• Good morning, everyone, and welcome to Monday morning. .
• It's Stephen Whiteside here from TheUpTrend.com. In the pre-market this .
• morning, stock index futures and commodities are trading below fair value. .
• Dow futures currently down to 180 points. .
• Well, the title of this video is Five Weeks of Fear. .
• It's been five weeks since the VIX gave us .
• a weekly buy signal, and that tells us that options traders are .
• concerned about the direction of the stock market. .
• On Friday, the VIX closed at a new high for this move. .
• We are going to remain long term bearish on the stock market as long as the VIX .
• continues to trade and close above $14.75. If on Friday we close below .
• $14.75, we are going to turn from being long term bearish to long term bullish. .
• Now, during the past five weeks, the stock market has tried to rally and of course, .
• it has been those big cap tech stocks that have led the market higher. .
• And if we look at just who's in control, .
• you can see that on the Nasdaq-100, the Pros did come back and take control. .
• They're starting to give up control right now. .
• Now, the rest of the market didn't perform as well. .
• And you can see on the S&P 500, yes, the .
• Pros did take control, but have given up control. .
• On the Dow, that never happened. .
• That never happened on the TSX-60, the Pros never took control. .
• That is also true for the Russell 2000, the Russell MicroCap .
• Index and on the TSX Venture exchange, we saw no sign of the Pros taking control. .
• If we go back to the US MicroCaps, you can .
• see the Pros gave up control back here in August. .
• That's also true on The Venture Exchange, .
• but they did come back once for a couple of days to take control, really didn't see .
• a lot of price movement in the index itself. .
• And as I've mentioned many times over the years, the stock market is a lot more fun. .
• It's a lot easier to make money when microcap stocks are trending higher. .
• Now, we've talked about the Russell 2000 .
• several times over the past couple of months where I've looked at this chart. .
• And the Russell 2000 has been in a tight range for almost two years now. .
• And on the IWM, $200 has been the top of the market, $162.50 has been the bottom. .
• What's interesting, of course, is we made .
• a high here, a lower high, and then recently another lower high. .
• And a series of lower highs and lower .
• lows, that's a bearish scenario, that's a bearish theme, and that has not changed. .
• You can see the midpoint here, and we've .
• been trading below the midpoint for the past couple of weeks, we're treating .
• towards 1.62.50, and that'll be very important for the market. .
• If we hold and bounce off that level, that .
• could certainly be the catalyst for the year end rally. .
• Otherwise, if we start to break down, the market might accelerate to the downside. .
• Now looking at the Canadian market since .
• the start of 2023, we've been in a tight range and about 90% of the trading .
• activity has been between two waypoints here. .
• Recently, while the VIX has been elevated, .
• the market has started to break down and we are heading towards 18,750. .
• That will be our first line of defense. .
• Otherwise, if we start breaking down below 18,750. .
• You can see the next line down is major support from 2022. .
• Now, year to date, the TSX is negative. .
• It's down 1.39% for 2023. .
• Now, in the next part of the presentation, .
• we're going to be focusing on the Fly Paper Channel chart. .
• I'm going to use the Dow 30 just to do some very quick market analysis. .
• Of course, there's winners and losers, and winners are typically stocks trading above .
• the Fly Paper Channel in which investors are willing to buy the dips. .
• That is certainly true of Amgen. .
• Amgen made a new high last week before .
• starting to pull back at the end of the week with the rest of the market. .
• A loser is a stock trading in or below the .
• Fly Paper Channel in which investors are willing to sell the rips. .
• American Express is a good example of that. .
• Anytime a stock is trading below the Fly Paper Channel, we assume the .
• Fly Paper Channel is going to act as resistance. .
• For us to go .
• from a bear market to a bull market or to start a year-end rally, we need a lot of .
• these stocks to start breaking out above the Fly Paper Channel. .
• That did not happen over the recent rally that we saw in the market. .
• Now, Apple, of course, is the biggest, .
• most important stock in the world, and it was doing really well until late July. .
• It came back, found support in the Fly Paper Channel. .
• They bought the dip. .
• We could only get it up into the open gap, and then we came right back down. .
• Now, one thing you're going to notice, of course, when you're looking at Apple, is .
• the fact that we are now starting to make a series of lower highs and lower lows. .
• Now, we made a lower low in September. .
• We'll have to see if that holds as support. .
• If it can hold the support, that could .
• hold up the rest of the market if it starts to break, that may be one of the .
• catalysts for the market to accelerate to the downside. .
• Now Tesla, on the other hand, which is not .
• a Dow 30 stock, but of course, is the most actively traded stock out there. .
• You can see that we came down hard into August and then we came back up. .
• And where do we get to? .
• Well, we couldn't fill the open gap. .
• We got up to the bottom of it before pulling back. .
• And again, look at the major chart pattern that's going on here. .
• We're making lower highs and on Friday we made a lower low. .
• And so that is a bearish chart pattern and .
• that should continue going forward until it is broken. .
• No hope for Tesla on Monday. .
• Now, NVIDIA is still holding up fairly well. .
• We did recently put in a lower high. We noted that. .
• And of course, that was the set up for the market starting to pull back last week. .
• We are still holding the recent lows. .
• That could change on Monday. .
• Now, Canadian natural resources, any of .
• the energy stocks have been doing well recently. .
• Most of them have been finding support in the Fly Paper Channel. .
• People have continued to buy the dip. .
• That has not changed. .
• We made a new high last week, .
• and most energy stocks look like this at the moment. .
• Now, the bond yields have continued to move higher. .
• This morning, or on Friday, you can see on the 10-year yield, the high was 4.993. .
• For a little while this morning, it was trading over 5%, and that certainly helped .
• pull stock index futures down this morning. .
• Now, with the yields going up, any of the .
• financial institutions have been having a hard time. .
• There's CIBC making a new low on Friday. .
• You can see Bank of America .
• has been trading below the Fly Paper Channel for some time now. .
• That's also true for Citi Group. .
• You can see that we were trying to poke .
• our head out above the Fly Paper channel, but couldn't break away from it. .
• That's a high over here, a lower high, lower high, lower high. .
• And what do you know? .
• Recently, we put in more lower highs and lower lows. .
• So a series of those is a very bearish sign. .
• Now looking at the Dow 30 stocks, we've .
• already looked at a couple, but Boeing are not looking healthy at the moment. .
• There's Caterpillar starting to break down below the Fly Paper channel. .
• We've got Salesforce stuck to the Fly .
• Paper channel right now, but again, we're looking at a series of lower highs and .
• recently a lower low in September and a lower high last week. .
• So not looking very bullish. .
• Cisco system still holding the Fly Paper Channel. .
• It hasn't broken yet. .
• That could change on Monday. .
• Now, Chevron is in the news this morning. .
• It looks like it's buying Hess, .
• and that'll probably put downward pressure on this stock. .
• If you look at how wide this .
• Fly Paper Channel is, it tells us that long term volatility is very low. .
• And so this is certainly not a stock that you would want to be trading. .
• There are much better energy stocks out .
• there with a lot more volatility that are worth risking your money on than Chevron. .
• Then Disney has been in a bear market for a while now, and you can see last week, or .
• over the past couple of weeks, we've driven up to the Fly Paper Channel. .
• Once again, it acted as a resistance, and now we're starting to pull down. .
• There's Dow trading below the Fly Paper Channel. .
• There's Goldman Sachs making a new low last week. .
• Then Home Depot, and you can see the nice big rally that looked like the summer .
• renovation season starting on June first and ending on September first. .
• Then the stock started to roll over. .
• Looking at Honeywell, you can see the .
• direction of the Fly Paper Channel, so nothing to talk about there. .
• Ibm, the Fly Paper Channel has started to flatten out for a while there. .
• You can see investors were willing to buy any dips. .
• Now we're oversold and looking to see if the low from last week is going to hold. .
• Then looking at Intel, Intel has been a big surprise in 2023. .
• It has been hated for a long time, but has .
• done fairly well in 2023, still holding up. .
• Flypaper channel still pointing higher. .
• Then looking at Johnson & Johnson, new low last week for this move. .
• And you can see we're trying to hold the lows from back in March of this year. .
• Then looking at JPMorgan, flat Fly Paper Channel. .
• This was a little anomaly, this pop here. .
• Otherwise, we would have been in the channel for a couple of months now. .
• And now we're looking to see if we can hold the September low. .
• No joy for Coca-Cola, no joy from McDonalds. .
• Then looking at 3M, pretty ugly here. .
• We put in a high, put in a lower high. .
• That was a warning signal. .
• Then, of course, once you take out the .
• previous low, it tells you that bad things are probably going to happen. .
• That was certainly the case for 3M. .
• There's Merck, a new low last Thursday. .
• Then looking at Microsoft. .
• Microsoft is still holding up, but look at what happened. .
• We put in a high, a lower high. .
• We put in a lower, lower, low. .
• I'm pretty sure that Microsoft is going to be heading lower from here. .
• Then looking at Nike. .
• Well, Nike has started to break down back in May of this year. .
• They took it up to the Fly Paper Channel. .
• They took it up to the Fly Paper Channel. .
• Now they've taken it up to the Fly Paper Channel. .
• What do you think is going to happen next? .
• Do we break out or start to pull back? .
• I believe we're going to start to pull back. .
• Then Proctor & Gamble, we're trading up into the Fly Paper Channel. .
• You can see that we're trading up to previous resistance, and that's probably .
• as high as we're going to be able to go at this particular time. .
• Then the Travelers group, again, there was a one day anomaly where we popped up .
• through the Fly Paper Channel and quickly reversed, so no joy there. .
• Unitedhealthcare made a new high last .
• week, so that stock is still loved at the moment. .
• And then no joy for Visa trading up into .
• the Fly Paper Channel now starting to pull back. .
• No joy for Verizon. .
• It's been a dog all year and the .
• Fly Paper Channel has continued to act as resistance. .
• So if we can continue to move higher, we .
• would expect the Fly Paper Channel to continue to act as resistance. .
• Walgreens has also been a dog in 2023. No joy there. .
• Looking to see if we can hold the September Low, which we tested on Friday. .
• And given what the future is doing in the .
• premarket, we'll probably start to break down below that on Monday. .
• And last up, looking at Walmart. .
• Walmart recently put in a lower low. .
• It looks like we put in a lower high last week. .
• So wouldn't be surprised if Walmart continued to move lower from here. .
• Let's finish off with the daily VIX. .
• And again, we made a new High on Friday. .
• On Monday, we're going to remain bearish .
• on the market on a short term basis unless the VIX starts to close below 17.36. .
• Of course, we're also going to be watching to see what the Pros do with the VIX. .
• Right now, the Pros are in control. .
• If they start to give up control, that .
• would certainly turn us from being short-term bearish to short-term bullish. .
• Okay, folks, that is all for this morning's presentation. .
• Obviously, the recent rally didn't change the overall tone of the market. .
• Bigcap tech stocks are still leading the market higher. .
• Outside of Bigcap tech stocks, there's a .
• handful of winners, but it's not really broadly based. .
• It's still looking pretty gloomy for the market in the month of October. .
• Hopefully, that could change in the not so .
• distant future, but it's not going to change on Monday morning. .
• Have a great day, folks. .
• And the next time you'll hear my voice is on Tuesday morning. .