Morning Market Outlook 12042023

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Hello, everyone, and welcome to Monday Morning.
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It's Stephen Whiteside here from theuptrend.com. In the pre market this
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morning, stock index futures and commodities are trading below fair value.
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So so far it looks like the market wants
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to do a little selling at the open on Monday morning.
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And that's not surprising.
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We had an amazing week last week.
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The month end has come and gone.
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And so to see a little selling this week wouldn't be that's surprising.
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In the pre market this morning, Uber is trading higher.
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The reason for that is it's being added to the S&P 500.
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Here's what the weekly chart of Uber looks like.
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Here's the weekly chart of the stock it's replacing.
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Looks like, and as we always say, always be upgrading.
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That's why the stock market indices continue to move higher over time.
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Now, we're going to be looking at a lot of weekly charts.
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We'll flip back to a couple of daily
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charts, but for the most part, we're looking at weekly charts.
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In this presentation, the VIX actually
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closed slightly higher on the week, really had an inside week.
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We're going to remain long term bullish on
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the market as long as the VIX does not close above $17.96 this coming Friday.
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Looking at a short term view of the VIX, we're going to remain short term bullish
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on the market as long as the VIX does not close above $13.79 on Monday.
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Now, if it doesn't close above that level,
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then that upper channel is going to continue to move lower.
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We're going to have trouble seeing the VIX break down from here.
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We are down to long term support at the 12.50 level.
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This is where we bottomed in September and
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the market started to pull back from that point.
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We're not looking for a huge pullback here.
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If we look at the daily Fly Paper Channel chart, you can see in the summer, we
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spiked up to the Fly Paper channel and came right back down.
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I'm expecting something like that to happen over the next two weeks in early
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December here before we go into the rest of the year end rally.
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But we'll just have to wait and see.
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Looking at a weekly chart of the US.
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Dollar index, it closed slightly lower on the week after making a new low.
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That's supportive for higher stock prices.
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Bond prices continued to move up and bond yields continued to move lower last week.
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That's supportive for higher stock prices.
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Crude oil was down on the week.
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That helps the inflation picture.
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That helps bond yields continue to move lower.
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At the present time, it's not so helpful for the Canadian stock market.
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Natural gas was down over 6% on the week, so no change in trend there.
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Now here's something interesting.
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Gold was up sharply on the week and it
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went into the weekend moving up towards that 2125 level.
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Now overnight, there was a huge spike in
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the price of gold and then it completely evaporated.
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And we're actually trading slightly lower
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in the pre market at the time of this recording.
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So we actually traded up over 2125 overnight and then came right back down.
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So technically gold might have peaked overnight.
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We'll just have to wait and see how the
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market digests that move over the next couple of days.
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For silver, we're looking for a move up to 26.
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56 for our next weekly price target.
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Now the TSX moved up nicely.
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It's heading up to long term resistance up at the 20,625 level.
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We'll have to see how the market reacts to that if we can push through it or not.
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The Dow certainly has pushed through
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resistance and is starting to trade above our next mathematical price target.
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We haven't broken away from it, we've just been able to trade above it.
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Looking at the S&P 500, we still got a
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ways to go before we get to our next weekly target.
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But we have come up to our daily target
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and that's where we peaked out back in the summer.
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So looking to see if we can break through
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the 4609.38 level and then looking at the Nasdaq 100, we're pretty well unchanged on
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the week, and we've come up just below resistance at 16,250.
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Similar situation for the Nasdaq composite at 14,375.
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Now, looking at a daily chart of the
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Russell 2000, we had a huge update on Friday which took us up over the
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resistance we've been following for the last couple of weeks.
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That's bullish for the market.
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It's telling us that the
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rally is starting to broaden out, so we'll look to see if that can continue.
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Our next target on both the daily and weekly chart is 1875.
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For the Russell 2000, we also saw the Nasdaq Next Generation stocks also break
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out on Friday and break out above the $25 level.
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We were up nearly 2% on the day.
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So that's bullish for the overall stock market.
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Looking at the TSX and we're looking at weekly charts here, you can see mid cap
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stocks were up back on a weekly buy signal, small cap stocks are back on a
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weekly buy signal, and the micro cap stocks in the Venture exchange were also
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up on the week, ending the week on a weekly buy signal.
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So that's bullish for the market that the rally is starting to broaden out.
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What might happen between now and year end
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is we might see some sector rotation in which money comes out of those big cap
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tech stocks and goes into the undervalued sectors of the market.
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We'll just have to wait and see if that happens.
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Certainly month end has come and gone, so that bullish bias is no longer with us.
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Wouldn't be surprised if we saw a pullback, especially in those big cap tech
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stocks over the next week or so before the year end rally gets going.
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Once again, enjoy the rest of your day, folks.
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Next time you'll hear my voice is on Tuesday morning.

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