- Hello, everyone.
It's Stephen Whiteside here from the .
- uptrend.com with this weekend's edition
of Stock Market Timing Television. .
- Well, it was a holiday shortened week
that was negative for the markets. .
- Let's start off today by doing
a little history lesson. .
- Let's start off doing a little recap of .
- what's been going on for
the past six months. .
- The market started off making a major low
in October, and of course, that's a .
- seasonal time where you
look for a major low. .
- Then we had a nice run into
the end of November, early December, .
- depending on what symbol
you're looking at. .
- The market was really led higher by a
couple of major indices, the TSX 60, which .
- only has 60 stocks, and the
DOW30, which only has 30 stocks. .
- If you take a broader look at what
happened during that time period, yes, .
- most of the rest of the market was moving
up, but not to the same intensity. .
- The S&P 500 was not able to break
out above the summertime lows. .
- That's also true for the Nasdaq. .
- Then since that
rally started to peter out, you can see we .
- had a nice decline into
the end of the year. .
- Then at the start of the year, we had
a nice run up into the end of January. .
- In February, we've had trouble and we've .
- been pulling back over
the past couple of weeks. .
- What's been interesting
in this last rally, a lot of the stocks .
- that didn't participate in the October to
December rally started to participate. .
- They put in some amazing
percentage returns. .
- To see
the ARK Innovation ETF go from the low 30s .
- into the 40s, that's quite a tremendous
return on a short term basis. .
- So for short term traders, this has been
quite a time period the start of .
- 2023, if you're a long term investor, it
really doesn't mean very much .
- looking at a monthly chart of ARC
innovations or to look at Peloton. .
- I've got a subscriber that rides his
Peloton every day and trades it, .
- and he's learned to trade it both
sides, going long and then going short. .
- And the stocks had a tremendous .
- run in 2023 to come off the eight dollar
level to go all the way up to 17. .
- That's over 100 % move and normally that
would be something to be very proud of. .
- From a trading point of
view, it certainly is. .
- From a long term investment point of view,
there's not a lot to say about the stock. .
- The stock was up over 160 at one time
and now it's trading at $12. .
- So if you're a long term investor,
it hasn't been that great. .
- But from a short term .
- trading point of view, the January
rally was quite intense. .
- Now, one of the big standouts in 2023
has been Tesla. .
- Tesla was a big failure in 2022. .
- You can see the skid marks
across the bottom of the screen. .
- Here's a bunch of opportunities
that failed very quickly. .
- And then we came down to the $100
level and we were contemplating whether .
- Tesla would break $100
dollars, but it did not. .
- And in short order, it came back and has .
- moved up over 100 % in a
very short period of time. .
- So congratulations to anyone
that's trading Tesla on the long side. .
- You can see the early warning signal up .
- there, but we haven't really had a lot of
fall through to the downside just yet. .
- And it is certainly a standout against
many other stocks in its sector. .
- Now, I don't know who flipped the switch, .
- but somebody flipped the switch on January
first and took us from risk off to risk .
- on, which is bizarre because
nobody wants to fight the Fed as the Fed .
- wants us to go into recession
to fight inflation. .
- And there's a bunch of sectors that .
- traditionally don't do well during a
recession, but they did well in January. .
- So whether you're looking at .
- financials, whether you're looking at
consumer discretionary or retail stocks or .
- homebuilders, they all
had nice runs in January. .
- They've all started to fade in February, .
- but they certainly put in
some good numbers in January. .
- And that also includes real estate stocks. .
- So everybody's starting to fade now. .
- Who knows how much they're going to fade. .
- Only time will tell. .
- Now, one of the things that we've been
concerned about is the fact we had those .
- nice rallies and the DOWtook
us up and then stopped. .
- That's the 34,375 level. .
- We've come back to support at 32,8,12.50. .
- We've been here before, and now we're
going to see what happens next. .
- Do we start to take in out those lows from .
- a couple of months ago, or do we
reverse and move higher from here? .
- TSX 60 moved up to 1250
and then started to pull back. .
- We were also looking at the
Nasdaq, which moved up to 12,500. .
- This is the Nasdaq 100. .
- We were watching the Russell 2000
turn back at 2000. .
- We were watching the SOX
index turn back at 3,125. .
- And then we were looking at microcaps. .
- And US microcaps peaked .
- four weeks ago, did not make it to 125,
and we've been pulling back ever since. .
- Now, that peak from four weeks ago
is lower than the previous peak. .
- So that is a bearish sign. .
- And then a bearish sign
for the Canadian market. .
- The Venture exchange did move up to the .
- 625 level over a month ago and it
has been treading water ever since. .
- So yes, some of the market has .
- moved up nicely in 2023, and
some of the market has not. .
- But we are looking at those
levels of resistance. .
- We wanted to see, could the market
punch through those? .
- And if they could and start making higher .
- highs, that would be overall
bullish for the market. .
- Of course, some people want to know why? .
- Why is all this going on? .
- There are several markets that are
much bigger than the stock market. .
- And if you start off with currencies,
you can see that since the October lows in .
- the stock market, the US
dollar has been falling. .
- That stopped happening about four weeks
ago and we've been moving up ever since. .
- And the US dollar index is back on a
weekly buy signal as of Friday's close. .
- Of course, with the US dollar moving up,
you have other currencies .
- around the world such as the euro
and the Japanese yen moving lower. .
- Now, another market that's much bigger
than the stock market is the bond market. .
- And you can see it peaked four weeks ago
and has been moving down ever since. .
- Falling bond prices
puts pressure on yields and yields have .
- been moving up over the
past couple of weeks. .
- And that could put pressure
on the stock market. .
- Now, what's interesting, what's happening .
- right now is the bond
yield curve has inverted. .
- And historically, financial institutions .
- like longer term 30 year yields to
be higher than shorter term yields. .
- And right now,
the yield on the 30 year bond is 3.93 %. .
- On the 10 year, it's 3.94 %. .
- And then on the five year, it's 4.21 %. .
- So when you've got short term yields .
- rising over long term yields,
that's a bond yield inversion. .
- And historically, when bond yields invert, .
- it suggests that investors
expect weak economic growth and .
- possibly even a recession, which can lead
to lower corporate earnings and .
- reduced demand for stocks, causing
a decline in stock prices. .
- That's the world we live in right now, and
that's probably why stock prices have had .
- trouble making higher highs
over the past few weeks. .
- Now, moving on to the
VIX of the fear index. .
- It certainly spiked above the upper .
- channel line this week,
but did not close there. .
- So we're going to remain long term bullish .
- on the market as long as the VIX does not
close above 22.63 this coming Friday. .
- Now, looking at the daily charts of the .
- VIX, you can see the 200 day moving
average has been acting as resistance. .
- And unless the VIX can get up and over .
- that, the the decline in the stock
market may come to an end soon. .
- Now, we are watching the VIX trade above .
- 2,188, but on Thursday and Friday, it
came back and closed below that level. .
- And we're sitting right at the upper
channel line as of the close on Friday. .
- Things would change on Monday .
- if the VIX were to close below
$20.05. If that doesn't happen on Monday, .
- of course, that lower channel line is
going to continue to move higher daily. .
- Now, looking at a daily chart of the
S&P 500, we made a new low on Friday. .
- We're not only on a right side sell
signal, but we're also on a mid term sell .
- signal for the S&P 500, and we're starting
to trade below all the moving averages. .
- The 200 day moving average is no longer
acting as support, and we are hanging on .
- to the 100 day moving average at the
present time and projecting lower prices. .
- Looking at the weekly panic zone chart for .
- the S&P 500, you can see we've got
an early warning signal up there. .
- So we're anticipating .
- lower prices right now based on that
off that early warning signal. .
- And we traded down into the channel. .
- So a close below this week's low this .
- coming Friday would give
us a weekly sell signal. .
- That's also true for the Canadian market. .
- Looking at the TSX it too traded
down to the lower channel line. .
- So a close below this week's low .
- coming up this Friday would give
us a new weekly sell signal. .
- That's also true for the TSX 60. .
- Now, a couple of weeks ago, I mentioned
that there was four stocks I was watching .
- closely, and three of the four actually
made new lows for this move on Friday. .
- Apple has filled that open gap, so
that open gap is no longer in play. .
- There's the new low on Friday. .
- Certainly recovered going into the close. .
- We made a new low for Microsoft, a new low
for Shopify on Friday, .
- and this gap looks like it's been
filled as of Friday's close. .
- Then we've got Tesla.
Tesla is still holding up. .
- It traded below the lower channel line
on Friday but did not close below it. .
- On Monday, we're looking for a close below
194.43. Now, one interesting thing that .
- happened during the week, we
saw NVIDIApop on Thursday. .
- I mentioned that I wouldn't chase that. .
- In fact, I'd probably fade
it if I was trading NVIDIA. .
- It did pull back on Friday. .
- The chip sector certainly got a pop on .
- Thursday, but you can see AMD
faded that on Friday. .
- And we saw Intel, which actually closed up
on Thursday, but then made a new low .
- and is now breaking down
below the December lows. .
- So that big up move for NVIDIA on Thursday .
- really didn't help the
market on a long term basis. .
- Now, let's finish off
with commodity prices. .
- We saw copper pulled back 4 % on the week. .
- So an outside reversal week for copper. .
- Still on a buy signal
here, no change in trend. .
- Gold continued to move lower, down 1.8 %. .
- We see the bearish reversal signal a .
- couple of weeks ago, marking the high, and
we've pulled back down to support at 18 .
- 12.50. Lots of history of support at
this level over the past year or two. .
- And then if that breaks, you can see that .
- back last summer, the 1750
level did act as support. .
- So certainly a legitimate
target to the downside. .
- Now, we've been talking about the fact .
- that silver has been leading
the markets lower. .
- And once again, it was down
more than gold, down 4.53 %. .
- It's broken down below
2187.50 heading towards 1875. .
- And then looking at the energy sector,
crude oil not doing anything, the pros not .
- doing anything, and natural gas might
have made a significant low this week. .
- We had a bullish reversal signal. .
- The pros have not... .
- They're not close to taking control. .
- But when you look at this, you've got to .
- assume that the pros are probably not
aggressively selling any longer, and they .
- may be getting ready to
start to accumulate. .
- And then, of course, when they do, we
look for a nice up move in natural gas. .
- So that could happen
over the next few weeks. .
- Okay, folks, that is all for
this weekend's presentation. .
- A lot of people want to be very
bullish on the stock market. .
- The Fed is trading against against us, the .
- currencies are trading against us,
and the bonds are trading against us. .
- So I'm not sure what percentage chance
the market could move higher from here. .
- I think we have to go
down before we go up. .
- And previously, we looked at the
seasonality of the VIX, which is to move .
- higher from this particular time,
and that could .
- put some weight against the stock
market moving up over the next month. .
- Enjoy the rest of your weekend. .
- The next time you'll hear my
voice is on Tuesday morning. .