SPX is hardly a reliable trade signal, the changes in trend can be timely with the equity markets on occasion. When they all look ripe for some signal, that can be important. If nothing else, be alert for potential trend changes when the currencies are changing their trends.

When currencies trade towards support and resistance levels, signals are given out depending on the result. Below, I've captured some of the important levels for the Dollar that are generating curiosity for me. 

The US Dollar ($USD)

Back in January, we were discussing the $USD's inability to break through 100. The stock market had just been thru a significant month long decline to start the trading year. As the dollar stalled, and the trend lines started to snap, many of the commodities like oil, gold, silver, copper, and steel all made significant rallies. 

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Canadian Healthcare Stocks Are Tempting New Investors

Healthcare in North America has been a volatile sector. With the big drops in Valeant and Concordia north of the border and drops in Gilead and Celgene in the USA, the sector has lost some of the shine it previously held. There have been some smaller names starting to percolate to the top of the rankings. Here are a few Canadian charts to think about.

Nobilis Health (NHC.TO) was a very strong performer in 2014 and early in 2015. After having a major correction, the stock has become a top performer again. With the previous high almost 80% above current levels, there seems to be room to run!

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Investing On A Knife Edge - Webinar Highlights-2016-05-03

The overbought pullback has arrived. The breadth of the market heading into the overbought situation appears to be demonstrating a new bull market in my work. However, the macro situation is a big cause for worry. We covered a lot on the webinar yesterday. 

"The Canadian Technician LIVE!" with Greg Schnell - 2016-05-03 17:00 from on Vimeo.

Webinar Content // Breadth 0:00 //Crude Oil 4:00 // Currencies 5:30 // $TSX 11:00 // Sectors 21:00 // BPI Charts 44:30 // Commodity Countries 48:00 // Closing Thoughts and Ideas 51:00 //

I am not sure that the fundamental investors are aware of how fine the knife edge is on the charts at this particular moment. 

This is the Canadian Financial Services chart. $SPTFS. There are enough technical signals here to send technicians to a bunker. The RSI continues to be in bear mode with a reading below 60. In bear markets, the weekly charts usually stall around 60 on the RSI. Moving to the Relative Strength, the Canadian banks have been losing their strength compared to the $TSX index. While I don't usually compare to the $TSX, this is definitely a concern as the major banks all tried to make new highs recently. The price chart couldn't be more unnerving. After a big topping structure built over the last two years, we recently broke down in the area circled. The rally back up appears to have stalled at the confluence of three trend lines. First is a failure of the short term horizontal trend. The price action recently took out the previous high, only to roll over and fail quite dramatically this week. It also broke below the current uptrend line off the February lows. While that might be considered too steep anyway, there is more to the story. Bear market uptrends are usually quick, vicious and quite upright. They break just as quickly. The third up-sloping line is the neckline for the topping structure. When that line is extended as shown, this looks like a normal backtest of the trendline from below. The final bullet in the gun is the major long-term uptrend going back 6 years was broken in 2015. This is a backtest of that area as well. Having the failure appear at the backtest point as well as the confluence of these trendlines can only be considered as a major blow in the bull/bear debate.

Staying with the chart above, the timid volume in April is concerning as well. The Banks were pushing to record highs, but no new buyers showed up to push the stocks higher. Now it appears the MACD is rolling over once again and the long-term Full Stochastics are also rolling over after failing to reach the 80 zone or a new bull market level.

One sector like the banks shown above does not make a new bull or a bear market. It is the broad confluence of information that makes it a new bull or bear market. The breadth charts shown early in the webinar were particularly bullish. That needs to be tempered with the data coming off these sector charts.

Here is the chart of the industrials. $SPTIN.

The huge volume spike was associated with Bombardier's new jet order announcement from Delta. That would be my take on it.

For the energy sector, it has been a significant run.

Probably the most influential groups in the bull/bear debate are the consumer staples (defensive) vs. consumer discretionary (bullish).

Here is the bull chart. The only problem is, it is not bullish! $SPTCD. The Consumer Discretionary group. The RSI is below the bear market level. The relative strength is a problem as it is trending down. The price stalls at the horizontal support/resistance level.

Let's look at the Consumer Staples so you can scroll between them. ($SPTCS). The RSI is stuck in bull-market mode. It has stayed above 40, bouncing up to 70. The relative strength is drifting down slightly, but maybe the chart can explain some of that. During the recent rally, this has pulled back. But it is in exactly the opposite position as the chart above. That was hitting resistance and failing, this chart is hitting support and bouncing. The MACD is well above zero, albeit with a lower peak on the last peak. The Full Stochastics are still above 80. 

The bottom line is the bull market sits on a knife edge. This knife edge is defined as support/resistance. The growth-oriented businesses are breaking down. The defensive businesses are turning up. You can also watch the video for more information on the REITs, Income Trusts, and Utilities. Click on this link to watch the video. The Canadian Technician Live 2016-05-04

Lastly, I'll be hosting the Commodities Countdown webinar on Thursday, March 5th. Follow the link to register. You can follow me on Twitter for some independent stock charts that are blurted out. @Schnellinvestor. Please click on the big Yellow button below to subscribe to this blog. You will have to do that with each blog that you wish to follow. While the webinar on Tuesday covered the global situation, I also covered that on last Thursday's Commodities Countdown  2016-04-28. Here is a link to the last Commodities Countdown blog article. If you think the lows in the Commodities are in, you might want to hit the big yellow Yes button at the bottom of that blog chain as well.

Good trading,
Greg Schnell, CMT, MFTA.

Energy Stocks Continue To Be Added To Canada's Top Performers

The momentum continues to surge towards the energy sector and now the oil services sector. If you have not seen the change in momentum, I'll be hosting a Commodities Countdown webinar 2016-04-28 and you can click on this link to register. Here are a few more stocks adding to the momentum.

ARC Resources (ARX.TO) continues to press to the upside. After breaking to new 6-month highs, it has paused. With the momentum across the industry, this probably has more to run.

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