September 16, 2013

Report prepared by: Ryan Lewenza, CFA. CMT

Volume 5 Highlights
Since bouncing off its 50-day moving average (MA) in early August, the S&P/TSX Composite Index (S&P/TSX) is up over 3% and for the first time in over a year, is outperforming the S&P 500 Index (S&P 500). However, it is now once again trading at the key technical resistance level of 12,900, which has contained the S&P/TSX over 2013. Because the S&P/TSX remains range-bound, we expect the S&P/TSX to be capped at 12,900 in the near-term and see it heading lower in the September/October period, which has historically been a weak period for the equity markets. The REIT sector had a rough summer, with the S&P/TSX Capped REIT Index down roughly 20% since May. The weakness in the sector can largely be attributed to the recent rise in government bond yields. Given our view that government bond yields should be nearing their peak on an intermediate basis, the recent pressure on REITs should soon abate. With the S&P 500 approaching technical resistance and a near overbought condition, we expect the S&P 500 to struggle in the coming days and see the potential for some near-term profit taking, resulting in a pullback to its uptrend, currently intersecting at 1,650. With the U.S. Federal Reserve (Fed) likely to announce a tapering of asset purchases following its September 17-18 meeting, and the S&P 500 near technical resistance (and all-time highs), we believe the S&P 500 is approaching an important inflection point, with the market reaction in the coming days, possibly providing a window into the next few quarters. The S&P 500 Industrials Index remains in a clear, long-term upward channel but the sector is quickly approaching short-term technical resistance and is nearing an overbought condition, which could lead to some near-term profit taking. However, we would look to increase exposure to the industrials sector on weakness, as its technical profile remains bullish in our view. In this weeks report we highlight Bank of America Corp. (BAC-N) and Dundee REIT (D.UN-T) as attractive buy candidates and recommend investors trim/sell Conagra Inc. (CAG-N), Campbell Soup Co. (CPB-N) and Kellogg Co. (K-N).

Inside
Technical Commentary...................... 2 Technical Almanac Trading Ideas ... 10 Relative Strength Analysis .............. 13 Sentiment Indicators ........................ 17 Overbought/Oversold Stocks .......... 18 Market Statistics .............................. 19

This Document is for distribution to Canadian clients only. Please refer to Appendix A of this report for important disclosure information.

The Technical Take

September 16, 2013

Technical Commentary
S&P/TSX Composite Index

Since bouncing off its 50-day moving average (MA) in early August, the S&P/TSX Composite Index (S&P/TSX) is up over 3% and for the first time in over a year, is outperforming the S&P 500 Index (lower panel). However, it is now once again trading at the key technical resistance level of 12,900, which has contained the S&P/TSX over 2013. The recent strength in the S&P/TSX was in large part driven by strength of the financials sector, which represents 35% of the S&P/TSX. Following strong Q3/13 earnings results, the financials sector has gone on to make new highs, outperforming the broader market. However, with the financials sector near overbought technically, and the S&P/TSX at key resistance, we expect the S&P/TSX to rollover and decline to its support around 12,550, which is the convergence of the 50- and 200-day MAs. A break below this level would likely lead to a deeper correction, with the S&P/TSX possibly trading down to the bottom of its year-long range of 11,900. Conversely, if the S&P/TSX were to break above the key 12,900 resistance level, we would likely re-evaluate our near-term cautious view. Overall, because the S&P/TSX remains range-bound, we expect the S&P/TSX to be capped at 12,900 in the nearterm and see it heading lower in the September/October period, which has historically been a weak period for the equity markets. Page 2

The Technical Take

September 16, 2013

Canadian Sector Highlights

Name S&P/TSX TELECOM SERV IDX S&P/TSX INDUSTRIALS IDX S&P/TSX FINANCIALS INDEX S&P/TSX CONS DISCRET IDX S&P/TSX COMPOSITE INDEX S&P/TSX ENERGY INDEX S&P/TSX UTILITIES INDEX S&P/TSX CONS STAPLES IDX S&P/TSX HEALTH CARE IDX S&P/TSX INFO TECH INDEX S&P/TSX MATERIALS INDEX Last Price 1094.74 1703.23 1911.19 1372.87 12804.04 2770.51 1704.95 2513.62 1393.49 136.03 2190.42 50 DMA 1051.06 1699.74 1861.73 1343.63 12572.03 2738.44 1780.03 2493.25 1345.96 130.30 2163.11 Trend of 50 DMA Uptrend Uptrend Uptrend Uptrend Uptrend Uptrend Downtrend Uptrend Uptrend Uptrend Uptrend 200 DMA 1106.66 1639.79 1811.52 1199.04 12516.89 2704.06 1885.36 2274.46 1130.27 123.95 2502.55 Trend of 200 DMA Downtrend Uptrend Uptrend Uptrend Uptrend Uptrend Downtrend Uptrend Uptrend Uptrend Downtrend RSI 14 Day 62.93 55.26 63.82 55.70 58.94 61.34 41.65 60.03 53.25 56.04 48.01 Market Ranking of Weekly Momentum Condition Current 2 3 4 5 Neutral 1 1 7 3 9 Neutral 2 9 5 7 8 Neutral 3 4 3 6 6 Neutral 4 10 6 8 4 Neutral 5 6 4 4 5 Neutral 6 2 9 5 10 Neutral 7 5 11 10 11 Neutral 8 3 10 11 7 Neutral 9 7 8 9 2 Neutral 10 8 2 2 3 Neutral 11 11 1 1 1 6 6 5 8 4 9 3 10 7 1 2 11

Source: Bloomberg Finance L.P. As at September 11, 2013.

Weekly Momentum: The telecommunications sector came back to life after Verizon Communications Inc. announced that it would not be entering the Canadian marketplace, moving on to post the strongest sector returns over the last two weeks. As already discussed, the financials sector remains strong, hovering near the top of our sector rankings over the last three weeks. The materials sector fell to the bottom of our sector rankings over the last two weeks, following strong gains made in August. As we predicted in the Weekly Insights report dated August 23, 2013, the strength in August was likely just an oversold bounce, with technicals remaining weak for the sector. Market Condition: All sectors are neutrally ranked, with Relative Strength Index (RSI) readings between 30 and 70. Other: With the recent strength in the S&P/TSX, the utilities sector is the only sector trading below its 50-day MA. The telecommunications, utilities and materials sectors remain below their 200-day MAs, which is one reason why we suggest an underweight in these sectors within portfolios.

Page 3

The Technical Take

September 16, 2013

S&P/TSX Capped REIT Index

The REIT sector had a rough summer, with the S&P/TSX Capped REIT Index down roughly 20% since May. The weakness in the sector can largely be attributed to the recent rise in government bond yields. As seen in the chart above, the peak of the REIT sector in May was concurrent with the breakout and rapid rise in the 10-year U.S. Treasury yield, which moved up nearly 130 bps over this period. Given our view that government bond yields should be nearing their peak on an intermediate basis (longer term, we see rates moving higher), the recent pressure on REITs should soon abate. Additionally, given how oversold the REIT space is, we could see a decent countertrend rally in the coming weeks. If this thesis plays out, we would focus on names such as Dundee REIT (D.UN), H&R REIT (HR.UN) and RioCan REIT (REI.UN). Page 4

The Technical Take

September 16, 2013

S&P 500 Index

In the Weekly Insights report dated August 23, 2013, we stated that with the S&P 500 approaching uptrend support at 1,630 and momentum near oversold levels, that we see the potential for a trading bounce over the next week or so. This short-term call has materialized and now, we note that the S&P 500 is quickly approaching its next technical resistance around 1,700. Given recent market strength, the S&P 500 is nearing an overbought condition, with an RSI reading of 62.23 (above 70 indicates overbought). With the S&P 500 approaching technical resistance and a near overbought condition, we expect the S&P 500 to struggle in the coming days and see the potential for some near-term profit taking, resulting in a pullback to its uptrend, currently intersecting at 1,650. With the U.S. Federal Reserve (Fed) likely to announce a tapering of asset purchases following its September 1718 meeting, and the S&P 500 near technical resistance (and all-time highs), we believe the S&P 500 is approaching an important inflection point, with the market reaction in the coming days, possibly providing a window into the next few quarters. We remain bullish on U.S. equities longer term as: 1) the S&P 500 remains in a clear, long-term uptrend and is above its rising 50- and 200-week MAs; 2) the Advance/Decline Line for the S&P 500 continues to make new highs, showing strong market participation; 3) the S&P 500 has broken and remained above its previous resistance and all-time highs of 1,575; and 4) sector performance continues to indicate a strong market, with the cyclical sectors (consumer discretionary, industrials, and financials) outperforming the broader market. Page 5

The Technical Take

September 16, 2013

U.S. Sector Highlights

Name S&P 500 HEALTH CARE IDX S&P 500 FINANCIALS INDEX S&P 500 INDUSTRIALS IDX S&P 500 CONS DISCRET IDX S&P 500 INFO TECH INDEX S&P 500 MATERIALS INDEX S&P 500 ENERGY INDEX S&P 500 INDEX S&P 500 CONS STAPLES IDX S&P 500 UTILITIES INDEX S&P 500 TELECOM SERV IDX Last Trend of Price 50 DMA 50 DMA 200 DMA 589.98 578.13 Uptrend 532.88 272.35 271.74 Uptrend 249.66 397.86 387.34 Uptrend 362.10 474.95 466.90 Uptrend 426.13 519.88 510.09 Uptrend 487.87 265.94 254.94 Uptrend 247.32 612.87 601.10 Uptrend 577.44 1687.15 1668.23 Uptrend 1570.80 413.92 419.72 Downtrend 403.12 186.39 193.81 Downtrend 191.22 150.46 155.29 Downtrend 155.31 Trend of 200 DMA Uptrend Uptrend Uptrend Uptrend Uptrend Uptrend Uptrend Uptrend Uptrend Downtrend Downtrend RSI 14 Day 62.15 57.77 64.56 60.12 63.73 66.61 60.39 60.47 46.00 43.33 44.33 Market Ranking of Weekly Momentum Condition Current 2 3 4 5 Neutral 1 4 4 8 4 Neutral 2 11 10 5 10 Neutral 3 10 8 2 9 Neutral 4 5 3 10 7 Neutral 5 9 2 1 3 Neutral 6 7 1 3 1 Neutral 7 1 6 4 5 Neutral 8 8 5 6 6 Neutral 9 6 11 9 2 Neutral 10 3 7 11 8 Neutral 11 2 9 7 11 6 9 6 1 2 3 4 10 5 7 8 11

Source: Bloomberg Finance L.P. As at September 11, 2013.

Weekly Momentum: Last week was a clear risk on week with the financials, industrials, consumer discretionary and information technology sectors outperforming the broad market. The health care sector was the top-performing sector last week, and continues its trend of outperformance versus the broad market. With the 10-year Treasury yield hitting a two and a half year high of 3% last week, the interest sensitive consumer staples, utilities and telecommunications sectors underperformed the broad market last week. Market Condition: All sectors are neutrally ranked, with RSI readings between 30 and 70. Other: The utilities and telecommunications sectors remain below their 50- and 200-day MAs.

Page 6

The Technical Take

September 16, 2013

U.S. S&P 500 Industrials Index

The S&P 500 Industrials Index remains in a clear, long-term upward channel, being supported by rising 50- and 200- day MAs. Additionally, relative strength continues to improve, with the industrials sector recently making a new relative high. The sector is approaching its short-term technical resistance and is nearing an overbought condition, which could lead to some near-term profit taking. However, we would look to increase exposure to the industrials sector on weakness, as its technical profile remains bullish in our view.

Page 7

The Technical Take

September 16, 2013

Intermarket Picture

U.S. Dollar Index The U.S. Dollar Index recently rallied off its short-term support around 80.50, up to resistance of 82.50, which is the convergence of the 50- and 100-day MAs. The U.S. Dollar Index remains range-bound between 80.50 and 84.50 but we expect a stronger U.S. dollar in the months ahead, given our belief that the Fed will soon begin to taper its asset purchases, which should be dollar bullish.

U.S. 10-Year Treasury Yield The U.S. 10-year Treasury yield continues to move higher, recently hitting our technical target of 3%. With the recent move, the 10-year yield broke its 7-year downtrend (green circle). Next technical resistance comes in at 3.25%, then 3.75%. While the upside break in yields is technically significant in the long term, we continue to expect an upside cap in yields of 3.0% to 3.25% on an intermediate basis, given our expectations for continued anemic economic growth and benign inflationary pressures. For the near term, we note that yields remain technically overbought while sentiment around government bonds remains heavily bearish. Given these extreme readings, we see the potential for a countertrend rally in bond prices, and lower yields in the coming weeks. Page 8

The Technical Take

September 16, 2013

Gold Following a significant sell-off in June, gold was technically oversold. With gold entering its strong seasonal period in September, it was set up for an oversold bounce. Since the bottom in July at US$1,180/oz, gold has traded in a shortterm upward channel, but more recently found technical resistance around the US$1,430/oz level, which was resistance in the May June period. Gold is now pulling back to its lower channel line, and with momentum rolling over (lower panel), we believe gold prices could pull back further, into a range of US$1,328/oz (50-day MA) to US$1,270/oz (August lows). With our expectations of: 1) a Fed taper in the coming months, which could be dollar bullish and in turn put pressure on gold prices; 2) gold prices nearing the end of their strong seasonal period; and 3) a delay of a potential military strike in Syria, we continue to believe upside is limited in the near term and expect gold prices to pull back in the coming weeks. On an intermediate basis, we see gold trading in a range between US$1,180/oz and US$1,480/oz.

West Texas Intermediate (WTI) Oil The recent escalation of geopolitical issues in the Middle East has put a bid under oil prices, and as a corollary, has led to the highest net long position in WTI oil futures positions seen for some time. With the U.S. stepping back from a potential military strike on Syria, and our belief that the recent rally in oil prices is more technical than fundamental, we continue to expect a pullback in WTI oil prices, possibly back to the US$98 to US$100/barrel range. Additionally, we note that natural gas prices have recently started to outperform oil prices (lower panel), as the strong seasonal period for natural gas approaches. We prefer natural gas to oil in the coming fall months. Page 9

The Technical Take

September 16, 2013

Technical Almanac Trading Ideas

Bank of America Corp. (BAC-N) Published September 9, 2013

Over the last year BAC has been trading in a solid uptrend and above its rising 200-day moving average (MA). BACs relative trends have also been strong, and the stock has been outperforming the broader market over the period. On a near-term basis the stock has formed a flag pattern which is continuation pattern, and is close to registering a momentum buy signal (middle panel). Given BACs strong price and relative technical trends, and near-term potential buy signals, we believe additional upside is possible. We would employ a stop-loss just below the 200-day MA at $12.50.

Page 10

The Technical Take

September 16, 2013

Dundee REIT (D.UN-T) Published September 11, 2013

2013 has been challenging for Dundee REITs share price, with the stock down 22% year-to-date. The weakness in D.UN can largely be attributed to the recent rise in government bond yields. This can clearly be seen in the chart, with D.UN peaking in May, concurrent with the rise in the 10-year U.S. Treasury yield. Given our view that the rise in government bond yields may be nearing its end (on an intermediate-term basis), we believe D.UN could experience an oversold bounce soon. Supporting this thesis we note that D.UN recently broke its short-term downtrend (green circle), and that there is a positive momentum divergence, with the MACD indicator putting in a higher low (lower panel). Given the recent upside trend break, the positive momentum divergence, and our view that government bond yields could be near a peak on an intermediate basis, we believe D.UN is set up for a short-term rally.

Page 11

The Technical Take

September 16, 2013

Conagra Inc. (CAG-N) Published September 13, 2013

We are following up on our May 13, 2013 recommendation to trim/sell Conagra Inc. after CAG was captured as a technical breakdown this week in our model*. We recommended investors trim/sell CAG if it fell below support of $34.50. As displayed in the chart, this occurred shortly after our recommendation. Although the stock made a new high of $37 in early August, it has been weak since then and has broken through its uptrend and 200-day moving average on heavy volume. CAG is now technically oversold with a Relative Strength Index reading of 22.13 (below 30 indicates oversold). As such, the stock could experience an oversold bounce, but given the technical breakdown we recommend investors exit the position on any strength. It is interesting to note that other U.S. food stocks have also been weak. Campbell Soup Co. (CPB-N) and Kellogg Co. (K-N) have broken down and also appear in our screen this week. We recommend investors trim/sell these positions on any strength, given their deteriorating technical trends.

*NOTE: Our technical breakout/breakdown model is based on a weekly screen of the S&P 500 and S&P/TSX Composite for stocks making a new high/low over the last 90 days on volume greater than +1 standard deviation from the 90-day average volume.

Page 12

The Technical Take

September 16, 2013

Relative Strength Analysis

S&P 500
Cyclicals
13SEP10 - 13SEP13
0.290
S&P 500 CONS DISCRET IDX Relative to S&P 500

13MAR13 - 13SEP13
0.288
S&P 500 CONS DISCRET IDX Relative to S&P 500

0.259

0.276

The consumer discretionary sector remains in a longand short-term relative uptrend.

0.227 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.265 Mar 13

Apr 13

May 13

Jun 13

Jul 13

Aug 13

Sep 13

0.37
S&P 500 INFO TECH INDEX Relative to S&P 500

0.32
S&P 500 INFO TECH INDEX Relative to S&P 500

0.33

0.31

The information technology broke its intermediate downtrend and is trading range-bound in the short-term.
Jul 13 Aug 13 Sep 13

0.30 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.30 Mar 13

Apr 13

May 13

Jun 13

0.25
S&P 500 INDUSTRIALS IDX Relative to S&P 500

0.24
S&P 500 INDUSTRIALS IDX Relative to S&P 500

0.24

0.23

The industrials longterm downtrend has recently been broken, due to its improving short-term trends.

0.22 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.22 Mar 13

Apr 13

May 13

Jun 13

Jul 13

Aug 13

Sep 13

0.20
S&P 500 MATERIALS INDEX Relative to S&P 500

0.16
S&P 500 MATERIALS INDEX Relative to S&P 500

0.17

0.16

The materials sector remains in a longterm relative downtrend. Range-bound on a short-term basis.

0.15 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.15 Mar 13

Apr 13

May 13

Jun 13

Jul 13

Aug 13

Sep 13

0.46
S&P 500 ENERGY INDEX Relative to S&P 500

0.38
S&P 500 ENERGY INDEX Relative to S&P 500

0.41

0.37

The energy sector remains in a longterm relative downtrend. We prefer the Canadian energy sector over the U.S.

0.35 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.35 Mar 13

Apr 13

May 13

Jun 13

Jul 13

Aug 13

Sep 13

Source: Bloomberg Finance L.P. As at September 13, 2013

Page 13

The Technical Take

September 16, 2013

Defensives
13SEP10 - 13SEP13
0.28
S&P 500 CONS STAPLES IDX Relative to S&P 500

13MAR13 - 13SEP13
0.28
S&P 500 CONS STAPLES IDX Relative to S&P 500

0.26

0.26

The consumer staples sector is trading range-bound on a long-term basis. The sectors shortterm trend is negative.

0.23 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.24 Mar 13

Apr 13

May 13

Jun 13

Jul 13

Aug 13

Sep 13

0.18
S&P 500 FINANCIALS INDEX Relative to S&P 500

0.17
S&P 500 FINANCIALS INDEX Relative to S&P 500

The financial sector is in a long-term uptrend. Short-term uptrend is under pressure.

0.16

0.16

0.14 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.16 Mar 13

Apr 13

May 13

Jun 13

Jul 13

Aug 13

Sep 13

0.37
S&P 500 HEALTH CARE IDX Relative to S&P 500

0.36
S&P 500 HEALTH CARE IDX Relative to S&P 500

0.32

0.35

The health care sector remains in a long-term uptrend, making new highs in 2013.

0.28 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.33 Mar 13 0.11

Apr 13

May 13

Jun 13

Jul 13

Aug 13

Sep 13

0.12
S&P 500 TELECOM SERV IDX Relative to S&P 500

S&P 500 TELECOM SERV IDX Relative to S&P 500

0.10

0.10

The telecom sector recently made new long-term relative lows.

0.09 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.09 Mar 13

Apr 13

May 13

Jun 13

Jul 13

Aug 13

Sep 13

0.16
S&P 500 UTILITIES INDEX Relative to S&P 500

0.14
S&P 500 UTILITIES INDEX Relative to S&P 500

The utilities sector is making new longterm relative lows.

0.13

0.12

0.11 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.11 Mar 13

Apr 13

May 13

Jun 13

Jul 13

Aug 13

Sep 13

Source: Bloomberg Finance L.P. As at September 13, 2013

Page 14

The Technical Take

September 16, 2013

S&P/TSX Composite
Cyclicals
13MAR13 - 13SEP13
0.113
S&P/TSX CONS DISCRET IDX Relative to S&P/TSX Comp

13MAR13 - 13SEP13
0.112
S&P/TSX CONS DISCRET IDX Relative to S&P/TSX Comp

0.092

0.101

The consumer discretionary sector remains in a longand short-term relative uptrend.

0.071 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.090 Mar 13

Apr 13

May 13

Jun 13

Jul 13

Aug 13

Sep 13

0.02
S&P/TSX INFO TECH INDEX Relative to S&P/TSX Comp

0.01
S&P/TSX INFO TECH INDEX Relative to S&P/TSX Comp

0.01

0.01

The information technology sectors longer-term trend is improving. The sectors shortterm trend remains volatile.

0.01 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.01 Mar 13

Apr 13

May 13

Jun 13

Jul 13

Aug 13

Sep 13

0.14
S&P/TSX INDUSTRIALS IDX Relative to S&P/TSX Comp

0.14
S&P/TSX INDUSTRIALS IDX Relative to S&P/TSX Comp

0.12

0.14

The industrial sectors long-term trend is constructive but is stalling on a short-term basis.

0.10 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.13 Mar 13

Apr 13

May 13

Jun 13

Jul 13

Aug 13

Sep 13

0.34
S&P/TSX MATERIALS INDEX Relative to S&P/TSX Comp

0.22
S&P/TSX MATERIALS INDEX Relative to S&P/TSX Comp

0.25

0.19

The materials sector trend is weak on a long- and short-term basis. Underweight sector within portfolios.
Aug 13 Sep 13

0.16 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.16 Mar 13

Apr 13

May 13

Jun 13

Jul 13

0.25
S&P/TSX ENERGY INDEX Relative to S&P/TSX Comp

0.23
S&P/TSX ENERGY INDEX Relative to S&P/TSX Comp

The energy sector broke its long-term downtrend in June. Short-term relative trends are improving for the sector.

0.23

0.22

0.21 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.21 Mar 13

Apr 13

May 13

Jun 13

Jul 13

Aug 13

Sep 13

Source: Bloomberg Finance L.P. As at September 13, 2013

Page 15

The Technical Take

September 16, 2013

Defensive
13MAR13 - 13SEP13
0.21
S&P/TSX CONS STAPLES IDX Relative to S&P/TSX Comp

13MAR13 - 13SEP13
0.21
S&P/TSX CONS STAPLES IDX Relative to S&P/TSX Comp

0.17

0.19

The consumer staples sectors longand short-term relative trends are positive.

0.12 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.17 Mar 13

Apr 13

May 13

Jun 13

Jul 13

Aug 13

Sep 13

0.15
S&P/TSX FINANCIALS INDEX Relative to S&P/TSX Comp

0.15
S&P/TSX FINANCIALS INDEX Relative to S&P/TSX Comp

The financial sector remains in a longterm relative uptrend.

0.14

0.15

0.12 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.14 Mar 13

Apr 13

May 13

Jun 13

Jul 13

Aug 13

Sep 13

0.12
S&P/TSX HEALTH CARE IDX Relative to S&P/TSX Comp

0.12
S&P/TSX HEALTH CARE IDX Relative to S&P/TSX Comp

0.08

0.10

The health care sector remains in a strong long- and short-term uptrend.

0.03 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.08 Mar 13 0.10

Apr 13

May 13

Jun 13

Jul 13

Aug 13

Sep 13

0.10
S&P/TSX TELECOM SERV IDX Relative to S&P/TSX Comp

S&P/TSX TELECOM SERV IDX Relative to S&P/TSX Comp

0.08

0.09

0.06 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.08 Mar 13

The telecom sector recently broke its long-term relative uptrend. The sector has experienced a bounce in recent weeks.
Aug 13 Sep 13

Apr 13

May 13

Jun 13

Jul 13

0.18
S&P/TSX UTILITIES INDEX Relative to S&P/TSX Comp

0.16
S&P/TSX UTILITIES INDEX Relative to S&P/TSX Comp

The utilities sector continues to make new relative lows.

0.15

0.15

0.13 Sep 10

Mar 11

Sep 11

Mar 12

Sep 12

Mar 13

Sep 13

0.13 Mar 13

Apr 13

May 13

Jun 13

Jul 13

Aug 13

Sep 13

Source: Bloomberg Finance L.P. As at Septerber 13, 2013

Page 16

The Technical Take

September 16, 2013

Sentiment Indicators

Volatility (VIX) Index

60 1.5 1.4 50

CBOE Total Put/Call Ratio 5-Day MA

1.3
1.2

40

1.1 1.0

30

0.9 0.8 0.7

20

10

0.6 0.5

0 Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

0.4 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 CBOE Put/Call Level 0.87 1 M Ago 1.11 3 M Ago 1.00

VIX

Level 14.18

1 M Ago 12.31

3 M Ago 16.41

AAII Investor Sentiment: Bulls Minus Bears

60 50 40 30 20 10 0 -10 -20 -30 -40 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13

NYSE % of Stocks Above 200-day MA

100 90 80 70

60
50

40
30

20
10

0 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13

Bulls Bears Bulls - Bears

Level 45.52 24.58 20.94

1 M Ago 39.50 26.65 12.85

3 M Ago 29.47 38.95 -9.48

% of Stocks Above 200-day MA

Level 67

1 M Ago 73

3 M Ago 71

Source: Bloomberg Finance L.P. As at September 13, 2013

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Overbought/Oversold Stocks
S&P 500
Most Overbought Name MOLEX INC AUTONATION INC MCKESSON CORP NETAPP INC FMC CORP AKAMAI TECHNOLOGIES INC GOODYEAR TIRE & RUBBER CO ALTERA CORP EOG RESOURCES INC CUMMINS INC E*TRADE FINANCIAL CORP VIACOM INC-CLASS B ROCKWELL AUTOMATION INC NVIDIA CORP MASTERCARD INC-CLASS A Most Oversold Name INTEGRYS ENERGY GROUP INC CONAGRA FOODS INC SCANA CORP CAMPBELL SOUP CO PEPCO HOLDINGS INC H&R BLOCK INC KELLOGG CO INTUITIVE SURGICAL INC P G & E CORP HEWLETT-PACKARD CO CONSOLIDATED EDISON INC TESORO CORP SOUTHERN CO/THE WISCONSIN ENERGY CORP ABERCROMBIE & FITCH CO-CL A

RSI (14D) 85.10 77.36 76.56 76.37 75.44 75.02 75.01 74.91 74.90 74.75 74.62 74.42 73.78 73.74 73.68

RSI (14D) 21.24 21.92 22.95 23.74 26.09 26.20 28.91 29.83 30.03 30.40 30.69 30.87 31.37 31.61 31.82

Source: Bloomberg Finance L.P. As at September 13, 2013

S&P/TSX Composite
Most Overbought Name NATIONAL BANK OF CANADA HOME CAPITAL GROUP INC WESTSHORE TERMINALS INVESTME GENIVAR INC TRANSCONTINENTAL INC-CL A MEG ENERGY CORP SAVANNA ENERGY SERVICES CORP TRINIDAD DRILLING LTD BONTERRA ENERGY CORP SUNCOR ENERGY INC AECON GROUP INC WESTJET AIRLINES LTD PASON SYSTEMS INC CML HEALTHCARE INC RUSSEL METALS INC
Source: Bloomberg Finance L.P. As at September 13, 2013

RSI (14D) 78.83 75.74 73.17 72.67 71.57 70.75 70.63 69.75 69.63 68.89 68.87 67.77 67.49 67.29 67.19

Most Oversold Name REITMANS (CANADA) LTD-A EMERA INC NIKO RESOURCES LTD BELL ALIANT INC DUNDEE CORP -CL A ARGONAUT GOLD INC AURICO GOLD INC EMPIRE CO LTD 'A' PAN AMERICAN SILVER CORP ELDORADO GOLD CORP ALGONQUIN POWER & UTILITIES RIO ALTO MINING LTD GOLDCORP INC AGNICO EAGLE MINES LTD MANITOBA TELECOM SVCS INC

RSI (14D) 19.61 23.80 25.65 26.03 26.36 28.19 29.02 30.02 31.56 32.15 32.66 32.85 34.25 34.59 34.63

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Market Statistics
Region U.S. Index S&P 500 Dow Jones Industrial Average Dow Jones Transportation Dow Jones Utilities Nasdaq Composite Russell 2000 Russell 1000 Value Russell 1000 Growth S&P/TSX Composite S&P/TSX 60 S&P/TSX Smallcap S&P/TSX Venture DAX FTSE 100 Nikkei 225 Hang Seng Shanghai MSCI World MSCI EAFE MSCI Emerging Markets Consumer Discretionary Comsumer Staples Energy Financials Health care Industrials Information Technology Materials Telecommunications Utilities Consumer Discretionary Comsumer Staples Energy Financials Health care Industrials Information Technology Materials Telecommunications Utilities Last 1683.42 15300.64 6516.44 472.64 3715.97 1048.48 852.63 779.80 12701.05 729.98 570.57 940.39 8494.00 6588.98 14387.27 22953.72 2255.60 1535.73 1788.95 278.32 474.64 414.15 610.33 270.82 589.57 396.75 519.05 263.39 151.51 186.14 1364.32 2470.87 2771.08 1900.88 1383.19 1704.81 135.19 2128.73 1071.43 1692.15 1 Week 1.84 2.94 2.07 0.82 1.48 2.14 1.87 2.04 -0.76 -0.93 -1.14 -1.78 2.66 0.34 3.92 1.30 4.50 2.03 2.65 3.01 2.34 2.08 1.61 1.88 1.91 2.68 1.21 2.49 2.98 0.77 0.67 -0.37 -0.06 -0.20 -2.05 1.05 -0.41 -4.78 -0.59 -1.10 1 Month 3 Month -0.50 3.01 -0.58 1.22 0.79 2.55 -4.02 -1.60 0.80 7.80 -0.04 6.25 -1.08 2.50 0.65 4.89 0.65 1.03 0.37 1.38 0.95 -0.64 3.88 1.66 6.18 0.38 1.42 3.26 -0.18 -2.37 1.74 -1.36 0.38 0.31 -0.49 1.46 -1.35 -4.23 -0.95 -1.47 2.26 1.47 -4.78 0.36 -2.08 -2.37 5.11 -4.29 3.64 3.85 4.74 0.84 4.94 4.20 15.74 9.71 4.09 4.69 6.78 6.23 6.26 -0.54 3.52 1.89 5.25 5.49 2.81 4.64 -5.06 -1.74 11.71 7.24 4.22 6.53 12.69 2.46 0.46 -4.39 -3.58 -7.25 YTD 18.20 17.22 22.54 5.33 23.00 23.81 19.34 18.53 2.33 2.45 -2.34 -23.20 11.60 11.39 38.57 1.14 -1.45 14.53 11.61 -0.69 26.17 15.49 14.99 22.59 27.58 20.65 11.85 11.38 4.33 5.72 28.63 17.20 4.52 8.34 52.05 14.77 28.08 -28.52 1.02 -11.98 1 Year 15.46 13.45 25.00 0.41 17.69 22.83 18.35 15.00 2.94 3.23 -6.20 -28.01 16.21 12.88 60.14 14.30 5.96 15.30 16.91 6.63 26.58 12.60 8.94 25.00 28.44 22.09 3.18 10.88 -3.74 1.37 34.10 26.00 0.54 14.23 54.75 19.51 37.01 -32.14 3.87 -10.53 3 Year 14.54 13.36 13.50 6.41 17.56 17.26 13.91 16.06 1.55 1.14 -2.95 -16.41 10.70 5.68 15.61 1.90 -5.95 9.91 5.53 n/a 22.75 13.67 14.39 10.78 19.71 14.35 13.82 9.52 9.13 5.73 10.60 16.26 0.61 5.56 42.04 11.72 -10.38 -14.70 9.38 -1.99 5 Year 6.13 6.10 5.09 0.78 10.43 7.86 4.91 8.20 -0.07 -0.90 -0.01 -10.22 6.38 3.93 3.35 3.44 1.46 3.62 0.97 n/a 14.20 6.73 3.41 -0.82 9.58 5.55 9.00 2.57 3.55 0.47 6.06 10.83 -3.05 2.67 33.62 6.54 -18.41 -5.35 3.65 -1.36

Canada

International

S&P 500 Sectors

S&P/TSX Sectors

Source: Bloomberg Finance L.P. As at September 13, 2013

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Appendix A Important Disclosures

General Research Disclaimer The statements and statistics contained herein are based on material believed to be reliable, but are not guaranteed to be accurate or complete. This report is for informational purposes only and is not an offer or solicitation with respect to the purchase or sale of any investment fund, security or other product. Particular investment, trading, or tax strategies should be evaluated relative to each individuals objectives. Graphs and charts are used for illustrative purposes only and do not reflect future values or future performance. This document does not provide individual financial, legal, investment or tax advice. Please consult your own legal, investment and tax advisor. All opinions and other information in this document are subject to change without notice. The Toronto-Dominion Bank and its affiliates and related entities are not liable for any errors or omissions in the information or for any loss or damage suffered. TD Waterhouse Canada Inc. and/or its affiliated persons or companies may hold a position in the securities mentioned, including options, futures and other derivative instruments thereon, and may, as principal or agent, buy or sell such securities. Affiliated persons or companies may also make a market in and participate in an underwriting of such securities. Technical Research Disclaimer The opinions expressed herein reflect a technical perspective and may differ from fundamental research on these issuers. Fundamental research can be obtained through your TD Wealth advisor or on the Markets and Research site within WebBroker. The technical research opinions contained in this report are based on historical technical data and expectations of the most likely direction of a market or security. No guarantee of that outcome is ever implied. Research Report Dissemination Policy TD Waterhouse Canada Inc. makes its research products available in electronic format. These research products are posted to our proprietary websites for all eligible clients to access by password and we distribute the information to our sales personnel who then may distribute it to their retail clients under the appropriate circumstances either by email, fax or regular mail. No recipient may pass on to any other person, or reproduce by any means, the information contained in this report without our prior written consent. Analyst Certification The Portfolio Advice and Investment Research analyst(s) responsible for this report hereby certify that (i) the recommendations and technical opinions expressed in the research report accurately reflect the personal views of the analyst(s) about any and all of the securities or issuers discussed herein, and (ii) no part of the research analysts compensation was, is, or will be, directly or indirectly, related to the provision of specific recommendations or views expressed by the research analyst in the research report. Conflicts of Interest The Portfolio Advice & Investment Research analyst(s) responsible for this report may own securities of the issuer(s) discussed in this report. As with most other employees, the analyst(s) who prepared this report are compensated based upon (among other factors) the overall profitability of TD Waterhouse Canada Inc. and its affiliates, which includes the overall profitability of investment banking services, however TD Waterhouse Canada Inc. does not compensate its analysts based on specific investment banking transactions. Corporate Disclosure TD Wealth represents the products and services offered by TD Waterhouse Canada Inc. (Member Canadian Investor Protection Fund), TD Waterhouse Private Investment Counsel Inc., TD Wealth Private Banking (offered by The Toronto-Dominion Bank) and TD Wealth Private Trust (offered by The Canada Trust Company). The Portfolio Advice and Investment Research team is part of TD Waterhouse Canada Inc., a subsidiary of The Toronto-Dominion Bank. Trade-mark Disclosures Bloomberg and Bloomberg.com are trademarks and service marks of Bloomberg Finance L.P., a Delaware limited partnership, or its subsidiaries. All rights reserved. TD Securities is the trade name which TD Securities Inc. and TD Securities (USA) LLC. jointly use to market their institutional equity services. TD Securities is a trade-mark of The Toronto-Dominion Bank representing TD Securities Inc., TD Securities (USA) LLC, TD Securities Limited and certain corporate and investment banking activities of The Toronto-Dominion Bank. All trademarks are the property of their respective owners. /The TD logo and other trade-marks are the property of the Toronto-Dominion Bank or a wholly-owned subsidiary, in Canada and/or in other countries.

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