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The bull has another cause for concern. Our score is now 12-0-3; that is 12 for the bulls and zero for the bears - but now we have got up to 3 for the undecideds.
The trouble is all in Elliott (we wrote a book on it) and for the S&P/TSX 60; for the DJTA; and for the Nasdaq Composite it is possible, and even probable, that all three of these Indices are in the 5th and final wave of this bull market. (See our reports for more on this.)
The majority view is that the U.S. dollar is going lower; if it does the liklihood is that the Euro is going higher. The Euro has already gone from 80 to as high as 138 against the U.S. dollar and is currently 134.
The Euro is already up 72.5%. If in the same time frame the Canadian dollar were to imitate the Euro the looney would be at $1.09 versus the U.S. dollar and Canada would most likely be in big trouble. If the Euro goes to a new high we submit they too could have big problems.
For the first time since we started in Nov. 2002 many of the oil stocks in this country are no longer undervalued.
The worst offenders are Imperial Oil and Shell Oil; but even Canadian Natural Resources and Talisman are barely undervalued depending on what figure is used for cashflow.
Of the three major sectors in Canada, the financials are still undervalued, and now so are the Materials (Alcan, Inco and Noranda.) But the oils are borderline.
Our S&P/TSX 60 stock list will be published on Thursday of this week unless there is some kind of last minute hitch. These 60 stocks will be arranged in order of our ratings where the most undervalued will head the list.
There are many changes from our last list published Nov.12, 2004. What we can say right now is that the most undervalued sector is the life insurance stocks, in alphabetical order they are Great West ($28.65); Manulife ($57.28) and Sunlife ($39.51).
On Feb. 15, 2005 we said: "When an Indice goes to a new high for the current bull market it re-affirms the Bull, so far the S&P/TSX is the only indice to do this - but we expect the others to follow."
Well, they have. Both the DJIA and the S&P 500 made new highs for this Bull Market. This augurs well for the intermediate term; happy days are here again and not just for FDR.
Our inception time for "Topicks" was in November of 2002. All of these Topicks went up, and are still up! The best one has been Transat which was designated "topick" on March 3, 2003 when the stock was selling at $4.55 and most investors were scared of airlines; Transat is now selling at about $28.00. Our "Topick" list has 40 stocks on it and this list will be published later this month.
Bank of Montreal stock ($55.81) has been sideways approximately between $50 and $60 for over a year now.
The stock has traced out a bullish chart pattern, and the breakout would be going through $59 to $60.
BMO is a topick for us at this time and our rating number is most attractive at 0.97 and merits a No.1 rating (substantially undervalued).
Just say no has become the policy of the Canadian Government.
When the United States asked us to help them in Iraq we couldn't wait to walk away. With friends like us who needs enemies!
When the U.S. asked us to go with them in the anti-missile system to defend our own country it is hard to believe but we said no again.
Is our government not aware that 94% of our international trade is with the U.S.
Why should we be surprised that the U.S. is continuing to say no to us on lumber and now on live cattle?
We are now entering the third year of this bull market. We should all be aware that it will likely come to an end sometime this year. Using the S&P 500 as a yardstick this bull market has taken this Index from approximately 800 to 1200 for a move of 50%.
While the end is getting closer, have no fear at this time. We have a boxscore system of 15 points and at this time the score is 13 for the bulls; 0 for the bears; and 2 undecided.
We will keep you posted on any changes in the score!
