• Good morning, everyone, and welcome to Friday morning. .
• It's Stephen Whiteside here from theuptrend.com. .
• In the premarket this morning, stock index futures are mixed. .
• We're seeing a little weakness in the Nasdaq this morning, and that has a lot to .
• do with Apple trading lower in the premarket. .
• Commodities are fairly stable. .
• Both gold and crude oil are slightly higher on Friday morning. .
• Now I am doing this video ahead of the employment numbers that are coming out at .
• 8:30 this morning, and they could certainly add to the premarket volatility. .
• Now, it's been a week since I recommended .
• you lock in some profits on your short positions or your long bear ETFs. .
• Since then, the market has come back .
• nicely and the VIXs continue to fall this week. .
• And of course, a falling VIX is supportive for higher stock prices. .
• Now, if we go back a week and look at the SPY chart for the S&P 500, you can see we .
• were ranked as zero, punching through the bottom of the Panic Zones. .
• This is the time and place that we look .
• for buying opportunities, not selling opportunities. .
• Now we keep a history of that particular .
• indicator at the bottom of the Flypaper Channel chart. .
• You can see there's a couple of lines here. .
• There's one line at the two level, one .
• line at the eight level, anything to or below, that's the time and .
• place where we look for buying opportunities. .
• That was certainly the situation we were in last Friday. .
• Of course, we talked about the fact that .
• every particular symbol is going to have its areas of potential resistance, .
• whether it's recent peaks or valleys, recent highs and lows, our mathematical .
• price targets, the moving averages, or even trend lines. .
• In this particular case, last Friday, we had this downtrend line in the S&P 500. .
• Remember, we've been talking about the fact that markets have been making lower .
• highs and lower lows, and that was still certainly the case last Friday. .
• We've had a very dramatic week over the past five trading days. .
• What do you know? .
• The S&P 500 traded right up to that downtrend line and stopped yesterday. .
• Now here's the current panic zone chart for the SPY. .
• As you can see, we are projecting higher .
• prices all the way into December, up into the 450 area. .
• Of course, we have to get over recent resistance to get there. .
• Our next price target is up there at .
• 437.50 but if you remember back in September, we got lower and the top of .
• that open gap is at 438.43. Is that an important number? .
• Well, we couldn't get up to that level in October. .
• That is still a major area of resistance .
• to get up and over and can a short covering rally get us up and over that? .
• Well, we'll just have to wait and see. .
• Now, a week ago, the TSX looked like this. .
• Again, it was ranked as zero down the .
• bottom of the Panic Zones, Pressure Zone had formed. .
• What do you know? .
• Yesterday was a huge day up for the TSX. .
• We weren't on a buy signal coming into yesterday's trading action. .
• It happened very quickly. .
• Of course, you got to think that most of that is short covering. .
• Now, as you can see, the TSX is traded .
• right back up towards the highs from October, where we stopped on a dime. .
• One of the reasons we stopped on a dime .
• in October was because we ran up to the lows of August. .
• And so what was support on the way down .
• often becomes resistance on the way back up. .
• So it'll be quite interesting to see and quite bullish if we can take out that .
• October high and drive through the August resistance. .
• Now, Is expecting the US dollar to have to .
• come down for a rally to start, but that is certainly not the case. .
• And if you've been with us before, we talked about using the mid term chart on .
• the US dollar index as it had just been treading water for a month now. .
• Now, bonds have played a much bigger role in the rally this week. .
• Bond traders have come in and started to buy bonds again. .
• And again, it'll be interesting to see if we take out that October high. .
• Of course, bonds going up has put downward .
• pressure on bond yields, and that has helped fuel this short covering rally. .
• The price of crude oil has been helpful this week. .
• It has certainly not been going up. .
• It is holding the October lows. .
• If those break, then 78, 13, and 75 dollars come into play. .
• Now if you were with us yesterday morning, I was pondering why Shopify had not .
• participated in the Big Cap tech rally this week and then this happened. .
• And so Shopify gap to hire yesterday and closed near the high of the day, which .
• looks pretty bullish and traded up towards the top of the Panic Zones. .
• I'm not sure that I would want to be .
• jumping in on Shopify on Friday morning, but certainly if you still have a short .
• position, you'd want to cover any short position that you have remaining. .
• Now, when we talk about shorting stocks, .
• we want to be shorting off the top of the Panic Zones where an early warning signal .
• has gone off and you get a right side sell signal. .
• That's the time and place you short stocks. .
• You do not short stocks when they're trading down the bottom of .
• the Panic Zones where a Pressure Zone has formed. .
• That's the time and place where we get short covering rallies. .
• One of the reasons we get short covering .
• rallies is that the public is usually comfortable enough to short a stock when .
• it's down at the bottom of the Panic Zones. .
• They don't know what Panic Zones are, but .
• what they have is psychological support to take a short position. .
• That psychological support is often based .
• on the fact that when a stock is hitting new lows on any particular move, that's .
• when there's the most negative news and negative opinions about that stock. .
• They have a current history of the stock trading lower and lower and lower. .
• Why can that not continue forever? .
• This is the time and place where they like to short stocks. .
• Of course, it's the worst time and .
• their shorting at the end that causes a lot of the short covering rally because as .
• soon as the stock starts to turn around, they have absolutely no profit in their .
• short trade and have to cover as quickly as possible. .
• That's certainly what we saw in Shopify on Thursday. .
• Now, while stocks have been coming back .
• this week, there's still a lot of stocks that are dropping out of the sky. .
• It's very easy to just go through and see some of the stocks are still getting hit .
• hard on Thursday, while the rest of the market was moving sharply higher. .
• Now, Apple is in the news this morning. .
• It has been on a buy signal for the last couple of days. .
• We're still projecting higher prices here. .
• There's how Apple closed yesterday, second day of a buy signal. .
• It is trading lower this morning. .
• And of course, this number is going to be different by the time you see this video. .
• But we are trading in the channel. .
• We're not trading through the lower channel line right now. .
• So so far, it doesn't look like we're .
• going to see a sell signal for Apple on Thursday. .
• Of course, if we ended the day with a sell .
• signal for Apple, that would certainly be bearish for the overall market. .
• Now with this short covering rally, you'll .
• notice that on a lot of the charts, the pros have not taken control just yet. .
• It's going to take a couple more days of .
• higher closes than higher opens for us to see the pros actually take control. .
• So again, a lot of short covering rallies this week. .
• It doesn't mean that it can't continue to go higher from here. .
• Certainly, a short covering rally can be a spark for a major trend change, and we'll .
• just have to give it time to see if that is actually the case. .
• Let's finish off with a look at gold and gold stocks. .
• We've got the price of gold up at the top of the Panic Zones. .
• Early warning signals have gone off. .
• We're still having trouble getting over $2,000, which is for us, a mathematical .
• target, but it's also a big round number, so a big psychological target. .
• Gold had an inside day on Thursday. .
• On Friday, we're looking for a close below $1,972.50. From what we're seeing in the .
• premarket this morning, not expecting that to happen. .
• Now, gold stocks have pulled back ahead of the price of gold. .
• You can see on the GDX, the early warning .
• signal up there at the top of the screen on the panic zone chart. .
• We had a couple of bearish reversal days marking the top for this move. .
• We're on a sell signal right now, but really not trending lower at the moment. .
• We're just not attracting new buyers right now. .
• That's also true on the XGD, a couple of .
• bearish reversal signals, early warning signal at the top of the Panic Zones. .
• There we are, we're on a sell signal. .
• I put in a low on Wednesday, I did not take out that low on Thursday. .
• You can see that there's a couple of open .
• gaps over here and there's one, there's the other one. .
• They may need to get filled before gold stocks can start rising again. .
• We'll just have to wait and see how that turns out. .
• And that's all for this morning's presentation, folks. .
• It's still fairly quiet. .
• We're still ahead of those employment numbers that will come out at 8:30. .
• And that could certainly add some additional volatility this morning. .
• Enjoy the rest of your day. Enjoy your weekend. .
• Enjoy your extra hour of sleep this weekend. .
• And next time you'll hear my voice is on Monday morning. .