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00:00:00Good morning, everyone, and welcome to Wednesday morning.
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00:00:02It's Stephen Whiteside here from theuptrend.com.
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00:00:06In the pre-market this morning, things are fairly quiet, stock index futures are
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00:00:09slightly below fair value, while commodities are mixed with crude oil
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00:00:13higher and gold trading lower in the pre-market.
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00:00:18I won't keep you very long this morning.
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00:00:20Let's start off with a little housekeeping.
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00:00:22Christmas is on Monday.
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00:00:24We will be closed next week, but we will come back on Saturday, December 30th, and
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00:00:30do a complete daily, weekly, and monthly update of the website.
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00:00:36Looking at the VIX, the VIX is just treading water here.
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00:00:39Notice that we've got two blue dots here.
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00:00:41We've had that before.
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00:00:43We are looking for a close on Wednesday above 12.89. If that were to happen, we
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00:00:50would turn from being short term bullish to being short term bearish on the market.
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00:00:56Now, we talked about watching the bond market and the TLT and the XBB both
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00:01:00traded higher on Tuesday, so that's supportive for higher stock prices.
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00:01:05We saw the US Dollar Index pull back a little.
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00:01:07It's still on a sell signal.
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00:01:09That's supportive for higher stock prices.
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00:01:11Crude Oil continued to move higher on
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00:01:14Tuesday and closed above the upper channel line, giving us a new daily buy signal.
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00:01:19The TSX Energy sector also
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00:01:22generated a new daily buy signal, closing just two cents above the upper channel
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00:01:27line, joining US energy stocks already on a buy signal.
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00:01:31Well, what worked on Tuesday?
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00:01:32Well, silver miners were the big winners.
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00:01:34They were up over 3 %, followed by US Gold miners, followed by Copper stocks.
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00:01:40And then the TSX Global Gold Index was up just under 2 % on the day, still trying to
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00:01:46break out above the highs from a couple of weeks ago.
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00:01:49Now, the market is still in love with tech stocks.
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00:01:52We saw the Nasdaq-100, the equal-weighted
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00:01:55Nasdaq-100, and the Next 100 all make new highs on Tuesday.
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00:02:00We also saw a new high for Canadian tech
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00:02:03stocks, but they ended the day slightly lower, so no change there.
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00:02:06Shopify was able to hit our next price
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00:02:09target yesterday, and then semiconductors are up at the recent highs.
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00:02:13No change in trend for semiconductors.
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00:02:16Now, the majority of stocks in the Nasdaq
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00:02:18100 are included in the S&P 500, which also made a new high on Tuesday.
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00:02:24If we look at the percentage of stocks on
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00:02:26the S&P 500 currently trading above their 50-day moving average, you can see that
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00:02:31we're right up at the top of the levels where we have peaked previously.
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00:02:36This is the time and place where you look to sell stocks, not buy stocks.
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00:02:40Obviously, a lot of people are buying stocks right now.
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00:02:43They are certainly getting in at the end, not the start of anything new.
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00:02:48Of course, the best places to look to buy
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00:02:50stocks is when an indicator like this is down at the bottom of the level.
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00:02:54We talked about this back in the fall when we were looking for the year-end rally set
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00:03:00up to start, and it certainly has worked out so far.
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00:03:04But yeah, this is the time and place you look to be a seller, not a buyer.
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00:03:08When we overlay the S&P 500 on this indicator, you can see that last time we
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00:03:13peaked was back in the summer, and that led to a multi-month sell-off.
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00:03:20Looking at the seasonality of the S&P 500, and we've been looking at this all year
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00:03:24and expecting rally into year end, and that's what we're getting.
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00:03:28What happens in January, if you'll look at the bottom left-hand corner here, usually,
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00:03:32we get buying into the start and selling into the end of January.
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00:03:37And given where the market is right now, I
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00:03:39would not be surprised if January ended up being a negative month.
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00:03:43Let's finish off this morning's
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00:03:44presentation looking at a stock in the news this morning, and that is FedEx.
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00:03:50Fedex, like many stocks, bottomed in October and then started to move up off
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00:03:55the bottom of the Panic Zones, a pressure zone formed.
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00:03:58That was the low risk setup and we've been moving up.
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00:04:01We've been up at the top of the Panic Zones for a while, so this is the
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00:04:04time and place you look for selling opportunities.
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00:04:07Now, when we look at the Fly Paper channel
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00:04:09chart, you can see it's not the most volatile stock in the world.
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00:04:12The average true range is currently at 1.97%, so just under 2% per day.
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00:04:18Yesterday was a fairly quiet day, was down
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00:04:220.68%. When we look at the Right-Side chart, we are coming into today's trading
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00:04:27action, looking for a close below 271.03 to give us a sell signal.
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00:04:32Here's where the buy signal showed up, the first close above the upper channel line.
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00:04:36You could have bought the next day at 245
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00:04:39and had had lots of opportunity to take money off the table along the way.
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00:04:43One of the reasons that we like you to
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00:04:45sell into strength is because stocks usually fall faster than they rise.
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00:04:50Here's where FedEx is trading.
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00:04:52Last time I checked this morning, so down over 10 %, down near the 250 level.
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00:04:57If I still owned any FedEx, I wouldn't be selling at the open.
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00:05:01Usually, people in the premarket overreact
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00:05:04and calmer heads get involved after the market open.
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00:05:09So if I still had some FedEx left in my
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00:05:12account, I wouldn't be selling at the open.
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00:05:13I'd wait to see where it closed this afternoon before I put in a sell order to
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00:05:19get rid of the remainder of my FedEx position.
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00:05:23Okay, folks, that is all for this morning's presentation.
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00:05:25So far, it looks like we may get a little selling at the open on Wednesday morning.
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00:05:29Have a great day.
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00:05:30Next time to hear my voice is on Thursday morning.