Hello, everyone. .
It's Stepen White side here with this .
weekend's edition of Stock Market Timing, Television. .
Now, this was a holiday shortened week and .
the market does very focused on bond yields, which moved up sharply this week .
and looking to see if we can break out above the 2022 highs for bond yields. .
Of course, bond yields rising usually equates to bonds falling in price .
and the 30 year bond was down just a tick under two and a half % on the week. .
Now, there is a Fed meeting in the month of July, and it's almost 100 % consensus .
that the Fed is going to raise 25 to 50 basis points. .
So that's already baked into the market. .
But as you know, if you've ever watched .
any of the Fed meetings, it's not necessarily what they do. .
The market often overreacts to what they say afterwardss. .
Everybody will be keeping an eye on that, .
especially currency traders, which have been in basically trading water, whether .
you're looking at the US Dollar index, and of course, it's a weekly chart. .
They've been trading water in the channel. .
That's also true for the Euro. .
So currency traders really just taking the month of June off, waiting for something .
to happen in July before they put more money on the table. .
Now looking at the VIX. .
The VIX started to move up on Wednesday, .
peaked on Thursday and had a pull back on Friday, still on a daily buy signal. .
Of course, on a short term basis, that's negative for stocks. .
Looks like we're catching resistance at .
15.63, which is where we'd expect to catch it. .
If we can start breaking out and closing .
above 15.63, then 18.75 certainly comes into play. .
Now, of course, what's happening on a .
short term basis does not affect long term investors. .
Still looking for a close this coming .
Friday above $17.49. So it came down another 50 cents this week. .
If we get a close above 17.49, then yes, .
long term investors need to be concerned about what's going to happen next. .
Now, on the daily charts, we did get a .
sell signal for the TSX 60 and for the DOW 30. .
Still waiting for a sell signal for the S&P 500, the Nasdaq 100. .
Both of them did not generate sell signals .
this week, even though they traded down to the lower channel line on Thursday. .
We did see a big sell off in the mid caps .
and microcaps on Thursday, but they came back into the channel on Friday. .
There was certainly some interest in buying some margins on Friday. .
We'll have to see if that continues this week. .
Now, the market is, I would call it, very unstable at the moment. .
There's just a handful of stocks still holding the market up. .
What I would say to you is the first thing .
we're going to be looking for, of course, is a close below the previous week's low .
for Apple, for Meta, for Microsoft, for NVIDIA, and for Tesla. .
Tesla gapped higher this week and made a new high before pulling back. .
It's a bearish reversal signal, but again, .
we didn't close below the previous week's low, so not overly concerned just yet. .
But that is going to be the first sign .
that something new is happening if the market starts to give up on those stocks. .
Now, when I talk about those big cap tech .
stocks leading the market higher, they're leading it in several ways. .
First of all, their capitalization or the .
value of the companies have continued to increase. .
But also, oddly enough, they're the most actively traded stocks in the US. .
Tesla is eight out of 10 days is the most actively traded stock. .
When those stocks start to pull back and people start selling, that is going to .
cause a cascading effect for the rest of the market. .
That's what I'm overly concerned about. .
Now, at the same time that the stock market indices have been doing really well .
in 2023, being led by those big cap tech stocks. .
At the other end of the market, we've got .
the financials, which are still struggling here. .
On a bullish note, in March, we actually .
made a higher low for the SPDR Financial ETF. .
We've been on a buy signal for a month now, but still haven't gone anywhere. .
And a lot of that upward momentum has been .
from the insurance sector, not from the banks. .
So the pros still haven't taken control. .
When we look at US banks, we've been in the channel for the past couple of weeks. .
We have not generated a buy signal. .
The pros do not look like they have any interest in taking control right now. .
Remember, we're looking at weekly charts here, so a longer term view of the market. .
Regional banks, yes, they've come off .
their lows from a couple of months ago, but still haven't gone anywhere. .
The pros still haven't shown any interest in taking control at the present time. .
Now, what I'm probably seeing here is that the pros aren't aggressively selling .
anymore, but they haven't come back to buy either. .
With interest rates going to continue to rise, probably for the rest of the year, I .
don't see any hope that these are going to come back anytime soon. .
No interest of the broker dealers. .
We have seen some positive price action for the insurance stocks. .
But again, the pros have not taken control. .
When we look at the Canadian market, the .
financials have not generated a weekly buy signal yet, neither have the banks. .
The banks are still, the pros have shown no interest in taking control. .
They did back in April, but that only lasted a couple of weeks. .
Here we are looking for money to come back into Canadian banks. .
Certainly, the pros are not showing any .
incredible interest in the Royal Bank right now. .
In the US, Bank of America looks like this. .
The further you get away from those big national banks, then you get into the .
regional banks and the pros showing no interest in taking control at the moment. .
Now, there are certainly some stocks in .
the financial sector that have been doing very well. .
Berkshire Hathaway is one, and you can see .
the pros took control back at the end of March, and the stock's been moving higher. .
In Canada, the Canadian version of .
Berkshire Hathaway is is Fairfax and pros took control back in October. .
The stock has moved up .
nicely and you can see it looks like the pros are giving up control, but you can .
get this chart action with the pros not selling they just have stopped buying. .
As we got up towards $1,000 here, it looks like the pros have .
stopped out bidding the public for shares in this particular stock. .
That doesn't guarantee that it's going to go down. .
It'll probably go down with the rest of the market. .
But this is not necessarily a negative thing. .
We need to have confirmation of negative price action as well. .
And so far, we haven't got that. .
So let's just assume that the pros have stopped buying. .
That does not mean that they have started to sell. .
And we can see that as we haven't had any .
major negative price action over the past couple of weeks. .
Now, looking at Fairfax, you can see that .
investors since 2021 have been buying the dip. .
And so if we get a pullback here down to .
the $800 level, which would be about a 20 % pullback, .
we could still look for buying opportunities after a move down to the fly .
paper channel if that happens anytime soon. .
And of course, if we see a 20 % pullback .
in Fairfax, we'll probably see a 20 % pullback in the overall stock market. .
Let's finish off with a quick look at commodities. .
No trend changes here. .
Gold was up $3.10 on the week. .
Silver was up $0.26 in change. .
Trading up to the lower channel line, no change there. .
Crude oil traded up to the upper channel line looking for a close this Friday above .
72.87. And we had a pull back for natural gas into the channel looking for a close .
below 244 this coming Friday to give us a weekly sell signal. .
Okay, folks, that is all for this weekend's presentation. .
We've now moved into that time of the .
month where the market is going to be focused on the Fed meeting. .
They've already agreed that the Fed is going to raise rates. .
Of course, they'll be more concerned about what the Fed says than what it does. .
Enjoy the rest of your weekend. .
Next time you'll hear my voice is on Tuesday morning. .