Canada and US...Twin Stock Markets

The Canadian and US Stock Markets are for the most part, joined at the hip. Historically the degree of change varies a little but they run pretty much parallel.

Starbuck Follow-Up/News

The stock price continues to decline for Starbucks. Now at $22.50 and the P/E still at 26. Still a long way to go before the price makes business sense.

Today news came out about a problem with their thermos coffee cups burning people when the handle fails. Reminds me of a Seinfeld show.

This won't help the stock price.

Water Bill Caution

If you have a water meter, and if your home plumbing develops a slow water leak, one you don’t notice, your bill will climb. Keep tabs on the consumption on the bill, comparing it to normal. Otherwise you risk getting a big surprise on your water bill payment one day. A bill could easily be a couple of hundred dollars higher just for the leak, especially if your paying for both water and sewer when both costs are based on the water meter reading. Toilet leaks that run 24/7 are a most common cause of this sort of thing. Fortunately, you can hear toilet leaks during the night when the house is quiet if you listen while …well you know.

TD Bank...penny stock or blue chip?

This is such an interesting move by the price for TD Bank stock that I had to post it. It took the best part of the last 2 months to come down from $75 to a low of $64. Then, acting more like a penny stock driven by the power of a stock market bubble it regained $75, an increase of about 17 percent over the last four trading days. Now that is volatility!

Chart Game

While surfing the net I came across a site called "Chart Game". As I understand it, the purpose of the site is to allow people...to test their ability to predict stock price direction using just the information contained in the price chart. The charts are good quality and include both price and volume. The game allows one to play with "play money".

A significant limitation to the charts is that they only go back 24 months. For my type of analysis I need to see the entire available history for the chart because what may happened in the future is governed in large measure by what has occurred for the last 10 years or more. Limiting the data to only 2 years of history... in my opinion is not a valid test.

One needs to recognize that not all stock charts are useful for "good predictions". Indexes are always good but many stock charts are terrible candidates. In addition, there are periods of time when no one can make good long-term prediction.

I like the basic premise of the game and hope the site developer will take the idea further. I firmly believe that any one who thinks they can forecast anything be able to demonstrate that ability.

Sayward Photos

A couple of photos I took near Sayward on Vancouver Island.

Dow Theory Sell Signal...almost there

If you follow market news you will be seeing articles discussing if the Dow Theory has signaled a change from a long term uptrend (bull market) to a long term downtrend (bear market).

So far only the DJTransportation Average Index has developed a sell signal by declining below the August low near 4,450. The DJIndustrial Average has not yet done so and this confirmation is required before the Dow Theory sell signal is confirmed.

The DJIA must break below the August low near 12,500 points. It is not far away from doing so with a low of 12,725 today. Another ~3 % drop will take it below the 12,500 level and confirm the sell signal.

In comparison, the S&P/TSX must decline to below about 12,500 before it has developed the Dow Theory change of long term trend signal.

The S&P 500 and Nasdaq Indexes also have a way to go down before they would give a sell signal.

The fact that the DJTransportation Average Index has developed a sell signal...an early warning that a bear market trend may be underway, as opposed to just another small correction, is significant. This is consistent with the overall Dow Theory that expects the industrial slow down to show up first in the transportation industry. For example, before an industry can produce items made of raw products such as steel, these products must first be transported. If a slow down is under way it will then show up first in the transport of raw materials.

The fact that the Dow Theory sell signal seems to be within reach may have influence on some investors and lead to more selling...as people try to beat the gun to avoid getting caught in a fast moving down-draft of price decline.

The next few trading days will be interesting to follow.