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bnn market call

Bill Carrigan.Kevin Van Paassen/The Globe and Mail

Bill Carrigan is a technical analyst with Getting Technical Info Services.

Top Picks:

Cascades (CAS.TO)

A cyclical packaging and fibre company with global exposure, just printing a series of new 52-week highs.

BMO Emerging Markets Equity Index (ZEM.TO)

Exposure to indexes and equities of the smaller global economies is a lagging play on global growth. The U.S.-listed EEM has printed a higher low on a volume jump.

BMO Junior Oil Index ETF (ZJO.TO)

A basket of smaller crude producers is a play on consolidation and a lagging play on global growth.

Past Picks: October 6, 2015

Agnico Eagle Mines Limited (AEM.TO)

NEW COMMENTS: One of the stronger gold miners relative to its peer group, with a recent higher low and trading at the 200-day moving average.

Then: $37.60 Now: $33.45 -11.04% Total return: -11.04%

Rogers Communications (RCIb.TO)

NEW COMMENTS: A yield and content play and a strong reformer relative to its peer group and the broader S&P/TSX composite.

Then: $46.90 Now: $52.47 +11.88% Total return: +11.88%

Chartwell Retirement Residences (CSH_u.TO)

NEW COMMENTS: A growing component of a dominant theme play – an aging population. A strong performer relative to its peer group, also hitting a recent new 52-week high.

Then: $12.30 Now: $12.86 +4.55% Total return: +4.93%

Total Return Average: +1.92%

Market outlook:

During the latter stages of a long bull market, investors can get confused and begin to engage in market timing or over-trading. The best approach would be to understand the longer term structure of the great 2009-2016 advance in the major global stock markets. If we apply long-term analysis to an important bellwether, we can better identify our current location within the great 2009-2016 advance.

Berkshire Hathaway Inc. Cl B (BRK.B) is a conglomerate holding company owning subsidiaries engaged in a number of business activities and basically a proxy for the world's largest economy. Our long term plot of BRK.B displays the structure of the great advance the began from the lows of 2009. The first bull cycle originated from the lows of 2009 and peaked in early 2011. This was a rebound bull that typically occurs after a crisis bear such as the 2007-2008 global financial crisis. The second bull cycle originated from the bear market lows of late 2011 and peaked in late 2014. This bull was powered by the easy money policies of the major central banks. If we get a typical Elliott Wave count, then a third and final bull cycle should follow the current 2015 bear in Berkshire and persist through 2016.

The 2016 Outlook:

Final Elliott Wave up-legs are typically high risk – unlike the prior two advances, third and final bull cycles have thin leadership and are of less price magnitude than the first two advances. Also what worked in the prior advance – consumer & heath care – may not work in the final advance and conversely the losers in the prior advance – energy & materials – may outperform through 2016.