• Well, good morning, everyone, and welcome to Tuesday morning. .
• It's Stephen Whiteside here from theuptrend.com. .
• Well, it's pretty early in the morning. .
• Stock index futures are slightly below fair value. .
• Commodities are mixed with crude oil lower while gold is higher on Tuesday morning. .
• Now, we don't have a lot of economic numbers coming out on Tuesday. .
• We do have US existing home sales coming out at 10 o'clock. .
• That could put a little volatility into the market. .
• The VIX closed lower yesterday, and we're going to stay short term bullish on the .
• market as long as the VIX does not close above $15.24. Let's start off looking at .
• the elephant in the room, and that's NVIDIA, which pushed over $500 yesterday. .
• It's coming out with earnings this afternoon after the market closes. .
• This is not only a semiconductor play, but an AI play. .
• So if the earnings are received well and .
• the stock moves up, that could pull the semiconductors and AI stocks with it. .
• If it doesn't impress investors and it .
• starts trading lower, that could take the semiconductors and AI stocks lower. .
• We'll just have to wait and see. .
• But a lot of stuff going on in the AI .
• world over the weekend and the head of OpenAI got fired and Microsoft .
• hired him and Microsoft made a new closing high on Monday. .
• The US dollar continued to move lower on Monday. .
• That's supportive for higher stock prices. .
• We got a new closing high for the bonds on Monday. .
• This is the 30 year bond and that put downward pressure on bond yields. .
• Now, falling bond yields is currently supportive for higher stock prices, .
• especially stocks that don't make a lot of money. .
• Now, looking at a bond ETF such as the XBB, you can see we've had a nice run off .
• the October lows and we've run right up to the 200 day moving average. .
• That could continue to act as resistance. .
• It's been quite a while since we've been up to the 200 day moving average. .
• This could be interesting going forward. .
• It could just stop the market in its .
• tracks if bonds start pulling back from this level. .
• We'll just have to wait and see. .
• Now, just eyeballing this chart, it looks like it's had a nice move off. .
• You can see the change in the moon cycle there. .
• We made a low and we've had a nice move up to the 200 day moving average. .
• But in percentage terms, that's not that big a move. .
• It's important to .
• know exactly what the percentage opportunity is for a particular symbol. .
• Let's do a little Trade School this morning. .
• Again, this looks like a nice move, but compare that to any other chart and you'll .
• find out that in percentage terms, it's not that big a deal. .
• When we look at the Fly Paper channel chart, the first thing you're going to .
• notice is just how wide the Fly Paper channel is. .
• Without knowing anything else, you can assume that the level of .
• volatility for this particular symbol is rather low. .
• Now, when we're looking at a futures contract, if it looks like this, then the .
• opportunities can be made up by using margin. .
• Anytime you're trading a futures contract, .
• and especially in the world of commodities, you can get much higher .
• leverage using margin than you can in the stock market. .
• Typically, when we're looking at stocks and ETFs, the margin opportunity is not .
• that big compared to the futures contracts. .
• When we're looking at something like this particular bond ETF, the .
• Average True Range or the difference between the average low and the high each .
• day is only 0.65 %, so certainly over half a %, which is not that big a deal. .
• Typically, a financial institution such as the Royal Bank or SunLife, their .
• Average True Ranges are usually in the 1-2 % per day. .
• Now, typically, these financial .
• institutions pay a dividend, so that helps reduce their volatility. .
• If you want to increase your volatility, increase your risk reward, you can always .
• move to commodity or technology related stocks. .
• Currently, Athabasca has an Average True Range of a little over 4%. .
• That's also true for Shopify. .
• And so you can see how wide the Fly Paper channel is. .
• It gives you a feel for the long term volatility of a particular symbol. .
• Of course, if a technology stock pays a .
• dividend, then that's going to reduce volatility. .
• So you can see Apple, the Average True Range is currently 1.56 %. .
• Compare that to Roku, which doesn't pay a .
• dividend, of course, and it fluctuates much more than Apple does. .
• So just take a look at that chart versus this chart. .
• And currently, Roku's Average True Range is 5.74 %. .
• When you're comparing opportunities, you .
• need to look at something like the Average True Range to give you an idea. .
• Am I buying something that's a hand grenade and I'm pulling the pin? .
• Or is it much more a calm, cool, collected .
• symbol, such as most of the financial institutions? .
• Now not only do we provide .
• Average True Range %, which you need for comparing symbols, but we also show you .
• what the Average True Range is in a dollar amount. .
• And currently for Roku, it's a $5.46 per day. .
• You can't use that to compare one symbol to another. .
• But certainly, once you're trading the .
• symbol, knowing that the average range is $5.46, you can use that .
• in your daily calculations, especially if you're trading options. .
• Now moving on, let's take a look at a couple more bond ETFs. .
• The TLT made a new closing high yesterday. .
• We saw a new closing high for emerging .
• markets and a new closing high for the junk bonds. .
• And so the fact that money is going into .
• all of these different bond sectors is a good sign for the market. .
• People buying bonds is going to help put pressure on bond yields. .
• And of course, that's going to help the stock market move higher. .
• Now, we're looking at the Nasdaq-100, we .
• made a new high yesterday, which is what everybody's talking about. .
• We were up 1.22 %, but notice that the equal weighted Nasdaq ETF is up 1.23 %. .
• So that tells us that the rally is broadening out. .
• That's a good thing. .
• We also saw the Russell 2000 and the Russell Microcaps move up yesterday. .
• We also saw Canadian small caps and .
• Canadian microcaps continue to move up yesterday. .
• That's a good sign. .
• We want to see the market, the rally broaden out into year end. .
• We don't want it to just be those big cap seven technology stocks. .
• Now the SPY hit its next target yesterday, so congratulations. .
• You got to take some money off the table. .
• The Nasdaq 100 also hit its next target yesterday. .
• Again, congratulations. .
• You got to lock in some profits up there. .
• Of course, you're not going to completely liquidate a position. .
• The Nasdaq-100 is up at the top of our trading range. .
• You can do the math and figure out where the next targets are. .
• If we continue to move higher from here, then the trading range will expand. .
• That hasn't happened yet to get a feel for what the next target could be. .
• If you look at the weekly chart, you can see that 406.25 is our next target. .
• At the same time, $400 would certainly be .
• a potential area of psychological resistance. .
• Now, another positive note from yesterday's trading action is the .
• semiconductor ETF has started to trade above $200. .
• We haven't broken away from it, but a new high is a new high. .
• And $212.50 could be our next target to .
• the upside if we break away from the $200 level. .
• There is a little gap up here that could also act as a potential price magnet. .
• Then looking at the iShares for the .
• TS X60, you can see we're still projecting higher prices here, but we are coming up .
• to long term resistance up at 31.25. That held us in check earlier this year, so .
• that could be a major line in the sand for the TSX going forward. .
• Now, a lot of these charts have open gaps, .
• and I always tell you to don't worry about a gap that's behind you. .
• If the market's moving up, you don't have to worry about gaps behind you. .
• But we're going to see a pullback at some point and a logical place for the market .
• to find support is at the top or the bottom of an open gap. .
• We'll be watching for that going forward. .
• It has nothing to do with Tuesday's trading action, but as you're looking .
• through your charts, you should know where those open gaps are, and we'll be watching .
• to see what the market does when it does start to pull back. .
• Let's finish off this morning's .
• presentation with a quick look at the commodity ETF starting with the USO. .
• It traded right up to the upper channel line yesterday. .
• A close above 72.81 would give us a buy signal on Tuesday. .
• Currently, Crude oil is trading down in the premarket. .
• No hope for natural gas on Tuesday, a new low on Monday. .
• Then looking at the metals, we've got the GLD on a buy signal that would change on .
• Tuesday with a close below 181.70. So far in the premarket, gold is trading higher. .
• Palladium is on its second day of a buy signal, trading up to the open gap. .
• Then we've got platinum trading up over two % on the day. .
• So nice big update for platinum. .
• And then silver pulled back yesterday, a .
• close below $20.99 would give us a sell signal on Tuesday. .
• Silver ran up to the 21.88 level, put in a bear reversal day and has pulled back. .
• The high from Friday or from Thursday is the one to break out above. .
• Then, of course, we can see that we made a high previously back in August, and that .
• would certainly be the next target to the upside. .
• If silver wants to continue to move higher .
• from here, you can see the pros are still in control at the present time. .
• And of course, if Silver wants to continue .
• to move lower on Tuesday, we're looking for a close below $20.99. .
• Okay, folks, that is all for this morning's presentation. .
• Have a great day. .
• Next time you'll hear my voice is on Wednesday morning. .