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...
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...
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...
Has the Tide Turned for the Canadian Economy?
The last two months have dynamically changed the narrative toward the Canadian economy. Over those two months, the markets have substantially shifted, including: 15% rise in the Canadian Dollar from its $0.68 lows to its current levels around $0.78. 27% rise in oil prices from their lows below $30.00 to around $38.00 today. 16%...
Will Gold Glitter Again – Part II
With gold having a strong start to the year and a solid 20% off its 2015 lows, the bulls vs. bear’s arguments have taken center stage. Let’s review both arguments. Bear Case for Lower Gold Gold is an inflation hedge and performs poorly in deflationary times. The most commonly referenced example is the 20-30% decline in gold...
The Canadian Bear Market Roars!
I find a sense of irony that investors need to be losing 20% or more on their equity investments before the economic experts feel they can officially conclude that it is a bear market. It makes it almost meaningless to react to the news as often the worst part of the portfolio damage has already occurred. None the less, we find...
The Risks of Prolonged Commodity Weakness
The Bank of Canada released its semi-annual Financial Systems Review on December 2015. Click to download the Report. While the report was comprehensive in looking at Global Macro Risks, we wanted to focus on their comments on the global commodity markets. Here is an excerpt from the report (p.27): “Risk 4: Prolonged Weakness...
Will Gold Miners Glitter Again?
This week ushers in a wave of 3rd quarter earnings for many of the large cap gold stocks in Canada. We reference the term large cap loosely as the gold bear market of the last 4 years has wiped out the market capitalization of many gold miner darlings. In some cases 75% or more from their peak values. During that bloodletting,...
Creating Income from Franco-Nevada
To say that the gold mining sector has underperformed over the last 3-4 years is a significant understatement. The sentiment in the group has never been more negative as some darling gold miners have lost more than 90% of their value. Yet, in that environment, one gold company has been able to stand strong like the Rock of...
Have We Seen the Market Bottom?
The last two weeks have seen material volatility as we had a serious market decline and substantial rebound in stocks. Much of the blame has been pointed toward China, but there is no denying the material declines in all global markets. The VIXC, which is the Canadian measure of implied volatility on the Canadian markets spiked...
Patrick Ceresna
Derivatives Market Specialist
Big Picture Trading Inc.
124 posts
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