BNN Market Call

3 top picks from Horizon’s Don Vialoux

Special to The Globe and Mail

Don Vialoux.

Don Vialoux is a research analyst at Horizons Investment Management. His focus is on technical analysis and seasonal investing.

Top picks:

iShares Trust Barclays 1-3 yr Treasury Bond Fund ETF
The period of seasonal strength for U.S. Treasury prices is May 6 to Oct. 3. This trade has been profitable in 10 of the past 13 periods.

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90-day Treasury bills
Use this as a source of funds when sector seasonal trades in gold, fertilizer, consumer staples and biotech appear.

180-day Treasury bills
A place to hide during the usually volatile period from mid-May to the beginning of October in the year after a U.S. presidential election.

Past picks: June 22, 2012

Global X Fertilizers ETF
Then: $12.20
Now: $13.31
Total return: +10.36 per cent

Market Vectors Gold Miners ETF
Then: $44.58
Now: $32.31
Total return: –26.78 per cent

PowerShares Dynamic Leisure & Entertainment
Then: $21.44
Now: $26.98
Total return: +26.40 per cent

Total return average: +3.33

Market outlook:

North American equity markets are overbought and vulnerable to a correction into the summer. The “Buy when it Snows, Sell when it Goes” strategy is lining up nicely this year. U.S. equity markets are expected to reach an intermediate peak by early May followed by a volatile, shallow correction into October typical of a post-U.S.-presidential-election year. Canadian equity markets have already entered a corrective phase that likely will last until October. Thereafter, equity markets on both sides of the border are expected to move higher to close at their 2013 highs at the end of the year.

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