• Hello, everyone. .
• It's Stephen Whiteside here from theuptrend. .
• com, and welcome to this weekend's edition of Stock Market Timing television. .
• Well, the stock market ended on a low on Friday. .
• If you're looking at the S&P 500, the Nasdaq hit a low on Thursday for the month .
• of October, and then Friday was an inside day. .
• And for the iShares for the TSX 60, we also hit our October low on Friday. .
• So not a pretty picture going forward. .
• Now, we came into October knowing that the seasonalities were weak, whether you were .
• looking at the S&P 500 or they're much easier to spot on the TSX. .
• Then from this point on, the market is .
• usually pretty bullish, but we don't know exactly when it's going to start. .
• October is not only seasonally weak if we .
• look at the last 20 years, but if we go back in time, there's a lot of negative .
• historical events that have happened in the month of October. .
• Going back to the panic of 1907, then, of .
• course, the crash of '29, the crash of '87, I was trading back then, and it's .
• when I flipped over from being a fundamental trader to a technical trader. .
• Then, of course, the Asian Financial .
• Crisis and then the Global Financial Crisis in 2008. .
• Now, we are coming up to the end of .
• October, and that's when the sell in May crowd comes back. .
• One of the most successful investment strategies in history, of course, is the .
• selling on May first and coming back and buying on November first. .
• It's often called the Halloween indicator. .
• And that could kick in in the not so distant future. .
• We also have a full moon this weekend and we're coming up to month end. .
• And traders typically don't like to trade .
• against the automatic money that comes into the market at monthend. .
• Now, as a long term investor, we want to remain long term bearish on the market as .
• long as the VIX does not close below $15.22 this coming Friday. .
• So for the last six weeks, the VIX has been on a weekly buy signal. .
• That, of course, is long term bearish for stocks. .
• And we've seen that work out throughout the month of October. .
• The pros are still in control on a weekly basis. .
• We're projecting higher prices here on our panic zone chart. .
• And if we go back in time, you can see .
• that back in March of this year, the VIX got all the way up to 3,125. .
• If we go back to last fall, we got up to .
• 34.38. Then nearly two years ago, we're up at the 37.50 level. .
• Technically, there is a lot more room to go on the upside based on recent trading .
• activity, but the bears could be running out of time here. .
• We'll just have to wait and see. .
• The first sign that something new is .
• happening is going to be a change on the daily chart for the VIX. .
• And coming into Monday's trading action, we're looking for a close at the end of .
• the day below $18.66 on the VIX for the S&P 500. .
• That would be the first sign that .
• something new is happening on the bullish side of the market. .
• And of course, if that doesn't happen on .
• Monday, that lower channel line is going to continue to move higher daily. .
• Now, 2023 has been all about the Nasdaq-100 and a handful of stocks. .
• When we look at the Nasdaq-100, it's .
• currently clustering around the 200-day moving average. .
• When we look at what's been working in 2023, Citia has been the big winner. .
• It's a $400 stock. .
• It was recently a $500 stock, and it's .
• currently up 177 %, followed by Meta up 146 %, and then Tesla at 68.29 %. .
• Those are huge, big cap stocks that have been holding the market up. .
• The rest of the market is not looking for any moving average support. .
• Whether you're looking at the Russell 2000 or you're looking at the TSX, .
• there's no potential support from the moving averages right now. .
• The big line in the sand is that 200-day moving average on the NASDAQ. .
• Now, when we look at what's not been .
• working, some stocks have just been crushed this year. .
• I believe the biggest losing stock on the .
• S&P 500 is SolarEdge, down 72 %, generated a sell signal back in March of this year. .
• Then on the NASDAQ-100, it's end phase, .
• which is down 69 %, big sell signal back in late 2022. .
• On the Dow 30, it's Walgreens, which also .
• came in with a sell signal right at the start of the year, down over 43 %. .
• On the TSX, the big winner on the TSX-60 .
• is Cameco, up over 71 %, gave us a weekly buy signal back in April of this year. .
• Now on the TSX, only 24 of the TSX60 stocks are currently positive for 2023. .
• So it's been really hard to find winners in 2023. .
• And I guess the biggest disappointment for me, and there's not stocks that I actually .
• trade, but just watching the financial stocks disintegrate in 2023. .
• And here's the .
• Canada's biggest bank, the Royal Bank, making a new low this week for 2023. .
• Now, the Royal Bank and all the major banks are widely held. .
• You know when you see a chart like this .
• that the average investor, whether they're actively involved in the market or if .
• they're in long term mutual funds, they're getting hurt at the moment. .
• Now we've been following the same script, the same movie, the same book, the same .
• theme for months now in which we've been making lower highs and lower lows. .
• It's going to take some work to change .
• that because not only do we need a nice rally into November, but then it's not the .
• rally that tells us what's going to happen, it's what happens after. .
• And what we're going to want to see is a .
• rally above recent highs followed by a pullback above recent lows. .
• And so it's a two step .
• approach to actually change the theme of lower highs and lower lows. .
• Now, while the world is watching the Nasdaq, I've been watching the Russell .
• 2000, and we've been talking about this for quite a while. .
• The Russell 2000 has been in a tight range for almost two years now. .
• Looking at the IWM, $200 at the top of the range, $162.50 at the bottom of the range. .
• Speaking of lower highs and lower lows, there was a high back in the middle of .
• 2022, a lower high in early 2023, an even lower high in the summer of 2023. .
• Now we're looking to see what happens at the bottom of the range. .
• On Friday, we actually closed below the level. .
• We closed up 162.21, so that was our price target. .
• If we continue to move lower from here, then 150 and 137.50 could certainly come .
• into play, and that would be very ugly for the overall stock market. .
• Looking at the Canadian market, the TSX has been in a tight range in 2023. .
• Looking at this chart from a month ago, what we were looking for was, could we .
• break out above the highs of 2023, which were just above the 20,625 level? .
• Again, look at this pattern. .
• There's a high, lower high, and then in .
• the summer, we put in an even lower high, bearish all the way across. .
• We are trying to hold support. .
• We actually penetrated below the 19,375 level, but the market always came back. .
• That's where we were looking to find support and move ahead a month. .
• What happened? .
• Well, we were looking to see if the 19,375 level would hold. .
• If it didn't, then 18,750 would be our next target. .
• Where did we end on Friday at 18,750? .
• Nope, we ended at 18,737 and change, so just below this level. .
• And of course, if we continue to move .
• lower from here, we can go back to the lows from 2022 down at 18,825. .
• That would certainly be a logical move to .
• the downside if we keep going lower from here. .
• Now, if we do want to change the movie to .
• change the channel, we need to get the remote control away from the cat. .
• To do that, we're probably going to need .
• bond traders to change what they've been doing in 2023. .
• The third year bond hit a new low this .
• week and actually closed higher on the week. .
• But what it didn't do, it did not close above the previous week's high. .
• So nothing going on there so far. .
• The pros: nowhere near taking control. .
• But that doesn't mean they can't bid up bonds. .
• That just means that we're not going to have a new uptrend start anytime soon. .
• Now, the TLT also made a new low this week and also closed higher on the week, but .
• again, did not close above the previous week's high. .
• Bond yields pulled back. .
• Whether you're looking the 30 or the 10 or the 5, they all pulled back, but again, .
• did not close below the previous week's low, so nothing has started just yet. .
• Now, if we can get bond traders to get .
• back in there and start buying bonds, that could also put pressure on the US dollar .
• index, which actually closed higher on the week while the euro closed slightly lower .
• and the Japanese Yen was slightly higher after making a new low this week. .
• No change in trend for any of the major currencies. .
• Next up, let's take a look at commodities. .
• Crudeoil had another wild week trading down to the lower channel line. .
• We need to close this coming Friday below .
• $81.88. That would give us a new weekly sell signal. .
• We're looking for intraweek support at the $81.25 level. .
• If that breaks, then $75 would be our next target to the downside. .
• Energy stocks got hit hard in the US down over 6%. .
• That had a lot to do with just two stocks. .
• Looking at the Chevron, which was down .
• 13.47% and Hess, which was down 12.1% on the week. .
• So both of those putting huge downward pressure on the US energy sector. .
• Canadian energy stocks were down, but not by that much, down 2.35%. .
• Looking at the iShare's TSX energy ETF, and you can see Sunnovus traded right down .
• to the lower channel line, but did not close below it. .
• This coming Friday, we would be long term bearish on Sunnovus if it were to close .
• below $26.33. Now, the gold futures contracts traded up to 2,000 again. .
• Now, depending on where you look, what .
• futures contract, whether you're looking at spot or cash, gold has been able to .
• trade above $2,000, but has been unable to break away from it just yet. .
• The GLD closed at a new high for this move .
• on Friday, and we're trying to get to 187.50, and that's where sellers started .
• to come in back in March and April of this year. .
• Looking at gold stocks in the US, they .
• closed down nearly 1 % on the week, still on a weekly sell signal, no change there. .
• Canadian gold stocks were down just a tick .
• on the week and still on a weekly buy signal, so no change there. .
• Let's finish off today's presentation with a quick look at financial institutions. .
• You've probably heard me say this, but US .
• insurance companies have held up very well over the past couple of months. .
• That came to an end this week. .
• The previous week, we made a new high and traded above the early 2023 high. .
• This week, we came down hard. .
• We're back on a weekly sell signal, joining the rest of the financial sector. .
• Now, .
• the S&P 500 financial ETF has not broken down below the 2023 lows or retested them. .
• That's also true for US banks and US regional banks. .
• That could happen before the market starts to turn around. .
• But it's important to remember that during .
• a rate tightening cycle, the Fed usually breaks something. .
• It's often a financial institution. .
• Sometimes it's a whole country. .
• You just have to wait and see what happens. .
• It's still very risky to be in any US financial stock. .
• It might even be more risky to be in a Canadian financial stock right now. .
• Look at the TSX financial ETF. .
• It's breaking down below the lows from a year ago. .
• If we start breaking away from 40, 63, .
• then 3750 comes into play for the iShare's financial ETF. .
• Then looking at Canadian banks, this is the BMO equal weighted bank ETF. .
• We broke down below that low a while ago. .
• We're looking to trade down to the bottom of our weekly projected trading range for .
• this ETF, which would be all the way down at 20, 8, 13. .
• Remember, we started way over the .
• left-hand corner of the screen back at $42. .
• That's quite a move for Canadian banks. .
• But right now, they're looking weaker than .
• the US banks, and that could present a problem going forward. .
• Okay, folks, that is all for today's presentation. .
• We're going to be watching the VIX closely .
• to see if options traders start giving up their hedges against lower stock prices. .
• If that starts to happen, that could be the first sign that something new is .
• happening and it could be the potential sign that the year-end rally has started. .
• But coming into Monday's trading action, .
• we're not expecting that to happen on Monday. .
• Enjoy the rest of your day. .
• Next time you'll hear my voice is on Tuesday morning. .