Canadian Stock Market Outlook 02212024

00:00:00

Good morning, everyone, and welcome to Wednesday morning.

00:00:02

It's Stephen Whiteside here from theuptrend.

00:00:05

com.

00:00:06

In the pre-market this morning, things are fairly quiet.

00:00:08

Stock index futures and commodities are slightly below fair value.

00:00:12

The market is waiting for a couple of things this morning.

00:00:16

First of all, we've got the Fed Minutes coming out later today, and then the world

00:00:20

is going to be watching for NVIDIA's earnings after ours.

00:00:24

Nvidia sold off yesterday.

00:00:26

Not enough to give us a sell signal.

00:00:27

We're sitting right on the edge.

00:00:30

So a close on Wednesday below, $692.

00:00:32

88 would give us a new sell signal for NVIDIA.

00:00:37

Now, the VIX is already on a buy signal.

00:00:39

We had a wild day a week ago, and we have not settled down at all.

00:00:43

And this is the time and place where the

00:00:45

VIX moves up on a seasonal basis, and that, of course, is negative for stocks.

00:00:50

Looking for a close on Wednesday below 13.

00:00:53

57 to give us a new sell signal for the

00:00:55

VIX, that, of course, would be supportive for higher stock prices.

00:00:59

Now, we saw a lot of selling in technology, especially the chip sector

00:01:02

yesterday, and that caused the Nasdaq 100 to generate a new daily sell signal.

00:01:08

Now, we had one a few weeks ago, and it quickly reversed, and that could certainly

00:01:12

be the case once again, but we need to take the signals as they come up.

00:01:17

Now, I've been watching Apple closely to see if it could hold the recent lows, and

00:01:20

we were down there testing them yesterday and still holding the recent lows.

00:01:25

Of course, it opens up a whole new world to the

00:01:28

downside if we take to check out the low from a couple of weeks ago.

00:01:32

Now, a couple of stocks in the news this morning.

00:01:34

First of all, Amazon, which traded through

00:01:36

the lower channel line yesterday but did not close below it.

00:01:39

We're looking for a close below $166.

00:01:42

99 on Wednesday to give us a sell signal.

00:01:45

It's going to be replacing Walgreens in the Dow 30.

00:01:49

So just like what you should be doing, the

00:01:52

major indices are always upgrading the stocks in those indices, and that's

00:01:56

something that you should always be doing, always be upgrading.

00:02:00

Now moving on to the Canadian stock

00:02:01

market, and we'll start off looking at the seasonality chart for the TSX.

00:02:06

This is historically a strong period for the Canadian Stock Market.

00:02:11

The reason for that, of course, it's RRSP

00:02:13

season and a lot of money enters the market this time of the year, and it

00:02:18

usually goes into the most conservative investments, the most conservative stocks.

00:02:23

Then after our RRSP season is over, you

00:02:25

can see the big dip that we usually get in March.

00:02:28

That's usually what happens, but There's no guarantee.

00:02:31

But to hear that the TSX is up making

00:02:33

multi-year highs at this particular time is not that unusual.

00:02:37

Here we are.

00:02:39

The TSX is up at resistance.

00:02:41

It's been there several times over the past month.

00:02:43

You can see that since we entered this

00:02:45

zone back in December, we've been stuck between these two lines.

00:02:50

Of course, we're looking for a breakout or a breakdown from this

00:02:54

particular range, and we're up at the top of the range at the moment.

00:02:58

That's also true for the TSX-60.

00:03:00

Then we've got mid-caps, small caps, and microcaps all on short-term buy signals

00:03:05

right now, but none are trending anywhere at the moment.

00:03:08

Now, what worked yesterday, what didn't work?

00:03:10

Well, Consumer Staples were the winners,

00:03:12

while the big losers was Info direct, just like in the US.

00:03:17

When we look at Consumer Staples, the index made a new high yesterday.

00:03:21

You can see that Circle K had a great day.

00:03:24

We saw Loblaw's continued to move higher.

00:03:26

We've got Metro on a buy signal right now.

00:03:29

We've got It's George Weston making a new high yesterday.

00:03:33

What's not working in this sector, Empire is not working at the moment.

00:03:36

It is on a buy signal, but then we saw a pullback yesterday.

00:03:40

So a close below $33.

00:03:42

97 on Wednesday would give us a new sell signal for Empire.

00:03:47

Then looking at the financials, which should be a strong sector at this

00:03:51

particular time, you can see we're on a buy signal making a new high yesterday.

00:03:55

All the major banks are on buy signals right now.

00:03:59

If we just to walk through them quickly, there is one anomaly, and that is the TD

00:04:03

Bank really not pulling its weight at the moment.

00:04:06

It is on a buy signal at the moment, but as you can see, we pulled back on Tuesday.

00:04:11

And then the regional banks, Canadian Western Bank, had a big update yesterday.

00:04:15

It's back on a buy signal, joining Laurentian Bank already on a buy signal.

00:04:20

Then looking at the industrials, and the

00:04:23

biggest component in the industrials is the railroads.

00:04:27

And so we do have CN and CP both still on buy signals right now.

00:04:31

That's holding up the industrial sector.

00:04:33

Now, one stock in the industrial sector,

00:04:35

and I don't know why it's in the industrial sector, but TELUS International

00:04:39

has had a great run over the past couple of weeks.

00:04:42

You can see it's had a great run since the low back in late October.

00:04:47

Then looking at Info Tech, we're on a sell signal right now.

00:04:51

Of course, that has a lot to do with Shopify, but a lot of the most traded

00:04:55

Infotec stocks are not doing well at the moment.

00:04:57

There's light speed, there's open text.

00:04:59

We've got Blackberry still on a sell signal, no change there.

00:05:02

No joy for Enghouse still on a sell signal.

00:05:06

New low yesterday for Quarterhill before closing higher on the day.

00:05:09

Certainly no change in trend there.

00:05:12

And then Shopify still on a sell signal from last week.

00:05:15

No change in trend for Shopify.

00:05:17

A couple of stocks in the infotech sector that are still working, CGI and Celestica.

00:05:22

Celestica trading in the channel yesterday.

00:05:24

A close below 49.

00:05:26

74 would give us a sell signal on Wednesday.

00:05:29

And Bitfarm, which had a huge up week last

00:05:32

week, made a new high yesterday before pulling back.

00:05:35

So no change in trend for Bitfarm.

00:05:39

Let's finish off looking at the world of commodities.

00:05:41

And we've been watching energy stocks on a buy signal for the past week, made a new

00:05:46

high for this move yesterday before pulling back.

00:05:48

We still have Baytex, Crescent Point, Athabasca all still on buy signals.

00:05:52

No change there.

00:05:54

Then looking at the most actively traded Canadian energy stock, we've got Suncor,

00:05:59

which has a very interesting chart pattern here.

00:06:02

We've got something for everyone.

00:06:03

We've got higher lows, which are bullish.

00:06:06

We've got lower highs, which is bearish.

00:06:08

We're working ourselves into a triangle

00:06:10

here, looking to see which way we're going to break out.

00:06:13

The energy sector is currently on a buy

00:06:15

signal, so we're hoping it breaks out to the upside.

00:06:18

Let's finish off looking at the world of gold.

00:06:21

Gold stocks traded up to the upper channel

00:06:23

line yesterday, so there's the potential for a buy signal on Wednesday, but gold's

00:06:28

down just a few pennies in the pre-market this morning.

00:06:31

Still waiting for Barrick, looking for a close on Wednesday above $20.

00:06:35

07, and that would join a Agnico Eagle already on a buy signal.

00:06:41

No joy for B2Gold.

00:06:43

Dundee Precious Metals was the top performer on the TSX yesterday.

00:06:48

Third day of a buy signal, big pop there.

00:06:51

Then looking at Endeavor Mining, no change.

00:06:53

Looking for a close on Wednesday above $22.

00:06:57

57.

00:06:58

Now, Franco-Nevada, not a stock we talk about very often, but

00:07:01

has been trading sideways for a couple of months now.

00:07:04

When this happens, it's often good just to stand back a bit and take a look at

00:07:11

the midterm chart or even look at the weekly chart to see what it's going to

00:07:15

take to really change the direction for this stock.

00:07:19

And as you can see, we've had a lot of our early warning signals over the past couple

00:07:22

of months, but we really haven't been able to break out above 150.

00:07:27

And so that's what we're looking for right now is to break out above to tell us that

00:07:31

investors think that something new is starting to happen for this stock.

00:07:35

Otherwise, it's been dead in the water for a couple of months now.

00:07:41

Then looking at Kinross, no joy here.

00:07:43

We need to close above $7.

00:07:44

13 on Wednesday to give us a buy signal.

00:07:48

Okay, folks, that is all for this morning's presentation.

00:07:51

Looking for a fairly quiet open this

00:07:53

morning as the market gets ready to digest the minutes from the last Fed meeting.

00:07:58

Then, of course, a lot of technology investors are going to be waiting for the

00:08:01

NVIDIA earnings which come out after the market closes later today.

00:08:06

Have a great day, folks.

00:08:08

Next time, you'll hear my voices on

00:08:09

Thursday morning, and at that time, we'll take a closer look at the US stock market.

Transcription