Hedging Canadian Bank Risk with Debit Spreads
August 01, 2017
Protection

Hedging Canadian Bank Risk with Debit Spreads

The recent hawkish shift and rate hike by the Bank of Canada has ushered in a resounding 10% rise in the Canadian dollar in a few short months.  This has not only put stress broadly on Canadian equities, but it has instilled concerns about the tightening of credit conditions on an already over indebted Canadian consumer....

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3 weeks ago
Bottom Fishing Cenovus? Hedging may be Appropriate
May 10, 2017
Bullish Outlook

Bottom Fishing Cenovus? Hedging may be Appropriate

Cenovus stirred up the Canadian oil industry back on March 29th with an announcement on the $17.7 billion-dollar purchase of ConocoPhillips’ Canadian oil sand assets. To say the deal was not well received is an understatement as the stock dropped over 10% on the announcement and continued to actively distribute lower. From...

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3 months ago
Peak Optimism Weighing on Canadian Banks
April 05, 2017
Risk Management

Peak Optimism Weighing on Canadian Banks

Reflecting on the last 9 months, we can decisively identify the global reflation trade as the primary driver of the equity rally. This was considerably accelerated by the Republican sweep in the U.S. elections driven by expectations of new growth driven by tax cuts and fiscal spending. During that roaring bull advance, it was...

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5 months ago
Is the Extreme Bullish Speculation in Oil a Warning?
February 06, 2017
Bearish Outlook

Is the Extreme Bullish Speculation in Oil a Warning?

The OPEC agreement to cut production back in late 2016 ushered in a further wave of enthusiasm that pushed oil and the energy sector higher, with the belief that the oil bear market was over and long gone. Coupled with the Trump reflation trade enthusiasm, we have witnessed a very strong finish in 2016. The price of WTI oil...

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7 months ago
Fading the Trump Hysteria
January 05, 2017
Protection

Fading the Trump Hysteria

The stock markets are first and foremost a behavioral exercise. Investors are always trying to price in the future – 6 to 9 months in advance. To put that statement into perspective, one must recognize that the market is therefore driven by perceptions and assumptions more than it is about realized certainties. That...

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8 months ago
“Buying the Dip” on REITs
December 05, 2016
Bullish Outlook

“Buying the Dip” on REITs

It is incredible to have witnessed what has transpired in the month of November 2016. Trump’s victory has spurred a complete 180 degree turn in macro thinking. Some of the great macro men like Ray Dalio, Stanley Drunkenmiller and Jeffery Gundlach have discussed what is now openly believed to be a new growth and inflation...

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9 months ago
Using Options for Hedging Market Cycles and Tail Risks
November 01, 2016
Index Options

Using Options for Hedging Market Cycles and Tail Risks

There are many signs suggesting that the current economic business cycle, debt cycle and market cycle are in the mature to late stages. In traditional manner, there will eventually be a peak to trough correction that will play out no different then any other time in the past. As we approach the inevitable, the buy and hold,...

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10 months ago
The Divergence in Oil and Oil Stocks
August 08, 2016
Bullish Outlook

The Divergence in Oil and Oil Stocks

Something weird is happening in the energy markets… Oil and gas stocks seemed to stop caring what oil is doing. The divergences are staggering. What do I mean? Back in May, when crude oil was at its $50+ peak level, there was jubilee amongst investors. It has become consensus that oil has not only bottomed but is discovering...

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1 year ago
Betting on A Volatile Finish to the Year
June 01, 2016
Volatility

Betting on A Volatile Finish to the Year

There has been no shortage of volatility in the Canadian stock markets over that last year. It was April of 2015 that saw the S&P/TSX60 top at the 905.00 level and usher in a 9-month bear market decline that wiped out 25% of the value of the TSX down to the 680.00 level in January 2016. Over the last 4 months, the...

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1 year ago
Hedging Hope
May 03, 2016
Protection

Hedging Hope

Those that regularly follow my articles and forecasts can easily ascertain that I am a worry wart. Fortunately, or unfortunately I am always skeptical on overly optimistic views on stocks and the economy. So what am I skeptical on now? I am skeptical on the supposed turn around in the Canadian economy. Yes, things have improved...

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1 year ago