A Comment -- General Comments From an Expert (A Commentary)

TSX. Feb/09 to today does it look like a classic head and shoulders down trend? Doesn't think so. Any kind of a topping pattern is led by a large uptrend. TSX uptrend was somewhat broken in 2008. Also the length of time mentioned is a little bit long. There seems to be some pretty strong support at around 11,000.

Gold. On a very, very long-term chart drawn from 2009 that he did, it broke the uptrend in late 2011 and is now showing a descending triangle. It found support at around $1540. It could go to a almost $1700. Looks okay for a short-term bounce but he wouldn't be ragingly bullish on it just yet.

Oil has come off quite a bit here with the Risk off trade. Economies are growing and China is a big consumer of oil. Looking at $90-$105 oil price in medium to short term. Nat gas has had a nice bounce. Mid to long term he sees new uses for Nat Gas. He likes both base and precious metals. Demand on base metals for infrastructure building will continue.

Markets. Not afraid to take risks when the wind is at his back but in the current market you have to be very tactical. In this market you really need support in the portfolio by way of dividend yields that are growing or distributions. This part of the market is doing remarkably well. It is not the kind of market to be in economically sensitive sectors like commodities and industrials. He has stayed pretty defensive through the year. January/February you had a bit of a junk rally off the lows and through that period he underperformed because that was not something that was sustainable.

Using moving averages to move in and out of the market? He likes to see when the 50 day moving average is sloping upwards and likes to see the 200 day moving average sloping higher. Once he owns a security, he likes to see it stay above the 50 day moving average. You can also use this on a basket of securities to see what percentages of them are above their 50 day moving average. This can tell you whether the breadth of the market is doing well or is weakening. You can use this to decide to hedge a portfolio.

Markets. The whole commodity TSX Venture has been extremely oversold. Juniors, in some cases, have lost up to 80% of their value as they approach zero cash position and there is some question about access to capital going forward. There are a lot of incredible deals out there right now but the market doesn't differentiate between a good and the bad. The best case scenario would be near-term producer with all of the financing in place to build everything they need to go to production. You also want jurisdictions where you are not going to suffer political risk exposure.

Commodities. Feels that the greatest opportunity we are about to enter is in gold again because it has been oversold. There is a degree of weariness setting in amongst the former supporters of gold and it is starting to drift down yet the US and China are continuing to crank out currency so on a pure nominal basis relative to the quantity of currency in the world, the quantity of gold is not rising in tandem.

Natural Resources. This feels like the 2008-2009 period with the fear and panic. Canada has been a victim of the “Sell Canada” trade on the part of European and US investors. People have been ditching natural resource stocks because of fears of an economic slowdown in Europe and fears of a slowdown in China. It feels like we're getting to the point where investors are going to be freaking out. They are down, probably on average 20%. However, 1) fundamentals do matter eventually and 2) stocks will ultimately discount the worst-case scenario. Some of the oil/gas stocks are more than discounting the worst-case scenario and there are names now that are stupidly cheap.

Natural gas. There had been a bit of a rally since his last visit, which was an oversold technical bounce. Still thinks there is another down leg coming this summer because of storage levels in the US and Canada. The surprising thing is the amount of switching from coal to natural gas and has been well above what people have been expecting. That is all price induced demand because of very low gas prices. Potentially there is a risk of a reverse switch of going back to coal and gas prices will drop again.

First time on this show. At different parts of the market you want to be focused on high yielding or high growth dividend stocks. He is right in the middle at present. You want to be in financials in Canada, which is probably the only place in the market where they are a defensive stock.

Economy. Greece is such a small part of the European economy and he feels it should be pushed out of the euro and this would not have as much impact after it was done as it is going into it. Because of the indecisiveness, it causes a lot of volatility. The Greeks have a very difficult road ahead of them if they leave the euro because their currency is going to go down anywhere from 10% to 50% and will create a lot of inflation for them.

Markets. JP Morgan issue has more to do with the fact that CEO came out initially and said it was a tempest in a teapot and now has egg on his face. $2 billion seems like a lot of money but it's not. It's a very big bank and they can manage through this very easily. Stock is trading below book and giving you a 3% yield in this situation has very little impact on their stock or their balance sheet.

Markets. S&P 500 is below its support level of 1,350 and TSX is below its support level of 11,700. His company is a mid and intermediate term investor meaning, but depending on your timeframe; you might have a shorter or longer term. As a longer-term investor, he gives a trend line 2%-3% room to drift. He tightens it up when things are a little more volatile.

Gold bullion. You would think that with the market today, the flight to safety would be to gold but that hasn't happened. Some of his investments are based on a model and this one is of a sentiment model. When people are really, really bearish, that is when he wants to get in. He has a tight Stop in at around $1520.

Markets. The market this year doesn't seem to be as much of a liquidity concern. It is more lack of buying than people panic selling. Volumes have been a lot lower this year than last year. If we continue to trend down, mainly from an absence of good news, rather than more bad news, as an investor you can nibble away all summer long. By the end of the year, the focus will come back to the North American economic numbers, which seem to be getting better month by month.