The Market Dumps

 

Dailies

The SPY, QQQ, DIA, and XIC ETFs on freestockcharts.com

While some investors have been freaking out, I’ve been casually checking the market and my portfolios. Is this the correction I’d been impatiently waiting for?

Looking at the daily charts of the SPY, the Qs, the Diamonds, and the XIC, you can see a few major things happening here. A big precipitous move often creates another one. Look at the XIC on Monday, Jan 29. It gapped down and just kept going. Something similar happened to the Dow on Tuesday. While there was some defending going on, it still broke its trend on Friday. The SPY and Qs had a huge down day like the others on Friday; however, their uptrends are still intact. It will be interesting to see if there’s a bit of a bounce before these go down even more and break their shorter-term trends.

 

Weeklies

When we pan out and inspect the weekly charts, it’s hard not to notice the glaring red candle on the XIC. Whoa, Canada! In one week, it wiped out all the gains made since mid-October. The other charts only came down past the gains from the last week or two. If this is the start of the move down for the US market, it might be wise to take some profits off your US stocks before they correct even further.

Monthlies

As for me, I’m just hanging onto everything and waiting for my next buying opportunity. In fact, I transferred more cash into my registered accounts so that I’ll be ready when I see a good trade is on.

I’m noticing some beautiful monthly corrections on the weed stocks. You can bet that I will be scaling into these before their next big move. If you have difficulty selecting which weed stocks to buy, then just buy the ETF, HMMJ. You can visit this link to get more information on the fund and its stock holdings. I created a watchlist on freestockcharts.com with all the stocks that are in the HMMJ ETF. I like to cruise through the charts and check out which ones are helping the portfolio or weighing it down.

Stock Picks

selloffs

Market ETFs: SPY, QQQ, DIA, and XIC on freestockcharts.com

The US market is making me nervous as the charts get higher with bigger candles. At some point, it’s gotta sell off, right? I notated on the charts the last months where the most selling happened.

Market cycles can either be four months for the shorter term, or eight to ten months. The SPY and DIA show their last major sell-offs were in March of last year. The Canadian market, on the other hand, looks like it could be halfway through its current move up. It could pause for a bit at the current highs before continuing its move. If the US market pulls back, it’ll be interesting to see how the Canadian market will react.

It’s been a hectic week for me and I’m gearing to go back to work tomorrow. I managed to do a quick search and I found some decent charts to check out:

  • BB.TO
  • PD.TO
  • ACBN.TO (watch for a consolidation setup on the daily chart)
  • ENB.TO

Be sure to check the sector and do your necessary research and take the right amount of risk so that you can feel confident in your trades/investments.


Oh, and happy new year!

 

The Transparent RRSP: Vacay

The week of November 27
  • I deposited $150 into the RRSP ahead of December. There is $351.89 cash in the RRSP account.

JP and I are going away for a week to Costa Rica (we’re going to the Pacific side). We decided to only bring our tablet and phones. Neither of us has plans to trade while we’re away. Our main focus is to relax, enjoy the warm weather, check out the real estate situation there, and read and swim at the beach. I might squeeze in some study time whenever I can. Derivatives and options have my brain turned in on itself – to take a week off could mean excruciating reviewing when I return.

The airfare was too hard to turn down: $770 CAD for both our tickets! Yes, we’re travelling at a time when the weather isn’t totally unbearable in Ontario yet. We do, however, plan to go to Florida in late February. That’s usually when the cabin fever is at its most intense and could use a warm disruption. Before I take off, I must, of course, look at the markets.


 

November markets

SPY, QQQ, DIA, XIU ETF charts on freestockcharts.com

 

I don’t know how the market will trade after the US Thanksgiving holiday. December could be positive because of a stronger retail sector around this time. The bearish correction in the fall that I was bracing/hoping for never came. (And that is why we trade the trend, even if we don’t believe it’s still there.)

The trade volume in the US markets seems to be coming down while the prices are going up. The confluence of those two factors often means that: 1) savvy investors start to take profits, and 2) the public starts asking those investors if it’s a good time to buy Apple. The best thing to do is wait for 3) to happen, which is an actual correction.

I was in the Caribbean on my first and last cruise in early 2015 when this happened:

Caribbean

XIC ETF on freestockcharts.com

When JP and I checked our email for the most expensive 10 minutes of our lives, we also checked the markets. At the time, we were only day trading, which meant we were holding no positions in our accounts. Although we weren’t losing money, we figured good opportunities would be short-lived. We were concerned about entering a more hostile trading environment in which small fish like us would get eaten by the bigger, well-funded fish.

After we returned and got our sea legs back, we looked at Canadian companies that traded on both Canadian and US stock exchanges. We discovered they were CHEAP. We bought just a few to hold long term and had a gangbuster year. I doubt the market will do that in the week that we’re gone. Perhaps next January?


I have some stock charts worth checking out:

  • FIRE.V (New and risky, but cheap. Take fewer shares.)
  • IMH.V (Same as above.)
  • TCW.TO
  • SSL.TO (I already have this in my RRSP.)
  • SMF.TO

Please check the company, the sector, the earnings, the market, and the fundamentals that you think are important. Always do your due diligence to trade with confidence while respecting your risk tolerance. I do think that the market could pull back early in the new year. You could wait until then before buying or take fewer shares now and more later.

Sector Action

The Canadian and U.S. markets closed strong this week. There was a bit of weakening on Wednesday, but some big moves for Microsoft and Amazon last night helped the NASDAQ as well as other tech stocks. The energy sector just had a strong couple of days which helped the rest of the market.

oils

Oil/energy ETFs HOU.TO and XEG.TO on freestockcharts.com

A lot of Canadian oil stocks were in play today. Here are a few:

  • RRX.TO
  • CPG.TO
  • CVE.TO
  • CFW.TO
  • TCW.TO
  • TOG.TO
  • ERF.TO

The charts for these either had good daily, weekly, or monthly charts – but none of them had great setups on all three of these timeframes. I decided to take a look at a couple of the energy ETFs, the HOU.TO and XEG.TO.

While it looks like the recent surge could take the sector higher, I checked to see if there is room to move up. The bullish move had already started in September, now nearing previous resistance as marked off on the charts. If the sector moves sideways a little longer with more buying and less selling, it could result in a more substantial move up.

This weekend, as you attend your costume parties and chat about the markets with your friends, try not to get too swept up in all the hype. It’s tempting to get really excited over all the market action that’s happened in the last while. Before you start buying up tech and energy stocks, watch how the market digests this over the next week or two.


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Trading this Market

On Monday, JP went through all the Canadian stocks and gave me a list to check out. I went through it and thought the following were great charts:

  • RME.TO
  • FRU.TO (A royalty company.)
  • LCS.TO (A fund)

The next day, he asked me which one(s) I was going to buy. I told him none of them. He couldn’t believe I was just going to sit on a bunch of cash without investing it. Of course, I had some explaining to do. It was very simple: I didn’t like the market. I figured the market was going to offer hokey bullishness all week which it did, ending with a big hoorah day on Friday.

 

Market Monthlies

The XIU, SPY, QQQ, and DIA ETFs on freestockcharts.com

Here are the monthly charts for the Canadian XIU ETF, and the U.S. ETFs: the SPY (S&P 500), the QQQ (the NASDAQ), and the DIA (Dow Jones Industrial Average). There are seven trading days left in this month. If we close at new highs with lower volume, then I will happily wait for a correction next month.

I noted on the charts the months when we last saw a correction or a reset. On the DIA chart, I put a star over March 2017. Even though there wasn’t a proper sell-off/ correction, it consolidated and traded sideways for the following three months, which is often a good setup for another run.

Out of all of them, Canada’s XIU looks the best. If the U.S. markets undergo a correction, then trading Canadian stocks could be the next best play. I’d keep a close eye on the Canadian financial stocks, though, to see whether they reset or have a substantial sell-off that could weigh down the Canadian market.

For the rest of the week, JP kept asking me for my contribution of picks in return. I flat out declared I’d rather sit on cash than to buy anything right now. (Honestly, I was too lazy to look, but we both knew that.) He agreed that although the market looks overbought, sector rotation could keep it churning and that unless something fundamental changes in world economics (like a big war), we’re going to keep going.

I found some charts worth watching over the next week or two:

  • CCO.TO (Needs better setups on daily, weekly, and monthly timeframes.)
  • MX.TO (Could tighten up on the monthly, but decent daily and weekly charts.)
  • ALA.TO (Nice monthly, but it went up a lot already on the daily and weekly.)
  • ATZ.TO (I own this already. This must set up on all timeframes.)
  • H.TO (I own this already. The monthly chart is meh.)
  • DRT.TO (I own this already. The weekly isn’t that clean.)

JP’s picks definitely look better than mine. However, I feel these are worth watching as they had more recent corrections on the monthly timeframe. None of these have great patterns on all their daily, weekly, and monthly timeframes. I find that often when the pickings are slim, we’re due for a correction. By the time the correction or reset comes around, these picks could be even tighter. That’s the benefit of having cash ready and waiting in your account: you’ll be ready to go once the best opportunities are there. You can always afford to be patient.

 

 

 

 

 

The Transparent RRSP: Thanksliving Day Weekend

The week of October 2
  • On Oct 2, I bought 10 shares of ZPR.TO at $11.61. This cost me $116.10.
  • To my horror, I realized later on that I meant to buy 15 shares of ZPR, not just 10. So I ended up buying another 5 shares the next day at $11.67 a share (6 cents more!). This cost me $58.35. Aw phooey!
  • I would have bought more ZPR on Wednesday when I finally had more funds in the account, but the price was up higher by that point. Instead, I bought 15 shares of GRL.TO at $7.96 per share. This cost $119.55.

I have $37.92 in cash left in my RRSP.

GRL and ZPR

Price charts for GRL and ZPR on freestockcharts.com

I bought both of these stocks earlier this year. In early January, I got 50 shares of ZPR for $10.86 and 50 shares of GRL for $7.74 in mid-February. When you work out the average price, it looks like this:

ZPR

  • 50 shares @ $10.86 + $0.50 in commission* = $543.50
  • 10 shares @ $11.61 = $116.10
  • 5 shares @ $11.67 = $58.35
  • This totals to $717.95
  • Take the total cost of $717.95 and divide it by 65 shares. You get $11.05 a share for ZPR.

* I forgot to buy this under the “Free ETF Investment” commission structure with Virtual Brokers. I did remember to choose the correct commission structure this time around. At least I got one important thing right.

GRL

  • 50 shares @ $7.74 + $0.50 in commission = $387.50
  • 15 shares @ $7.96 + $0.15 in commission = $119.55
  • This totals to $507.05.
  • Divide $507.05 by 65 shares = $7.80 a share

Oh, what fun math can be! 

I really need to work this out for all the stocks I’ve averaged or scaled into. I scaled into a few of my other stocks last week — as I’ve been doing throughout the summer. I wish I could be a little more type A when it comes to tracking.

My new year’s resolution was to get more organized with tracking my trades. I still use post-it reminders occasionally. I now have two bulletin boards and a whiteboard to post better visual reminders for my trade ideas, upcoming strategies, and items that need attention. While I’ve made improvements in keeping up with things, I’m still floundering in the tracking department.


Thanksgiving Day 

Tomorrow my in-laws are coming to stay with us for a few days. They know it’s going to be a vegetarian ‘Thanksliving’ (the term courtesy of Jesse Eisenberg), so I’m sure they’re getting their turkey fill tonight with the other half of the family in Calgary before they fly in tomorrow.

I’ve got yummy Tofurky on the menu (don’t knock it until you try it) along with savoury kale chips, grilled veggies, dessert cookies, and other things that go well with good wine and craft beer. This may seem unappetizing to many, but we’re decent cooks for a couple of veg-heads and have yet to disappoint our guests. Cholesterol levels will not be spiking tomorrow!

I’ve got some cleaning and prep to do tonight so that tomorrow, I can trade in the morning for my US margin account as the US markets are open. Once I’m done trading, Thanksgiving cooking – and drinking – begin in the early afternoon.

Happy Thanksgiving to all!

 

 

The Transparent RRSP: Portfolio Choices

The Week of Oct 2
  • Over the weekend, I deposited $150 into the RRSP. I will have $328.22 in cash in the account as it takes a couple of business days for the transfer to show up in the account.

September was a bit of hectic month for me. Other than scaling into THCX.V, a stock which I already owned in my TFSA, I didn’t do much in the portfolio department. Sometimes you just have to take care of other business before you can properly take care of the business.

Last week, I finished the Trader Training Course with the Canadian Securities Institute. The night I found out I passed, I immediately signed up for the Technical Analysis Course. Even though I read charts all the time and dream about them in my sleep, I always like to read up on the basics. The text and course have been recently updated and I must say, I’m pretty impressed so far with the really clear explanations. I’ve read a lot of other books on technical analysis and this one is the best one yet. It better be because it costs A LOT more!


Now that I will have more cash, I’m considering buying more shares of ZPR. Check it out.

ZPR

Price chart for the ZPR ETF on freestockcharts.com

In the summer, I was curious to see if this would continue trading sideways. It still is, but it could be starting to break out. The worst that could happen is that if the market turns, this one will too after I enter, but I don’t really care. They say you should never have a bias when it comes to your investments, but I can’t help but like this one. I have shares of this in my TFSA as well.

Since it’ll take a couple of days for me to have the other $150 in this account, I’ll put a limit order in for 15 shares on Monday (tomorrow). Once the other cash shows up, I’ll get more. We’ll see how it works out.


Some More Stock Picks

I like the monthly charts for the following stocks:

  • CPG.TO
  • WCP.TO
  • ERF.TO
  • EFN.TO (This one needs another week or so to set up better.)
  • ACB.TO (This could use another week or two to set up.)
  • EXE.TO (I already own shares of this. It needs to tighten up, but I’m watching this one closely.)
ACB

Price chart for ACB.TO on freestockcharts.com

ACB is interesting because it’s a young stock. When you don’t have much to go on for the longer term charts of the weekly, monthly, and yearly, then you have to look shorter term and rely on the daily, hourly, or even shorter intraday timeframes (30 min, 15 min). It becomes more of a risk when you have less historical information to make your decisions on. In these situations, you just manage your risk accordingly. Even though it’s a cheap stock, you might want to buy fewer shares. As time goes on and you have more information and encounter better setups, you can always buy more shares.

I say this because I normally wouldn’t enter a stock that has gone up for six straight weeks as seen on the weekly chart. It would have to have an amazing monthly chart, which this one doesn’t yet because it’s still new. However, the daily chart is great in that is has a lot of trade volume supporting its most recent uptrend. What’s also attractive about this uptrend is that it’s had four pullbacks testing the trendline since it started in late August.

I’m a little hesitant to buy a new weed stock for the RRSP, but I think I will take on a few shares of this for my TFSA.

As always, do your necessary research and only risk what you’re comfortable with!

 

 

 

 

 

 

 

Stock Markets and Stock Picks

Marks

Monthly charts of market ETFs: XIU, DIA, SPY, QQQ on freestockcharts.com

The Markets

I typically like to analyze the XIC ETF as it consists of more TSX stocks. The XIC is very much like the SPY ETF for the S&P 500 index. When I want to know how the tech-focussed stocks are doing, I check out the QQQ.

I admit, I rarely look at the XIU (the TSX’s top 60 large cap stocks) or the DIA (the U.S. ETF for the Dow Jones Industrial Average). It’s an old habit of mine as my trading background was more focussed on shorter timeframes and bigger price action. There is less price action in these indexes that cover the large-cap, blue chippy stocks. Molasses moves faster than some of these stocks’ prices — this is because there are so many more shares to go through at each price level before the price moves up or down. Less price action, though, doesn’t mean less money. It’s just more stable. I really should watch these ETFs more because this is where big money, like funds, tends to go. With investing, it’s often good to follow the big money.

I drew horizontal lines on the charts for the XIU, DIA, and QQQ to show where those stocks had reset. The XIU has been “resetting” for a long while now, pretty much since February. The DIA (often called “the Diamonds”) had a reset in April and the Qs had one in July. Look at the SPY’s trendline that goes straight up. When is the SPY going to take a breather? If we’re going by season, then perhaps in the fall?

Observing the timing of these corrections demonstrates well the cyclical nature of markets. To get a better idea of what drives these differences means to take a closer look at the sectors and specific stocks that dominate their respective markets.

I worry that if the SPY makes a correction, it will affect the Canadian market. If I didn’t concern myself with the U.S. market at all, I have to say that I like what the charts tell me for the Canadian market. It’s been rationally pulling back for over half a year now and moving sideways for three months. It could be gearing up for another bullish move up. Let’s hope that if and when the SPY comes down, investors move into the Canadian stocks and start a new investment cycle.


Stocks to Check Out

Here are some stocks with nice-looking monthly charts:

  • TCW.TO
  • CVE.TO
  • SJR.B.TO
  • HSE.TO
  • IPL.TO
  • POU.TO
  • MG.TO
  • THCX.V (I own shares of this one already.)

Now, keep in mind, most of these are oil stocks. If you’re considering trading any of these, keep a close eye on the sector. And as I always advise, do your own necessary research on the company, the sector, and the markets. Consider how your choices fit into your grand plan and decide on the appropriate time horizons and how much you can safely risk for your portfolio.