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.

The Transparent RRSP: Breakout, Breakdown

The week of December 18
  • I bought 35 shares of TPK.V at $6.55 on December 18. It cost $229.25 plus $0.35 in commissions. There is $11.86 in cash left in the RRSP account.
TPK

TPK.V price chart on freestockcharts.com

Last Monday, I put in a limit order to buy 35 shares of TPK.V at $6.55 and it was filled at that price. I was so glad as it went straight up right after…until it did a reversal on Wednesday. It’s now back to my entry price.

I did the above screenshot the day I bought the shares. I commented on the monthly chart that this stock could trade sideways even longer. Sometimes with these bottoming patterns, you’ll find that there are a few false takeoffs before it really takes off. My hope is that it continues to trade sideways for longer, offering even more entry opportunities to add to the position. That way, if and when it does take off, the upward move will have a better chance of being sustained even longer.

The market didn’t budge much this week and I don’t expect it will next week. Trade volume between Christmas and the new year is usually quite low. There might be a bit of selling, but I don’t plan on making any trade decisions within the next week.


Already people are posting with glee that they’re on vacation. I wish you all happy and safe holidays! I hope to catch up again next week when I’ll be in Vancouver. 

pod-01-011218903256.jpeg

 

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.

The Transparent RRSP: Taking Some Action

The week of November 6
  • I didn’t do anything for the RRSP. There is currently $194.64 of cash in the account.

I did, however, pass my Technical Analysis exam. I certainly didn’t do as well as I wanted to though! I carried on by buying some shares of H.TO and ATZ.TO for my TFSA. I already own these stocks in the TFSA so I was just scaling into what looked like some (aggressive) buying opportunities. I also signed up for the Derivatives Fundamentals & Options Licensing Course and the Futures Licensing Course. (Talk about intense content!) I hope to finish these courses early in the new year.


I’m still not a fan of this market and entering any new positions makes me nervous. I am considering making a move this week, though, depending on how my idea performs alongside the market.

TA2

TA.TO price chart on freestockcharts.com

The daily and weekly charts aren’t great for TA.TO; however, the monthly is appealing to me. It’s making higher lows and demonstrating a trading range that is tightening. This could lead to a really good long-term trading opportunity with so much room to move into the upside. I wouldn’t mind owning more shares of this stock should this move actually occur.

Last Thursday and Friday experienced heavier selling in the U.S. and Canadian markets. If the selling continues and the market starts to correct this week, I’ll be watching this stock to see how it performs against the market. TA is in the energy sector which has been showing more strength than other sectors. If energy keeps going, scaling into this could be a good idea.

I would only scale in with a few shares (5 to 15) as I think the market will still endure a larger correction. I don’t know if energy’s strength will outlast or outperform the overall market correction. There are times when the right thing to do is sit on your hands and wait, while other times you should take full advantage of great opportunities. I feel that right now, I should find some balance in taking some action with little risk as opposed to doing nothing.

 

The Transparent RRSP: A Beauty Swing Trade

The week of October 30 
  • I deposited $150.00 into the RRSP account. There is 192.17 in cash now.

I’m still waiting for the market to correct, even by just a little on the weekly chart before I do anything. My focus is also elsewhere as I have an exam tomorrow for my Technical Analysis Course. Even though technical analysis is my ‘thing,’ it would be totally humiliating if I didn’t pass. I’m actually studying much more for this exam than I did for my last one. This also means I’m putting in zero effort in looking presentable around the house. JP drew this picture of me this morning:

 

20171105_1731241444805594.jpg

This is me.

 

If this is how I look right now, JP must really love me for what’s inside!

I haven’t been interested in opening any new positions in the last little while because I’d rather wait until the market has had a correction. For JP, his strategy in trading an extended market is to trade this bullish sentiment with shorter term trades. He took a beauty trade last week worth talking about.

MOGO

MOGO on freestockcharts.com

JP bought shares of MOGO.TO last Thursday. Then on Monday, KABOOM! He sold 2/3rds of his shares. On Tuesday, he sold some more shares. Now he has a small number of shares which he’ll keep in for a longer time period.

The thing is, MOGO has been on JP’s radar for quite some time now. It’s had a number of breakouts (November 2016, January 2017, February, and April). He either missed the breakouts or wasn’t paying close enough attention to during those times.

MOGO had been building a base over the last two months. It had consolidated, trading sideways with the price range tightening up on less volume. In a bullish market, this is a money setup. JP’s patience paid off with a handsome profit made over just a few days. He also bought shares of PUR.TO and DRM.TO. I hope these trades work out too!

 

 

 

 

 

 

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.


39

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.