Morning Market Outlook 12052023

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Hello, everyone, and welcome to Tuesday morning.
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It's Stephen Whiteside here from
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TheUpTrend.com In the pre-market this morning, stock
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index futures are below fair value, being led lower by the Nasdaq.
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Now, we don't have any major economic
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numbers coming out this morning, so things should be fairly quiet at 9:30,
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even though we are going to see a little selling.
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Looking at the VIX, The VIX traded up to the upper channel line once again on
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Monday, looking for a close above 13.70. Now, the VIX for the Nasdaq
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traded above the upper channel line and closed right on the upper channel line, so
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close above 17.26 would give us a buy signal on Tuesday.
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You're seeing a little more weakness in
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the Nasdaq when just looking at the VIX itself.
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Now, the US dollar index has been up over the past couple of days, and that could be
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negative for stocks if this trend continues.
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So far, we've seen a little weakness in a
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couple of areas and a lot of sector rotation.
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Remember, we were talking about the fact
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that money is starting to come back into those mid-cap, small-cap stocks, and we
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certainly saw that on Friday and on Monday.
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Looking at the DOW, it had an inside day on Monday being led higher by 3M.
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3m led the market higher, I think, two days last week.
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A lot of interest in 3M over the past month.
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Then looking at the S&P 500, down a little
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over half a %, still trading and closing above the upper channel line.
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We dipped into the channel yesterday
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looking for a close below 452.19 on Tuesday.
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That could happen.
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The big winner on the S&P 500 on Monday was Bath and Bodyworks, up over 8%.
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One of the stocks that got kicked out of the S&P 500, Alaska Airlines announced a
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takeover and it was down over 14 % on the day.
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Then looking at the Nasdaq, we dipped below the lower channel line yesterday,
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held the channel line going into the close.
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Certainly, there's a strong likelihood we're going to get a sell signal in the
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Nasdaq on Tuesday with the close below 385.84.
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The big loser on the Nasdaq-100 was Sirius XM.
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It was down over 6% on the day.
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Then Microsoft joined some of the other magnificent eight stocks.
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It is back on a sell signal as of the day's close.
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Then looking at nVidIA, nVidIA bounced off the 450 level.
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Let's see if it can hold that on Tuesday.
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Then looking at the iShares for the TSX-60, we're down slightly on the day.
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Speaking of the Magnificent Eight stocks, Shopify still on a buy signal.
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That would change on Tuesday with a close
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below 95.85. The big winner on the TSX 60 was Cameco,
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while the big winner on the TSX Composite was Tillray, up over 7% on the day.
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Now, what didn't work on Monday, and it
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happened a lot in the pre-market, was gold.
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Gold had a huge reversal day yesterday,
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making a new high for this move, then closing below the previous day's low.
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That is very bearish, but it hasn't been felt throughout the market.
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We did run up and hit our next price target of 2125.
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Congratulations if you had an order and up there, it got filled yesterday.
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If you look at the GLD, you won't see as
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much volatility because the GLD, of course, doesn't start trading until 9:30.
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We did trade lower yesterday, looking for
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a close on Tuesday below 186.18. Then if you look at the gold stocks and
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the silver stocks, they didn't get hit too hard yesterday.
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We're still above the upper channel line for the GDX and the XGD.
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You can see the huge swing in the price of silver, just like gold.
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We certainly closed below the previous days low.
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A close below 24.54 would give us a sell signal on Tuesday.
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Looking at the silver ETF, again, not as
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much volatility to the upside, but we certainly closed sharply lower.
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Looking for a close on Tuesday below
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22.25, silver stocks actually ended the day with an inside day.
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So gold and silver stock investors are
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holding up much better than the precious metals themselves.
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Now, we've talked about sector rotation and the fact that the rally was broadening
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out into mid-cap, small-cap, micro-cap stocks.
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And that continued on Monday with the iShares for the Russell 2000 moving up and
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the iShares for the Micro-cap sector moving up.
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Now, we do not have a lot of stocks from the Russell 2000.
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We have probably no stocks from the Russell's micro-cap index in our database.
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There are a handful of stocks from the
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Russell 2000 such as Carvana and Beyond Meat.
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Both saw money go in last week and certainly yesterday as well.
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So money is moving into the really the weakest part of the market for 2023, and I
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believe it's coming out of those big cap tech stocks.
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So keep an eye on those.
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I would prefer to just play the ETFs because there's a lot less risk on the
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downside with mid-cap, small-cap, micro-cap stocks.
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Certainly, most of them don't make any
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money and can get toppled with just a simple press release.
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I'd rather play the ETFs in those sectors
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than the stocks themselves, but that's just me.
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Now, the money that came out of gold and silver on Monday, where did it go?
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Well, it might have gone into Bitcoin and Ethereum, both gapping higher on Monday.
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Okay, folks, that's all for this morning's presentation.
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We're watching the VIX.
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It could be a buy signal on Tuesday.
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We're watching the US dollar index.
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If both of those move higher, we could see the stock market continue to move lower.
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Is that surprising?
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Well, not for the first week of December.
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We've had a great run in November looking
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to work off some of that overbought condition.
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Some money managers are looking to move
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money around to make themselves look better.
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If they put money in Carvana and Beyond Meat, well, they certainly look better
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this morning than they did a couple of weeks ago.
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We'll just have to wait and see how that works out.
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Enjoy the rest of your day.
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Next time you'll hear my voice is on Wednesday morning.

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