Morning Market Outlook 11132023

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Good morning, everyone, and welcome to Monday morning.

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It's Stephen Whiteside here from theuptrend.com.

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In the premarket this morning, stock index futures are slightly below fair value.

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Commodities are slightly above fair value.

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So far, it looks like we're going to have a quiet open on Monday morning.

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No major economic numbers coming out

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today, so expect it to be a fairly quiet day.

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Now, last time we talked, we were coming off a bearish reversal Thursday.

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And of course, when we look at a bearish

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reversal day, it can often mark the top for a market.

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And if we go back looking at the SPY, you

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can see we had a bearish reversal day there that marked the top, then another

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one there that marked the top, and another one there that marked the top.

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But this time around it may not have worked.

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Remember, these are one day events.

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They come up, they need to be acknowledged and watched.

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But we need to see fall through on a bearish reversal day.

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We need to see fall through to the downside.

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On a bullish reversal day, we need to see the follow through to the upside.

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We're looking to see if we're going to get that follow through.

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You can see the big bar that we had on

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Thursday and it engulfed the previous day's bar.

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We were looking for a breakout of

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Thursday's range to tell us which way the market wanted to go next.

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Oddly enough on Friday, we continue to push higher, putting in a higher high.

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On Thursday, I was also concerned about

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the fact that the chips were not participating in last week's rally.

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Well, on Friday, what happened?

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Well, chips actually led the market higher, so that was helpful.

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And so pushing the Nasdaq up again, we're

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making higher highs here, which are a positive sign for the market.

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At the same time, we are coming up to resistance.

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And you can see the high from late August there, up there at 380.

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83, that's a potential target within the grasp on Monday.

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And then above that, you can see that 38

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2.81 would be our next target above that level if we can take out the August high.

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Now, the Nasdaq-100 is market cap weighted.

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So Apple and Microsoft make up over 20 % of the value of the Nasdaq-100.

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And then if you go down the list, most of

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the ones are the ones we look at regularly.

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But you see, Broadcom is in there, and

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that's a stock we don't take a look at very often.

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But there's what Broadcom is looking like at the moment.

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Now, at the other end of the

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scale, Lucid is the least important stock in the Nasdaq-100.

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Its value is or its weighting in the Nasdaq-100 is less than 1%.

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So not giving the Lucid group a lot of

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ability to move the Nasdaq-100 if it doubled, tripled or whatever, nobody would

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really notice except Lucid shareholders, of course.

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If we look at the Nasdaq-100 and assume that the majority of the gains are made by

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the Magnificent Seven, if we take that away, you can see that if we look at an

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equal weighted version of the Nasdaq-100 that hasn't really moved that much over

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the last week and certainly has not taken out the October high.

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That's if you give every stock in the Nasdaq-100 equal weighting.

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Now, the next 100 stocks or the Nasdaq,

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let's say 200, is known as the Nasdaq Next Gen ETF.

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You can see that it really isn't participating in this week's rally at all.

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So once again, it is those big cap tech stocks that everybody's loved in 2023.

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That pattern has not changed.

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You can also see that in the S&P 500.

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If we look at the SPY compared to the equal weighted version of the SPY, the

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rest of the S&P 500 isn't really participating at the moment.

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And then, of course, we've also pointed

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out the fact that the Russell 2000, the microcap stocks are not participating.

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And we've also pointed out that in Canada, the small cap and microcap stocks,

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again, are not participating in this recent rally.

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Now, as I've mentioned before, we're in a

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risk-off situation at the moment, and that makes it very, very hard

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to make money outside of those big cap tech stocks that everybody loves.

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So you can do the best job at stock

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picking at the moment and pick out the best stocks in different sectors.

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If the market's not interested, they're

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not interested and that's just the way it is at the moment.

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Now, the VIX is still supportive for higher stock prices.

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The VIX is still on a weekly sell signal.

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That won't change unless the VIX closes

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above $19.47 this coming Friday on a shorter term basis.

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If you're trading the market on Monday, we're going to remain short term bullish

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on the market as long as the VIX does not close above $17.05 on Monday.

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And of course, that upper channel line is going to continue to move lower daily.

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Now we've talked about the seasonality of the VIX.

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We're in the middle of November right now,

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expecting the VIX to continue to move lower into Christmas.

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And that would be supportive of a year end rally in the stock market.

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If we move on to the Canadian market for

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the week, the TSX actually lost money on the week.

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What worked?

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Well, Infotech worked just like in the US, but the rest of the market, not so much.

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Financial services ended the week up a quarter of a %.

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Then what didn't work? Gold stocks rolled over.

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They're back on a weekly sell signal.

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Then we've got materials already on a weekly sell signal.

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No change in trend for marijuana stocks and no change in trend for base metals.

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Those were all the biggest losers on the TSX for the week.

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Energy stocks did come down but did not

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generate a sell signal, so we've got a little bit more to go.

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If we see energy stocks continue to move

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lower this week, we could end the week on a weekly sell signal.

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Let's finish off with the five charts the world's watching.

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And we've got the US dollar index in the channel.

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Once again, it actually ended the week higher.

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The euro did something similar, ended the week slightly lower.

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So no change in trend for the major currencies this week.

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No change in trend for interest rates either.

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Bond yields were actually up on the week.

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So both currencies and bond yields are

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trading in the channel on the weekly charts.

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Then looking at the price of crude oil,

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we're on our second week of a weekly sell signal right now.

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We held $75 at the close.

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If that breaks, then $68.

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75, and then $62.

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50 would be our next targets to the downside for the price of crude oil.

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And then last up, we're looking at the

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price of gold, which traded down into the channel looking for a close below $1918.

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50 this coming Friday to give us a weekly sell signal for gold.

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And as we expected, the $2,000 level was

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going to act as both mathematical and psychological resistance.

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And so far, that $2,000 level has held us in check.

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Yes, we traded above it, but we did not break away from it on a weekly basis.

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That's a bear sign for the price of gold.

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

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Higher highs last week are bullish.

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Chip stocks moving up but sharply on Friday, that's bullish.

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It is a risk off market, though, so it's very hard to make money in this market as

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most of the money is focused on a very small percentage of the stocks.

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Falling commodity prices are good for the

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US market, but not so helpful for the Canadian market, which is unfortunate.

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Okay, folks, it looks like we're going to get a fairly quiet open on Monday morning,

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and we may see Monday turn out to be an inside day or a day of indecision.

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Enjoy the rest of your Monday, and the

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next time you'll hear my voice is on Tuesday morning.

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