Morning Market Outlook 12212023

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Good morning, everyone, and welcome to Thursday morning.
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It's Stephen Whiteside here from T heUpTrend.com In the premarket this
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morning, stock index futures are trading above fair value.
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We do have US jobless claims coming out at 8:30, and of course, those numbers could
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change the direction of the market on Thursday morning.
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Well, yesterday turned out to be a wild
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day, and we do have the VIX back on a buy signal.
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That, of course, is bearish for stocks.
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But stocks really didn't break down.
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We've got some other things to look at.
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What the problem is right now, it's really a tale of two markets.
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The North American market is sitting by itself.
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The rest of the world is starting to fall apart.
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That could drag the North American markets
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down after the Christmas holidays, but we'll just have to wait and see.
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Now, we had a lot of bearish reversal signals yesterday.
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Remember, those are one day events.
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They still need to be confirmed.
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If the market is trading higher in the
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premarket this morning, the market is not in a rush to confirm those signals.
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So yesterday, this high is going to be a significant line in the sand.
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When we look at the TSX, we made a new
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high yesterday, then reversed, and we also closed below the previous day's lows.
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So that is bearish.
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You're going to see that a lot.
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So similar situation for the S&P 500, we
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closed below a couple of days of previous lows.
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So that's a very bearish sign.
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But we're not seeing any fall through to
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the downside in the premarket this morning.
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So the market had a hiccup yesterday.
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It might have had something to do what was
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going on in the rest of the world, but we'll just have to wait and see.
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Now, when we look at the rest of the world, and I'm just going to show you a
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couple of examples, we have the Indian market back on a sell signal, we have the
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Hong Kong market back on a sell signal, the Japanese market,
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the UK market, and the Taiwanese market, which fell nearly 12.5% yesterday,
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heading right back down to define support at the October lows.
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We always talk about the fact stocks often fall faster than they rise, and you can
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see gave up nearly two months of gains in just one day.
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There's obviously stuff going on outside of North America.
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North America is holding up fairly well.
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The US Dollar index had an inside day yesterday, so no sign of disruption there.
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The bond market, both the TLT and the XBB made new closing highs yesterday.
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The bond market is not worried about what's going on right now.
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That could change, but right now, the currency market, the bond market, still
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supportive of higher North American stock prices, or at least not overly bearish on
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the North American stock markets at this time.
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Now, you're probably wondering, over the past week, I've been asking you to make
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sure you've locked in some profits and taken some money off the table here.
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What I haven't said is to completely
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liquidate a position and give up on the market.
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Certainly, what I have not even got near
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is shorting the market, buying bear ETFs, or buying puts.
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We haven't got there yet, so there's still
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no reason to get overly bearish on the market.
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We just want to be prudent and take some money off the table and lock in some
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profits, but not completely liquidate a position.
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You could have taken money off the table in the Nasdaq.
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You don't have to completely liquidate a position.
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That's also true for the Russell 2000 and for the micro caps.
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These markets reversed yesterday, but
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there is no new downtrend as of Thursday morning.
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Now look at the Dow Diamonds.
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Again, we had an outside reversal day yesterday.
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The biggest loser on the Dow was Disney,
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which is back on a sell signal as of Wednesday's close.
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We had a reversal day for American Express.
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That was the second biggest loser on the Dow.
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On the S&P 500, the biggest loser was FedEx followed by Aon.
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Then on the Nasdaq 100, the biggest loser
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was Lucid followed by Warner Brothers Discovery, which traded right down to the
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lower channel line, did not close below it.
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A close below 11.47 would give us a sell signal on Thursday.
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Then looking at the TSX-60, the biggest loser was First Quantum.
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You got to imagine First Quantum is
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probably going to get taken out of the TSX-60 at some point,
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and that's going to put additional downward pressure on that stock.
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On the TSX itself, the biggest loser was
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Cargojet, back on a sell signal as of Wednesday's close.
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This particular stock is actually back on a sell signal.
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If you own CargoJet, today you've got a
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reason to completely liquidate any long position.
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Now, crude oil held steady yesterday is up slightly on the day.
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Natural gas had an inside day, so no fear in the energy market.
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Then looking at the metals, copper actually moved up.
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If the global economy is starting to
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shrink, it's not being seen in the copper market.
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Gold was down just $4.40, but no major move there.
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That was an inside day.
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Now, silver, on the other hand, moved up,
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and it is back on a buy signal as of Wednesday's close.
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Okay, folks, that is all for this morning's presentation.
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Wednesday was an interesting day.
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It might be just an aberration that is washed away over the next few days.
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We'll just have to wait and see.
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We are coming up to a long weekend that
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usually has a bullish bias to it, so not expecting a lot of downward pressure here.
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Again, yesterday just might be an anomaly that nobody remembers a couple of weeks
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from now, so we'll just have to wait and see.
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Have a great day, folks.
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Next time you'll hear my voice is on Friday morning.

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