The Canadian Technician

Canada's Top Utility Companies Are Accelerating

With the concern about the Brexit vote, this could be a wild week. There are lots of moving parts with the Vix Options Expiration on Wednesday, the quad witching for options on Friday, the Fed, the breakdown in European financials, the breakdown in the Asian charts this morning, and crude oil stalling around the $50 level. With all of that, its not a surprise that the Utilities and Consumer Staples continue to perform well.

Boralex (BLX.TO) leads the Utilities sector right now.

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Gold Miners Close On A Precarious Perch

The Gold Miners ETF (XGD.TO) has been the standout performer of the year. Friday's close marked an exceptionally interesting place on the charts.  From January's low to Friday's high, the ETF is up 95% from the low to the high! Remembering that the ETF is an average of sorts, many individual components surged a lot more than that. However, the price action on Friday was not that good. The ETF opened to a new high, traded higher and then spent all day drifting lower to close at the lower end of the range on high volume. That is a technically weak candle.

The MACD has been marking out some negative divergence with a lower high in May compared to February. The next week should be interesting to see if it starts rolling over again. An ETF running 100% in a few months might need some consolidation but this has been such a hot money trade, I am inclined to think it might be even more heated on the way down. One other thing that can happen when a massive trade ends, is a volatility surge. That happens in a highly volatile trade near the end of the run. You may see a pullback, then a surge with a massive gap up (6% in this case) and then over the next few days, it runs out of steam. That condition seems to be there.

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Canadian Financial Review, Martin Pring Chimes In! Webinar Skim 2016-05-31

I covered off the majority of the Canadian Financial Sector on Tuesday's Webinar. But we had a special guest with a new bullish buy signal. Martin Pring joined the webinar to launch some bullish charts.

"The Canadian Technician LIVE!" with Greg Schnell - 2016-05-31 17:00 from on Vimeo.

Webinar // Canadian Financials 0:00 // Martin Pring China Charts 27:00 // $NATGAS chart 59:00 //

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Betting On Insurance Companies? - The Fed Kickstarts The Charts

Since the Federal Reserve minutes last week, some investors are modifying their expectations for at least a 0.25% increase. Looking on the homepage today, it was also clear that some of the Canadian insurance companies were starting to show up on the most active list in early trading.

A good example is the Manulife (MFC.TO) chart. The SCTR is hitting a 5-month high. This is still weak, but accompanied by a pattern breakout, this probably has more room to run. The SPURS ( This is my acronym for the S&P 500 Relative Strength comparison shown in purple on my charts) is breaking out of the 6-month downtrend. This breakout started on the release of the Fed minutes. $19.00 was a support level on the price plot for most of 2015. Since the start of the year 2016, it has been trapped below. Now that resistance level of $19.00 has been broken, we can use it for support to trade with a stop just below there. The price is also breaking above the 200 DMA today for the first time since early December. The volume was above average breaking through resistance which is what we want to see. In the final panel, the StockCharts PMO is breaking to 2016 highs after making a cross above the signal line while above zero. That's very bullish. All in all, a great chart. 

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Archer Daniel Midland (ADM) Sprouts A New Uptrend

Archer Daniels Midland (ADM) is a big player in the Agriculture Industry. ADM revenues are 64 Billion. So the 64 Billion dollar question is : Can this stock start to outperform? Let's look into the chart.

The stock has been trending down for a year. This week, the SCTR finally went back above 75 for the first time in a year. The Relative Strength shown in purple is at new 6-month highs which is bullish. The price has recently moved above the 200 DMA for the first time since last summer. After a small pullback, today showed a renewed interest as the ADM stock surged higher. The volume was 80% higher than normal which is very nice with the surge in price.

Lastly, the MACD is also turning higher from above zero which is very bullish. This chart is setting up nicely. With $37 as support, this looks like a nice uptrend to participate in. There are some other factors that make this chart interesting.

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Markets Continue to Align Defensively - Webinar Skim 2016-05-17

One sector that moved to new 52 week highs in price and relative strength was the REITs this week.  I covered those off in this week's Canadian Technician Webinar.

"The Canadian Technician LIVE!" with Greg Schnell - 2016-05-17 17:00 from on Vimeo.

Webinar // Breadth // Crude Oil 7:00 // Currencies 14:00 // $TSX 17:00 // $TSX Relative Strength - Important 21:00 // Canadian Sectors 30:00 // Wrap Up 50:00 //

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Currencies Are Trying To Tell Us Something Part 3: Aussie, Loonie and Pound

This is part three of a three-part article on the currencies. Click here to link to the first article on the $USD. Here is the link to part 2: Euro and Yen. For this article, we'll review the Aussie, the Loonie, and the Pound.

First, let's start down under. Here is the daily for the Australian Dollar (nicknamed the Aussie - $XAD). I like to think of Australia as the commodity supplier to the Far East. We can see a pretty good correlation between the Aussie above the 65-period MA and a rising Australian Stock Market. Notice the failed break down (it reversed and went back up) in January on the currency marked an important change in trend. This also coincided with the bottom in crude oil ($BRENT, $WTIC a week later). The Aussie dollar reversal was a few weeks after $GOLD broke out. It is very clear to me that the Aussie Dollar is breaking down after going through the uptrend line and breaking below the 65 MA. Commodity-owners should be cautious here.

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Currencies Are Trying To Tell Us Something Part 2: Euro and Yen

This article continues the key discussion of currencies. Here is a link to Part 1: The $USD.

The Euro. Here is the short view. The major point is that this appears to have been rejected at the 115 level one more time. The spike in August 2015 was the highest intraday high. One of the major points about this chart is the breaking of the $DAX, the $XEU and the $SPX trendlines. 

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Currencies Are Trying To Tell Us Something Part 1 of 3: The $USD

On the Commodities Countdown Webinar, I implied that there were lots of interesting currency setups currently and I would try to write an article about them this weekend. Here is the first article in that effort. 

Currencies occasionally help to spot changes in market sentiment or weighting of international/domestic for equities traders.  While the correlation of the $USD to the $SPX is hardly a reliable trade signal, the changes in trend can be timely with the equity markets on occasion. When they all look ripe for some signal, that can be important. If nothing else, be alert for potential trend changes when the currencies are changing their trends.

When currencies trade towards support and resistance levels, signals are given out depending on the result. Below, I've captured some of the important levels for the Dollar that are generating curiosity for me. 

The US Dollar ($USD)

Back in January, we were discussing the $USD's inability to break through 100. The stock market had just been thru a significant month long decline to start the trading year. As the dollar stalled, and the trend lines started to snap, many of the commodities like oil, gold, silver, copper, and steel all made significant rallies. 

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Canadian Healthcare Stocks Are Tempting New Investors

Healthcare in North America has been a volatile sector. With the big drops in Valeant and Concordia north of the border and drops in Gilead and Celgene in the USA, the sector has lost some of the shine it previously held. There have been some smaller names starting to percolate to the top of the rankings. Here are a few Canadian charts to think about.

Nobilis Health (NHC.TO) was a very strong performer in 2014 and early in 2015. After having a major correction, the stock has become a top performer again. With the previous high almost 80% above current levels, there seems to be room to run!

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