Here’s a quick little trade idea for you: sell, short or buy puts on Metro Inc. (TSE: MRU.A). Metro Inc. is the operator of A&P, Food Basics, Metro and Loeb grocery stores in Ontario and Quebec. It’s not that I think being in the consumer staples sector is a bad thing in this environment, but this is a stock that has been a high flyer over the last year and I think it’s time for it to come back down to the market’s miserable reality.

Metro purchased the A&P/Dominion stores in Canada back in 2005 and have spent the last few years integrating them into their Metro brand. 2008 was the year they reaped the rewards, and the stock price soared. In 2008, while the rest of the market was plummeting, MRU.A advanced over 90% making it one of the best performing stocks of the year.

I hate sounding like the perma-bear, but we have another company on the “bankruptcy watch” list: Nova Chemicals (TSE: NCX), Canada’s “premiere” chemical manufacturer… actually, they’re pretty much Canada’s only chemical manufacturer. In the eyes of the equity markets, bond markets, and credit markets (i.e., CDS market) this company may be insolvent within months. But that fate is far from certain. For the gamblers out there, there may be a long-shot trade to be made.

As an introduction, Nova Chemicals (TSE: NCX) is Canada’s major chemicals producer. Basically, they produce a variety of plastic resins and styrenics that go into the manufacturing of stuff like plastic bags, plastic containers, disposable cups, and vehicle dashboards.

Sometimes equity investors have a habit of overlooking the bond/credit markets. But in times like these, when credit markets are tight, the states of corporate balance sheets become more important than ever and it becomes imperative for all equity investors to watch and understand the credit markets.

Take Suncor Energy (TSE: SU) for example. SU was Canada’s favourite oil and gas stock from 2004 – 2007. It is one of Canada’s largest oil and gas stock (by market cap), it produces almost 300,000 Boe/d, earns over $2 billion per year, and has probably the most ambitious plans for the Albert Oil Sands – plans that were originally estimated to cost ~$6 billion.

On July 3, I posted the article “HOD ETFs – A Bearish Indicator For Oil?” suggesting that the exponential increase in trading volume that we were seeing in the new Horizon Beta Pro HOD ETF (the one that offers 200% downside exposure to the daily change in crude oil prices) could be evidence that a substantial correction was coming. July 3rd was when oil hit its all-time high of $145. Since then, spot oil prices have declined by roughly 70% and HOD volume has dropped substantially (see chart below).

On November 25th Bank of Montreal (TSE: BMO) reported their Q4 results and the numbers weren’t all that bad, on the surface anyway. They reported EPS of $1.18, slightly ahead of analyst expectations and ahead of last year’s earnings. Revenue was also ahead of expectations, the tier 1 capital ratio was a solid 9.77% and there was no sign of a big write-down. So, low and behold, everything looks pretty good… could this possibly be the bottom?

I received an email from one of our readers the other day regarding Aecon Group Ltd. (TSE: ARE). This reader had some insightful thoughts, which I got permission to share with you, along with this, I thought that I would do some more research on this company and provide you with a Stock Analysis on it. Here is what our reader Mike M. had to say about Aecon.

“Bottoms are a lot better to watch than try to catch.” - I believe that was the lovely Becky Quick of CNBC that said that. I might have the exact wording wrong and welcome a correction. Anyway, a stock market bottom seems to be all anyone really wants to talk about. Today's lesson: picking a market turnaround on a candlestick chart.