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00:00:00Hello everyone, its Stephen Whiteside here
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00:00:02from TheUpTrend.com with this weekend's edition of Stock Market Timing Television.
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00:00:06Well let's start off with the good news.
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00:00:08The good news is it was a pretty good week.
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00:00:10Any time you're coming into a long weekend it usually has a bullish bias to it.
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00:00:15Friday we saw US markets open for half day, very quiet trading.
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00:00:20The SPY volume for Friday was 30 million
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00:00:23and change, the previous Friday was 92 million and change.
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00:00:26So you can see the dramatic drop in volume on Friday.
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00:00:30So we're also coming up to the end of the month that also has a bullish bias to it.
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00:00:34And I think after month end that's where
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00:00:37things should probably stop and we should start to head lower from there.
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00:00:41Probably not on the first trading day of December but certainly not expecting the
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00:00:47bullish momentum to continue into December at this time.
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00:00:51Now let's move on and take a look at the VIX.
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00:00:53The VIX was weaker again, which is
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00:00:56supported for higher stock prices, down another 11% and change.
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00:01:00Things would change this week if the VIX closed above 29.13 this coming Friday.
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00:01:06Looking at the daily charts you can see very quiet trading on Friday.
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00:01:10The VIX had an inside day.
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00:01:11We're looking for a close on Monday above $24.10. If that doesn't happen of course
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00:01:17that upper channel line is going to continue to move lower daily.
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00:01:21Now looking at the daily panic zone chart for the VIX and we're mostly going to use
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00:01:25weekly charts in this presentation, but we will flag when we show daily charts.
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00:01:30You can see we're currently ranked as zero.
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00:01:32We're now at the bottom of the panic zones.
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00:01:34The pressure zone has formed.
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00:01:35This is the time and place we look for a reversal.
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00:01:38Now we've been following the Dow closely for the last month or so.
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00:01:42I've talked more about the Dow in the last month than I have in the last 22 years.
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00:01:46But there's the Dow up at the top of the Panic Zones.
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00:01:49It hit our next price target on Friday.
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00:01:52Our next price target was 343. 75.
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00:01:55We got as high as 343. 80.
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00:01:57So just $0.05 above our target.
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00:02:00Now not only is this a daily target, but
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00:02:02it is also a weekly target, which makes it much more significant.
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00:02:06And as you can see it held us in check back in the summer.
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00:02:10Now looking at the eyeshares for the TSX 60, it did something similar on Friday.
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00:02:15It also hit our next price target which is 31.
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00:02:1725.
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00:02:18So in both cases we've broken out above the summer high, but just barely.
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00:02:23It's not a major or significant breakout at all.
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00:02:26Now the high for the I shares for the TSX 60 on Friday was 31.
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00:02:3031, while our price target is at 31. 25.
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00:02:34And it is also a significant target
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00:02:36because not only is it a daily, but it's also a weekly target.
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00:02:39And that weekly target held us in check back in the summer.
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00:02:43Now, I think the stock market is about to top here.
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00:02:46Of course, there's no evidence that that change has started.
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00:02:51So what we're looking at is possibilities,
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00:02:54and we certainly don't have any triggers to take any action.
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00:02:58The only trigger that you have so far is if you were trading the Dow diamonds or if
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00:03:02you were trading the Ishares for the TSX 60.
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00:03:05You had orders which got filled on Friday.
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00:03:07So congratulations.
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00:03:08You've taken some money off the table, but
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00:03:11you have no reason to actually completely liquidate a position at this time.
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00:03:17Now, this is still a risk off rally, and
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00:03:19that hasn't changed this week, and that's rather unfortunate.
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00:03:23Being in a risk off rally is very
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00:03:25uncomfortable because more and more money is going into fewer and fewer stocks, and
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00:03:30that's why you have the market being let higher by a stock like McDonald's and a
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00:03:35stock like Tesla is going in the exact opposite direction.
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00:03:39So people with deeper pockets than you and I and more resources than you and I are
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00:03:44staying away from anything technology related right now.
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00:03:48And it doesn't really matter what area of technology.
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00:03:50There's one area that's working.
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00:03:52But if we look at the QQQ's for the Nasdaq 100, we are still on a Weekly Sell signal.
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00:03:57No change for any of the ARK ETFs.
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00:03:59Whether you're looking at fintech, you're looking at Genomics, you're looking at the
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00:04:03ARK Innovation ETF itself, which is heavily weighted in Tesla.
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00:04:07Then you've got the Ark Industrials, you've got Internet, and you've got space.
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00:04:12Money is not going into any of those areas
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00:04:14of the market right now, and it's certainly not going into social media.
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00:04:19Now, let me pose a question to you.
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00:04:21How healthy do you think the market is if investors are only willing to put money
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00:04:26into the stocks of yesterday and ignore the stocks of tomorrow?
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00:04:30That tells me the market's not in a very healthy position at this time.
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00:04:35Of course, things could change over time.
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00:04:37They just didn't change this week.
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00:04:40Now, one area that the bulls can hang
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00:04:42their hat on is the Chip Sector, which did pop a couple of weeks ago.
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00:04:46But you can see that there's been no upward momentum since then.
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00:04:49Even on the back of the big announcement that Warren Buffett took a big position in
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00:04:55Taiwan Semiconductor, you can see that popped and then treaded water this week.
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00:05:00Now, there is one symbol you're going to watch closely this week.
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00:05:02This could be the make or break symbol for the week, and that's the spider ETF.
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00:05:07We're currently ranked at nine, so we're not overly overbought at the moment.
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00:05:11We're up in the overbought area, but we could still be ranked at ten.
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00:05:14We could still certainly move higher from here.
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00:05:17We are stuck at the 200 day moving average.
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00:05:19That seems to be an area of resistance right now.
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00:05:22And just above that is our next price target.
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00:05:25Now 406.25 is not only a weekly, but it's a daily target.
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00:05:28So when they match up like that, that is a more significant line in the sand.
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00:05:33And right now when we look up to the
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00:05:35406.25 to get there, we start to move into an open gap.
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00:05:39Of course, an open gap is a hole.
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00:05:42It's a big pothole in the road that investors remember.
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00:05:46Anybody who was buying up there in September certainly remembers that day.
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00:05:51And the market has a memory.
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00:05:52And right now the bottom of that open gap
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00:05:55is at 403.10. We got as high as 402.93, I believe on the week.
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00:06:01On Friday.
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00:06:01It was 402.91. So less than $0.20 away from the bottom of that gap.
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00:06:07So far you can see the fact that we haven't been able to run up and run into
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00:06:10the gap that at the bottom of the gap is acting as resistance.
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00:06:14Then if we can break through the bottom of
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00:06:15the gap, 406.25, and then the top of the gap is 408.46.
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00:06:20So there's some clustering there, there's some area of resistance that the market
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00:06:27would need to get up and over and I'm not sure it's going to be able to do that.
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00:06:31Now, looking down, if you're watching the
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00:06:33SPY ETF on Monday, we need to close below 392.
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00:06:3634 to give us a sell signal.
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00:06:38And of course, if that doesn't happen,
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00:06:40that lower channel line is going to continue to move higher daily.
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00:06:43Now these next couple of charts aren't designed to scare anyone because we will
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00:06:48certainly react to whatever the market gives us going forward.
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00:06:52But I've looked at this chart several
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00:06:55times over the past month and what this particular piece of software from Timing
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00:07:00Solutions gives us is a similarity engine and what that engine does.
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00:07:05And in this case, we're analyzing the SPY ETF in this particular chart.
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00:07:09I can't show the whole thing on the screen, but it goes back to when the
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00:07:14Spider ETF actually went public back in the this particular engine will go and
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00:07:21take a snapshot of the current market situation and see if there's any times in
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00:07:25history when the market looked like this before.
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00:07:29And the closest match that we could come to was back in 2000 to 2002.
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00:07:37That is the closest match with the current market situation.
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00:07:41And the reason I'm showing you this is not
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00:07:43to scare you, but just to let you know that from where we are right now, we could
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00:07:47still go much further next year to the downside than where we are right now.
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00:07:52That is also true for the Nasdaq 100.
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00:07:54And again, the similarity engine went back in time and said, hey, where are we right
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00:07:59now compared to where we've been in the past?
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00:08:02And it matches us up with what happened in 2000 to 2002.
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00:08:06And again, the market can go much lower from where we are right now.
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00:08:11Now, right now, we're still on a weekly sell signal for the Nasdaq.
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00:08:15So if the Nasdaq wanted to go much lower
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00:08:17from here, we would be on the right side of that market position.
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00:08:22Now, here's the last set of charts I want to use to look at the stock market, and
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00:08:26it's one that pretty well everybody can understand.
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00:08:29This particular chart is looking at the
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00:08:31percentage of stocks currently trading above the 50 day moving average.
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00:08:35Back in the summer, we used a similar chart.
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00:08:39We looked at a percentage of stocks currently trading above their five day
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00:08:42moving average because we were looking at a smaller term time frame.
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00:08:46Now we're looking at the bigger time frame.
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00:08:48So this is a percentage of stocks
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00:08:50currently trading above the 50 day moving average.
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00:08:52Now, when you get up to these levels, you're getting close to 100%.
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00:08:55And when a market gets up to 100%, that rarely happens.
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00:09:00But when you get up to that range, that's
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00:09:02the time and place when the market usually turns around.
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00:09:05I don't know what the catalyst is going to be for that, but if we go back in time,
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00:09:09the peaks on this particular chart match up with the peaks in the stock market.
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00:09:13Whether it's the high from August, the
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00:09:16high from late May, early June, or the high from late March, early April,
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00:09:21anytime that particular indicator was up near the top of the range, that's the time
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00:09:28and place where the market started reverse.
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00:09:30Now, the last time that we saw a high like this was back in August.
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00:09:33If we look at the Canadian chart and this is for a longer time frame, but this is
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00:09:38the percentage of stocks currently trading above the 50 day moving average.
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00:09:41We have not been this high in a few years.
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00:09:44So the Canadian market is very, very overbought at the present time.
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00:09:49Now, being overbought does not guarantee
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00:09:51that the market completely reverses and heads sharply lower.
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00:09:55An overbought condition can be alleviated by just treading water.
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00:09:59We could tread water for a couple of weeks, and the percentage of stocks
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00:10:03trading by the 50 day moving average could come down.
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00:10:06And that does not mean the market is going to crash.
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00:10:08But it certainly tells me that the S&P 500 trading up at its 200 day moving average
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00:10:13may be as high as we can go at the present time.
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00:10:18Now, as I mentioned for this particular chart, which is a longer term time frame
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00:10:21than the previous chart, the peaks that we see on this chart match
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00:10:25up with all the peaks on the TSX that we've seen over the past couple of years.
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00:10:31Let's finish off taking a look at the weekly commodity prices.
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00:10:34And last week we had big bearish reversal
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00:10:36signals, but we didn't see fall through to the downside.
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00:10:38For most of the charts, copper was down slightly.
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00:10:41That's not a major indicator that copper
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00:10:45is going to continue to go lower from here.
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00:10:46It's still on a weekly buy signal.
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00:10:49Gold actually closed higher on the week by just $3, but that is better than where it
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00:10:53was during the week when it dipped right into the channel.
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00:10:56And Silver also dipped into the channel
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00:10:58too, and it was higher on the week, up 2.31 percent.
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00:11:03So some of those bearish reversal signals
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00:11:05that we saw last week didn't really see any fall through to the downside.
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00:11:10Now on the other hand, energy starting off
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00:11:13with crude oil was down nearly 5% on the week, nearly touching the $75 level.
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00:11:20And of course, $75 is our big line in the sand.
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00:11:23If you look at a daily chart below 75, 68.
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00:11:2675 would be our next target to the downside.
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00:11:29If we start breaking through 75.
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00:11:31Now, looking at the weekly panic zone
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00:11:33chart, you can see that we are currently projecting down to the $50 level.
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00:11:37Of course, to get there, we've got to break through quite a bit of support.
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00:11:41Now natural gas on the other hand, had another wild week, closing up 6.27%,
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00:11:46trading above the upper channel line, but closing back in the middle of the channel.
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00:11:50So another wild week.
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00:11:51It was positive, but still no weekly buy signal for natural gas.
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00:11:56And you can see for natural gas, the pros
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00:11:58do not look like they want to take control at the present time.
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00:12:02Okay folks, that is all for this weekend's presentation.
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00:12:05We came into a long weekend.
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00:12:07Things are still looking pretty bullish.
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00:12:09We should expect to go into month end looking pretty bullish.
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00:12:13And then beyond that, I wouldn't be
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00:12:14surprised if we saw some selling in the month of December.
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00:12:18Enjoy the rest of your weekend.
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00:12:20The next time you will hear my voice
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00:12:21is on Tuesday morning video you.