Morning Call: Friday, May 01, 2009
Good morning. Hurray hurray the First of May......we start blogging today! Thanks to the encouragement from Mark McQueen and his kind help we've entered the Blog world. You can find us at— http://blog.dndsecurities.ca
April ended down a tad but the month had the S&P up 9.4% and the DOW up 7%. Add to that the spread on corporates in Canada dropped from 450 over (a couple of months ago) to 350 over and we've got pretty credible performance of markets. This has been showing up in a gradually lower TED spread and VIX, see the Box Score.
The fact that yesterday came off may have more to do with booking some profits and closing out some positions than any thing else. However the delay of the stress test results would have most players pull back a little. Good news travels fast and bad news doesn't.
A positive is that first time jobless claims started to recede probably signaling that the recession is about to turn up. But there are the first signs of non confirmation in the internals of the market (Mainly the RSI at this point). The advice we get from the UK is to evolve to a more conservative stance. Everybody is on the "Sell in May and go away" bandwagon. Momentum is still up and is supported by the declines in gold. Hard to sell the market if gold is going down. However the chart on gold is at a pivotal point. Above $920 and we have a shot at $1k again. Below $880 takes you to $860 and below that has it risked to the mid $700's. Trouble with charts is that don't tell you till it’s happened. They're supposed to give you a handle on the trend but with this much chop in the market they're just as likely to whipsaw you.
May Day has a history of “renewal for the class struggle” and for military parades, especially watched being the one in Red Square. This year’s version was mild and speaks volumes about the aging proletariat, the global recession and the internet apathy. Probably good news.
About Stocks
Rim has been up graded from neutral to a buy at UBS with its target raised from $65 US to $90US.
The chart on the US$ is fascinating. It’s almost to support on the 83 level. However the 50 Day MA is at 82 cents. A test below that and then a rebound back through that level would indicate another up leg. Stay tuned.
Follow the trend which is your friend (until its not) and ….………… invest the money.
UYG US (Bloomberg): Ultra Financials ProShares is an exchange-traded fund incorporated in the USA. The fund seeks daily investment results that correspond to twice (200%) the daily performance of the Dow Jones US Financial Index.
Quote of the Day:
“If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.”
-J. Paul Getty
Ed Pennock, CFA, Managing Director
416-369-6921, epennock@dominick.ca
Kris Fisher, Institutional Equity Trading
416-369-6924, kfisher@dominick.ca
416-369-6921, epennock@dominick.ca
Kris Fisher, Institutional Equity Trading
416-369-6924, kfisher@dominick.ca
The above note is prepared by an Institutional Salesperson based on morning meeting comments and general Institutional desk discussion and should not be construed as a research report or a solicitation. For information purposes only. D&D Securities, its clients, and principals may have positions in these securities.
