Big Picture

Our overall Primary Trend Indicator remains in a Negative position.  Geopolitical tensions, slowing economic global economic growth and overhang of $US/China trade tensions are weighing on investors sentiment.

Changing Fundamentals

$China May industrial production YoY 5.0% vs consensus 5.4%. **Negative**

$China May retail sales YoY +8.6% vs consensus +8.1%. **Negative**

$Germany May Wholesale Price Index MoM 0.3% vs previous 0.6%.  **Positive**

$US May Retail Sales Rise 0.5% vs. 0.6%.  **Neutral**

$US May Industrial Production up 0.4%. **Neutral**

Focus List

 

$Global Stock Markets are trading lower this morning on end of week profit taking as well as geopolitical issues in the Middle East and China.   Major European indexes such as Germany’s $DAX, France’s $CAC and London’s $FTSE are down on average 0.50%.  Chinese markets are lower by 0.50% while Japan’s $Nikkei index was up 0.40% at time of writing.   $WTI oil prices will be in the spotlight again today with the terrorism activities on tanker ships, in the Middle East, prices are up slightly to $52.50 per barrel.   $GOLD prices are jumping this morning by $16 to $1360 per ounce.  $COPPER prices are flat this morning at $2.65 per pound.   We believe today will be risk-off with concerns over the Broadcom forecast of lower demand for semiconductors – which historically is a bad sign for global growth overall.   Investors who profit from selling short stock would look to the chip stocks today for opportunities.

 

$GOLD Stocks – We highlighted $GOLD two weeks ago as an opportunity for investors, at the time was below $1300 per ounce – investors would be wise to continue holding or adding to shares of gold stocks.  Geopolitical issues, global economic growth concerns as well as currency devaluation prospects.   Sebright Capital likes the following names – Wesdome Gold Mines $WDO.to, Kinross Gold $KGC, $Kirkland Lake Gold $KL, B2GOLD $BTG.  Technically, the price of $GOLD could run through to $1385 if the price can close at or above $1353-55 today.  Momentum and Relative Strength are rising, and On Balance Volume – a measure of net money inflow into a stock or asset class – is rising rapidly.

 

 

Notables:

  1. Seymour Schulich buys 5% of MEG Energy $MEG.to.   Bullish for MEG.to, could run further on this news today.   Seymour Schulich made his fortune on oil/gas in the 1970’s/80’s.
  2. Amarin Corp $AMRN – The company is hitting record orders for its Vascepa triglycerides drug (see chart below).   Price action on the stock price indicates a test of $19.50 resistance and potential upside move to $22-23 on a break and hold of $19.50.
  3. Broadcom $AVGO – Big miss on earnings, and forecasted a broad slowdown in chip sector.   Negative for the entire sector – $AMD, $AMAT, $NVDA, $INTC, $MU.  Short selling opportunities exist today in this sector.