Looks like a divergence in the charts ... This is very clear when looking at the 5 year charts.... The trend is your friend, and according to Canaccord adams this is going to continue.
If I was an American investor I would be opening a Canadian trading account and taking a position in the Venture Jrs.... The venture exchange is trading at it's 3 year lows, commodities are in huge demand and many inventories are near their lows.
Ni has the illusion of being in surplus, yet it isonly a 3 to 4 day supply.... Couple this with pig iron producers droping like flies and an impending shutdown for refits next year in Sudbury.... and we will see Ni prices back in the $40,000/ tone next year.
What does the US investor do...... Take shelter in the undervalued Cnd exchange, protecting assets for the continued slide in the US dollar.
JMHO
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Portfolio Strategy
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Nick Majendie, CA, 1.604.643.7005 |
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Summary of this week's Strategy Note In our June Portfolio Strategy report, we raised our 12-month TSX target to 16,400 from 15,000. The increased target was purely a function of higher earnings estimates. The upwards earnings revisions for the TSX were the sharpest we have seen in many years. In consequence, we have seen marked outperformance by the TSX year-to-date relative to the indices south of the border. In contrast, for the US, for example, we have seen consistent downgrading of earnings estimates for the S&P 500, largely in the financial and consumer sectors.
Post-midyear, the US indices had another bout of panic induced by fears over the solvency of Fannie Mae and Freddie Mac and the actual takeover of IndyMac Bank by the Fed with its assets of $32 billion. The market weakness saw the S&P 500 reach a new 52-week low, while the TSX fell in sympathy, giving up just over 60% of its 3,100 point gain since January 25. Consequently, this week's Strategy Notes are devoted to the valuation of bank stocks in such an environment.
We conclude that, despite the strong oversold rally in the banks over the last three days of last week, it is premature to be thinking of moving to a more neutral weighting in the Canadian banks. In much the same way as they had a strong rally in the spring, but went on to new lows, we expect further such instances over the balance of the year and believe that we will have the opportunity to buy the banks at or below the levels they attained in the early part of last week.
Changes to Canadian Equity Model Portfolio Since our last Strategy Note, we increased our holdings in Petro-Canada (PCA : TSX), Husky Energy Inc. (HSE : TSX), Imperial Oil Ltd. (IMO : TSX), Suncor Energy Inc. (SU : TSX), Talisman Energy Inc. (TLM : TSX), Nexen Inc. (NXY : TSX), Research In Motion Ltd. (RIM : TSX), Potash Corp. (POT : TSX) and CAE Inc. (CAE : TSX), while reducing our positions in Toronto-Dominion (TD : TSX), Royal Bank of Canada (RY : TSX) and Enbridge Inc. (ENB : TSX).
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