Wal-Mart Expected to Open Higher; Stocks in Canada Oversold

U.S. equity markets are slightly lower this morning. S&P 500 Index futures are down 3 points in pre-opening trade. Equity markets are quiet prior to the U.S. election.

The LIBOR rate continues to drift lower. It eased another 0.17% this morning. The LIBOR rate has almost returned to levels reached prior to the Lehman collapse. The U.S. Dollar has responded by moving slightly lower. Gold advanced $11 per ounce on the weaker U.S. Dollar.

Wal-Mart (WMT) is expected to open higher at the opening. JP Morgan upgraded the stock this morning from neutral to outperform.  Wal-Mart has an improving technical profile. The stock recently moved above its 200 day moving average. Strength relative to the S&P 500 Index has been positive during the past year. Short term momentum indicators (RSI, MACD and Stochastics) are recovering from deeply oversold levels.

Several technical analysts have turned positive on the Canadian equity market during the past few days. This morning, Dennis Gartman noted “Stocks in Canada: Almost preposterously over-sold and we are turning bullish”.

Encana (ECA) announced a new oil discovery off the cost of Brazil. Encana has an improving technical profile. Short term momentum indicators (RSI, MACD and Stochastics) are recovering from deeply oversold levels. Strength relative to the TSX Composite and S&P 500 Index turned positive when equity markets bottomed on October 10th.