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00:00:00Hello, everyone. It's 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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00:00:07Well if you were with us at this time last
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00:00:09week, we were focused on what wasn't working.
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00:00:12The Dow was leading the market higher and we were watching to see if the rest
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00:00:16of the market would start to catch up or if the market would start to reverse.
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00:00:21And of the market certainly did some
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00:00:23catching up this week and what a difference a week makes.
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00:00:26Now the market moved sharply off
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00:00:28of the smallest inflation data point and one data point does not make a trend.
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00:00:34And so one wonders what will happen if we
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00:00:36get a data point of that size in the opposite direction?
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00:00:40Will the market move just as swiftly down as it did up this week?
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00:00:45Well the market action we saw this week
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00:00:47certainly fits into the seasonality chart where we get a rally in early November
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00:00:53and then we get some sort of pullback before we head up into December.
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00:00:58We'll just have to see how that works out.
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00:01:00Looking at the VIX.
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00:01:01The VIX has been on the sell signal for the last three weeks and we headed lower.
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00:01:07So we're going to remain longterm bullish
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00:01:09on the market as long as the VIX does not close above 30.31 this coming Friday.
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00:01:15If you're watching it during the week,
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00:01:17this is the chart we posted last weekend, daily chart of the VIX and we were looking
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00:01:22for a close above 28.01. That did not happen during the week.
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00:01:27We made a high on Thursday and then a quick reversal to the downside.
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00:01:32So on Monday we're looking for a close above 26.58.
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00:01:36If that were to happen of course that would change our view on the market
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00:01:40on a short term basis from bullish to bearish.
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00:01:43Now we have to be quite impressed that the market was able to catch up
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00:01:47with the seasonality chart this week and put everything back in order.
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00:01:51I'm not sure how long the market is going to be able to keep that up though we do
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00:01:55have still have inflation to deal with and the oncoming recession
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00:02:00and central banks are still raising rates around the world.
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00:02:04So I don't think that's going to change any time soon.
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00:02:07So just like any other week, you take it one week at a time.
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00:02:11This week is bullish,
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00:02:13next week could be bearish and we could see a change in trend.
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00:02:17We'll just have to take it as we always do, one week at a time.
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00:02:22Now we were watching the Dow Diamonds lead in the market higher.
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00:02:25It broke through the October highs,
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00:02:27the September highs, and now it's heading up towards the August highs.
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00:02:32Now the rest of the market is playing
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00:02:33catch up and we're looking at daily charts here that you can see.
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00:02:37The SPY ETF actually joined the party
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00:02:40on Thursday and broke through the October highs.
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00:02:43Now the next target that we have.
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00:02:45Mathematical target is 400 and 625.
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00:02:48But to get there we have to get over
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00:02:50the big round number of 400 and we got as high as 399.35 on Friday.
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00:02:56So if we can break through 400, 406.25 is our next target to the upside.
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00:03:02And then above that you can see we peaked
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00:03:04in September up there at 411.73 and then quickly reversed.
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00:03:09Looking at the QQQ's,
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00:03:10they also joined the party on Thursday, broke out above the October highs,
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00:03:15heading towards the areas that we haven't traded since September.
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00:03:20And we're looking at our next price target
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00:03:22of 296.88 and of course just above that is the $300 target.
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00:03:28Looking at the Ishares for the TSX 60 trading, pretty much like the Dow diamonds
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00:03:34at the moment, heading up towards those August highs, our mathematical target is
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00:03:3831.25, but we veered away from that in August getting as high as 31.20.
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00:03:44So just keep that in mind,
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00:03:46that's our next big target to the upside for the Canadian market.
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00:03:50Now last week at this time we were talking about the fact that the Energy sector has
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00:03:54been such a great performer this year, but it is far more important
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00:03:57to the Canadian market than the US market at this time.
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00:04:01Currently the energy sector is only 3% of the SP 500 while it's 13.5% of the TSX.
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00:04:09Now going back in time,
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00:04:10going back to the energy sector was a much bigger component of the S&P 500 way
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00:04:17back when it was almost like the technology sector today.
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00:04:22But times have changed.
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00:04:23There's been a lot of consolidation
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00:04:25in the energy sector over time and things priorities have changed,
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00:04:29the technology sector has become far more
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00:04:32important to the economy than the energy sector in the US.
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00:04:36Of course the energy companies in the US
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00:04:38a lot of them are global, so they're much bigger than the energy
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00:04:41companies in Canada which tend to be a lot more local.
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00:04:46Now, what worked this week and what didn't work well?
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00:04:49What worked in the Canadian market?
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00:04:50Well, it was the gold sector up nearly 12% for the week.
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00:04:56Then we've got it the technology sector up
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00:05:00just under 11% and then we've got the healthcare sector,
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00:05:04which of course includes the cannabis stocks, up nearly 9% on the week.
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00:05:08What didn't work well, energy stocks were down but also clean.
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00:05:12Technology stocks were down 2% on the week.
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00:05:15Looking at the US market, well,
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00:05:17semiconductors led the way up by 12.57%.
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00:05:22That's a good sign going forward.
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00:05:23If we can take out those August highs then we're looking at housing which was up, 12.1%.
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00:05:31And then we're looking at the XAU up 10.44% for the week.
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00:05:37Next up, let's take a look at those megatrends.
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00:05:39And one of them did end this week
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00:05:41and that was the US Dollar index, down 4.14% on the week.
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00:05:46That's a huge move for currency.
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00:05:48And then a lot of currencies around the world headed in the opposite direction.
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00:05:52Whether you're looking at the Australian
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00:05:54Dollar, the British pound, Canadian Dollar,
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00:05:56there's the Euro up of corresponding 14%, Japanese yen up nearly 6% on the week.
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00:06:03That is a huge move and there's a nice big move for the Swiss franc.
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00:06:08Now, bonds were also higher this week,
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00:06:11no major trend change so far for the XBB in Canada, the TLT.
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00:06:17Now we talked about the merging market
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00:06:19bonds, they were leading the market higher last week and we are back on a buy signal
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00:06:23for emerging market bonds, but not for the junk bonds.
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00:06:27Still waiting for a close above 91.53.
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00:06:30Then looking at commodities,
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00:06:32we had pullback in crude oil down 3.6%, still trading along the 87.50 level,
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00:06:39we closed at 88.16, so we're still not able to break out.
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00:06:43There's no trend going on in crude oil at the moment.
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00:06:47There's still a trend for natural gas and unfortunately it's to the downside.
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00:06:52The only bullish thing is we haven't made
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00:06:54a new low in three weeks and so we're down 7.66%.
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00:06:58And there's the price of copper up on the week, up 4.35% 2nd week in a row.
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00:07:05Then we had the gold up the $68.0.50 on the week and that is of course
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00:07:10the following silver which has been up for the last couple of weeks.
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00:07:14So there's all the metals up on the week.
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00:07:18Moving on to bitcoin and ethereum, they are down sharply this week,
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00:07:22down 24% and change for bitcoin, down 26.7% for ethereum.
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00:07:29I don't recommend any of these cryptocurrencies.
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00:07:32If I was 40, 50 years younger I might
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00:07:36consider them, but they're not something I'm really interested in.
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00:07:39The reason I'm telling you this is because people often ask me questions
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00:07:43and my opinion and I really don't have much of opinion on the crypto currencies.
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00:07:49Now let's finish off with the one chart to watch, and that is the US Dollar index
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00:07:53had a major move down this week and every time it's moved down in 2022,
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00:08:00we've got a corresponding up move in the stock market.
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00:08:03And so what we've seen recently is back
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00:08:06in September we made a high, then we made a series of lower highs
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00:08:09and lower lows and this week we actually broke down.
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00:08:13And so as the US Dollar has been coming down, the stock market has been going up.
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00:08:18So I think the US Dollar is the one chart to watch and of course if that changes
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00:08:23this week, that could also change the direction of the stock market.
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00:08:28OK folks, that's all for this weekend's presentation.
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00:08:31It was a memorable week, one of the best weeks we've seen in a couple of years.
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00:08:35Of course, we're going to look to see what kind of follow through we get this week.
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00:08:40If we got a small pullback or an inside week, that wouldn't be a big deal.
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00:08:43Of course, the first sign that something went wrong is if we start closing below
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00:08:48the previous week's low, that would be certainly a concern.
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00:08:51Or if we saw a big move in the VIX to the upside, that would also be a concern.
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00:08:56But otherwise, we're going to follow
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00:08:57the money and see how far it can take us into the year end.
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00:09:02Enjoy the rest of your weekend.
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00:09:03Next time you'll hear my voice is on Tuesday morning.