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This September 9. 2013 shows wind turbines at Flakfortet near Copenhagen.Jens Dresling/The Associated Press

Morgan Stanley strategist Andrew Sheets made an interesting observation in a Feb. 4 research report,

"What excess will this bull market be remembered for? It might be gentleness. Think about it. It is almost as if someone listened to all the pleas of a timid, shell-shocked, post-crisis market, and then delivered them at once ... Worried about uncertainty? How about some of the lowest realised and implied volatility on record."

This 'end of gentleness' might explain why I'm increasing nervous (but not bearish) about markets even though all the global fundamentals – notably economic and profit growth – look strong and the VIX-related equity mayhem appears to be in the rearview mirror.   I'm not alone, either. Marketwatch reports that "70% of fund managers see danger ahead—the highest percentage since the financial crisis."

A lot of the anxiety is certainly the usual 'wall of worry' – there's always something for investors to be jumpy about, no matter how positive the outlook.

Fear of the unknown is also a factor. If Mr. Sheets is correct and markets will be much less conducive to relaxation in the near future, the human brain can create any number of potential horror stories as to what that might look like.  I've been watching high yield credit spreads closely as an indicator, but other than a big jump in short positions, there are few signs of trouble so far.

Sentiment, even for institutional fund managers, is more likely to be a contrarian indicator than not - market history tells us that the large quantity of bearish fund managers is a bullish indicator.

Investors should avoid getting caught up in this broad sense of uneasiness and judge their current and prospective holdings with as much objectivity as they are capable. Beyond that, there's not much actionable advice that can be derived from current sentiment, except that maybe the winds of market change are upon us.

-- Scott Barlow, Globe and Mail market strategist

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Stocks to ponder

Kinaxis Inc. (KXS-T). A bullish 'Golden Cross' formation has emerged for this stock. The stock chart for Ottawa-based Kinaxis Inc., a cloud-based supply chain management software provider, looks attractive from a technical perspective as it has recently exhibited a bullish "Golden Cross" formation.  A "Golden Cross" is a potentially bullish technical signal that occurs when a short-term moving average, such as the 50-day moving average, crosses above a longer-term moving average, such as the 200-day moving average. When this occurs, it marks a potentially positive signal suggesting the upward price momentum may continue. Jennifer Dowty reports.

Killam Apartment REIT While macroeconomic concerns persist, on a security level, Killam is delivering solid growth - operating income and distribution growth. For investors seeking income, the recent pullback in the unit price may represent an ideal time to do some homework on the security. Acquisition growth may provide support and potential gains to the unit price in 2018. Jennifer Dowty profiles the stock

The Rundown

Canadian stocks that will benefit the most – and the least – from U.S. tax reforms

The sweeping, quick-moving U.S. tax bill passed by Congress and signed into law late last year left a lot to unpack, beyond the headline news that the country's corporations were getting a cut in their income tax rate. Indeed, it's turning out to be more complex than that, with winners and losers in the business community. Lest we forget, Canadian companies that operate south of the border pay meaningful U.S. taxes as well – and some of our top companies may benefit more than others. David Milstead reports.

How to make a simple trend-following strategy even better for producing great returns

The S&P 500 soared in January. It marked the 15th consecutive monthly advance for the index. But much like Icarus, the market went into a tailspin in early February. After the downdraft, investors are wondering if it's time to load up on bargains or if it's time to get out while the getting is good. Even after pulling back, the S&P 500's valuation remains sky high. Professor Robert Shiller's cyclically-adjusted price-to-earnings ratio (CAPE) hit a lofty 34 by the end of January. It exceeded its 1929 peak of 32 and all other market tops except for the internet bubble when the ratio climbed to 44. By Valentine's Day, the ratio had slipped to a still expensive 32. Norman Rothery explains a trend-following strategy that helps manage volatility.

Why John Heinzl is buying more of these two dividend dynamos

John Heinzl says he hasn't enjoyed watching his model Yield Hog Dividend Growth Portfolio shrink in value over the past couple of weeks. But there's a silver lining – actually, two: his dividends have continued to grow and, now that he's ready to reinvest some of his cash, there's a veritable storewide sale on dividend stocks.

Why Canada's stock market is among the most alluring in the world

If you still want to have some toes in the equity pool, Canada right now offers up some of the most alluring valuations in the world. Even in today's roller-coaster ride, it is comforting to know that there is tremendous valuation support for our local stock market. A market, by the way, that is no higher today than it was a decade ago, and a market that is unchanged from where it was in the summer of 2014 (only Australia and Singapore have also gained essentially no ground since mid-2014) even though corporate earnings have surged nearly 30 per cent since that time. David Rosenberg explains his view.

Know what's in your pot ETF

Canadian investors now have four exchange-traded funds to choose from for tapping the high-flying cannabis sector. But this wider availability of ETFs may not translate into significant differences for gaining exposure to the underlying stocks. Clare O'Hara reports.

Four strong balanced fund contenders for your RRSP

The stock market decline last week reminds us of the benefits of not having all your retirement savings in stocks. Bonds were more or less flat during the market rout, which means diversified investors had some stability amidst the panic selling. Want to buy this diversification in one easy step? Rob Carrick shows you how to do just that.

Others

Rob Carrick's 19th annual ranking of online brokerages

The week's most oversold and overbought stocks on the TSX

What bearish investors are betting against: TSX short sellers sharpening attack against pot stocks

Thursday's Insider Report: Companies insiders are buying and selling

Friday's Insider Report: Companies insiders are buying and selling

Number Crunchers

Amid investor uncertainty, this momentum strategy plays defence

Eight TSX dividends stocks with strong institutional ownership


What's up in the days ahead

On Tuesday, special situations analyst Leon Aghazarian from National Bank Financial will be discussing his top stock picks with investment reporter Jennifer Dowty. Watch for an upcoming report featuring his stock recommendations. The analyst has an extensive coverage list which includes the following stocks: New Look Vision Group Inc., Cascades Inc. Domtar Corp., CanWel Building Materials Group Ltd., Hardwoods Distribution Inc., Richelieu Hardware Inc., Stella-Jones Inc., Cara Operations Ltd., MTY Food Group Inc., Freshii Inc., Goodfood Market Corp., Savaria Corp., Uni-Select Inc., Premium Brands Holdings Corp., Park Lawn Corp., Lassonde Industries Inc., GDI Integrated Facilities Inc., KP Tissue Inc., and Dorel Industries Inc.

Should you have a question for Mr. Aghazarian, you can email Jennifer at jdowty@globeandmail.com  or Tweet her your question @jennifer_dowty. Jennifer regrets that due to time constraints, she will not be able to pose all questions to Mr. Aghazarian.

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Compiled by Gillian Livingston

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