2011 MARKET ACTION UPDATE…

2011 has so far been a most challenging period as markets have not made much progress up or down, whether it is the TSX in Canada or the U.S. markets. Emerging markets are down for the year. Strength in the economy and thus the markets can be seen through growth stocks. The authority for growth stocks is the NASDAQ Composite, which, as you see below, has not really made much progress either up or down. So far, it has been a period of what one could call chop n' slop. Such environments do come to an end.

Two investment specialists who follow a similar investment thesis, Dr. Katcher and Gil Morales, recently stated that these periods can obviously be frustrating, and it is challenging to know when a sideways choppy market will end and when a new trend will resume. Fortunately, such periods tend to be short-lived and always come to an end. While the current trend seems to be down, oversold action combined with leading stocks holding up in the wake of this selloff (Netflix, Baidu, Lululemon – to name a few) points to a strong probability of a bounce in the coming days.

Timing strategies capture returns on major uptrend and downtrend moves, while limiting losses on false signals, such as seen during whipsaw markets. We know this is an extremely unusual time with the U.S. Federal Reserve driven Quantitative Easing, the Japanese crisis, the Libyan unrest, etc. These periods in history cause challenging and unusual whipsawing in markets, which we are prepared and experienced to maneuver.

See the full PDF version of this month's commentary as well as the archive in our Market Info Section