Let’s talk technicals

RYANBy Guest Blogger Ryan Lewenza

In the investment industry there is a heated (and silly) debate between fundamental and technical analysts. It’s the finance equivalent of the Montagues and the Capulets or the Crips versus the Bloods. I’ve never understood the animosity between the two fields, but I think the beef has to end soon or someone could get hurt (or at a minimum someone’s Oxford shoes could get scuffed up and we can’t have that). Today I’m going to summarize the key differences between these two investment approaches, discuss why it makes sense to combine the two approaches, and provide a technical update on the global equity markets.

Fundamental analysis is a method for determining a security’s value by analyzing the “financials” of a company, both the income statement and balance sheet. Based on this analysis you can make projections of where the stock or security could go. This can be extended to the broader market and economy looking at things like valuations, earnings, interest rates etc. Fundamental analysts often poo-poo technicians believing chart analysis is voodoo and that fundamentals are all that matter.

Technical analysis is the study of price charts and making future predictions based on historical data, trends and technical patterns. Fundamental analysts believe you can’t successfully predict the future by examining the past. I respond to this by saying technical analysis is simply trying to isolate important trends and invest with them.

Take the long-term chart of the S&P 500 for example. Look at this beauty! Since 2009 the S&P 500 has traded in a great long-term upward channel and it remains above its rising 200-day moving average, confirming that the S&P 500 is in a long-term uptrend.

For years many fundamental analysts have been citing the high valuations for the US equity markets, that it’s “long in the tooth”, and that it’s destined for a huge drop. Not us, since we employ of mix of fundamental and technical analysis. We actually view the fundamentals favourably given the strong US/global economy and robust corporate profit outlook. Add in the strong technicals with the S&P 500 in a well-defined uptrend and we’ve remained steadfast bulls, which has greatly helped in driving our investment strategy and delivering consistent returns in recent years.

We can all have opinions about the equity markets but at the end of the day it’s going to do what it’s going to do and this is why we prefer to invest in long-term trends. As us technicians like to say “price is truth” and this is why we prefer to employ both investment disciplines in our approach.

S&P 500 Remains in a Long-term Upward Channel

Source: Stockcharts.com, Turner Investments

On a shorter term basis, the S&P 500 recently broke out from a “symmetrical triangle”, which is a continuation pattern. In layman terms, the S&P 500 consolidated through the spring, then broke out, and based on this technical pattern (triangles being a continuation pattern) suggests more upside in the coming months. We can actually make a price projection from this pattern by subtracting the high (2,872) from the low (2,532), and adding this difference (340 points) to the breakout level. In early May the S&P 500 broke out from this triangle, so if we add the 340 points to this breakout level (2,700) we derive a potential price projection of 3,040, or potentially another 6% upside from current levels. This breakout in May got me pretty hot and bothered on the equity markets so here’s hoping my price projection comes through by the end of the year.

Breakout from a Symmetrical Triangle

Source: Stockcharts.com, Turner Investments

Another big technical positive is “market breadth”, which looks at how many stocks are advancing versus declining. Market breadth captures the underlying strength of the equity market and in a strong bull market you want good participation with more stocks going up than down. Market breadth can be captured by NYSE Advance-Decline line, which measures how many stocks are advancing versus declining on the NYSE. Below I chart the NYSE A/D line with the S&P 500 and it shows that the A/D line continues to make new highs with the S&P 500 showing good participation and signaling strong market breadth. Why this is important is that often at major market tops the A/D line begins to diverge from the S&P 500 with it rolling over before the S&P 500 rolls over. With the A/D line making new all-time highs, it suggests more upside ahead for the S&P 500.

Advance/Decline is Making New highs

Source: Stockcharts.com, Turner Investments

Other technical positives include:

* Dow theory “buy signal” – this is a 100+ year old technical study that among other things breaks market trends into different stages (primary, secondary and minor) and requires that the two main Dow Jones averages (Dow Industrials and Transports) confirm each other. With the Dow Transports recently making a new high and the Dow Industrials on the cusp of doing so as well, we have a continued “buy signal” according to this study, which essentially means the US equity markets are in a strong bull market.
* The market is being driven higher by cyclical sectors such as technology, discretionary and small cap stocks, which is what you want to see in a strong bull market.
* Investor sentiment remains supportive with just 40% of individual investors currently bullish according to the American Association of Individual Investors (AAII) weekly survey. Typically, levels above 50 are worrisome as it points to investor complacency.
* Finally, from a seasonal perspective, we’re approaching the strongest period for the equity markets with November through May being the best seasonal period for stocks. Moreover, in US mid-term elections years the S&P 500 has returned on average 7.7% in the fourth quarter, which is adding to our bullish view into year-end.

Mid-term Election Years Are Good for Q4

Source: Bloomberg, Turner Investments

Looking at the other key global indices, the TSX recently made a new all-time high and is above its rising 200-day MA, both of which are bullish. If we can work out a new NAFTA deal then this could be very positive for the TSX over the next 6-9 months.

Japan’s Nikkei continues to trend higher, while Europe and emerging markets have been weaker of late on Trump’s trade war. But if the trade war is de-escalating, as I’ve been calling for, we could see a nice rebound in these markets into year-end.

To sum up, I believe strongly that the best investment approach is to combine these two fields using a mix of fundamental and technical analysis to drive one’s investment strategy and portfolio positioning. And right now the technicals remain demonstrably bullish so we continue to position portfolios for more expected upside into year-end.

Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

 

98 comments ↓

#1 Xpat on 09.01.18 at 2:05 pm

Screw RE. This is the kind of post that gets this moister’s hormones skyrocketing.

Thanks Ryan. Best BNN guest ever.

#2 Jungle on 09.01.18 at 2:45 pm

Awesome post, and really enjoyed you talking about RY on BNN the other day!!

On a side note, our FIRE couple could have done better buying RE with 5% down when they started their mission.

At least now the RE would have doubled/ tripled and they only used very little money to do so.

#3 Zapstrap on 09.01.18 at 3:00 pm

Man … how bout a warning … I gotta haddock from that …

#4 Jungle on 09.01.18 at 3:05 pm

Homeowners have access to big leverage with no margin calls. A rather unfair advantage when comparing to renting. With renting, you get no tools. Worse, you are at mercy of your landlord, betting against the intense, complex forces of demand in a highly desired, wealthy and growing global city.

Those who are knowledgable and savvy (like many on this blog) can easily dump large amounts of money into the stock market when it crashes by using your HELOC.

Many homeowners now have HUGE amounts of buying power due to massive surge in home equity. And banks LOVE to lend that out.

This long term strategy would easily trump any renting calculation and make you very wealthy while owning.

No stress from being evicted, or trouble finding a place with vacancy rate so low in the GTA>

#5 Jungle on 09.01.18 at 3:07 pm

Air BNB has been a game changer. Landlords making easily 5k income a month , even on pricy condos.

I don’t see them wanting to rent out on normal lease anymore, especially when air BNB is supplying enough demand.

Even the hotel industry is running 90%+ occupancy every day and rates are like 350-500/ night downtown.

They sell out.

#6 Sydneysider on 09.01.18 at 3:35 pm

Technical analysis is concerned with the psychological factors that drive the market. The apex of your triangle reflects the point at which people in the past took their profit, and where they and others will think about doing so again in the near future.

#7 David on 09.01.18 at 3:45 pm

When it comes to real estate fundamentals do prevail. There are well established metrics that determine the value of rental properties.
Warren Buffet always encouraged people to think of themselves as owners. Shares are more than a piece of paper according to the Oracle of Omaha.
Technicals are great for market scalpers.
The tech bubble of 2000 was instructive. As we speak today cannabis Licensed Producers are pure speculation. You know the old saying, bulls can make money, bears can make money and the pigs get slaughtered.
The real problem with both fundamental and technicals is which indicators throw up a buy or sell signal.

#8 Keith in Rio on 09.01.18 at 3:57 pm

Analysis techniques such as those discussed here are irrelevant in today’s rigged casino…..sorry, meant to say market. Partaking in them is merely a smokescreen for the initials following your name on a business card.

#9 Danny on 09.01.18 at 4:00 pm

Very detailed information……up she has gone.

Still at some point…..don’t enough investors want to cash in on their gains…and tip the existing condition?

Every long haul has an ending.

I know that investing in the stock market is not like gambling in a card game….but there comes a time when at least some people want out of the card game or the stock market to feel that cash?

I know that there are very large players who are always moving their investments around……but how does the rhythm of a large number of smaller investors cashing in affect those charts?

In other words what is the weight factor, by basically relatively small individual investors…like you and Garth help……….compared to the very large corporate or other groups with very large amounts of money such as pension plans or insurance companies?

Is the market affected by the little fish or the big fish when a major shift occurs to cause what you said before is overdue…….in what you called a ” correction ”

Or are the big players………with their millions and billions going to call the shots anyway…like forever?

Yes I am lacking a great deal of knowledge in this complicated field of investment….but every time there has been a correction…..there is also an attempt to simplify…..just what happened…in a few paragraphs ….like when the fraudulent mortgage system took many down….literally through high rise windows.

I know no one has a crystal ball but is there a nervous feeling….on the bed pillow……when things are flying too high for historically too long?

Maybe my questions about the weight factor by
” investors types and how much they bring to the table ” is something you can address in the future?

I guess this question is like in political parties…..who really drives the party actions…….small individual members or the big fish really behind the scenes….who have greater benefits to gain….with a government change of regulations, programs, etc.?

I am sure Garth has some great insight and knowledge being at the various levels and behind the scenes in his long term career in politics. Probably though something that he will keep close to his heart.

#10 Capt. Serious on 09.01.18 at 5:22 pm

Humans like to see patterns. I’ll give you that.

#11 Red_falcon on 09.01.18 at 6:00 pm

I don’t see the use of technical or fundamental stuff aside from three things… Graham price, Cape and Yield.

Red.

#12 Okay Ryan ... on 09.01.18 at 6:03 pm

You made the argument for US markets

Canada barely in the black
EM red
International also red

U over weight USA ?

#13 Renter's Revenge! on 09.01.18 at 6:07 pm

I find it incredible that only 40% of investors are bullish after such a long run.

Do the 60% who aren’t bullish think they’re smarter than the 40% who are?

According to this study, 65% of Americans think they’re above average in intelligence:

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6029792/

#14 dakkie on 09.01.18 at 6:19 pm

Canada’s Looming Debt Crisis

http://www.investmentwatchblog.com/canadas-looming-debt-crisis/

#15 El Presidente Trumpster on 09.01.18 at 6:25 pm

Let’s talk about me .. always a far better idea……

Once I kill NAFTA you canucks can kiss your markets bye bye.. is that technical enough for you..

I am the bermuda triangle to those than don’t bow down…

I love you canucks… as I first said its just a small tweek….. but your dancing socks dude has GOT to learn to kiss the ring… and that is the fundamentals

#16 R8 on 09.01.18 at 6:27 pm

Yawn! Saturday Charts episode.

#17 FOUR FINGERS WATSON on 09.01.18 at 6:46 pm

#98 SoggyShorts on 09.01.18 at 12:50 pm
#73 FOUR FINGERS WATSON ®️ on 09.01.18 at 7:48 am
Good luck with a safe 7%. Too much risk….4-5 % is more like it. Don’t forget the taxes on the income. A decent 1BR basement suite in Kelowna is going for around 13-1400, never mind a nice condo with an indoor pool and sauna, hot tub, gym, billiard room, library with “ free” internet, cinema room, elevator, and underground parking.
********************
Those amenities sound great. Is the condo fee pool all stocked up? Sounds like a lot of stuff that will need to be fixed/maintained/replaced over the years. 7% gains might sound risky, but I’m thinking those special assessments are too. BTW was I close with the 300K/300 fee numbers? I tried looking online, but not a single condo I could find in Kelowna listed the condo fees.
………………………………….

You were close on both counts…..balance sheet is in great shape and so is the building…We have a “super” on site 40 hrs. a week to do repairs, maintenance, and landscaping…One unit is strata property and is rented out on a daily/weekly basis to friends/relatives who are visiting residents and adds to the revenue stream. I have zero worries about special assessments. Three blocks to the beach.

#18 Troy McClure on 09.01.18 at 6:55 pm

#13 Renter’s Revenge! on 09.01.18 at 6:07 pm

According to this study, 65% of Americans think they’re above average in intelligence:

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6029792/

I think the last US presidential election showed us that 50% of Americans have below average intelligence.

#19 re., El Presidente Trumpster on 09.01.18 at 7:18 pm

you a jack ass in real life or this just an internet personna?

Trump needs to worry about the trillion dollar deficits he’ll be running indefinitely . USA has become the world debt drunks

#20 Gravy Train on 09.01.18 at 7:22 pm

Ryan, which of the weak, semi-strong, or strong forms of the efficient-market hypothesis do you accept? Or do you reject it outright?

#21 IHCTD9 on 09.01.18 at 7:25 pm

#4 Jungle on 09.01.18 at 3:05 pm
Homeowners have access to big leverage with no margin calls. A rather unfair advantage when comparing to renting. With renting, you get no tools. Worse, you are at mercy of your landlord, betting against the intense, complex forces of demand in a highly desired, wealthy and growing global city.

Those who are knowledgable and savvy (like many on this blog) can easily dump large amounts of money into the stock market when it crashes by using your HELOC.

Many homeowners now have HUGE amounts of buying power due to massive surge in home equity. And banks LOVE to lend that out.

This long term strategy would easily trump any renting calculation and make you very wealthy while owning.

No stress from being evicted, or trouble finding a place with vacancy rate so low in the GTA>
————

Just a couple of pointers:

1. If you don’t make your mortgage or property tax payments, you loose 100% of your house.

2. HELOC’s are demand loans. The bank can call tomorrow for any reason and demand repayment, even if you aren’t delinquent. If you don’t make the monthly, they can take your house. You are going to pay it all back – with interest – one way or another, no matter what you do.

3. The “huge equity” in RE is now declining. Hope you weren’t planning on making interest only payments on that inexhaustible HELOC forever. The party is now officially over.

4. There are only 2 cities in the entire country that have gained big valuations in RE. Every other city in Canada, you’d be way ahead with financial investments. As already stated, the rise is already in the rear view at this point. Party over.

5. These same two cities now have declining RE values. If you bought now in the GTA or GVRD, you’d be in a negative equity situation immediately 100%.

You may now carry on pumping.

#22 tccontrarian on 09.01.18 at 7:28 pm

“And right now the technicals remain demonstrably bullish so we continue to position portfolios for more expected upside into year-end.”
——————–

More important than TA or even fundamentals, as you call them, is WHO is doing the buying/selling.
If dumb money is buying, get out; and vice-versa of course.
Charts of all kinds are perfect for showing the past – not what’s up ahead.

TCC

#23 IHCTD9 on 09.01.18 at 7:48 pm

#79 Millennial Realist on 09.01.18 at 10:21 am
Pups, eh…

https://www.thestar.com/news/gta/2018/09/01/precarious-work-poses-serious-consequences-for-millennials-mental-health-report-says.html

Thanks again, Boomers. Everything you’ve done for yourselves has come at our expense. You have no idea how much more challenging life is for us than it was for you. This is why as we take control of everything over the next 2-5 years, we will be fair but merciless about taking control and privilege away from you. Get ready for major changes to unequal tax privileges, inheritance rules and more. You will suffer greatly, but it will only be a fraction of what we are already enduring.

Be part of the change. Or be run over by it.
———

Ahh… the leading edge of Millennials are on the cusp of hitting 40. If they’re not running things yet, they never will…

#24 IHCTD9 on 09.01.18 at 7:52 pm

$27.75 for a 26’er of rum today.

And beer ain’t a buck.

Might be a good time to start a speakeasy…

#25 Clueless Canadian Millenial on 09.01.18 at 7:59 pm

Is it the right time to invest in equities in emerging markets? What about Exxon/Mobil? I’ve read the news how Exxon/Mobil has found billions of barrels of oil in Guiana, and has projected oil reserves larger than Kuwait’s proven reserves at the Iranian border in Pakistan. Is Exxon/Mobil the next big thing?

#26 Ryan Lewenza on 09.01.18 at 8:04 pm

Gravy Train “Ryan, which of the weak, semi-strong, or strong forms of the efficient-market hypothesis do you accept? Or do you reject it outright?”

At best the weak form. Over the long run markets are efficient but shorter term markets can be very inefficient. The key flaw with the EMH is that it assumes investors are rational. That is definitely not the case. – Ryan L

#27 Nonplused on 09.01.18 at 8:05 pm

Technical analysis does work for short term trading, and the reason being simple: So many people use it. Back in the day when it was possible to move the market with a fairly small total position I remember watching the traders “test stops”. In other words they knew where the “longs” had set their stops because they all had the same Bloomberg graphs and probably didn’t go to far off what was on the screen. So when the price drifted near the Fibonacci number or whatever it was they’d start selling hoping to cause someone else’s risk management policies to start liquidating and hopefully set off a chain reaction. Probably no single trader (besides John Arnold or Brian Hunter) could do it by themselves, but there were hundreds of traders all watching the same screen and making the same bet or trying to close out. So a stampede would ensue. But sooner or later the “shorts” would have to close as well, so normality would return for a few days.

The reason technical analysis works is because everyone is looking at the same charts.

#28 El presidente trumpster on 09.01.18 at 8:12 pm

19 re., El Presidente Trumpster on 09.01.18 at 7:18 pm
you a jack ass in real life or this just an internet personna?

Trump needs to worry about the trillion dollar deficits he’ll be running indefinitely . USA has become the world debt drunks.

I love tariffs.. they’re yuuge…. deficit easily solved.. the whole world is gonna pay, pay, pay… bingo no more deficit… dancing dude better pony up

#29 baloney Sandwitch on 09.01.18 at 8:21 pm

Interesting you use S&P 500 as your example. The index has exploded as people dump cash into index etf’s without thought. There is a bubble forming there – looks like we are about to hit a double top. The most healthy situation now would be a 10% correction to take some of the froth out.
I am now 80% stocks but slowly diversifying into value stocks, small caps and emerging markets. There are some excellent value opportunities but you got to do your homework.

#30 conan on 09.01.18 at 8:24 pm

I see toxicity in Emerging Markets. Contagion cookie crumbs that need to be cleaned up, but we have no broom.

#31 Keith on 09.01.18 at 8:32 pm

Technical analysis is very helpful. There is a really great successful trader in Canada named Tyler Bollhorn. Put his name into the Youtube search bar and watch the videos that come up, and consider his training course. Very helpful for investors and traders alike.

#32 Tony on 09.01.18 at 8:39 pm

The only thing driving the U.S. stock market higher is the upcoming midterm elections November 6th.

#33 SoggyShorts on 09.01.18 at 8:40 pm

#17 FOUR FINGERS WATSON on 09.01.18 at 6:46 pm
#98 SoggyShorts on 09.01.18 at 12:50 pm
#73 FOUR FINGERS WATSON ®️ on 09.01.18 at 7:48 am

You were close on both counts…..balance sheet is in great shape and so is the building…We have a “super” on site 40 hrs. a week to do repairs, maintenance, and landscaping…One unit is strata property and is rented out on a daily/weekly basis to friends/relatives who are visiting residents and adds to the revenue stream. I have zero worries about special assessments. Three blocks to the beach.

**************************
Alrighty then, I can’t remember where this conversation began, but if it started with me saying owning a condo is always worse than renting, then I take it back. You seem to have found a winner(and the reason Garth is careful to always say things like “95% of the time”

Plus it’s paid off so not losing money on interest for 25 years helps, and from your previous posts I don’t think you are penniless other than the condo, so enjoy! (But not the hot tub in winter- don’t enjoy that bc I’m envious)

#34 Smoking Man on 09.01.18 at 8:45 pm

Nothing beats the 4 hour renko chart. Regardless of asset class.I like 4x, 400 to 1 Margin.

Makes everything else boring…

I should sell my algo… But then it would not work if everyone was using it.

Their are those that teach, and the others that do….

Vegas or Laughlin every week end. Love life….

Forex Rocks…….

#35 Interstellar Old Yeller on 09.01.18 at 8:51 pm

Informative post, thank you Ryan.

#36 Tony on 09.01.18 at 8:51 pm

Re: #13 Renter’s Revenge! on 09.01.18 at 6:07 pm

Everyone seems bullish until the central bankers open the trap door or uncover the bottomless pit. Everyone has the same story. My story is the bankers will of course be the first ones out and the major stock exchanges will be closed for 2 weeks to a month with a reopen some 50 to 60 percent lower for openers. The fact is no one is bullish on the stock market (pension funds are down a fortune) they just think the central bankers the fed and the plunge protection team can manipulate the markets forever.

#37 FOUR FINGERS WATSON on 09.01.18 at 8:59 pm

#18 Troy McClure on 09.01.18 at 6:55 pm
#13 Renter’s Revenge! on 09.01.18 at 6:07 pm

According to this study, 65% of Americans think they’re above average in intelligence:

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6029792/

I think the last US presidential election showed us that 50% of Americans have below average intelligence.
…………………………

Like the last Canadian federal election ?

#38 Gerold on 09.01.18 at 9:05 pm

Dream on Millennial Unrealist. You’ve just demonstrated why Libtards are mentally ill; they live in a world of make-believe. Dream as hard as you want …

Age and guile beat youth and a bad haircut every time.

#39 Stan Brooks on 09.01.18 at 9:15 pm

2 more nails in the coffin of this economy, managed by daddy’s boy ‘star’ businessmen, french villa, conflict of interests, numbered companies, offshore scandals, small businesses – doctors and plumbers killer;

a part time drama teacher, trust fund boy, balloon of hot air with an IQ of a 4th grader

and a ‘tough’ negotiator author of fiction assigned to negotiate the future of NAFTA,

all working for the ‘best interest of Canadians’ (it kind of gives me the chill that such deeply incompetent, but ‘confident’ people are in charge of our future):

https://ca.finance.yahoo.com/news/trans-mountain-pipeline-canada-buy-4-5-billion-lemon-192044880.html

https://ca.news.yahoo.com/trump-renews-threat-withdraw-u-180959733.html

What else is left here folks with the imminent crash of housing, result of the greatest ever credit bubble in housing in history?

There is no doubt that T2 will protect his sponsors and will not give up the subsidies for millionaire dairy farmers and US will hit Ontario really hard with auto tariffs. And somehow this is sold by the media to the sheepple as being in the best interest of Canadians.

It for sure is in the best interest of some Canadians (0.1 %) and in detriment to the rest of us – consumers and taxpayers, but disinformation seems to work as the sheeple is stupid.

I have to admit that no matter how positive I am trying to be in my realism (understood as negativism) these people in charge of the economy, BoC somehow manage to screw up things much more than even I expected, proving pretty much why paranoia could be sometimes a useful helper, specially when living in a mental institution.

Make no mistake, these people are capable of killing NAFTA which will be absolutely devastating to the economy here in a really childishly and incompetent way.

How can you trust someone who just blew 4.5 billions (maybe more) of taxpayers money on a lemon pipeline which really turned out to be a bail out of foreign investors to defend the future of this country and sell themselves as ‘hard working the phone’ after the US deadline expired is beyond me but it seems we are far more patient and trusting in idiots and incompetents as we should be.

Would you trust your kids future in the liberals and current BoC leadership?

I would not.

I can’t stress far enough how bad will be the real outcome from NAFTA failing by foreign investors running away with their money, the process has started and is already accelerating quickly.

===============================

As for technicals and charts, we should review it in the context of money/credit contraction and the charts for developed (US, Europe) and developing and third world markets (we really fit here) could be very different.

Look at Turkey and Argentina.

Besides Argentina has 60 % (sixty percents) interest rates on inflation of 30 %, but accelerating.

We have 1.5 % interest rate on real inflation of 8 % +
also accelerating and our current account is not looking good/the worse per capita in the whole world.

https://en.wikipedia.org/wiki/List_of_countries_by_current_account_balance

Inflation is transitory in the brains, all 2 neurons of it of the BoC leadership who will spew any amount of lies imaginable and unimaginable in order to protect their behinds.

#40 TurnerNation on 09.01.18 at 9:15 pm

The old saw Never dull a short market.
Err I mean Never short a dull market.
Jack’s a good boy

#41 Troy McClure on 09.01.18 at 9:35 pm

#37 FOUR FINGERS WATSON on 09.01.18 at 8:59 pm
#18 Troy McClure on 09.01.18 at 6:55 pm

I think the last US presidential election showed us that 50% of Americans have below average intelligence.
…………………………

Like the last Canadian federal election ?

You said it, brother!

#42 Ace Goodheart on 09.01.18 at 9:35 pm

Trump to Congress: If you try to protect Canada, I’ll pull the USA out of NAFTA entirely.

The guy is a bigger idiot than I thought he was.

Congress doesn’t give a flying rat’s pink ear muff about Canada.

Congress is worried about the damage Trump is about to do to US industry .

This is the problem with having billionaires as President. They don’t need the support of other billionaires, to stay president. If this guy needed to pay back all the business people who got him elected (like every other President) then we would not be in this mess right now.

Reality is, the only companies that are sophisticated enough to use NAFTA, and can afford the top shelf lawyers necessary to understand and interact with it, are big US companies. Auto companies, forestry products refiners, pulp and paper, mass media. NAFTA has allowed big US companies to operate in Canada and Mexico, for less than it would cost them to operate in the USA.

NAFTA did not have a positive effect on Canadian businesses when it was introduced. The reason for this is simple, it allowed big US industry to come into Canada, and crush our domestic industry. We now live in a “branch plant economy” with most of our large industries being owned by even larger US companies. We have no domestic auto industry, for example. All our plants are foreign owned.

Many, many small domestic Canadian companies went under when NAFTA was introduced.

Really, NAFTA is good if you want Canada to be a branch plant country. It sucks if you are a domestic industry.

#43 Chitty Chitty Bang Bang on 09.01.18 at 9:39 pm

@ #18 Troy McClure, then you obviously have no idea how an American election works. Trump received less than 63,000,000 votes (funny how that is twice the size of all of canada), losing the popular vote by the largest margin in American history. This translates to an aggregate of less than 1/5 of the U.S. population. Additionally, this demonstrates Americans are smarter than you’re giving credit, you dimwit. Do you ever pick up a newspaper and read? If you did, you’d understand Americans by a vast majority are still pissed that the orange-faced cheeto “won.” Once again, another idiot canadian like yourself giving your people a bad name, speaking about what you have no clue. Trump won on technicality of the Electoral College (I’m sure you have no idea how that works either).

#44 FOUR FINGERS WATSON on 09.01.18 at 9:40 pm

#33 SoggyShorts
Alrighty then, I can’t remember where this conversation began, but if it started with me saying owning a condo is always worse than renting, then I take it back. You seem to have found a winner(and the reason Garth is careful to always say things like “95% of the time”

Plus it’s paid off so not losing money on interest for 25 years helps, and from your previous posts I don’t think you are penniless other than the condo, so enjoy! (But not the hot tub in winter- don’t enjoy that bc I’m envious)
………………………………….

One thing you don’t have to envious of is the air quality in Kelowna. It has been so bad that the little grandkids can’t play outside and I was using the Ventolin puffer. Worst air quality ever for weeks on end, and fire season is not over yet. I finally said screw this a few weeks ago and came to the Philippines for a few months. I think i might stay until tax time in March. All that smoke, then all that snow…….

#45 crowdedelevatorfartz on 09.01.18 at 10:03 pm

@#5 Jungle
“No stress from being evicted, or trouble finding a place with vacancy rate so low in the GTA>”
+++++

Simple. Dont live in Toronto. No stress

@#6 Jungle
“Air BNB has been a game changer. Landlords making easily 5k income a month , even on pricy condos.”
+++++

Until Canada Revenue comes knocking, or the “tenant” trashes your place, or your neighbours tire of the constant stream of party A-holes you rent to and rat you out to the strata, the city or the CRA.

Get another “song and dance” Jungle ….no one here is “buying”

Happy Housing Crash :)

#46 crowdedelevatorfartz on 09.01.18 at 10:12 pm

@#27 IHCTD9
“$27.75 for a 26’er of rum today.
And beer ain’t a buck.
Might be a good time to start a speakeasy…’
+++++

Ahhhh Spirits and beer.
I was dwntwn last weekend and brought a case of beer and a 12 year old McCallans over to a buddy who needed a bit of “cheer”.

He couldnt just sip the McCallans …..had to chase it with beer!
Never will I waste a nice smooth scotch on that barbarian again.

Just curious what type of Rum?
When I’m in the mood for rum (occasionally).
I like Appletons or Flora de Cana…..

#47 AR on 09.01.18 at 10:13 pm

‘If we can work out a new NAFTA deal then this could be very positive for the TSX over the next 6-9 months.’

And if we can’t?

#48 re., El Presidente Trumpster on 09.01.18 at 10:17 pm

I love tariffs.. they’re yuuge…. deficit easily solved.. the whole world is gonna pay, pay, pay… bingo no more deficit… dancing dude better pony up

…….

damn, we have a troll. A dumb one too

#49 Al on 09.01.18 at 10:26 pm

“Fundamental analysts believe you can’t successfully predict the future by examining the past. I respond to this by saying technical analysis is simply trying to isolate important trends and invest with them”

That doesn’t ddress their comment, your response just restates their contention in different words, ie you do believe you can predict the future by examining the past.

#50 Ace Goodheart on 09.01.18 at 10:38 pm

Re: #47 AR on 09.01.18 at 10:13 pm

” ‘If we can work out a new NAFTA deal then this could be very positive for the TSX over the next 6-9 months.’

And if we can’t?”

I am old enough to remember pre-NAFTA Canada. The glory days of the Canadian company.

That was before Brian Mulroney decided that it would make sense to open up Canada to US Industry and US corporate ownership.

Canada was crushed. We became a branch plant economy. Mulroney resigned and the Conservatives went on to lose an election because of this, reducing his party to two seats and resigning, tossing in Kim Campbell, Canada’s only female Prime Minister, to the wolves as the Conservatives became inconsequential back benchers for almost 20 years (Campbell, Prime Minster at the time, did not even win back her own seat, becoming the first Canadian Prime Minister in history to lose her seat in an election).

That was the introduction of NAFTA to Canada. It destroyed the Conservative party. People hated it. We were of the belief we had been “Sold out” to corporate interests, and we were right.

So, what do we do now that the USA has an idiot for a President? Well, we survived when the USA had a moron for a President.

What we do is tell President turdbag to go F himself and continue on as the sovereign nation we always have been. Why do we even care about this a**hole?

Trump, you are banned from Canada. Go away. Everyone hates you. Bye!!!

#51 El presidente trumpster on 09.01.18 at 10:39 pm

The greatest troll the universe has ever known… I give you El presidente…. pay up dancing dude

Donald J. Trump

@realDonaldTrump
..Because of Tariffs we will be able to start paying down large amounts of the $21 Trillion in debt that has been accumulated, much by the Obama Administration, while at the same time reducing taxes for our people. At minimum, we will make much better Trade Deals for our country!

6:06 AM – Aug 5, 2018

#52 birkenschtcok on 09.01.18 at 10:40 pm

Ryan

Do your wear flipflops with your suit to the office, or does Garth force you to wear crocs?

#53 Ponzius Pilatus on 09.01.18 at 10:43 pm

Those who live by the charts will die by the charts.

#54 Ponzius Pilatus on 09.01.18 at 10:55 pm

Doug,
What you have forgotten.
Trump’s massive corporate tax deductions have in the short term driven up stocks.
We may be in for a nasty surprise once this high wears off.
Stock market investors are just junkies abetted by financial advisors.
Listen to “the pusher man” by Steppenwolf

#55 Jock DeCana on 09.01.18 at 10:56 pm

#46 crowdedelevatorfartz on 09.01.18 at 10:12 pm
“…. brought a case of beer and a 12 year old McCallans over to a buddy who needed a bit of “cheer”.

He couldnt just sip the McCallans …..had to chase it with beer!
Never will I waste a nice smooth scotch on that barbarian again.”

No wonder, you cheapskate. Break open your wallet next time, if you want to treat a friend. If it’s not a least an 18 year old, this dog don’t hunt!

#56 FIRE Revolution on 09.01.18 at 11:05 pm

This pathetic blog is way ahead of NY Times

https://www.nytimes.com/2018/09/01/style/fire-financial-independence-retire-early.html

#57 acdel on 09.01.18 at 11:18 pm

Always enjoy your post Ryan!

We all know the one change that will change everything in a country that is practically self sustained but is too stupid to realize that it is to trust “THE MAJORITY”,!

For peat sake it has nothing to do with so called ethnics, although we are all immigrants through our past or present built this country!

I do not know what to call it, distrust, mis-representatives, East versus West ideology, Quebec living on the rest of us and yet dictating the rules. West,East will never agree!

A parliament that is 40 yrs behind the times and yet
the special interest groups that have no interest in a country but to there own agenda controls this country!

Hey, they could care about you except your cash, (drunken Parliament) meanwhile they spend how much on Canuckles hard earn cash?

So modern this country is but yet so backwards! The day people realize beyond fancy commercials, hockey, Olympics, we are not a country. 10 provinces and 3 territories is all that it is.

I truly fear for the richest country on Earth that has no leadership; has not had it since Confederation and now, they are being vilified for making decisions in the days so different then ours and that created a country of Canada instead of being another America state or a Nazi nation, 1867 was much different then 2018. Holy Crap our ancestors did the best they could under the circumstances and now, what can I say???? U.. Y…R…S…..

#58 Smoking Man on 09.01.18 at 11:25 pm

Seeing this beast in less than an hour. Will I make it?

https://youtu.be/V9Yq5m9eLIQ

Had all these chicks hitting on me in the pool right in front of wifee poo.

She knows I’m useless , years of alcohol and tobacco abuse takes its toll.

For a price she offered out my services. It would have been huge win for her. Then I smiled. That rotten teeth thing needs to be addressed.

Could have been the orgey of grandmas cash feeding the wife’s slot machine tonight.

Note to self. See a dentist. Cheaper in the long run.

#59 Oft deleted much maligned stock.picker on 09.01.18 at 11:54 pm

Fundamentals predict what a company might do….and has the ability to accomplish….full disclosure. Technical is a useless view of what has already happened. Given that investors are forward looking and technicals are only good for day traders in the first five minutes of market open……to see how many open market orders are built up overnight ….stick to fundamentals.

#60 Troy McClure on 09.01.18 at 11:57 pm

#18 Troy McClure on 09.01.18 at 6:55 pm

I think the last US presidential election showed us that 50% of Americans have below average intelligence.

#43 Chitty Chitty Bang Bang on 09.01.18 at 9:39 pm

@ #18 Troy McClure, then you obviously have no idea how an American election works. … Once again, another idiot canadian like yourself giving your people a bad name, speaking about what you have no clue.

Lighten up, man. It’s a statistics joke. Intelligence is approximately normally distributed. In any population, roughly 50% are above average intelligence, and roughly 50% are below average intelligence.

I’m not sure which side of the line I fall on, but my mom says I’m special…

#61 Smoking man on 09.02.18 at 2:43 am

Why am I still alive. God hates me

#62 Dnd on 09.02.18 at 6:12 am

Ryan great post CN and my EU doing well same reits but looking ahead they say US fed will go to 5 this whould be bearish for everything but US bonds what do you think

#63 David Paquette on 09.02.18 at 6:45 am

I do look at charts. I got lucky with preferred shares. I noticed a few years ago that many were selling at a sharp discount to face. I could not find any charts to confirm. When I examined their prospectuses, I realized that the reset/cumulative preferred ones would reset at a lower level rates than issued but the price discount more than made up the difference. After buying the best available, interest rates began to rise. They are keepers for me even after resets. I consider them “bonds”. I did my homework and I can’t believe I could buy them so cheap and most are still under face. But then real estate was booming at the time. I think there was a connection.

I dream of the money I could have made over the years because I pulled the sell trigger early to avoid a Bre-X. I have a tendency to book a gain and let the rest run. Yup, I have paid for stocks that go to zero because I can be stubborn and think I can’t be wrong. These outcomes keep me honest and are teaching moments. Hence I keep a non- registered margin account to battle test equity share investments and I can borrow tax deductible money. Winners go to my TFSA as transfer in kind. So far this strategy has worked but there are no future guarantees.

#64 re., El Presidente Trumpster on 09.02.18 at 7:29 am

lol

the deficit is rising you fool, and at an accelerated pace. The administration has acknowledged this. In 2019 it will be breach the trillion mark. El presidente is on a spending spree

the tariffs aint paying for any debt, LOL, and it will make various goods more expensive for US citizens

capiche? :)

#65 Wrk.dover on 09.02.18 at 8:05 am

#46 crowdedelevatorfartz on 09.01.18 at 10:12 pm
Just curious what type of Rum?
When I’m in the mood for rum (occasionally).

——————————————

This one from Guyana through Nfld. , watered down 33% with vodka, no ice, is my choice. Yum!

http://rockspirits.ca/our-brands/london-dock-40-rum

#66 NoName on 09.02.18 at 8:44 am

Those are very very first book that i read on technical trading. For some vired reason of font being bluish and for some reason not contrasty enough for my eyes in white book, so all this time i preferred red over.

Red book deals with 5 different trading strategies and recognizing and picking stocks based on a different metric for 5 different managers, White was all about pattern and trend discovery and re enetering and exiting trends. Intersting at end of the book are 82 of trading rulles probably 1/2 of them deals with trade exit and risk management, what is achilies heal for most.

funny i skimmed thrue books looking for highlights and note and i did found two very interesting things, one note for my selh what book to buy to read, and letter form President of Honda Canada Mr H Kobayashi, when i went all deplorable on them, over the code for radio in my accord. I was so touched with correspondence that few yrs later i purchased few honda products few yrs later, (one is lownmore).

funny thing abot that radio fiasco was finished my graveyard shift and stopped by the dealership and asked how much money to retrive code for my radio, dude says 40$, so i flipped and leave, on a way home i stoped by another dealership, and aksed same question, second dude quoted me 80$ and vividly remember me blowing my gasket right there in an instant…

If i ever write a book it would be called “what not to do”, i didn’t steal this from SM.

books
https://imgur.com/a/IBUlcml
and “book” to read
https://imgur.com/a/tvP110P

#67 Felix on 09.02.18 at 8:46 am

Good pic, shows who’s really the boss.

Don’t forget it, useless mutts.

#68 Renter's Revenge! on 09.02.18 at 8:59 am

The market is not a fixed set of companies. New ones are forming all the time, and old ones are disappearing. People are constantly having new ideas, new technology is invented, and the world changes.

Neither type of analysis, or the even the combination of both, is perfect because they can’t predict the changes in what constitutes the market. They’re just doing math on what’s in the market at the moment.

What is the rate of return on analysis? Say you buy an index fund and forget about it and make 8% a year. Or you analyze the market for 100 hours a year and you boost your return to 9% a year. Is it worth the effort?

8%/0 hours of analysis = infinite return per hour of analysis
9%/100 hours of analysis = 0.09% return per hour of analysis

#69 Bytor the Snow Dog on 09.02.18 at 9:00 am

Ace- Canada was a branch plant economy long before NAFTA. When was the last time we had a domestic auto company? Before WW2?

IHCTD9- Please……it’s LOSE not LOOSE. Not a grammar Nazi, just a pet peeve.

Ryan- I see Garth didn’t give you the crib sheet of snarky phrases and one line comebacks that he gave to Doug. You should ask for a copy.

#70 KLNR on 09.02.18 at 9:05 am

@#38 Gerold on 09.01.18 at 9:05 pm
Dream on Millennial Unrealist. You’ve just demonstrated why Libtards are mentally ill; they live in a world of make-believe. Dream as hard as you want …

Age and guile beat youth and a bad haircut every time.
___________________________

What are you, 8 years old?
Try to come up with a coherent counter argument instead of petty name calling.
Age and guile aren’t mutually exclusive.

#71 KLNR on 09.02.18 at 9:09 am

@#43 Chitty Chitty Bang Bang on 09.01.18 at 9:39 pm

__________________

LOLOL, that one was over your head eh?
maybe you’re the one giving your populace the bad name LOL

#72 KLNR on 09.02.18 at 9:17 am

@
@#5 Jungle
“No stress from being evicted, or trouble finding a place with vacancy rate so low in the GTA>”
+++++

Simple. Dont live in Toronto. No stress

@#6 Jungle
“Air BNB has been a game changer. Landlords making easily 5k income a month , even on pricy condos.”
+++++

Until Canada Revenue comes knocking, or the “tenant” trashes your place, or your neighbours tire of the constant stream of party A-holes you rent to and rat you out to the strata, the city or the CRA.

Get another “song and dance” Jungle ….no one here is “buying”

Happy Housing Crash :)
________________________________

meh, the guy makes valid points. at least in Toronto proper. I know first hand that many people airBnB their basement suites out instead of rent to long term tenants. they make quite a bit more with way less hassle and yes they pay the tax.

#73 Ryan Lewenza on 09.02.18 at 9:45 am

Dnd “Ryan great post CN and my EU doing well same reits but looking ahead they say US fed will go to 5 this whould be bearish for everything but US bonds what do you think”

Fed Funds Rate is currently 2%. I see it peaking at 3-4%, so another 4 to 8 rate hikes. At 5% that would put a lot of stress on US government with the $21 trillion in debt outstanding (and growing). I discussed this topic in a recent post on inflation, and the best way to position for this is 1) maintain a good equity exposure since they act as an inflation hedge, 2) hold short duration bonds (less impacted by rising rates), 3) overweight corporate bonds versus government bonds, and 4) hold Canadian preferred shares since they benefit from rising rates. Also you consider floating rate securities if you believe rates are going significantly higher. – Ryan L

#74 dharma bum on 09.02.18 at 9:48 am

ZZZZZZZzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz….snort….

https://www.google.ca/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&ved=2ahUKEwj6w4vfupzdAhXH64MKHdCOB5UQjRx6BAgBEAU&url=http%3A%2F%2Ffacecoverz.com%2Fen%2Fcover%2Fsleeping-homer-simpson&psig=AOvVaw3t7et2w9iNNpkGzlAffMMb&ust=1535982440078232

#75 Ryan Lewenza on 09.02.18 at 9:49 am

birkenschtcok “Ryan. Do your wear flipflops with your suit to the office, or does Garth force you to wear crocs?

Funny you should ask. I broke my leg this summer so I’ve had to wear the crocs with the suit. I’m starting a new fashion trend on Bay St. – Ryan L

#76 Kaganovich on 09.02.18 at 10:01 am

This incredibly long bull market pivots on basically one thing, the rest is likely noise and fodder for financial consultancy gimmickery: central bank intervention.

https://confoundedinterest.net/2018/08/31/how-central-banks-killed-off-volatility-volatility-makes-financial-markets-go-round/

#77 Balraj on 09.02.18 at 10:05 am

#5 – Jungle
————————

What a clown who hasn’t actually looked at Airbnb app.

A 900 sq. Ft 2 bed 360 degree views of Coal Harbour (top end) is going for $200 per night.

Such a place would go for $1.5 million. Factor in maintenance, taxes and CRA dues. Ain’t left with much.

#78 crowdedelevatorfartz on 09.02.18 at 10:13 am

@#55 Jock McCallan
“No wonder, you cheapskate. Break open your wallet next time, if you want to treat a friend. If it’s not a least an 18 year old, this dog don’t hunt!”
+++++

Nah, I knew he’d chug the scotch and chase it with beer.
Doesnt matter if its a $300 35 year old Bruichladdich or a $450 35 year old Highland Park…..he’ll still chug it and immediately beer chase….I’ve watched him do it.
A truly cringe worthy moment.
I’ve learned he has the taste buds( and patience) of a starving jackal eating a bloated carcass on the African savanna…
Smooth ,expensive scotch is wasted on someone who enjoys that gasoline-like paint stripper known as Jamesons whiskey….and since that is his “choice of chug/chase” with his excoriated palate…..
No sense wasting good scotch.

Every so often I try to show him the ways of slow sipping Scotch and bring over an $80 bottle……to no avail.

#79 crowdedelevatorfartz on 09.02.18 at 10:25 am

@#72 KLNR
“know first hand that many people airBnB their basement suites out instead of rent to long term tenants. they make quite a bit more with way less hassle and yes they pay the tax.”
+++++
Suuuure they do.
And when the “endless bookings” of Summer turn into Jan, Feb, March…….?
Does Airbnb subsidize the mortgage then?
Not likely.
And I’m also sure their mortgage insurance provider whole heartedly agrees with them renting to strangers on a daily and weekly basis?

#80 crowdedelevatorfartz on 09.02.18 at 10:31 am

@#61 Smokey
“Why am I still alive. God hates me”
++++++

Even God wants you to see a dentist before “bringing you home”?

#81 crowdedelevatorfartz on 09.02.18 at 10:39 am

@#65 Wrk.Dover

You Scotians and your high octane Rum.
Reminds me of Pussers Rum.

http://www.lcbo.com/lcbo/product/british-navy-pusser-s-rum/136754

Peel the paint off a Transmission housing and help start an engine on a cold -40c day.

#82 Evangeline on 09.02.18 at 11:01 am

#32 Tony on 09.01.18 at 8:39 pm
((The only thing driving the U.S. stock market higher is the upcoming midterm elections November 6th.))

I hope that investors in the US markets are not watching the same sources that predicted that Hillary was a sure thing to win.

What is it they say?

“Follow the money.”

Imo what should be looked at is, What business deals is the US president making? In other words, how much money is he earning for the US economy?

For example, when the McCain funeral reporting was in high gear, PDJT was meeting with the president of Kenya and his lovely wife, and a deal was struck between the two leaders for the US to help Kenya build a super highway.

That means $$$$ pouring into the USA, as well as Kenya. The highway project, the first of its kind in Kenya, will increase Kenya’s economic activity — market transportation and access.

There are deals like that signed almost every week at the WH. All the deals are public, but not largely reported.

Imo that is what is driving the USA markets.

#83 Evangeline on 09.02.18 at 11:04 am

I don’t think I’ve ever read a Felix post that did not make me laugh.

Please don’t encourage him. – Garth

#84 Ponzius Pilatus on 09.02.18 at 11:18 am

If you torture a chart long enough, it will tell you anything you want.

#85 Crazyfox on 09.02.18 at 11:20 am

Lets see…. the mining sector, my favorite, has seen large caps drop 30% from the spring as metal commodities continue to trend down. Oil is up, flirting around the $70 a barrel mark. I don’t expect a breakout from there. So this covers 2/3rd’s of the TSX. Techs are overvalued as one would expect with a strong bull run. Pot stocks are dangerous now, blockchains are yesterday’s news and financials are finally facing an inflationary higher rate threat with real estate poised to cause a multi year recession in Canada beginning next year.

There is no shining light for Canadian markets that I can see, only more risk and the greatest risk comes not from within, but outside. The U.S. continues to dominate the narrative concerning global risk. Every borrowed Canadian dollar from real estate derives from U.S. treasuries. Government policy there has become highly inflationary at the federal level with central bank rates continuing to rise in response. The cost of borrowing continues to become more and more expensive. There is a lag to it… it takes time for defaults to bear out, but they are coming.

There is no NAFTA agreement for Canada with Trump in the WH. Trump continues to wage a trade war with China and elsewhere, sure to cause inflation there and higher rates in response. Just ask yourself, “what would a traitor do as president of the U.S.?” and you have what you see, a president that is trying to destroy NATO, alienating itself from its allies through trade wars causing inflation leading to higher interest rates in a debt laden western world, combining it with weakened systemic destructive economic and environmental policies from within.

The rich are only too willing to take tax breaks but the nation systemically will pay for it later on, as will the environment, as will the financial sector as a whole, at a time when the rest will need help the most. I haven’t seen much by way of systemic stability from Trump, only chaos. One of his latest musings is to go from quarterly reporting to semi-annual reporting in the market place. Just think about how this would weaken the integrity of the entire financial system in the world’s largest economy for a moment…

But I digress. The best Canadians can hope for is a Democratic majority congress after the midterms and potentially a Dem Senate. A majority house is not enough to impeach Trump however. There also needs to be a 2/3’rds majority Senate vote for impeachment and that means assumed Democrat house congressional investigations leading to so much dirt that everyone will want him gone, even the Koch brother backed Republican Senate and that will take time. Its likely that the Muller investigation will be ended with a different AG getting rid of Rosenstein and that leaks to the media will ensue from there, hence, Trump’s war with the media but who really knows how this will end. If it fleshes out that Trump really was a traitor to his country and still is… the damage on the integrity of the system will last for some time to come. Trump’s appointments will be the hardest to reverse and the Koch bros will still be there unless they die of old age.

Even so, a Democrat majority congress will hamper Trump’s ability to wage trade wars including trying to destroy NAFTA. Its the best Canada can hope for at this point… its a stretch to hope for a majority Dem Senate, but we should hope for that too. I don’t see any progress on trade agreements with the U.S. until we see a Democrat congress and nothing definitive until Trump is gone and that could still be a while and could end messy.

The greatest economic risk right now (and there’s a good deal of it to be sure. Italy’s debt bubble is ready to burst. Japan is still a zombie economy with numbers that would make any vet analyst wince, Russia continues to be controlled by an outright villain, China will some day soon want to rule the world) is geopolitical risk coming from the U.S. and that is not good for Canada any way you slice it. We can’t have the world’s still largest economy run by a corrupt traitor, and yet we do. That’s bad any way one looks at it and it has to be priced in.

#86 Asymmetrical Randomness on 09.02.18 at 11:30 am

We can actually make a price projection from this pattern by subtracting the high (2,872) from the low (2,532), and adding this difference (340 points) to the breakout level. In early May the S&P 500 broke out from this triangle, so if we add the 340 points to this breakout level (2,700) we derive a potential price projection of 3,040, or potentially another 6% upside from current levels. This breakout in May got me pretty hot and bothered …..
….
Dude… you need to read fooled by randomness..

So the question is: Did you reposition client portfolios based on that and specifically increase S&P500 exposure…

#87 IHCTD9 on 09.02.18 at 12:06 pm

#46 crowdedelevatorfartz on 09.01.18 at 10:12 pm
@#27 IHCTD9
“$27.75 for a 26’er of rum today.
And beer ain’t a buck.
Might be a good time to start a speakeasy…’
+++++

Ahhhh Spirits and beer.
I was dwntwn last weekend and brought a case of beer and a 12 year old McCallans over to a buddy who needed a bit of “cheer”.

He couldnt just sip the McCallans …..had to chase it with beer!
Never will I waste a nice smooth scotch on that barbarian again.

Just curious what type of Rum?
When I’m in the mood for rum (occasionally).
I like Appletons or Flora de Cana…..

——

It was Bacardi Superior. Probably one of the cheaper ones. I can’t stand any Rum that isn’t white.

#88 Shawn on 09.02.18 at 12:14 pm

It’s likely that most lay investors remain on the sidelines (& in bonds) until Nasdaq 10000, S&P500 3000 and DOW 30000. Then they will begin to re enter the market gradually.

#89 technical analysis? on 09.02.18 at 1:07 pm

gypsies predict the future, not technical analysts

#90 crowdedelevatorfartz on 09.02.18 at 1:14 pm

@#82 Evangeline
“The highway project, the first of its kind in Kenya…..”
+++++
Kenya, where elections turn into tribal butchery.

https://www.theguardian.com/world/2017/oct/27/kenya-election-less-than-half-of-those-eligible-thought-to-have-voted

Thats where the US needs to send billions of dollars in Aid…..
Or is this an attempt to outbid China’s “Belt and Road” initiative?

http://www.xinhuanet.com/english/2018-08/29/c_137428736.htm

Billions spent to ship food produce and raw materials to overseas (Chinese) markets with the added benefit of creating work for thousands of chinese workers….

Next stop for China and US billions ?
The Congo ?

#91 windsor guy on 09.02.18 at 1:15 pm

Hi Ryan, at this stage of this bull market, would it be a good idea to start looking at US value stocks and back off some growth ? And if so what would be a reasonable amount to hold in our portfolios at this stage?

#92 Wrk.dover on 09.02.18 at 1:19 pm

#81 crowdedelevatorfartz on 09.02.18 at 10:39 am
@#65 Wrk.Dover

You Scotians and your high octane Rum.

Peel the paint off a Transmission housing and help start an engine on a cold -40c day.

——————————————

I am a “comes from away”, that’s why I water it down with the Vodka.

I used to enjoy lighting shots on fire and downing the little blue flame and all, until the night I lit up some 150 proof Rum, in kitchen lit only by the open fridge light basically, as the party was out in the front room.

By the time we were through laughing at the new to us amazingly tall blaze, and I put the glass up to my pie hole, the hot glass rim welded itself to my lip just before the cold liquid reached the edge, causing the glass to then shatter. This was followed by flames all down my front and all over the kitchen floor, even lighting the dust bunnies under the fridge and range on fire, creating stinky burning hair smelling smoke!

I was sent home next door, and the lip hurt real bad for weeks.

As the Cat In The Hat has said, “It’s fun to have fun, but you have to know how!”

Finance talk on Labour Day weekend, that’s how?

#93 B Wilds on 09.02.18 at 1:35 pm

Many factors feed into the price of housing. When it comes to real estate, low-interest rates at some point becomes a double edge sword, that affects both its value by making it easier to purchase thus driving up prices, and at the same time allowing more building to take place and increasing the supply. Oversupply is the bane of real estate and crushes the value of this hard and expensive to maintain commodity.

What we see today is not a housing market, it is a place where too much money has gone to hide under the impression and hope it will pay off when inflation awakes and comes out roaring from its quiet slumber. Below is an assessment of the current housing market.

http://brucewilds.blogspot.com/2018/09/housing-in-america-part.html

#94 IHCTD9 on 09.02.18 at 1:53 pm

That same bottle of Rum I paid $27.75 for at the LC yesterday costs $11.97 in the USA.

https://www.walmart.com/ip/Bacardi-Superior-Rum-750-mL/10984545

Unfrickenbelievable.

#95 IHCTD9 on 09.02.18 at 2:22 pm

By the time we were through laughing at the new to us amazingly tall blaze, and I put the glass up to my pie hole, the hot glass rim welded itself to my lip just before the cold liquid reached the edge, causing the glass to then shatter. This was followed by flames all down my front and all over the kitchen floor, even lighting the dust bunnies under the fridge and range on fire, creating stinky burning hair smelling smoke!

————

Lol! This is some good old school Canadiana right there!

Years ago, I was camping with a bunch of guys at a Provincial park before it opened while in a fishing derby. There were 20 or so campers total in the whole park, and all were in said derby – we all set up in neighbouring campsites. Needless to say the hard liquor and beer flowed freely that night as we all mingled.

One guy (drunk as a fish) decides to crank his legs behind his neck and start lighting off his farts. Crowdie here has nothing on this guy, I don’t know what he ate, but it was like a flame thrower.

He was wearing some real worn out pants that were “fuzzy” due to abrasion over the years. On the third light off, buddy’s pants burst into flames. His whole crotch was on fire, and the flame front travelled all the way up to his knees in about a second.

A couple guys were laughing so hard they weren’t making any noise. Other guys were on the ground on all fours howling. One guy puked from laughter. This was all happening simultaneously. I don’t think I’ve ever laughed so hard in my life taking it all in.

That night was just the right blend of alcohol and characters!

#96 Xpat on 09.02.18 at 3:23 pm

Hey Ryan – with inflation back in the picture any thoughts on real return bond ETF’s?

#97 Wrk.dover on 09.02.18 at 4:41 pm

The Bruce Wilds piece certainly rings true for the rest of Canada too. (Other than GTA and Van)

#98 Ariana Grande on 09.02.18 at 8:30 pm

..or maybe its all just a mirage.

https://youtu.be/fwuQDonboaE