Stock Market Outlook 10162023

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Good morning, everyone.

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Welcome to Monday morning.

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

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morning, stock index futures and crude oil are above fair value.

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We're seeing a little pullback in gold this morning.

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The buying that we're going to see in the

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premarket this morning is not going to erase the selling we saw on Friday.

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We may actually see an inside day on Monday.

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Now, the VIX ended the week up over 10 %.

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This coming Friday, we're looking for a

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close below $14.42 to give us a weekly sell signal for the VIX.

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That, of course, would be supportive for long term stock gains.

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Looking at a daily chart of the VIX, you can see the huge move we had on Friday and

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back on a buy signal that's negative for stocks.

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That would change on Monday if the VIX were to close below $16.79.

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Looking at the daily fly paper channel chart for the VIX, you can see that it

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looks like we put in a higher low on Thursday.

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We'll just have to wait and see if that holds this week.

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And then we came back up to the previous high.

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So now we're looking to see if we can make a higher high.

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A higher low for the VIX and a higher high

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for the VIX would certainly be a bearish sign for the overall stock market.

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Now looking at the weekly charts from last week, the biggest loser on the week was

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Semiconductors followed by Biotechs and Pharmaceuticals.

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Those were the biggest areas of weakness last week.

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Looking at the iShares for the Russell 2000, we were down 1.58 % last week.

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Now we have been trading below the FlyPaper channel for quite a while now.

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We've been in a range and making a series

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of lower highs over the last couple of years.

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If we go back to the end of 2021, we put in a lower high, a lower high.

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And then in 2023, we put in a lower high.

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And by just about a dollar, we put in another lower high during the summer.

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So a series of lower highs for the Russell 2000.

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And you can see in the last 18 months, we drove up to the 200 level and pulled back.

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We also went down to the 162.50 level a

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couple of times, and that acted as support.

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So going forward, if we want to see a bull market in the stock market, we need the

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Russell 2000 to start breaking out above 200.

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And if we're going to see a bear market

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continue, then we want to see the Russell 2000 break down below the 162.50 level.

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And of course, we're talking about the IWM ETF.

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Now, Microcap stocks have already broken down and are making lower lows and we're

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trading back to levels we haven't seen since late 2020.

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And so we're making a series of lower highs and lower lows.

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That is also true for the Venture Exchange, which has fallen even harder

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and is trading back at levels that we haven't seen since early 2020.

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Now, looking at a chart of US or Canadian

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microcaps, it's a pretty easy indicator of the overall mood of the stock market.

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You've probably heard me say this many times before, but when microcap stocks are

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trending higher, the stock market is having a lot more fun and a lot more

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people are making money in the stock market.

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When microcap stocks are trending lower,

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that means investors are on the defensive and they're not willing to take money away

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from big cap safe stocks to small cap riskier stocks.

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Of course, the small cap riskier stocks have much greater potential to the upside.

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But we know that over the last couple of

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years, investors have not been willing to go after those Small cap Microcap stocks.

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Until they do, it's going to be very hard to make money in the stock market.

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Now you've heard the term been there, done that.

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Well, Lawrence McDonald posted that where

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we closed on Friday on the S&P 500 is exactly where we closed 819 days ago.

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We haven't really made any major gains since then.

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We've certainly traded above that level and traded below it.

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This is one of the reasons we ask you to take profits off the table along the way

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because sometimes the stock market just wants to trade sideways.

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Now, the US dollar index traded lower last week and then ended the

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week closing higher, but not above the previous week's high.

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Things slowing down for the US dollar index.

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Bonds are reversed.

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They made a load on the previous week and then closed higher last week.

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With bonds moving higher, we saw bond yields pulling back.

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We'll have to see if that trend is extended this week.

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That could help the stock market.

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The price of gold had a big up week, but

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we shouldn't get too excited because we're just back to where we were two weeks ago.

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No major gains made, losses recovered, but no major gains from two weeks ago.

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We're looking for a close this coming

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Friday above $1,958.10 to give us a new buy signal for gold.

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For silver, we're looking for close this coming Friday above

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$24.07. Now at the same time, gold and silver were moving higher, copper moved

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lower, closed lower on the week, did not take out the previous week's low.

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But as a global economic barometer, it's

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certainly not going in the right direction right now.

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Crude oil had an inside week closing up at

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the upper channel line, so no change in trend for crude oil.

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Looking at the major index ETFs for Monday, we're dipping into the channel for

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the iSharifs for the TSX-60, looking for a close on Monday below 29:33.

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From what we're seeing in the premarket

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this morning, I'm not overly concerned about sell signals on Monday.

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The Dow Diamonds closed in the channel, the SPY closed in the channel and the

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Triple Qs all closed in the channel on Friday.

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Now, what really didn't work on Friday was

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the Semiconductors down to 4.22 % and back on a daily sell signal.

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Let's finish off looking at a couple of market movers in the premarket.

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Now, Pfizer is in the news this morning.

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It's trading lower in the pre-market.

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You really need to follow stocks the

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market loves and ignore or short stocks the market hates.

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How do we know that the market hates Pfizer?

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Well, it's been on a weekly sell signal since the end of 2022.

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The pros have given up control a long time ago and do not look like they're

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interested in buying this stock at the present time.

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So while for other stocks that the market

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loves, investors are going to buy every buy signal that comes up.

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When you're looking at a stock like

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Pfizer, it's more a matter that investors are going to short every sell signal for

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Pfizer that comes up, and they're going to continue to try to drive the stock lower.

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Now, a stock that this market still loves is Tesla.

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Tesla closed just below the lower channel

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on Friday, giving us a new daily sell signal.

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It is trading lower again in the premarket this morning.

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Now we talked about Tesla trading into a triangle and it drove up to the top of

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that triangle last week and now is moving lower.

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So that resistance is still holding Tesla in check.

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What's not bullish here is we could be

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putting in a lower high and that may be bearish for Tesla going forward.

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Another stock that's putting in a lower high right now is Apple.

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And Apple is still on a buy signal here.

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It's trading lower in the premarket, as is Invidea.

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Invidea is also trading down the

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premarket, not enough to give us a daily sell signal just yet.

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That would happen on Monday with a close

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below 444.15. It looks like we may have put in a lower high on Thursday.

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We'll have to see if that lower high holds us in check this week.

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If that is a new lower high, then that is

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going to be bearish for the stock market going forward.

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

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