• Morning, everyone. Welcome to Wednesday morning. .
• Stephen Whiteside here from theuptrend. com. .
• In the premarket this morning, stock index futures are slightly below fair value. .
• Commodities are mixed with the energies .
• higher while gold is lower on Wednesday morning. .
• Well, we are coming up to month end, quarter end, and a long weekend, and all .
• of those usually have a bullish bias to them. .
• So even if there's bad news over the next .
• couple of days, I don't expect to see any aggressive selling this week. .
• When we look at the seasonality chart, and .
• typically we get selling in June, which we did in the Canadian market, not so much in .
• the US market, which is a little concerning. .
• Then in July, we usually get a summer rally. .
• So we'll have to see how that works out this year. .
• But the US market is certainly not in sync with the seasonalities in 2023. .
• Now, the TSX had a nice big up day yesterday. .
• Not enough to give us a buy signal. .
• We are trading a little lower in the .
• premarket this morning than we see that the TSX 60 also moved up into the channel. .
• When we take the TSX 60 out of the TSX, you're left with the midcap stocks and .
• they traded up to the bottom of an open gap yesterday. .
• So that could hold us in check. .
• Then we had a small gain for small caps .
• and a nicer gain for the venture exchange trading up into the channel. .
• So there was some interest in microcap stocks on Tuesday. .
• Now, if we look at what worked on Tuesday, .
• we had consumer discretionary followed by infotec, followed by real estate. .
• What didn't work was energy. .
• Not by much, though. .
• We had an inside day for energy stocks, then materials, and consumer staples. .
• So consumer discretionary in, consumer staples out. .
• So consumer discretionary is back on a buy signal. .
• In percentage terms, the big winner yesterday was Sleep Country. .
• In market cap terms, it was Magna. .
• Not enough to give us a buy signal, but trading up into the channel. .
• Then looking at InfoTech, .
• it was really the Bitcoin stocks that were the big winners yesterday. .
• Hut 8 and Bitfarms were the big winners in percentage terms. .
• You can see Bitfarms had an inside day on Tuesday. .
• Then looking at real estate, the index moved up to the lower channel line. .
• The big winner in percentage terms was Primaris, then followed by Firstcap. .
• So as you can see, Primaris back on a buy signal. .
• I'd be waiting to see if it could take out the high from a couple of weeks ago. .
• Then looking at energy stocks, had an inside day yesterday. .
• We saw TC Energy pulled back. .
• We saw a little bit of selling in Suncor, .
• but an inside day and a little bit of selling in Canadian Natural Resources. .
• Again, having an inside day or a day of indecision. .
• Then looking at gold stocks, looks like we're holding the low from four days ago. .
• We had the Barrick trade slightly higher. .
• A close above 22.07 on Wednesday would give us a buy signal. .
• Not expecting to see that. .
• B2 Gold was down yesterday. .
• Kinross was also lower on the day. .
• Then looking at financials, a big up move yesterday for financials. .
• Looking for a close above 351.12. We close at 350. .
• 67. We could certainly see a buy signal for .
• financials and a buy signal in bank stocks. .
• We do have the TD Bank back on a buy signal as of Tuesday's close. .
• No joy yet for CIBC and certainly no joy for Manulife, both higher on the day. .
• Let's finish off looking at commodity prices. .
• And copper has been on a sell signal for the last two days. .
• That, of course, is not helpful for the overall mining sector. .
• Gold was down $10 yesterday. .
• It's down $7 and changed this morning. .
• So starting to break away from $1937.50, .
• you can expect psychological support at $1900. .
• Then our next mathematical target is $1875. .
• And if you look back to the month of .
• February and March, you can see we traded below that. .
• Those lows could certainly be a legitimate .
• target to the downside and a potential area of support. .
• You can also see that the pros have had no interest in gold since the middle of May. .
• That has not changed. .
• They did have a little bit of interest in .
• the price of silver, and so silver has been holding up better. .
• We are looking at silver closing at the lower channel line. .
• A close above 23.75 would give us a buy signal on Wednesday. .
• Not expecting that to happen. .
• Here's a quick little tutorial. .
• Historically, silver has been much more volatile than the price of gold. .
• One of the reasons, of course, is silver .
• is only trading in the 20s where gold is trading up near $2,000. .
• Now, when you look at the average true range of silver, it's currently at 2.78 %. .
• When you compare that to the price of gold, the average true range for gold is .
• currently at 1.26 %, so less than half of the volatility of silver. .
• If this was a stock, I'd certainly .
• tell you not to consider trading it because there's not enough volatility to .
• make money compared to other options that you have in the stock market. .
• But we're not looking at a stock, we're looking at a futures contract. .
• And when you're trading futures contracts, you get a lot more bang for your buck with .
• your margin than you do in the stock market. .
• So there's a lot more risk reward in .
• trading actual futures contracts than there is in the stock market. .
• And remember, those two words are equal. .
• Risk and reward are much greater trading futures contracts. .
• And so that's why you can trade something .
• that has an average true range of only 1.26 %. .
• It's like being a currency trader. .
• When you're trading currencies, the margin .
• and the leverage in currencies is much higher than the stock market. .
• Now, when you look at currency ETFs, .
• they're not worth considering as a trading option. .
• But when you look at the currency futures .
• contracts, they have a lot more leverage and they are certainly worth trading. .
• And they're probably one of the biggest trading instruments in the world. .
• Now, looking at the price of lumber, .
• somebody was asking me about the price of lumber. .
• Yeah, we're making new lows here. .
• If we were going to get a buy signal here, .
• then move up to 400 would certainly be a legitimate target to the upside. .
• Now looking at the energy sector, we've .
• got crude oil working its way into a nice little triangle there. .
• So looking for a breakout or a breakdown. .
• Right now, it looks like we're going to .
• see a breakdown and probably a retest of the low from early May. .
• It's been very sloppy trading over the .
• last month and you can tell the pros in the public are intertwined. .
• Nobody really wants to make much of a .
• commitment in the crude oil sector at the moment. .
• You probably want to give it more breathing room. .
• Use the mid term chart instead of the .
• right side chart and just give it more room to breathe because nobody knows which .
• way they want the market to go at the present time. .
• Now, compare that to natural gas. .
• When we look at the mid term chart for natural gas, we are starting .
• to see some bullish signs here, which is probably a good thing. .
• In 2023, natural gas hasn't done much. .
• Certainly, it has .
• had a lot of volatility in a much smaller range than it has over the past few years. .
• So we are looking for a nice big up move in natural gas. .
• Pros are currently in control, so we're .
• looking to see if we can continue to move higher from here. .
• Okay, folks, that is all for Wednesday morning. .
• Have a great day. .
• Stay out of the smoke. .
• It's pretty smoky out there this morning. .
• Nice little haze over the city and you can certainly smell it. .
• Next time you'll hear my voice is on Thursday morning. .
• Enjoy the day and we'll talk to you again soon. .