OceanForest Investment Partners
Portfolio Manager’s Journal – February 4th, 2013
Brent Woyat, CIM, CMT
Portfolio Manager
Raymond James Ltd.
Suite – 102, 2168 Marine Dr.
West Vancouver, BC
V7V 1K3
Tel: 604-921-9222
brent.woyat@raymondjames.ca
www.ofip.ca
Short-Term Market Outlook
Back on November 19th we wrote a piece in our “Portfolio Manager’s
Journal” that we felt the market was putting in an important low. Several
technical indicators we were following at the time suggested that the post
U.S. election sell-off had run its course. In particular, the NYSE Summation
Index was at levels associated with previous market bottoms so the odds were
stacking in favor of a significant rally. In hindsight our call was correct with
the market trading higher and recording new recovery highs on Friday
February 1st.
The rally has lasted more than two months, gaining almost 13% as measured
by the performance of the S&P 500 Index. Now that the rally has unfolded as
we anticipated we want to provide an update on the near-term outlook.
This week we are at an important juncture in terms of time and price with the
odds now in favor of a short-term market top at current levels. We employ
several different techniques in our market analysis, providing us with some
interesting observations.
We like to use the Fibonacci number sequence to help us identify support and
resistance price levels as well as projecting future time zones where we
would be on the lookout for potential trend reversals. If we use the September
14th high and project out 144 calendar days the date for a potential turning
point is Tuesday February 5th as indicated by the red dotted vertical dotted
line on the chart.
The method for projecting the price target level involves taking the range
between the November low and the December high. The range was 104.65
points. Next we multiply this value by the Fibonacci ratio of 1.618 which
gives us a value of 169.32. If we then add this value to the November low of
1,343.35 we arrive at a price target of 1,512.67.
On Friday the market recorded an intraday high of 1,514.41 which is less
than 2 points above out target!
Therefore with time and price at an important juncture we feel that the current
rally is likely over for now and that we should expect a market correction to
begin. Some other factors that support a price high is seasonality and
 OceanForest Investment Partners
Portfolio Manager’s Journal – February 4th, 2013

sentiment. In post-election years the U.S. market tends to peak in the first week of February and decline into
late March. In the past couple of weeks the bullish sentiment numbers indicate above average optimism and
the bearish sentiment is also relatively low. From a contrarian perspective we interpret these numbers as
another sign of a top.

Our current strategy is to hold off on any more buying until the market declines to an oversold level. We
will be reviewing all our individual stock positions to identify stop loss levels in the event that the decline
begins to accelerate on the downside.

The next six weeks should be choppy and volatile as those that came late to this rally become nervous and
think twice about their recent purchases. We will provide another update when we feel that it’s safe to go
back in the water!
OceanForest
OceanForest Investment
Investment Partners
Partners
Portfolio Manager’s Journal – May 2012
Portfolio Manager’s Journal – February 4th, 2013

If you have any questions about your investment portfolios, the markets, or anything else, please give us a call
at 604-921-9222. We’d love to hear from you.

Sincerely,

Brent Woyat, CIM, CMT

Portfolio Manager
OceanForest Investment Partners

The model account performance reflects returns, net of fees, and it is historical, including compounding and reinvestment of distributions. The
performance calculation for the models may be different than that of the index/markets used as a reference point for comparison. Individual client
account performance is likely not to be exactly the same as the model account due to several factors, including timing of contributions, date invested in
the model and redemptions, etc. Performance data represents past performance and is not necessarily indicative of future performance; that there is
no guarantee of performance. The index rates of return do not take into account sales, redemptions, distributions or optional charges or income taxes
payable; whereas the model performance takes into account the respective charges and fees. Investors should read the available disclosure documents
before investing.

The information contained in this report was obtained from sources believed to be reliable, however, we cannot represent that it is accurate or
complete. This report is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or
sell securities. The views expressed are those of the author and not necessarily those of Raymond James Ltd. The performance numbers are based on
the underlying “model” client account in Dataphile, and that the source of the performance is Dataphile, which generates on “dollar weighted” returns.
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