Market Outlook 11072023

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Good morning, everyone, and welcome to Tuesday morning.

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It's Stephen Whiteside here from theuptrend.com.

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In the premarket this morning, and it is

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fairly early, stock index futures and commodities are trading below fair value.

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So far, it looks like we're going to see a

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little selling at the open on Tuesday morning.

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Now, we don't have any major economic numbers coming out this week, but we do

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have a lot of Fed speakers out there roaming the country, and that could, of

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course, affect the market on an intraday basis.

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We'll just have to wait and see what they say and how the market reacts.

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Now, the VIX is still on a sell signal, so fear is still falling.

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We're looking for a close on Tuesday above

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$19.19 to change that, not expecting that to happen on Tuesday.

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If you've been with us for a while, not

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only were we looking for a sell signal in the VIX, we're also looking for a

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breakdown of the Uptrend line and a move down below the Fly Paper channel.

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And so far, we have got those things.

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So we know options traders are not overly spooked at the moment.

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Now, the stock traders are a bit tired.

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They took the market up sharply last week.

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Yesterday was an inside day for the S&P 500.

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We're trading up towards the October highs, still trying to break that pattern.

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We made a low here.

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We made a lower high here.

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We made a lower low here.

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Now we're looking to see if we can break

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that pattern and possibly put in a higher high.

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There's lots of resistance up here at the

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437.50 level from October, and just above that is the top of an open gap at 438.43.

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Those numbers are going to play an important role over the next few days.

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Now, the first thing I look for is did we close below the previous days low?

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We certainly didn't do that for the S&P 500.

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We do have several open gaps below.

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I always tell you to look at gaps ahead of us, not behind us.

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But we are expecting a little pullback, a little consolidation this week.

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Maybe we come down and fill that first open gap.

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We'll just have to wait and see how things work out.

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Now, on a short term basis, the market is very maxed out as you could expect.

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Here is the percentage of S&P 500 stocks

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currently trading above their five day moving average.

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And if you look, you'll see we hit a new

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high last week for this particular time frame.

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And so what that tells us is that the day traders are currently maxed out.

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They are looking to take profits right now.

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They're looking to see what other stocks they should be in or not be in.

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And so we'll have to give them a little time.

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Now, a pullback here does not guarantee

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that we go all the way from the top, all the way back down to the bottom.

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But we do need to work off this overbot condition.

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We can do that by, yes, pulling back.

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But we can also do that by trading sideways for a little bit.

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Now, for longer term investors who really haven't been participating in

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much of the market this year, the percentage of stocks in the S&P 500

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currently trading above their 200 day moving average, we're coming off a low,

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but certainly not as low as we've previously been.

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This chart goes all the way back to 2020.

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If we're going to have a year end or

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Christmas rally, why can't we just go back up to the highs from 2023?

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That could certainly be doable.

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That's not too far away, and that would

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certainly take a large percentage of the stock market up.

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Of course, if we can eventually break out above those highs, then getting back to

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the 2020 highs would certainly be a new bull market for the overall stock market.

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We're certainly getting ahead of ourselves.

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If we can just get from here back here,

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that would be an incredible year and rally for the market.

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Looking at the Canadian market, the

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iShares for the TSX 60, we're certainly projecting higher prices here.

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We've got an open gap to get over.

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We've got mathematical targets to get over.

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We did have a pullback yesterday, or expecting a pullback today given the fact

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that crude oil and gold are trading lower in the premarket this morning.

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Those commodities are so much more

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important to the Canadian market than the US market.

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You can see we're trying to get to 30.

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47, and just above that is an open gap at 30.66. The US market has a wall.

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There's the Canadian markets wall up at those levels.

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Now, what can hold the Canadian market back?

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Well, there's the financials, and they ran into a wall at 343.75.

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Energy stocks have just put in a lower high, and they're starting to pull back.

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There's certainly the possibility of a new

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daily, short term sell signal for the energy sector on Tuesday.

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Then looking at gold stocks, looks like

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they also put in a lower high on Friday, pulled back on Monday, expecting another

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pullback today with the price of gold trading lower this morning.

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You can see on the index, we were trying

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to get above 281.25. We traded above it for a couple of

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days, but couldn't hold any gains up there.

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Now we're going to be looking to see if we

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can hold 265.63. You can see that acted as support

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last week, so we'll have to see if we can hold that.

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Then looking at Canadian Infotech, we ran into 187.50 and stopped.

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We've been dealing with that for the past couple of days.

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You can see back in August,

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we had a nice high up there, which was higher than the previous high.

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That was a little bit of a fake out, but

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looking to see if we can break out above 187.50 for Infotech.

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Then looking at telecom services, again,

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we ran into resistance at 168.75, looking to see if we can take that out.

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You can see that 175 is a legitimate target.

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Now we're trying to break this pattern of lower highs and lower lows.

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I think the best stock to watch to see if that happens is Apple.

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You can see we made a low in September, then another low in October.

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We made a lower high in October.

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Now, we're looking to see if we can change that pattern.

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That would be very important for the overall market.

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This is the most widely held stock in the world.

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Our mathematical price target for resistance right now is 181.25.

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If we can take that out, then 187.50 comes into play.

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Let's finish off this morning's presentation looking at commodities.

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Copper made a new high for this move yesterday.

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Gold, on the other hand, has been treading water for the past few days.

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On Tuesday, we're looking for a close below 1978 to give us a sell signal.

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For silver, we're looking for a close

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below 22.67 on Tuesday to give us a sell signal.

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Crude oil already on a sell signal.

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Looks like it may make a lower low for this move today, and that would take us

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down towards the $75 level as our next target.

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Then natural gas back on a sell signal.

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Natural gas, of course, is nicknamed the widowmaker because it is

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so volatile and has a lot of trouble holding a trend for any length of time.

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Looking at the Fly Paper channel, we

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traded slightly above it back in early October.

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We did not break away from it.

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We really need natural gas to break away

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and then that would tell us that a new bull market in natural gas is starting.

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That is certainly not the case on Tuesday morning.

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Okay folks, that is all for Tuesday morning.

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We are looking for some selling at the

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open, but we're not looking for a lot of damage to be caused on Tuesday morning.

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Have a great day, folks.

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

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