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Excessive volatility has made it very difficult to establish any real trend in the markets. I was wrong in betting against the materials sector in advance of its period of seasonal strength which normally starts in the middle of November.
The end of October begins the period of seasonal strength for the major stock markets. Materials, Information Technologies, and Agriculture tend to outperform other sectors between now and the end of the year. All three have already rallied from their summer lows. Still, I am wary of the affect of politics and tax-loss selling on these markets as the end of the year approaches.
The return I am showing for XIU (iShares TSX 60 ETF ) remains at the same level as July (when it crossed the 200-day moving average) since it continues to be at a price below its 200-day moving average.
Ten month return for TSX @ October 31, 2011 = -8.68 percent
Ten month return for Basic Timing Model using XIU = -0.98 percent
Ten month return for Advanced Timing Model (my returns) = -1.45 percent
Money for charity = $411.27
Are you expecting a year-end rally?