Morning Market Outlook 11082023

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Good morning, everyone, and welcome to Wednesday morning.

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It's Stephen Whiteside here from theuptrend.

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com. In the premarket this morning, stock index

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futures are flat, commodities are slightly lower.

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Now, we do have energy numbers coming out at 10:30 this morning, and they could

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certainly change the direction of the energy sector on Wednesday.

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Now, on Tuesday, the VIX continue to move lower for the seventh day.

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That, of course, is bullish for the overall stock market.

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Things would change on Wednesday if the

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VIX were to close above $18.55. From what we're seeing in the pre-market

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this morning, we are certainly not expecting that to happen.

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In today's presentation, we'll break it up into three parts.

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We'll start off with a look at the US market followed by the Canadian market,

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and then we'll close off looking at commodity prices.

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Probably the most important chart that we're watching this week is the S&P 500.

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It has moved up to our next price target

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and hit that price target yesterday at 437.50, got as high as 437.59.

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Now, just above that is the top of an open gap that could not be filled in October.

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So as hard as they tried, we moved up two lines in October, could not fill that gap.

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And so far in November, we have not been able to fill that gap.

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So that gap is a major area of resistance.

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The market could hit it and reverse, and

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that could mark the top for this particular move.

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If we are able to not only fill that gap but close above it, then the probability

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of moving up to our next price target at 456.31 increases dramatically.

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But that has not happened yet.

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Now, Tuesday was a very mixed day for the

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US market, where most of the major S&P sectors were actually lower on the day.

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We did see continued strength in consumer

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discretionary, technology and consumer staples.

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What didn't work?

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Well, materials and energy.

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We'll find out that that's true on both sides of the border.

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There's Consumer Discretionary moving up.

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Yesterday, it almost hit our next price

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target of 162.50, we got as high as 162.41 before backing away slightly.

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There's the Technology Sector moving up.

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Step One has been completed.

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We have made a higher high.

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Step two, yet to be determined and we're certainly not concerned about that on

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Wednesday, which is did we make a higher low?

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And of course, again, we're not going to deal with that on Wednesday.

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We did hit our next price target.

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So if you had an order to sell in at 75, it got filled yesterday.

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Of course, I recommend putting orders in just below those price targets.

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We did get as high as $175.29, so you got covered yesterday.

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I did mention that we're going to keep a close eye on Apple to see if Apple would

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break the pattern of lower highs and lower lows.

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We did put a slightly higher high

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yesterday, and so that's part one of the equation has been reached.

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But of course, we still need to see what

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low we make next time the market moves down.

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Now here's an area of concern.

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It's nice to see technology stocks lead the market higher, but it would be nicer

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if the chip sector was going along for the ride.

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As you can see, the pros have no interest

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in taking control of the chip sector on Tuesday.

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NVIDIA is still holding up well.

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It has not made a higher high just yet and

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we are expecting resistance at the 468.75 level to kick in once again.

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Then what didn't work well, the energy

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sector and we've been concerned about this sector for a while now.

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If we go back to September, we put in a lower high.

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Then in early October, we put in a lower low.

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Then we came back in October, put in a slightly lower high.

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Now, we're putting in a new lower low for the energy sector.

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For the XLE ETF, we were trying to hold

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support at 84.38, that broke yesterday, and so our next price target for this

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sector is 81.25. Slumberger was the big loser yesterday in the energy sector.

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Then we saw Chevron make a new low for this move.

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Of course, Chevron is a Dow 30 stock.

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Then looking at what didn't work, well,

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the Russell 2000 and the Russell Microcap ETF both pulled back.

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They both been down for the last couple of days.

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We're not getting that broad support for a rally that we would want to see.

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That puts us on a little bit of a defensive here, thinking that this may not

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last very much longer, but there's no proof to that just yet.

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Just a couple of signs: the stocks index, the chip sector is not participating and

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mid-cap and micro-cap stocks are not participating.

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So that's probably not a good sign going forward.

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Now moving on to the Canadian market, here's a little bit of a problem.

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What's working right now?

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Well, the big cap stocks and the TSX60

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have been the best performing and small-cap micro-cap is not doing well.

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We want those to participate.

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We want a broad rally to take us into year end.

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So far, we're not seeing that.

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There's the TSX-60 pulling back yesterday.

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There is the TSX itself pulling back.

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Then when you look at mid-cap, small cap, and micro-cap stocks, they did not perform

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very well yesterday, and that is a concern going forward.

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What worked?

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Well, similar to what worked in the US, it was infotech and Consumer Discretionary.

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Consumer Staples was down.

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Everything else was down on the day after those two sectors, and then materials and

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energy stocks were the biggest losers of the day.

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So there's Infotech making a new high.

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This chart looks very similar to Shopify.

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You'll see that in a second.

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The big winner on the TSX Infotech sector on Tuesday was BlackBerry.

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It's been on a buy signal for a couple of days now.

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Hut8 was a big winner yesterday, up 3.51 %.

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And then there's Shopify.

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And Shopify looking very much like the Infotech index itself.

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Consumer Discretionary was up yesterday, but it's consumer staples that have been

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the big winner over the past week, and that sector was down just a quarter of

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a % on the day, but it looks like it might be putting in a top up at these levels.

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Then what didn't work?

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Well, Materials was down yesterday.

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I've been on a sell signal for a couple of weeks now.

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Gold stocks rolled over.

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They are back on a sell signal.

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Once again, we put in a lower high.

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We'll have to see if we put in a lower low.

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Then looking at energy stocks, they

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finally rolled over after being on a buy signal for a couple of days.

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Certainly, we're not bullish about the energy sector over the past couple of

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weeks with both crude oil and then natural gas, both back on cell signals.

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I have a question now.

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Will the FlyPaper channel once again hold this support?

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Will investors be willing to buy the dip

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or do we break down and finally give up the ghost for the energy sector in 2023?

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Let's finish off looking at commodity

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prices and there's crude oil breaking down yesterday.

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We were trying to hold support at '81.25.

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That didn't work.

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Then the 78.13 should have been support.

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Look at all that support from back in August.

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That didn't work.

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This is looking pretty bearish.

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75 and '71.88 are certainly our next two targets to the downside.

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Then we've got natural gas on its second day of a cell signal.

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Once again, putting in a lower high for natural gas.

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3.32 would be our next target to the downside.

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We did find support there in September.

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Looking at the metals, we still have

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copper on a buy signal, certainly not helping the mining sector at the moment.

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Gold and silver both rolled over yesterday.

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They're both back on sell signals.

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We've been concerned about both of those for a while now.

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I think it's important to point out that the gold and silver market of our fathers

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is not the gold and silver market of today.

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Investors have many more options, including all of the cryptocurrencies,

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which have been doing very well over the past few weeks.

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If there has been global stress because of

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what's happening in the Middle East, there are other options for investors to get in

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and out fairly quickly besides the gold and silver market.

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

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Have a great day.

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Still a little concerned about the market

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with the chip sector, mid-capital-cap, small-caps not participating.

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But certainly, there's nothing to do about

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that based on that information on Wednesday morning.

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Have a great day.

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Next time you'll hear my voice is on Thursday morning.

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