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..