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00:00:00Hey, good morning, everyone.
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00:00:01Welcome to Tuesday morning.
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00:00:03It's Stephen Whiteside here from the
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00:00:04Uptrend.com. Well, the stock market was down again yesterday.
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00:00:09It's fairly quiet in the premarket this morning.
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00:00:11Stocks were fairly volatile in Asia last night, but things settled down in Europe,
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00:00:16and that settling down seems to be transferring over to North America.
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00:00:21Let's start off with a consumer
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00:00:23discretionary and a consumer staple stock, both of them in the news yesterday at
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00:00:28Disney was in the news yesterday, not for a good reason.
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00:00:30We made a new low yesterday, and when we look at the weekly Flypaper Channel chart,
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00:00:36we've been in a bear market for a while now.
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00:00:38We had a nice run up off the pandemic lows
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00:00:41to the pandemic highs, but that quickly fizzled.
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00:00:44And Disney has been in a bear market since late 2021.
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00:00:47And you can see that well, you actually can't see on this chart
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00:00:53because this weekly chart has not been updated since last weekend.
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00:00:57But we are now trading back at the levels we haven't seen since the Pandemic lows.
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00:01:02Now looking at the daily Flypaper Channel chart.
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00:01:05We're back under the Flypaper channel.
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00:01:07We did pop for a few days back in the summer, so there was some news came out.
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00:01:13People were anticipating positive news.
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00:01:15It came out, of course, when that happened, we were at the top of the range.
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00:01:20We ranked a ten on the Panic Zone chart.
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00:01:23So that's the time and place you look for selling opportunities.
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00:01:26Obviously, it took a couple of weeks
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00:01:28before the news was really dissipated and everybody figured out it's probably not
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00:01:33going to make much difference for Disney going forward.
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00:01:36And then we were back to the old pattern of trading under the Flypaper Channel.
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00:01:40And of course, if we start moving up from
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00:01:42here, then your opportunity is probably limited by the daily Flypaper Channel.
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00:01:47And if there is a chance, if the whole market started to turn up now and Disney
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00:01:52started to trade up above the daily Flypaper Channel, then we go back to the
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00:01:56weekly Flypaper Channel and look for the next area of resistance.
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00:02:00Now, Disney is mostly a consumer discretionary stock.
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00:02:03People do not have to go to the parks and certainly will be reconsidering trips to
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00:02:09the park during a major recession, which we expect to happen in 2023.
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00:02:16Now, JM Smucker more of a Consumer Staples stock.
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00:02:20Peanut butter and jelly sandwiches sound great during a recession, and I don't see
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00:02:25them having a problem next year, so they hit a new 52 week high yesterday.
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00:02:30Now, when you look at the weekly
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00:02:32Flypaper Channel chart, one of the first things you should notice right away is
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00:02:36just the width of the Flypaper Channel compared to other stocks.
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00:02:41And as you go through, you'll notice which ones are wider.
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00:02:45The wider the Flypaper Channel, the more
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00:02:47stable the stock, the less volatility, the less chance for capital gains or loss.
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00:02:52And then of course, numerically that's reflected in the average true range.
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00:02:57And so the weekly average true range for
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00:03:00Smuckers is currently 4.21%, which is very low.
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00:03:04Not something that I would want to trade
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00:03:06myself, but there's a lot of reason to have a stock like this in your portfolio.
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00:03:10It's stable.
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00:03:12There's a lot less risk than with other stocks, especially a stock like Disney.
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00:03:18You can see Disney's Flypaper Channel just
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00:03:20visually right away when you look at this one.
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00:03:22Compared to this one, the Flypaper Channel is much thinner.
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00:03:26And then of course, if you look down here,
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00:03:27you'll notice that's reflected in the average true range, which is much bigger
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00:03:32at 9.69%. So Disney much more volatile stock, which gives you much bigger capital
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00:03:40gains opportunities and of course the much bigger opportunities for capital loss.
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00:03:46And so when we compare the two, when you look at the difference between the
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00:03:50Pandemic low and the Pandemic high for Disney, the stock moved up 157%.
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00:03:56That is certainly not true for Smuckers,
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00:03:58which just recently completed a move of 71%, which took much longer.
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00:04:05So we're looking at a couple of years to move up that level.
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00:04:08But it was more of a straight line to the top right hand corner of the screen.
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00:04:13So I'm not saying anybody bought at the
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00:04:16low and I'm not saying anybody sold yesterday.
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00:04:18But just as a comparison, when you're looking at opportunities,
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00:04:23the higher the average two range, the thinner the Flypaper Channel, the bigger
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00:04:27the opportunity is for capital gains and capital loss.
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00:04:33Now we've been talking about banks
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00:04:34recently and US banks are continuing to break down.
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00:04:37They're starting to break down below the October lows.
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00:04:40Canadian banks are heading in the same direction, but holding up much better.
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00:04:45When we look at still in the financial sector, insurance stocks are holding up
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00:04:50much better than bank stocks at the moment.
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00:04:52Looking at the SPDR Insurance ETF and then
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00:04:55looking at just a couple of the big ones in Canada, Manual Life and Sun Life.
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00:05:00Yes, both of them are daily sell signals,
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00:05:02but they are up at the top right hand corner of the screen.
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00:05:05So still holding up fairly well.
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00:05:07In the US, you've got MetLife and Progressive just as a couple of samples,
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00:05:12so they're still holding up fairly well compared to most of the major banks.
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00:05:16There's bank of America, there's Citigroup, and then in Canada we have
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00:05:20CIBC, which has broken down below the October lows already.
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00:05:23And the Royal Bank still holding up fairly well, still on a sell signal, but compared
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00:05:28to some a lot of other symbols, still holding up fairly well.
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00:05:32Now, looking at the major indices
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00:05:34yesterday, the Dow held up fairly well, down just less than half a percent.
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00:05:38You double that, that's the S&P 500.
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00:05:40You double that again, you get the Nasdaq, which was down 1.64% yesterday, and we'll
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00:05:47talk about a couple of stocks that helped that and looking to close that open gap.
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00:05:52And then looking at the TSX, the Ishares
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00:05:54for the TSX, 60 were down 1.01% yesterday, so tick over 1%.
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00:06:01We're not doing well at the moment, and
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00:06:03probably the biggest reason for that is the energy stocks, which have pulled back.
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00:06:07We're still expecting energy stocks to continue to move lower from here.
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00:06:11Right now, 14.84 seems to be acting as
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00:06:14support, and you'll notice that there's an open gap over here just below that level.
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00:06:19So the top of the open gap our
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00:06:22mathematical target, both acting as support at the moment.
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00:06:26We may fill that open gap on Tuesday and then head down to 14 six.
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00:06:31That would be our next target to the downside.
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00:06:34Now, energy stocks in the US.
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00:06:35Are holding up fairly well.
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00:06:37They have not broken down below the recent low.
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00:06:40They haven't got down to 81.
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00:06:4125 yet, which is our next mathematical target.
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00:06:44But notice that back in august and
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00:06:47september, and then into october, we peaked above that level, above the 81.
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00:06:5325 level. So that is really acting as support.
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00:06:56And we are still clustering around the 100 day moving average.
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00:07:01Now, if things break down, if we start breaking down below the bottom of the
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00:07:04Flypaper channel, then the 200 day moving average may be the market's next target.
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00:07:09Notice last time when we started to head down in that direction, we actually gapped
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00:07:13down right to the 200 day moving average and then started to trade below it.
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00:07:18So these could be setting up for great
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00:07:21buying opportunities over the next few weeks and into january.
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00:07:25We'll just have to wait and see.
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00:07:27It's certainly not a buying opportunity on Tuesday morning.
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00:07:31Now, Apple is in the news.
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00:07:32We made a new low yesterday, so 131.
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00:07:3525 is still acting as support.
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00:07:37The low yesterday was 131.
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00:07:3932, so some buyers came in just at that level.
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00:07:43If that breaks down, then 125 is the next target to the downside.
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00:07:48I've talked about that target before, and
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00:07:50we haven't been able to get back down to it.
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00:07:52If you look at the weekly chart, we can go
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00:07:54back to 2021, where 125 did act as support.
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00:07:59And so I expect that Apple will probably head down to that level.
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00:08:04I heard some people talk about Apple going down to $100 at some point.
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00:08:08That could certainly happen, but we have to get through that level of support at
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00:08:13125 before $100 comes into the real conversation.
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00:08:19Now, Apple is already trading under the 100 week moving average, so the next
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00:08:23logical target is the 200 week moving average, which is down at 120.
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00:08:29Compare that to tesla, which has already broken down below the 200 week moving
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00:08:33average and heading down towards 125, which is our next weekly target.
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00:08:40125 is our next target to the downside on both the daily and weekly charts, and you
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00:08:46can see that we're seeing panic selling at the moment.
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00:08:49So if Tesla is going to do it it's going to do it sometime soon.
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00:08:54But here's the problem.
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00:08:56We're looking at a series of lower highs
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00:08:58and lower lows, and that pattern hasn't changed.
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00:09:01So if we do continue to move lower from here, as I mentioned on the daily and
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00:09:05weekly charts, it's 125 is our next target.
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00:09:08On Tuesday, we need to close above 172 56 to give us a buy signal.
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00:09:13Not expecting that to happen.
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00:09:15And if it were to happen, then you can see
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00:09:17the Flypaper channel is way up there at $220.
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00:09:22So I don't expect us to head anywhere near that direction any time soon.
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00:09:28And as time passes, that Flypaper channel will continue to move lower daily.
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00:09:34Okay, folks, that is all for this morning's presentation.
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00:09:37Have a great Tuesday.
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00:09:38Next time you'll hear my voice is on Wednesday morning.
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00:10:10Thank you.