Keith Richards, president and chief portfolio manager, ValueTrend Wealth Management

FOCUS: Technical analysis 

MARKET OUTLOOK:

Same old song. The market remains in a sub-optimal risk/return environment. But, as noted in my recent blogs, some factors such as breadth are improving. If you look at sort of the recent movements, and I’m talking just two to three weeks, where there has been some strength emerging in some of the other sectors. I continue to think there is room for a correction, especially in the rather overbought tech stocks.

When the techs take that back step and finally settle out some of their overbought conditions, what’s going to happen is money’s going to move into some overlooked sectors. There could be a massive opportunity when that happens and that, I wouldn’t doubt, will happen in line with the seasonal patterns of weakness into the fall and then opportunity after that. So the next few months could be an awesome opportunity to start picking away at positions that really are unloved value stocks.

We have a fairly flat-looking U.S. dollar. The U.S. dollar fell and now it’s kind of treading water sideways, and that can be good for gold because there’s a negative correlation between gold and the U.S. dollar.

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iShares TSX Global Gold Index ETF (XGD TSX)

Nutrien (NTR TSX)

Wheaton Precious Metals (WPM TSX)