Bill Carrigan is a technical analyst at Getting Technical Info Services. His focus is on technical analysis.
iShares S&P/TSX Venture Index Fund
iShares S&P/TSX Capped Energy Index Fund
Martinrea International Inc.
Past picks: Sept. 21, 2012
iShares S&P Global Timber & Forestry Index Fund
Total return: +18.60 per cent
BMO S&P/TSX Equal Weight Global Base Metals Hedged to CAD Index ETF
Total return: –11.57 per cent
BMO S&P/TSX Equal Weight Banks Index ETF
Total return: +9.74 per cent
Total return average: +16.77 per cent
The current "rebound bull" is about 48-plus months or 1,500 days old. The previous rebound bull of 2002-2007 ran for 60 months. A rebound bull is a powerful linear advance that follows a "granddaddy bear" such as we had in 2000-2002, 2007-2009 and the crash of 1987.
Modern bulls are running longer than the historical 48-month U.S. business cycle, perhaps due to the forces of the global economy.
The current rebound bull may be predicting a global recovery, which would allow the U.S. Fed to slowly wind down its quantitative easing program. As this bull ages look for normal sector rotation to return as the global recovery becomes a reality.
The normal sector rotation order is: leading stock sectors – financial, utilities and telecom; followed by coincident stock sectors – consumer, health care, industrial and technology; and then lagging stock sectors – energy and materials.
The best strategy: Prepare for a gradual trend to higher interest rates by moving away from utilities, telecom, REITs and toward the industrial, energy and materials sectors.