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Time to get your shopping list ready, but caution advised.

Aug 2 timing gaugeCanada’s Primary Wave is Up for a second day. Have you got your shopping list ready? If not, join me tomorrow, Monday, August 3 at 12:30 ET for our regular weekly SOTW Q&A presentation. We’ll answer your questions about Friday’s Special Presentation, Master the Viewers Tab, and we’ll use the VIEWERS and graphs to find and analyze potential shopping list candidates for the week ahead. Click Here To Register

The caution light is still on however. It’s too early to tell if Canada’s stock market will continue to rise after snapping a lengthy downtrend with four strong up days last week. It is a good sign however the market bottomed and rose steadily after the MTI fell below 0.60 intraday Tuesday (See graph below). When the MTI is near or below 0.60, we can say we are near a significant bottom historically. For aggressive traders and investors, the Primary Wave Up (PW/Up) signal Thursday with follow-through on Friday was an opportunity to begin trickling back into the market. For more conservative to prudent investors, we could get the GLB signal (Green Light Buyer) as early as next Tuesday. Whatever your investment style and Market Timing Signal, it’s a good idea to have your shopping list ready so please join me tomorrow for our SOTW Q&A webcast.

Reinforcing the need for caution, both the TSX Composite (PTSE)  and VectorVest Composite (VVC/CA on the MTI or Market Timing Graph) are nearing resistance zones of both an upper channel trendline and the 65-MA. We would like to see a breakout above the trendline to a higher high to firmly establish a new uptrend. (Note: The green and red triangles on the MTI graph below are the Primary Wave Up and Primary Wave Dn market timing signals.)

Aug 1 MTI

Aug 2 MTI Intraday

U.S. Market Update. The bulls seem to be in charge however we had an unusual situation Friday where the VectorVest Composite (VVC) rose even though three major indices, the DJI, S&P 500 and NASDAQ, all fell. The end result Friday was a Primary Wave Up (PW/Up), however VectorVest guidance to Prudent Investors in Strategy section of the Views tab is to use caution when buying stocks at this time. As you can see from the graph below, the VIX, a volatility measure and contrary market indicator, has fallen to a significant level of support. We might expect a bounce up from this support, an indication the S&P 500 could move lower at least in the short term.

EARNINGS UPDATE. On the positive side for the bulls, the earnings picture is better than expected. Factset reports that 73% of the 354 companies which have reported earnings as of July 31, 2015 were above estimate and 52% reported sales above estimate. Earnings growth was also better than forecasted.

Aug 2 VIX

DISCLAIMER: The information contained in this Blog is for education and information purposes only. Example trades should not be considered as recommendations. There are risks involved in investing and only you know your financial situation, risk tolerance, financial goals and time horizon.

Presented by Stan Heller, Consultant, VectorVest Canada


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