Thursday Radio Rallies & Reversals

Rallying -Stocks are rallying out of the gate after the Fed announced it will pump $600 million into the economy. Overseas markets are also on the rise. The Canadian dollar is rising with the risk off attitude. Good for the Snowbirds.

Reversing - The US $ is lower. The QE2 is causing a rotation out of US $ into all assets especially commodities. It's added liquidity by increasing the supply of US$ and those dollars are chasing returns.

Opportunity -Alot of investors argue the two major events in the US this week, the Fed QE2 and gains by the Republicans were already priced into the market. As a result we may see focus shift back to the economy specifically the jobs numbers which surged on the last weekly report.On the other hand the Fed has ignited the market in the short term and seasonality may sustain the momentum.


staying with the seasonality theme again today, UBS reported some interesting stats on what is historically the best period for stock performance, that being from November through May. Historical performance for the June through October period has averaged a negative 1.2% over the last 55 years. This year the TSX Composite index is up 7.8% from June through October. So what is in store for the next 6 months. If history is any indicator, when June through October performance is down more than 5%, the next 6 months are up 7.8%; when June through October performance is between negative 5% and positive 5%, the next 6 months are up 6.2%; and when June through October performance is up more than 5%, the next 6 months are up 10.3%.