Don Vialoux is Research Analyst at Horizons ETF Management Canada. His focus is technical analysis and seasonal investing.
Horizons S&P 500 ETF
Originally purchased by the fund on Dec. 30. Not held personally.
The better of two seasonal “sweet spots” for U.S. equity markets is from the beginning of March to the end of April. This is the time of year when the U.S. economy recovers from its winter slowdown to its spring spurt triggered by consumer buying of cars, homes and clothing. This year, the spring buying season has been delayed slightly by weather.
Financial Select Sector SPDR Fund
Originally purchased by the fund on Dec. 16t. Not held personally.
The U.S. financial sector is in the middle of its period of seasonal strength from January 19 to April 13. This year, the sector is expected to benefit from successful completion of financial stress tests that will allow increases in dividends.
First Trust Auto ETF
Not held by the fund or personally.
The auto industry has a period of seasonal strength from March 3 to May 3 when the spring new car buying season occurs. Timing for seasonal strength in the sector has been delayed slightly this year due to weather. Analysts are forecasting growth in 2014 auto sales in the U.S., Canada, China, India, Far East and South America.
Past Picks: Feb. 12, 2014
United States Oil Fund
Then: $35.80; Now: $35.34, -1.28%; Total return: -1.28%
Horizons Comex Silver ETF
Profits were taken at $13.36 on Feb. 27
Then: $12.70; Now: $13.26, +4.41%; Total return: +4.41%
iShares China Large-Cap ETF
Then: $35.38; Now: $32.98, -6.78%; Total return: -6.78%
Total return average: -1.22%
The technical outlook for North American equity markets remains positive. The S&P 500 index and TSX composite index remain in intermediate uptrends and remain above their 20-, 50- and 200-day moving averages. A word of caution beyond mid-April! North American equity markets have a history of correcting from mid-April to the beginning of October during mid-term U.S. presidential election years. Political rhetoric related to the election creates economic and stock market uncertainties. Note that the low by North American equity markets at the beginning of October historically has been the low for the four year presidential election cycle.