Stock Market Trends - Weekend Edition 08062023

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Hello, everyone.

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It's Stephen Whiteside here from theuptrend.

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com.

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Welcome to this weekend's edition of Stock Market Timing Television.

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Well, I hope you're having a wonderful weekend.

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It's really nice here and we're heading

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out for a barbecue a little later this afternoon.

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This time last week, we were looking at

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S&P 500 that had a wild day on Thursday and then recovered on Friday.

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That Thursday was a Bearish Reversal day

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and has marked the high for this particular move.

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We move forward a week and we do have lots

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of new daily sell signals to deal with, but not necessarily weekly sell signals.

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Now you can see the latest

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Bearish Reversal signal on the S&P 500 chart.

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The pros are giving up control but haven't given up control just yet.

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Looking at a weekly chart of the S&P 500, a big sign of weakness, of course, is the

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fact that we closed below the previous week's low.

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That is certainly a warning sign going forward.

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Looking at the Nasdaq 100, you can see we

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had a Bearish Reversal three weeks ago, and that high has held us in check.

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Looking at the Nasdaq composite itself, we ran up to 14,375 and stopped.

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And so far, that level is holding us in check.

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And that held us in check earlier in the year.

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Then looking at the Russell 2000, what do you know?

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We're stuck at 2,000 and have been that way for a couple of weeks.

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And 2,000, of course, held us in check earlier in the year.

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And then looking at the TSX, well,

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unfortunately, we had a big pull back this week back into the channel.

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We were trying to break out above the

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level that has held us in check for a year now, up at 20,625.

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Unfortunately, that is still holding us in check.

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Another sign of possible continued weakness here is the fact we put

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in a high, a lower high, and now we've put in a lower high.

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So a series of lower highs, not usually a good sign going forward.

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Now, oddly enough, it was not the big cap stocks in the TSX that have led us higher.

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If you look at the composite, then you look at the 60 biggest companies and then

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look at the remainder of the TSX composite or what are called the midcaps.

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They've outperformed the big cap TSX 60 stocks over the past couple of weeks.

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Then looking at small cap stocks, they're stuck at resistance

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at 718.75. Then looking at microcap stocks in the venture exchange, we're trying to

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break out above 625, closed at 615.72, so still no joy.

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Now, if this was truly a bull market, and we know it isn't because most of the gains

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in 2023 have been from a handful of bigcap technology stocks, the venture exchange is

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basically where it was at the start of the year.

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So investors have not been compelled to put money into early stage startups such

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as those listed on the venture exchange, and that's not a good sign.

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Everybody has a lot more fun in the stock

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market when small and microcap stocks can do well.

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And so so far in 2023, that has not been the case.

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Now, we've gone over this chart a few

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times over the past couple of weeks, and we've talked about the percentage of

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stocks currently trading above their 20 day moving average.

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We looked at the TSX, the Nasdaq, and the S&N P 500.

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And so here we are.

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We were up at the top of the range and we were looking for a pullback.

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Of course, when you're up above 80 %, we consider that a high risk zone.

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When you're down below 20 %, that's a low risk zone.

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This is when we look to sell, this is when

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we look to buy and now we're looking to see how far down we can come.

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Of course, as you come down to the low risk area, there's no guarantee the market

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is going to instantly reverse and move higher.

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Just because we're down here doesn't mean we can't continue to go lower.

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We're also always going to look for a reversal in price momentum before we start

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getting too excited about becoming new buyers down in the low risk zone.

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Now, the biggest mistakes that a lot of

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investors make is they wait until they get enough psychological support.

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So anytime that the market is up at these levels where the percentage of stocks

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currently trading above their 20 day moving average is above 80 %, you're

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mostly going to find positive news and the market reacting positively.

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Remember, this last run up that we had, the DOW was up day after day after day.

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In fact, it broke all its previous track records.

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We had to go back to 1987.

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So there was a lot of cheerleading, a lot

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of positive support from the media up at these levels.

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So this is the time and place where a lot of investors are willing to throw money

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into the market because they have that psychological support.

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Now, the opposite is also true.

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While we want to short stocks up at these

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levels, the average investor is going to be looking for negative psychological

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support before they pull the trigger and short stocks.

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And so they're going to wait.

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They don't know they're waiting, but this

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is the time and place where you get the most negative information about the market

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is when we're down below 20 % of the stocks on the S&P 500, the TSX, or the

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Nasdaq trading below their 20 day moving average.

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So this is the time and place where you're going to get the most negative news.

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And for somebody who's not that confident, doesn't understand how the stock market

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works, this is the time and place they're going to decide to either sell or short

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stocks or buy puts down at the bottom of the range.

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And that's the exact opposite of what you really want to do.

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We want to be looking for buying

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opportunities off the bottom and selling opportunities off the top.

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Now, talking about selling opportunities, NVIDIA is still holding up fairly well.

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

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Now, this is just a short term right side sell signal.

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So this is for short term traders.

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The midterm chart is still on a buy signal, so that has not changed just yet.

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Of course, we're still on a weekly buy

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signal, still closing above the upper channel line, so not with that concerned.

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We need a close below 395.02 this coming Friday.

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Not expecting that to happen.

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And we'll be watching every stock to see

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how they react to the Fly Paper Channel on the way down.

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Does the market trade down to the Fly Paper Channel and do previous

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investors come back and buy the dip, or are they going to start walking away?

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If they start walking away, you can tell

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that by the fact that the stock will be trading through the Fly Paper Channel.

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In this situation, looking at NVIDIA, you

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can see the top of the open gap basically lines up with the Fly Paper Channel.

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So that would certainly be a reasonable target to the downside and an expected

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area where you'd expect the stock to find support.

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Now, if things are going to get worse,

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then we're going to break down below the Fly Paper Channel and the market may take

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a run for the bottom of the open gap, which is just about $300.

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So if we're going to go from up at the 450 area down to 300, that's a 33 % loss

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and that's going to have a major effect on the overall stock market.

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Now, Apple had a very bad day on Friday,

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not something that you usually see from Apple.

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And for the last couple of months, most of the bars have been fairly small.

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We've got a couple where we had wide range

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bars, but for the most part, they were pretty small.

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But Friday, not only did we move lower,

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but we gapped lower and closed near the low of the day.

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That's not a good sign.

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187.50 was our first target, and then 181.25 was our next target.

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So far, we're holding 181.25. If that

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breaks, 175 is our next target, then there's a nice open gap just above that

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that could act as a target on the way back down.

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We are up at the top of the Fly Paper channel right now.

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The bottom of it is about 176.

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So it's certainly possible that we could hold the Fly Paper channel.

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If we don't, then that's going to

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certainly send a message to the overall stock market.

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Now, Amazon popped on Friday.

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If we look at our price target chart from

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Thursday, we were looking at 137.50 and 143.75. Got up to 143.63 on Friday.

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So not enough to hit our exact target.

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But I ask you to consider putting orders in just below that target.

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Now, if you're using your Right Side Chart, you weren't

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participating in that big move on Friday but certainly people using the midterm

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chart or a longer term analysis certainly are.

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And hopefully some of you got to lock in some profits.

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What would I do about Amazon coming in on Monday?

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Not a thing.

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I would not be chasing Amazon up at these levels.

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Then looking at Shopify, Shopify was down over 11 % on the week.

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It is back on a weekly sell signal as of Friday's close.

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We came into Friday already on a daily

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sell signal, trying to hold support in the Fly Paper channel.

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You can see we're trying to hold support port at the 100 day moving average.

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I am looking at Shopify on the TSX.

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You can see we're still projecting down to

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the 200 day moving average, which is down right around $70 at the moment.

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Our next mathematical target is going to be 75.

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Is there any history at 75?

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Yes, we bounced off it in late May.

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If that does not hold, then you've got the top and the bottom of the open gap here

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that could potentially act as price targets.

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You've also got 68.75 in the middle.

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So the market may want to come down and fill that open gap.

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We'll just have to wait and see.

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And of course, the first sign is a break of $75.

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Moving on to commodity prices.

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The price of crude oil continued to move higher, closing above the previous week's

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high for the second week in a row, 81.25 was our next target.

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We closed at 81.21 on Friday, certainly hit our target.

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And of course, if we continue to move

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higher from here, we will create a new price target going forward.

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Looking at natural gas, we were down 2.31 % on the week.

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Looking at the metals, copper had a pullback.

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We had a Bearish Reversal week in copper.

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The pros still have not taken control.

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Gold was down $23.80 on the week, so no change in trend for gold.

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Having trouble getting up and over and staying over $2,000 at the moment, if we

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take out the recent low, then $1875 is our next target.

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And we saw silver pull back 3.18 % still closing above the lower channel line.

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So we'll close this coming Friday below

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23.42 would give us a new weekly sell signal for silver.

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When we look at the price of silver,

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notice that we put in a lower high recently.

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So now we're going to have to see if we continue to make a lower low here.

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We put in a lower low.

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Now we're going to have to see what happens next.

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We put in a Bearish Reversal week three weeks ago.

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That high is still holding us in check and

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the pros are starting to give up control on the weekly charts.

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Looking at stocks, Canadian energy stocks

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were up 1.39 %, US energy stocks were up 1.25 %.

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Looking at the metals,

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US gold stocks were down 3.78 %, while Canadian gold stocks were down 2.88 %.

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Us gold stocks, Canadian gold stocks still

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holding the recent low from a couple of weeks ago.

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We'll have to see if that low holds going forward.

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Otherwise, our next target to the downside will be the low from spring of this year.

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Looking at bonds, bonds continue to move lower for the most part this week.

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Bond yields continue to move higher.

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Looking to see if the highs from late 2022 will hold us in check.

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Looking at the XBB, we actually closed down just slightly on the week, closing up

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the lower channel line after making an intra week low.

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There's the TL2 MT making a new low for this move.

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We saw a lot of movement in stocks that

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are heavily tied to interest rates such as utilities.

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Us utilities coming down 4.55 %.

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Canadian utilities coming down 4.27 %, making a new low for this move.

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Let's finish off looking at the VIX.

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Last week, we talked about the fact the VIX was in a fairly tight range.

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Top of the range was 1,7.08. We closed on Friday at

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17.10, so starting to break out above the range on the daily chart.

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We generated a buy signal on Wednesday,

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saw a small pull back on Thursday, and a nice big up move on Friday.

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We are starting to punch out above the

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daily Fly Paper Channel, and we are certainly back on a weekly buy signal.

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So we will remain long term bearish on the

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stock market as long as the VIX does not close below 13.75 this coming Friday.

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

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We are expecting the market to be weak during the month of August and September.

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And at some point, hopefully there'll be a

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low risk buying opportunity where we can ride the market higher into the year end.

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Enjoy the rest of your weekend.

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

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