The Canadian Technician

European Equity ETF's Start To Accelerate

In the world of central bank stimulus, currently China, Japan and Europe have some form of stimulus going. Recently, Mario Draghi from the ECB said they would look at increasing the level of stimulus in their December policy meeting.

While most of the global markets have been trapped under their 200 DMA, this week a lot of the European charts broke above on this notion of more stimulus coming on board. As all currencies seem to be endlessly dropping to the US currency, investors choosing to work in European investments may need a hedged product to protect themselves against currency swings.

Below is an example of a European High-Quality ETF that is hedged to the Canadian Dollar. ZEQ.TO. I like it because the price action has pushed the SCTR back up above 75. I would be more interested if the relative strength (SPURS) shown in purple could break out of the downtrend.

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Toronto PnF Chart Restarts Primary Bear Market Signal

Canada made market highs in 2014. Recently it rallied up and tried to restart a new bull market cycle. Today, that cycle reversed and we marked a resumption of the primary bear market trend.

I showed this chart in my webinar yesterday. You can see that webinar by following this link. Commodities Countdown 20151105. This is still a concern for all the commodity related countries as commodities continue to go lower here.

Not great news for the $TSX as the recent rally appears to have stopped for the Canadian Marketplace. Maybe next week, it will pop back up. The $TSX would have to reach 13651 to reverse this chart in the short term and would have to take out 13801 in order to break the trend of lower highs and lower lows. The linkable version to this chart specifically is here. $TSX PnF 20151106.

Good trading,
Greg Schnell, CMT

Oil Stocks Are Rallying Like There Is No Tomorrow

One of the great influences in my life used to talk about how something was 'going like there is no tomorrow.' It's an interesting phrase and it reminds me of the US oil stocks rallying this week. Crude is stuck in the trading range between $43 and $51. But the indicators tell a different story. The MACD has a nice positive divergence. That should not be a surprise to anyone as the momentum on the major drop in crude oil last year was huge. Now that crude is stabilizing in a trading range the momentum lower is a lot less. The SPURS relative strength shown in purple is stabilizing, but it does not appear to be outperforming. So is flat the new black?

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Evaluating The Market Structure After The October Run

Every TV station is gasping about the great run-up in stocks. From BNN to Bloomberg, everybody is talking about this October being the best for stocks in 4 years. The US market really popped last week ($100 Billion) between Amazon, Microsoft and Alphabet. That is a step change. For the broader market, it has been much more subdued but we still have two huge weeks of earnings to work through. Looking specifically at Canada, we need to do some major work to get some confidence back into the stocks. On Chart 1, you can see the $TSX underperformed the venture exchange since the September low. A large part of the $TSX underperformance is Valeant fainting from an overdose of financial reporting questions.

Chart 1

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How To Trade The New Politics In Canada

Congratulations Canada! We had a very high turnout for the election which was the largest at 68% since 1993. Voices were heard!

One of the major platforms for the new government was a large infrastructure program to stimulate jobs. A couple areas of interest could be real estate construction as well as engineering firms.

The first company, Aecon Group (ARE.TO) is up over 5% already this week and the KST for the stock and the relative strength are both turning up. This one looks to be in full buy mode.

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Gold Lovers Unite Or Do They?

There has finally been some positive price action on Gold ($GOLD) and to some extent on the gold miners. Let's take a look. Gold has been building this red wedge for almost three years now. The past two weeks it broke above the trend line and tonight we'll see a taller candle approaching horizontal resistance around $1180.

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Three Gushing, Below The Radar, Energy Stocks

Oil stocks have rallied recently over the last few days. While it would still appear to be a volatile time to look for entries some charts are starting to form bases longer than a few days.

The big names are always in focus north of the 49th but there are some interesting tickers that have much better chart patterns.

  • Parex PRX.TO
  • Total Energy Services TOT.TO
  • Advantage Oil and Gas AAV.TO

Here is Parex Resources (PXT.TO) with an SCTR of 95.9. Nice break above resistance yesterday with follow through today. $11.10 will be very interesting resistance.

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Is The Auto Business Blowing Black Smoke Because Of Emissions? US & Canadian Edition

I created an article over on Commodities Countdown blog (please connect if you are interested by subscribing at the bottom of any article as it does not currently appear on the blogs page) about the car business charts globally. Is The Auto Business Blowing Black Smoke Because Of The Emissions Crisis? I would encourage you to read that. However, I wanted to examine Magna, Martinrea and Linamar for Canadian investors. Also, I will be doing a commodities-focused webinar this afternoon where I will dip my toe in on this area of the market. (Commodities Countdown 20150924).

Magna (MG.TO)  or MGA in USA has been a wonderful growth story and the stock launched a few years ago. Luckily, we had an article right here on this page explaining how good things were going to get. Magna Looks Magnificent (20121220). That came a week after the big bold headline of a new bull market. 2012 12 12 Announcing The Global Bull Market. I didn't trade that as well as I should have!

If you read the Magna article, you'll have seen the setup. Here is the updated chart. I made a reference to my friend Tom McClellan, who suggested never look for a top when you're staring at the base. This is a pretty good example of why! 

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