- Good morning everyone.
Welcome to Wednesday morning. .
- It's Stephen Whiteside here from .
- theuptrend.com. Well, yesterday
was an interesting day. .
- We saw the fear index rise. .
- It settled just on the edge of the upper .
- channel line, so any higher close
would give us a buy signal. .
- Of course, a buy signal for the
VIX is negative for stocks. .
- US dollar index closed in
the channel yesterday. .
- Then we saw bond prices. .
- We saw a new closing high
for the 30 year bond. .
- So the bond traders are putting
downward pressure on interest rates. .
- And it's the yield curve that's hurting
the financial stocks at the moment. .
- Looking at gold, gold held steady on
Tuesday, looking for a close blow. .
- 1766.09 on Wednesday to give us
a buy signal for gold stocks. .
- So far in the pre market,
it's holding up fairly well. .
- Then we've got crude oil coming down to .
- last week's low, putting in a
new closing low for this move. .
- If we take out last week's low, then 68. .
- 75 is our next target. .
- And then we saw natural gas
continue to move lower on Tuesday. .
- Now for the past month or so, we've been
calling this rally a Risk Off trade, .
- certainly not the start of a new bull
market or the end of the current bear .
- market, which will probably
end sometime next year. .
- We saw the Dow poked its head
out above the August highs. .
- Everybody got excited and that brought
in the last of the retail investors. .
- And now we're starting to move back down. .
- We were able to poke out above the
Flypaper Channel again, the Dow 30 stocks. .
- They have a certain profile, they're
global institutions for the most part. .
- They're able to take advantage of currency .
- fluctuations, they're able to
move money around the world. .
- And for the most part, Dow 30 stocks
don't really pay a lot in taxes. .
- And so they are the least risky stocks on .
- the stock market, no matter
what sector you're looking in. .
- And that's why people plowed into them. .
- They are now back on a sell
signal as of Friday's close. .
- So the big pop that we saw last week off .
- the Fed speech, that faded
fairly quickly as expected. .
- And so here we are back on
the sell side of the market. .
- Now the S&P 500, of course a much
broader take on the stock market. .
- It includes the Dow 30 stocks, but there's .
- a lot of other stocks and sectors in the
S&P 500 that you don't find in the Dow. .
- And the S&P 500 did not get anywhere
near the August highs last week. .
- We saw the gap get filled and then the .
- S&P 500 started to
retreat from that point. .
- And here we are back on a sell signal. .
- Now if you were watching the market
commentary last week, a lot of people got .
- very excited that the S&P 5 had started to
trade above the 200 day moving average. .
- I looked at it and said,
yeah, that's totally true. .
- We have started to trade and close above .
- the 200 day moving average, but what
we didn't do was break away from it. .
- And that's also true for our price target
of 406.25. We closed above it, we traded .
- above it, but we didn't
break away from it. .
- And so once that open gap filled, I think .
- that was the last thing that
the market wanted to do. .
- And then it started to reverse. .
- Now we are holding support. .
- We did not hit 393.63 yesterday. .
- We traded down to just a dollar
and one penny above that level. .
- If we break down below that, our
next mathematical target is 375. .
- But there's a nice big open gap there that
could potentially act as not only a price .
- magnetic pulls down, but it could
be a potential area of support. .
- We'll just have to wait and
see how that works out. .
- Now the Nasdaq 100 rolled over
yesterday's, back on a sell signal. .
- Now remember last week we had a sell
signal and then the Fed chairman came out .
- and spoke and I said you should probably
sit on your hands and wait and see if we .
- get any fall through to the
upside, which we really didn't. .
- In fact, the next couple of days were
lower volume than this big update. .
- So that was just a shortcovering day. .
- No new money came into the market and
now we've rolled over once again. .
- Now stepping back, looking at the big .
- picture, I've been calling
this a risk off trade. .
- Well, one of the reasons it's a risk off
trade is a the Dow led us higher, but we .
- didn't get a lot of participation
from the riskiest end of the market. .
- So whether you're looking at the Nasdaq
100 with all those tech and biotech stocks .
- or you look at the broader Nasdaq
Composite Index which has approximately .
- 3700 companies in it, neither one really
participated in this recent rally and .
- certainly got nowhere
near those August highs. .
- So for a bear market to end and a bull .
- market to start, you really need
participation from these 3700 companies. .
- And until investors are willing to go and .
- do the research and look at these
companies and look for opportunities and .
- put money into those opportunities,
this bear market is not going to end. .
- Now, one sub sector of the Nasdaq that I
was excited about was the chip sector. .
- Of course, on the news that Warren Buffett
had made that big investment in Taiwan .
- Semiconductor, that
attracted a lot of money. .
- We were able to move up above the Flypaper
Channel, but unfortunately we've been .
- trading sideways ever since and
so no continued upward momentum. .
- If you're bullish, it looks like people .
- have been accumulating
chip stocks up in this level. .
- If you're bearish, it looks like
distribution, it looks like people have .
- been unloading their chip
stocks up at this level. .
- What's going to be interesting to watch is
if we continue to move lower from here. .
- Does the stocks index go with us? .
- And do we break down below
the flypaper channel? .
- We'll just have to wait and see. .
- Now, looking at the Canadian market, just
like the Dow, the TSX and the TSX 60 was .
- able to trade above the August
highs, but not break away from them. .
- Here we are, we are coming back down. .
- We're back on a sell signal
as of Tuesday's close. .
- Now, just like in the US. .
- Canada has its own version of the Nasdaq
Composite, and that is the TSX Venture .
- Composite Index, which has about 400
microcap small cap microcap stocks. .
- And as you can see, it did not participate
in the recent rally, even when we had that .
- nice rally in the TSX and the
TSX 60 over the past month. .
- So you're going to need to see these type .
- of stocks start moving up with the rest of
the market or even leading the market up .
- before a bear market is going to end
and a bull market is going to start. .
- Now, I've been watching
the energy sector closely. .
- Of course, in 2022, this has
been the strongest sector. .
- What led us up may lead us down. .
- And as you can see for Canadian energy .
- stocks, they broke down
below the recent low. .
- That is also true in the US. .
- And so we're seeing people unload their
energy stocks right now, whether this .
- continues or not for any length of
time, we'll just have to wait and see. .
- Now, looking at bank stocks,
and we talked about the US. .
- Bank stocks recently, and
it looks like a total mess. .
- And US. .
- Bank stocks are being led
lower from by bank of America. .
- Looking at Canadian bank stocks, they're
holding up a little better still on a sell .
- signal, though, being
led lower by the CIBC. .
- Now, oddly enough, with its huge US. .
- Exposure, the TD Bank is still on a buy .
- signal that would change on
Wednesday with a closed blow. .
- 89.
84. .
- Last up, apple. .
- Apple looks like it put in
a lower high on Monday. .
- So you've got a high, got a lower high
lower high, lower high, lower high. .
- That's a very bearish chart that will be .
- confirmed if we start breaking down
below this recent low here at 140. .
- And then, of course, we've got the lows
from November as a potential target to the .
- downside for Apple, but Apple's not
looking very bullish right now. .
- And then Tesla, tesla is back on a
sell signal as of Tuesday's close. .
- Tesla's, another stock that popped last
week on that Fed speech, and it fizzled .
- out fairly quickly, as many
other stocks did as well. .
- Okay, folks, that is all
for Wednesday morning. .
- Next time you'll hear my voices on .
- Thursday morning, have a great day
and we'll talk to you again soon. .