Don Vialoux, technical analyst at TimingTheMarkets.com and EquityClock.com

Focus: Technical analysis and seasonal investing
_______________________________________________________________

MARKET OUTLOOK
Tomorrow is an important day for North American equity indices. There are three possibilities: Hillary wins and equity markets move higher, Trump wins and equity markets move lower, or results of the election are contested due to a variety of reasons (recounts, terrorist interference, claims of voter interference) and equity market move lower. The more important question is: What happens after the initial reaction? History shows that U.S. equity markets move higher (on average three per cent) between the day after election day and inauguration day (January 20), when investors anticipate at least partial approval of the president’s new mandate by Congress. However, reality strikes shortly after when investors realize that congressional action on the mandate will not come quickly. U.S. equity markets move lower from late January to March. Thereafter, U.S. equity markets have a history of moving higher.

TOP PICKS

ISHARES TRANSPORTATION AVERAGE ETF (IYT.US)
Current period of seasonal strength is from the beginning of October to the first week in January. Technical parameters currently are positive (upward intermediate trend, positive strength relative to the S&P 500 Index, positive short-term momentum). The sector will benefit from lower fuel costs.

MARKET VECTORS AGRIBUSINESS ETF (MOO.US)
Current period of seasonal strength is from the beginning of October to the first week in January. Technical parameters currently are positive (upward intermediate trend, positive strength relative to the S&P 500 Index, positive short-term momentum). The sector will benefit from a recovery on grain prices.

BMO EQUALLY WEIGHTED GLOBAL METALS ETF (ZMT.TO)
Current period of seasonal strength is positive from the middle of November to at least the first week in January. Technical parameters currently are positive (upward intermediate trend, positive strength relative to the S&P 500 Index, and short-term momentum indicators are trending up). The sector will benefit from higher base metal prices triggered by greater demand from China.
 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
IYT N N N
MOO N N N
ZMT N N N


PAST PICKS: OCTOBER 14, 2016

ISHARES GLOBAL AGRICULTURE ETF (COW.TO)

  • Then: $34.29
  • Now: $35.39
  • Return: 3.20%
  • TR: 3.20%

UNITED STATE NATURAL GAS FUND (UNG.N)

  • Then: $9.43
  • Now: $7.59
  • Return: -19.51%
  • TR: -19.51%

FIRST TRUST U.S. TECHNOLOGY ETF (FHQ.TO) – Did not start trading until October 17, 2016

  • Then: $23.30
  • Now: $24.17
  • Return: 3.73%
  • TR: 3.73%

TOTAL RETURN AVERAGE: -4.19%
 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
 COW N N N
UNG N N N
FHQ N N N


BLOGS: www.timingthemarket.ca and www.equityclock.com
TWITTER: @EquityClock