Canadian Stock Market Trends 10242024

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Good morning, everyone, and welcome to Wednesday morning.

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It's Stephen Whiteside here from the theUpTrend.com. In the premarket this

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morning, things are fairly mixed and they're also fairly quiet.

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We've got Dow futures up while the S&P 500 and Nasdaq are trading slightly lower.

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Commodities are flat, bond yields are

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flat, so not a lot going on Wednesday morning.

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Now, the stock index futures, the S&P 500, the Nasdaq are trading lower.

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A couple of stocks that are already on sell signals are trading down.

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We've got alphabet and Meta are trading lower.

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They probably have the biggest effect on premarket activity.

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Now, we're going to do a little chart

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school this morning, and we'll start off looking at the US market.

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Now, as we always do, we try to start off looking at the VIX.

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And the VIX is one day away from a new

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high, traded back into the channel yesterday.

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A close below $17.96 would probably be the first sign that something new is happening

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on the bullish side of the overall stock market.

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Of course, we're going to need to get down

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below the bottom of the Flypaper Channel before things start to really clear up.

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Looking at the VIX for the Nasdaq, it

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traded right through the lower channel line yesterday, and we do expect the

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Nasdaq to probably lead us into the year end rally.

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That, of course, has not started yet.

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Then the Russell 2000, again, we're on a

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buy signal here that's negative for stocks.

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That, of course, could start to change if

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the VIX for the Russell were to close below $22.20 events on Wednesday.

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Now, yesterday, I spent some time pooh-pooling the DOW.

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Of course, we use the DOW because it's a baseline.

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You're in the car, you turn on the radio, if they're going to give you any

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information about the stock market on your normal radio station, not a business radio

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station, but a normal radio station, they're going to lead off with the DOW.

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It's the easiest way to keep track of what

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the overall stock market is doing or the mood of the stock market.

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Two things I see on this chart.

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Well, the bullish note, we did not break

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down below the recent low, so that's bullish.

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On a neutral note, we traded up yesterday,

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we did not close above the previous day's high.

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So that was a fairly neutral day.

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Even though the DOW was up over 200 points, it doesn't really mean very much.

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There's daily volatility.

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The stock market swings back and forth continuously.

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What we're looking for here is the start of a trend.

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And yesterday did not indicate a start of a new trend.

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Now, I may talk about what the DOW is doing in the premarket, but I'm probably

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never going to show a DOW chart in the presentation.

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That's also true for the S&P 500, the Russell 2000, and even the TSX.

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I rarely show those charts and the reason for it is nobody's trading those.

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They're trading the corresponding ETF such as the DOW Diamonds.

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It's important that you make all your

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decisions based on what the individual ETFs are doing or the individual stocks,

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not the corresponding index or futures contract.

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Those can be out of sync, especially when you're looking at commodities, the

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price of gold, the price of crude oil can go up.

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But at the same time, if the stock market does not want stocks right now, they can

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push down the corresponding ETFs and stocks in those sectors.

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When we're looking at something such as the DOW Diamonds, traders can front-run

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the market with the ETFs, and that can be a good and a bad thing.

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If Chairman Powell is speaking this afternoon investors have a hunch

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that he's going to say something bullish for the stock market, they can go in and

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buy the DOW Diamonds and it can move up much faster than the index itself.

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That can be good for you.

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You can take your ETF up to the next price target fairly quickly.

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On the downside, if they get overly

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bearish, they can run down the DOW Diamonds ahead of the index.

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And so while there's an underlying correspondence to it, investors can pay

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whatever they want for these ETFs or corresponding stocks.

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Just because the DOW is up 10 points

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doesn't mean that investors can't pay a lot more for the DOW Diamonds.

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So that is true for stocks.

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It's also true for commodities.

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If you're out driving in the car, you turn

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on the news, they may mention what the DOW is doing.

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They may mention what the price of gold and the price of oil are doing and they

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won't talk about the individual stocks or ETFs that correspond with those.

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Yeah, it's a good guide.

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I know that 99% of the people watching this video are not going to be actively

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trading the price of gold, especially the futures contract.

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They may be trading stocks.

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They may be trading the GDL,

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but they're certainly not actively trading the futures contracts.

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Just be aware, there's a separation.

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You need to just focus on the individual items that you're actually trading.

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Not following, but trading.

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The GDX is another one.

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It's the major gold and silver index in the US.

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We can watch it, we can set price targets, but nobody's actually trading it.

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The fact that it went up to 18.75 is a

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good indication, but what are people actually trading?

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Now, we can look at individual stocks.

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It's hard to do because there's so many gold stocks out there.

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If I'm going to look at a gold stock in

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the presentation, I'm probably going to look at Barrick or one of the big cap ones

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because that's going to cover the most people watching the video.

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Barrick's been nice to us lately.

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It ran up to 21.88. You got to take some profits.

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It ran up to 23.44, got two cents higher.

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If you had an order in around there, it got filled.

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Now you're sitting with a partial position.

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You're looking for a breakdown on

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Wednesday below 21.63. If that doesn't happen, of course, the

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lower chain line is going to continue to move lower daily.

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What are people trading?

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Well, the majority of people investing in

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the gold and silver market are probably using the major ETFs.

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That's why we follow the GDX.

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Gdx ran up to our next price target.

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It started to pull back.

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We're looking to get kicked out after taking profits.

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Then north of the border, of course, the

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XGD is one of the most popular ETFs out there.

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Again, we've had a chance to take money off the table.

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It didn't get as high as 17.97. If you had

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an order and just below that, it got filled.

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Congratulations.

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When we look at this particular ETF, we've had a couple of bearish reversal signals.

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That should be a warning that this is the

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time and place to expect the market to pull back.

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There's no guarantee. There's no guarantee that the early

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warning signal on the panic zone chart, which just went off.

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There's no guarantee that that's going to pull the market down.

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But if we look and see what it's done recently, it's a pretty good indication

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that this is the time and place for the market to start to pull back.

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Now, continuing to look at the US market, instead of looking at the S&P 500 Index

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itself, we're looking at the ETF, which is the most popular ETF in the world.

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You can see that we recently made a lower-low on a Monday.

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That's a bear sign.

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Didn't close below it, but we did make a lower-low.

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Again, it's a pattern of lower highs, lower lows.

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The Nasdaq, which is looking a little more bullish because we did hold that low.

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But again, in both cases, do we close above the previous day's high?

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No, we didn't. No, we didn't.

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We closed at the previous day's high.

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Yesterday was a fairly neutral day for the overall market.

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Now, taking a broader look at the US stock

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market and farther away from those big cap tech stocks, you've got the Russell 2000.

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This is an incredibly popular US ETF. You can

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see we made a new low on Monday, on

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Tuesday, did we close above the previous day's high?

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We did not.

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That's a bearish sign.

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That is also true for the iShare's Microcap ETF.

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I realize that 99% of you do not own any US Microcap stocks.

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That's not. Really what.

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We're using this chart for.

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This chart is a great indication of the overall mood of the average US investor.

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I don't need to get on the phone and call people or poll my subscribers.

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I can tell right from this chart the mood of the market.

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If people are successful, if people are

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bullish about the stock market, they're going to go looking for.

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Opportunitiesin Microcap stocks.

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From this chart, I can tell you that

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they're absolutely positively not doing that at the present time.

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Let's finish off today's presentation,

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taking a look at the Canadian stock market.

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Typically, I would use the iShares for the

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TSX 60 to show you what's going on in the Canadian market.

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Today, I was going to show the indexes themselves.

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The reason for that is the Canadian market does not have as many ETF opportunities.

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There are a lot of ETFs.

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Most of them are very thinly traded.

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There are some great sector related ETFs from iShares.

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But beyond that, while other people have a sector related ETFs, again, a lot of them

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are very thinly traded, which is dangerous.

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The TSX has over 200 stocks.

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It was down yesterday, had an inside day, so a day of indecision.

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On a bullish note, we're still holding the

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recent lows, so that could be something going forward.

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The TSX 60, which is 60 stocks out of the TSX themselves, the big cap stocks.

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Of course, this is a very group of companies.

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A lot of them have international businesses.

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A lot of them have international listings.

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The international listings can help and hurt at certain times.

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If there's a big rally in the US market,

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that could help also lift up some of these TSX60 stocks.

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And of course, if there's a big sell-off

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in the US, that could also pull down some of these TSX60 stocks.

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You can see that we had a slightly lower close yesterday, made a new low for this

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week, but we're still holding the recent low.

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Now, if you take the TSX 60 stocks out of the TSX, you're left with this index,

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which was basically unchanged yesterday and having an inside day, small caps,

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fairly quiet trading yesterday, and micro caps.

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Unfortunately, they traded higher

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yesterday, but they're still on a sell signal here.

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Again, I can use the venture exchange similar to the micro cap stocks in the US

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as an indication of the overall mood of the Canadian investor.

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Now, gold stocks are still holding up at the moment.

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Without gold stocks, without energy

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stocks, the TSX would be much lower than it is now.

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Energy stocks are starting to roll over.

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Some of the big cap stocks have rolled over.

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Not necessarily all energy stocks have rolled over just yet.

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We're still waiting for some of them.

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Now, what we're going to be looking for is do we continue to hold up here?

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Does the Flypaper Channel act as support?

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Does 250 act as support?

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We put in a higher high last week, which is bullish.

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Now we have to see if we can put in a higher low.

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Looking at the global mining sector, not

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doing well at the moment, still in the Flypaper Channel.

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That's also true from material stocks.

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So unlike the gold sector, these stocks are not doing well at the moment.

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There's a clean technology index.

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I never talk about it.

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Really, as you can see, there's no reason to.

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I don't know much about it and nobody ever

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asks about it, so that's why I don't talk about it.

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Consumer Discretionary, this is the area of the market that should do well in a

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coming recession, not doing well at the moment.

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Infotech.

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Now, the reason I'm showing you this chart, of course, is because just like the

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Nasdaq-100, we are still holding support from the September lows.

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Now we're looking for not only a buy signal, that would be something.

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But what we would really be looking for is a breakout above the October highs.

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That would be a tell that something new is really starting to happen.

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Looking at the telecom services, we're on a sell signal right now.

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We're still holding the recent low and that could be something going forward.

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It isn't anything on Wednesday morning.

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Then financial services and bank stocks, this is pretty horrible at the moment.

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One of the reasons it's really horrible is that 95% of all Canadian investors have

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money in bank stocks whether they know it or not.

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If they own any major ETFs, if they own any major mutual funds, they're totally

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invested in bank stocks and this is not going well at the moment.

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The pros gave up control at the start of August and it does not look like

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they want to come back and take control on Wednesday.

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Industrials made a new low on Tuesday.

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They're down at the bottom of the panic zones.

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This is what October often looks like.

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I would certainly be interested in looking

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for buying opportunities if we start to move up from here.

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We're seeing panic selling.

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That's what we're seeing at the moment.

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That's also true for the Canadian Real Estate sector.

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Back in the summer, things were looking a little brighter.

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We put in a higher high and a higher low.

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Then we started to come into September, we put in a lower high.

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That was our first warning sign.

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Then we took out the recent lows, so put in a lower low.

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That was a very bearish sign.

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We were hoping to find support at the June low.

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That didn't work out.

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So the June low is now acting as resistance.

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What was once support is now resistance.

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It will not only be a buy signal that is

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going to make us bullish, it's also going to be a move out above the October high.

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Of course, as I mentioned earlier, this is what October often looks like.

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We've had panic selling here.

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We want to be buyers down in this area, not sellers.

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This is where the average retail investor throws in the towel.

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And once they throw in the towel, that's

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usually the sign that the market is about to reverse.

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Let's finish off looking at a couple of the TSX most actives.

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And we've got some bright signs here.

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Embridge traded back into the channel after making a higher-low on Monday.

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That is going to mean something if not only we get a close above 4.4, 47, but if

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we start trading above the high from last week, we're seeing money go back into

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Bitcoin stocks as Bitcoin has had a good week.

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Hut 8 is on its second day of a buy signal.

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Looking at TC Energy, looking for a close

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above 47.53. And of course, the tell will be, not only did we put in a higher low,

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but if we start breaking out above the October high, that would be a higher high.

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That would be bullish.

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No joy for the bank stocks as we looked at a couple of minutes ago.

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So TD Bank, which at one time was the big

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winner, is coming down with the rest of the banking sector.

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Manulife inside day yesterday, still holding the August lows.

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It could be something there in the future, but not on a Wednesday morning.

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And then, Baytex, unlike some of the big

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cap energy stocks, has not rolled over just yet.

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Looking for a close on Wednesday below

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$5.84 to give us a new sell signal for Baytex.

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

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It's fairly quiet out there.

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Dow futures up, Nasdaq S&P 500 features

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down, commodities are barely moving anywhere on Wednesday morning.

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Enjoy the rest of your day.

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

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