- Good morning, everyone.
Welcome to Thursday morning. .
- Stephen Whiteside here from TheUpTrend.com .
- with today's look at North American
stock market trends. .
- In the premarket this morning,
stock index futures are fairly quiet. .
- Dow and S&P 500 futures are higher,
while Nasdaq futures are slightly lower. .
- Commodities are higher across
the board on Thursday morning. .
- Let's start off looking
at the price of copper. .
- And copper is often
referred to as dr copper. .
- It's considered a global economic .
- barometer, mostly to do with construction
activity around the world. .
- On a shortterm basis,
this charts looking pretty bearish. .
- We had a high here in August, a lower high
in September, and then a lower high here. .
- We had a low there and then a lower low. .
- So now we're looking
to see what happens next. .
- Do we hold support here
at the recent lower? .
- Do we break it? .
- And I would imagine that we're
probably going to break it now. .
- If we look at a longer term monthly chart .
- of copper, you can see that we've
seen some weakness in 2022. .
- Most of that has to do with the
construction weakness in China. .
- The Chinese market made
a new low yesterday. .
- It is going to make another new low today
as the market traded down overnight. .
- So when the Chinese ETFs open up .
- in New York at 9:30, they're all going
to trade lower on Thursday morning. .
- Now, the other economic barometer that I
like to watch closely is the socks index. .
- The chip sector chips are basically .
- included in everything that's manufactured
today from, of course, .
- we know cell phones and computers,
but the whole world of the automobile .
- industry is totally controlled
by the chip sector. .
- And chips are still on a cell signal
right now inside day yesterday. .
- If we look at a monthly chart of the socks .
- index, you can see the weakness
that we've had in 2022. .
- And of course, we made
a new low last week. .
- So the first time something new is
happening, of course, .
- is going to be a monthly close
above the previous month's high. .
- And not expecting that
to happen in October. .
- Looking at a daily chart of the pros
and the public, they're still in their own .
- corners, and it doesn't look like
the pros want to take control right away. .
- Now, the chip stocks that I watch .
- the most, and I really try to focus
on a handful of stocks each day. .
- I don't go wandering looking in the dark .
- corners of the stock market
for something to do. .
- I trade the stocks that I
follow and that's it. .
- And AMD is still on a sell signal here. .
- Looks like it's building
an area of support. .
- It's been trading sideways
for the past couple of weeks. .
- It did make a new low last week,
but then came back. .
- And so yesterday it was an inside day. .
- A close above 61 45 would give
us a buy signal on Thursday. .
- Now, I talked about Nvidia last week. .
- It looked like the market was more .
- interested in Nvidia than AMD,
and that is still true. .
- We traded through the upper channel line
on Tuesday and inside day on Wednesday .
- at close above 123.17 would give us
a buy signal on Thursday for Nvidia. .
- Now, intel is a widely watched stock
because it's part of the Dow 30. .
- I'm going to show you why I don't trade
intel or follow it, .
- but right now it's been trading
in the channel for the past five days .
- and looking for a close
on Thursday above 26.62. .
- Now, if you look at the average true range
of intel, it's currently just a little .
- over 4%, which is quite big for
the average stock on the stock market. .
- But we're in the chip sector and what you .
- should be looking for in the chip sector
is something more like Nvidia over 6% or .
- AMD, which is up just under
six and a half percent. .
- So if you're trying to trade for capital .
- gains, you want a stock that has a fairly
normal average true range for the sector .
- and not go after the stock with the lowest
average true range in the sector. .
- And intel is often that particular stock. .
- So if you want more volatility,
if you want more opportunity for capital .
- gains, you stick with the ones
with a higher average true range. .
- And of course, if you're a risk averse,
you don't go after stocks like this .
- because 6.46% is actually pretty high
for the average North American stock. .
- Now, the queues had an inside day
yesterday, so we're still on a sell signal .
- here that would change on Thursday
with a close above 270 319. .
- Tesla's in the news
came out with earnings. .
- It's down in the pre market this morning, .
- still above last week's lows,
so they haven't been broken yet. .
- So that's a good sign. .
- There may be a chance Tesla could
start to put in a bottom here. .
- Things could turn around on Thursday, .
- but in the premarket this morning,
they are trading lower. .
- Now, there's a lot of talk
regarding Tesla. .
- Of course, there always is. .
- Elon Musk is thinking about doing share
buybacks, and then the market is looking .
- at the fact that Elon Musk is probably
going to have to sell more of his Tesla .
- shares to afford to buy Twitter, which
of course he has an obligation to do. .
- Now, IBM's in the news this morning,
it's on a buy signal right now. .
- It's trading higher in the pre market, .
- right up at the high
from a couple of weeks ago. .
- So 125 is our mathematical target, .
- but we did poke our head
above that back in October. .
- Now, I haven't traded IBM in probably 2025 .
- years because it's got a very low average
true range at 2.63%. It's not a technology .
- stock and that's probably
why I stopped trading it. .
- It's a consulting company. .
- It's not a technology stock anymore, .
- but it is widely followed
because it's part of the Dow 30. .
- So it's got an average true range,
but that's not what I'm looking for. .
- I'm a more aggressive investor than
probably the average investor out there. .
- Now, looking at the bond market, .
- bonds made new lows yesterday
and bond yields made new highs. .
- So the market has been holding up fairly .
- well as the yields
continue to move higher. .
- So I would have expected
the stock market to sell off. .
- More on the news of these new higher
yields, there's the TLT making a new low. .
- There's the XBB in Toronto
making a new low. .
- We've got emerging market
bonds holding up fairly well. .
- And then the junk bonds are still on a buy
signal here from Tuesday's trading action. .
- Now, junk bonds have a very
low average true range. .
- And so I personally would
never trade a bond ETF. .
- Yes, they have buy and sell signals, yes,
they trend, but the chance of making .
- reasonable amount of capital gains
on trading a bond ETF is rather low. .
- Now, I trade bonds,
but I trade bonds in the futures market .
- because the margin leverage on a bond
is much higher than it is on an ETF. .
- So there is a lot more opportunity to make
capital gains and capital losses .
- in the bond futures market,
but not the bond ETF market. .
- And of course, some people have a reason .
- to be in the bond ETF market,
but it is not me. .
- Next up, let's take a look at commodities,
starting with the price of gold. .
- Made a new low for this move yesterday,
coming down to the 162.50 level. .
- That's where we expect to find support. .
- If that breaks, of course,
then 1562 50 is our next target. .
- The GLD looking pretty similar
to the futures contract. .
- 150 is our next target, .
- but the low a couple of weeks
ago is 151.03. .
- So that should be the low
that you're looking for right now. .
- Gold miners in the US on a sell signal. .
- Gold miners on the TSX
also on a sell signal. .
- Now we've got crude oil
on a sell signal right now. .
- Had an inside day yesterday. .
- The USO ETF did not have an inside day. .
- Traded up into the channel. .
- Then we've got the natural gas futures .
- contract and the Ung both
making new lows on Thursday. .
- So those charts don't look very bullish. .
- But on the other hand,
we still have energy stocks on the TSX .
- on a buy signal and energy stocks
on the NYSE also on a buy signal. .
- Heading up to try to retest
the highs from back in August. .
- Let's finish off this morning's .
- presentation looking at the major
indices starting with the VIX. .
- The VIX is still on a sell signal, .
- but didn't do anything
for the market yesterday. .
- Trading higher, closing higher. .
- If we move from the right side chart .
- to the midterm chart,
you can see when conservative investors .
- are going to feel more comfortable
getting back into the market. .
- And that's when the VIX
is going to be below 26. .
- And you can see on the spider ETF chart, .
- even though we're on a bicycle
on the right side chart, .
- we've got a bit of work to do before
we get above the midterm tether line. .
- That's also true for the Q's. .
- The Q's, of course, are still
on a cell signal right now. .
- And then there's the I
shares for the TSX 60. .
- So the first sign that more conservative
money is getting back into the market is .
- when we start closing above the upper
tether line on the midterm charts. .
- And that may take a little bit of work,
so I'm not going to get overly excited .
- on these new daily short
term right side buy signals. .
- Right now, the market has a bit more work
to do, and certainly everybody's .
- anticipating a low here in October
and then a rally into the year end. .
- Of course, you can anticipate those .
- things, but we need to see more evidence
that that's actually happening. .
- And of course, the bond market hitting new
lows is probably not supportive .
- for the stock market to have
a major turnaround at this time. .
- Okay, that's all
for Thursday morning, folks. .
- Enjoy the rest of your day. .
- I won't be back on Friday. .
- Next time you'll hear
my voice is on Sunday. .