- Good morning everyone.
Welcome to Tuesday morning. .
- It's Stephen Whiteside here
from Theuptrend.com. In the pre market .
- this morning stock index futures are
currently down below fair value. .
- Down future is currently down 190 points. .
- The market was fairly quiet and trading .
- right around fair value
for most of the morning. .
- So the sell off we're seeing
right now has started recently. .
- Of course it could change but from where
I'm sitting right now it looks like we're .
- going to see some selling
at the open on Tuesday morning. .
- Well the biggest story in the investment
world yesterday was the continued decline .
- of the Chinese market
which gapped lower once again. .
- So here we are seeing .
- this is what Panic Selling is
and of course you do not want to consider .
- shorting the Chinese market at the moment
even though it could go lower. .
- This would be the highest
risk time to do that. .
- This of course is the time and place. .
- If you're interested in the Chinese market .
- and interested in Chinese stocks,
you should be doing your homework right .
- now and looking for which stocks
you want to buy on the way back up. .
- But across the board Chinese
stocks got hit hard yesterday. .
- Whether you're looking at Baidu
or Ten Cent, they both gap lower. .
- All the Chinese stocks gap lower and a lot
of North American stocks that have large .
- Chinese exposure also
got hit hard yesterday. .
- So Las Vegas Sands,
Starbucks are two examples. .
- One example that didn't really
get hit hard yesterday is Nike. .
- Nike comes up in just about every .
- conversation about the Chinese
market and Chinese exposure. .
- But the Nike shares were down just
a little over half a percent yesterday. .
- If Nike starts running to the downside
of course that could hurt the Dow then .
- Nike is a Dow 30 stock and right now all
the excitement in the market is focused .
- around the Dow and the Dow 30 which made
a new high for this move yesterday. .
- So confidence in my mind I'm not
very confident in what's going on. .
- I would much rather see more
of a risk on trade right now. .
- I'd rather see technology stocks lead .
- the market higher and I'd rather see chip
stocks lead the technology stocks higher. .
- And then of course you can look
and see what Microcaps are doing. .
- There's the Ishares, Microcap ETF. .
- There's the Venture exchange in Canada. .
- In both situations we're not really
trending anywhere at the moment and so .
- this is still a risk on situation
and people are flooding into those big Dow .
- 30 stocks but not the rest
of the market just yet. .
- Next up, let's take a look at the VIX. .
- And what I've noticed about the VIX
of course is there's no early warning .
- signals up here as there were
back at previous peaks. .
- We seem to be stuck in a range right now. .
- If you can see that we need to head down .
- towards the $20 level if we're going
to get a Christmas rally, .
- but right now we're stuck in a range
we've been in for a few weeks now. .
- And so 34.38 at the highs and 28.13. .
- We traded down just above the 28.13 level .
- a few times and are finding
support down there. .
- So we're looking for a breakout of this .
- range to tell us which way
we're going to go next. .
- You can see we're still
above the Flypaper Channel. .
- You can see we are in a short term sell
signal, which is bullish for stocks. .
- That would change this week if
the VIX were to close above 32.13. .
- And if we can get above 30 213,
then I would expect we're going to take .
- out the recent highs and head
towards the $40 area. .
- Next up, let's take a look
at those megatrends. .
- And the US dollar index is officially
back on a shortterm sell signal. .
- Again.
We're range bound here. .
- We put in a recent high and a recent low. .
- We're still trading within that range,
so that doesn't tell us much just yet. .
- The Euro is back on a buy signal and again .
- we'd get more excited if we took
out the high from early October. .
- And the Canadian dollar is back on a buy
signal, pulled back into the channel .
- yesterday, so back on a buy
signal as of Friday's close. .
- And the British pound has been
treading water over the past few days. .
- Not much movement yesterday, .
- given that the next temporary prime
minister was named yesterday. .
- So the market has stabilized a bit, .
- but certainly we're not making
higher highs for the British pound. .
- Now, the price of gold had a wild day .
- yesterday, traded up to the upper
channel line, ended the day lower. .
- So we are still on a sell signal here. .
- The price of silver is back on a buy
signal as a Friday's close. .
- Now, silver is traditionally a lot
more volatile than the price of gold. .
- The average true range for silver right
now is 3.93%. Compare that to the average .
- true range of gold,
which is currently 1.65%. .
- So you expect to see a lot more volatility .
- in the price of silver than you
would in the price of gold. .
- That is the normal activity. .
- If those reverse for some particular .
- reason, then you know that hell
is about to freeze over. .
- Looking at bonds,
bonds made a new low yesterday. .
- Bond yields made a new high. .
- So that story has not changed. .
- Then we've got the energy sector. .
- We've got crude oil
trading lower yesterday. .
- We're still on a cell signal here .
- that would change on Tuesday
with a close above 86.92. .
- Natural gas. .
- Are we putting in the bottom here? .
- Well, we'll just have to wait and see. .
- We need to close above 6.84 on Tuesday
to give us a buy signal for natural gas. .
- Okay, folks, that is all
for this morning's presentation. .
- Not expecting a lot out
of the market on Tuesday. .
- We are getting a little overbought on A .
- Short Term basis
but haven't got There yet. .
- You can see that it's really the Dow .
- that is pushing the market higher,
not the rest of the major indices. .
- And that is something
to be concerned about. .
- Enjoy the rest of your day. .
- Next time you'll hear my voice is .
- on Wednesday morning music you. .