Technical Seasonalities

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1 Equity Clock: Seasonality Analysis July 27, 2015 Technical Seasonalities eresearch Corporation is pleased to provide technical opinions on the market from a seasonality standpoint, courtesy of Equity Clock, a division of the Tech Talk Financial Network.eResearch also posts, daily, the regular technical opinions provided by affiliate: Tech Talk: TimingTheMarket. Equity Clock ( is a market analysis company that provides, completely FREE, technical, fundamental and seasonality analysis on a daily basis via TimingTheMarkets.com and EquityClock.com. Equity Clock s mission is to identify periods of re-occurring strength among individual equities in the market using methodologies presented by some of the top analysts in the industry, including those of Donald Vialoux, author of TimingTheMarkets.com. Donald Vialoux, co-founder of Tech Talk, is a past president and director of the Canadian Society of Technical Analysts (CSTA). He holds the designation of Chartered Market Technician (CMT). Mr. Vialoux has 45 years of experience in the investment industry, including prominent positions held at Richardson Greenshields and RBC Investments. He is the author of a daily letter on equity markets, which is available free at TimingTheMarket.ca. Mr. Vialoux is also the author of a weekly column published at GlobeAndMail.com that combines technical, fundamental, and seasonality analysis. He is a frequent presenter on Business News Network (BNN) Television. Mr. Vialoux also offers advice to the Horizons Seasonal Rotation ETF (HAC). eresearch was established in 2000 as Canada's first equity issuer-sponsored research organization. Our various research packages allow corporate management to choose the form of research coverage that best meets their company s needs. We are a primary source for professional investment research, focused primarily on small- and mid-cap companies. Our research and analysis is of institutional quality, and has the potential to reach millions of global investors through our extensive electronic distribution network. Bob Weir, CFA: Director of Research Note: All of the comments, views, opinions, suggestions, recommendations, etc., contained in the TechTalk/Timing The Market articles, reports, files, documents, essays, etc., and which are distributed by eresearch Corporation, are strictly those of TechTalk/Timing The Market and do not necessarily reflect those of eresearch Corporation. eresearch Corporation 78 Cameron Crescent, Suite 202 Toronto, Ontario M4G 2A3

2 Stock Market Outlook for Monday, July 27, 2015 Headline: Gold ETF charting an outside reversal day as the period of seasonal strength for the miners gets set to begin. The Markets Stocks ended lower on Friday in a bout of profit taking following a lacklustre week for earnings in the US. According to FactSet, S&P 500 company earnings are set to post a year-over-year decline of 2.2% and revenue is set to decline 4.0% for the second quarter, the first time companies in the large-cap benchmark have posted two consecutive quarters of year-over-year revenue declines since the height of the recession in Guidance has also been weak with 20 companies providing a warning of things to come in the third quarter versus 7 that have issued positive guidance. Overall, with stocks hovering around all-time highs and the earnings picture for the remainder of the year becoming clear, investors are now inclined to step back from the equity market, a tendency that is typical in the last half of July. The S&P 500 Index is now testing minor support around 2075 with eyes set on more substantial support around the July low at Below the July low, the technicals suggest a calculated move lower to around Seasonally, stocks remain in a period of seasonal weakness through to October. eresearch Corporation ~ 2 ~

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4 Typically, one of the beneficiaries of the seasonal weakness for stocks over the next nine weeks is Gold. Between July and October, as volatility rises in the equity market, the price of gold tends to gain, benefitting producers of the commodity; gold miners seasonally gain between July 27th and October 1st, on average. The miners already appear to be responding, reversing heavy losses intraday on Friday to close positive on the session. The reversal followed an outside reversal session for the Gold ETF (GLD), which opened below Thursday s low and closed above Thursday s high. Outside reversal sessions typically mark a low point for an investment, indicating that selling pressures have been exhausted, leading to abrupt rebounds. Of course, this reversal in the price of the gold miners is occurring on the eve of the average start of the period of seasonal strength for the industry, an appealing trigger to gain an entry into the seasonal trade. Commodity prices, in general, will continue to face headwinds, particularly from a rising US Dollar, but, assuming currencies can find some stability around present levels, the seasonal gold trade does present appealing attributes at present levels. Both gold bullion and gold miners charted a parabolic move lower over recent weeks, a technical setup that is typically unsustainable over the longer-term. A rebound to levels around major moving averages, particularly the 20 and 50-day, would be expected over the near-term. eresearch Corporation ~ 4 ~

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6 On the economic front, a report on New Home Sales for June was released on Friday and the result was not encouraging. The headline print indicated that the seasonally adjusted annual rate of sales in June was 482,000, well below the consensus analyst estimate of 550,000. Stripping out seasonal adjustments, sales of new homes declined by 6.25%, exceeding the average decline for June of 2.9%. The year-to-date change hovers around 29%, below the 41% average gain through the first half of the year. Sales of completed new homes were the largest drag, dipping into negative territory, in terms of the year-todate change; over the past 50 years, completed new homes for June have averaged a rise of 0.3%, however, declines have become commonplace for this summer month as sales peak into the middle of the year. New home sales tend to decline through the back half of the year, a trend that seems well underway. The price of the Dow Jones US Home Construction ETF (ITB) responded accordingly, declining over 2%, breaking support around the July lows. <continued> eresearch Corporation ~ 6 ~

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9 Put-Call Ratio Sentiment on Friday, as gauged by the put-call ratio, ended overly bearish at <continued> eresearch Corporation ~ 9 ~

10 Seasonal charts A. Sectors and Industries Entering Period of Seasonal Strength Today ^GOX Relative to the S&P 500 eresearch Corporation ~ 10 ~

11 B. Stocks Entering Period of Seasonal Strength Today Netflix, Inc. (NASDAQ:NFLX) Seasonal Chart Gilead Sciences, Inc. (NASDAQ:GILD) Seasonal Chart Automatic Data Processing (NASDAQ:ADP) Seasonal Chart eresearch Corporation ~ 11 ~

12 Denison Mines Corp. (TSE:DML) Seasonal Chart Gold Fields Limited (ADR) (NYSE:GFI) Seasonal Chart Tetra Tech, Inc. (NASDAQ:TTEK) Seasonal Chart eresearch Corporation ~ 12 ~

13 IAMGOLD Corporation (TSE:IMG) Seasonal Chart Eldorado Gold Corporation (TSE:ELD) Seasonal Chart Autodesk, Inc. (NASDAQ:ADSK) Seasonal Chart eresearch Corporation ~ 13 ~

14 C. Seasonal Charts of Companies Reporting Earnings Today eresearch Corporation ~ 14 ~

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35 S&P 500 Index eresearch Corporation ~ 35 ~

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37 Horizons Seasonal Rotation ETF (TSX: HAC) Closing Market Value: $16.40 (down 0.24%) Closing NAV/Unit: $16.40 (down 0.39%) Performance* 2015 Year-to-Date Since Inception (Nov. 19, 2009) HAC.TO 8.39% 64.0% * performance calculated on Closing NAV/Unit as provided by custodian Click Here to learn more about the proprietary, seasonal rotation investment strategy developed by research analysts Don Vialoux, Brooke Thackray, and Jon Vialoux. Special Free Services Available through Equityclock.com is offering free access to a data base showing seasonal studies on individual stocks and sectors. The data base holds seasonality studies on over 1000 big and moderate cap securities and indices. Notice that most of the seasonality charts have been updated recently. To login, simply go to ########## BW: Information on Equity Clock is provided on the ensuing page. eresearch Corporation ~ 37 ~

38 Equity Clock is a division of the Tech Talk Financial Network, a market analysis company that provides technical, fundamental, and seasonality analysis on a daily basis via TimingTheMarkets.com and EquityClock.com. Equity Clock s mission is to identify periods of reoccurring strength among individual equities in the market using methodologies presented by some of the top analysts in the industry, including that of Don Vialoux, author of TimingTheMarkets.com. Feel free to use any of the content or seasonality studies (charts, timelines, or otherwise) presented as long as a link-back to this site at EquityClock.com is provided. For further information on indicators used in reports presented on this site, please visit our reference page. Equity Clock Website: Horizons AlphaPro Seasonal Rotation ETF (HAC) Interested in the methodologies and strategies presented by Tech Talk? The Horizons AlphaPro Seasonal Rotation ETF (trading on the Toronto Stock Exchange under symbol HAC) uses a proprietary, seasonal rotation investment strategy developed by research analysts Don Vialoux and Brooke Thackray. The strategy s core position consists of broad markets at seasonally favourable times of the year and money market securities at seasonally unfavourable times of the year. The strategy allocates from the core portfolio to various sectors when those sectors offer favourable opportunities. Rotating a portfolio in anticipation of these opportunities is designed to deliver returns that are superior to a static investment in broad markets. As seasonal periods are never the same, this investment strategy is supported by additional fundamental and technical analysis. For more information, Click Here. ############ eresearch Corporation ~ 38 ~