Canadian Stock Market Timing - 06022023

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Good morning everyone and welcome to Friday 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 above fair value.

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So so far it looks like we're going to see some buying at the open.

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We do have us. Employment numbers coming out at 8:30 and

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that could add to the pre market volatility.

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Well debt ceiling seems to be fading away as a major issue for the market.

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It and yesterday we saw the VIX come down hard.

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I think new closing low for the VIX

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yesterday, that's supportive for higher stock prices.

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Chips came back and moved up leading the market higher on Thursday.

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Of course you've got the queues making a new closing high.

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You've got the S&P 500 making a new

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closing high and we closed right at the 421 88 level, closed at 421 82.

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Now if we can keep going from here then

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429 69 would be our next target to the upside for the spy.

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Looking at the overall market you can see the spy made a new closing high yesterday.

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If we look at the S&P 500 based on equal

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weighting, remember this is market cap weighting.

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So Apple and Tesla have a huge responsibility for yesterday's high.

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When you give every stock in the S&P 500 equal weighting, it looks more like this.

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And yesterday was an interesting day for the overall us.

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Stock market. We had 74 new 52 week highs.

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At the same time you had more than double the number of 52 week lows.

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And if we're looking year to date a

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similar statistical anomaly, we had 121 new year to date highs.

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At the same time we had over 300 new year to date lows.

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So you can see what the overall market is

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doing compared to what is happening on the headlines.

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Now.

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While most of the market's attention is focused on what's moving up, we should

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probably take a look at what's moving down and US.

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Retail is not doing well at the moment.

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Yesterday's big disaster was

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Dollar General which was down nearly 20% on the day.

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It was already on a sell signal coming into yesterday's trading action.

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So it's joining Big Lots, Dollar Tree and

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Target all getting crushed over the past couple of months.

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So that's not a good sign for the overall economy.

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If the stocks that probably should be able to make it through a recession.

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The discount retailers are having a hell of a time at the moment.

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Now moving on to the Canadian market, if we look at the seasonality chart you can

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see that we should be peaking right around now.

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And so to see the market moving up the

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first day of the month, second day of the month, remember we get that automatic

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money that comes in and traders usually like to trade with that, not against it.

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So here we are, we should be peaking now

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and then the month of June is historically not a good month.

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Now there's an argument to be made to say that the TSX has already gone through that

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decline, so maybe the seasonality is off a bit this year.

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But the TSX made a new low on Wednesday, made a slightly higher low on Thursday.

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We see the TSX 60 moved up yesterday, filled the gap.

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Then we saw more money go into mid cap,

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small cap and micro cap stocks on Thursday.

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And that could be a good sign going forward if we look at what worked and what

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didn't work yesterday, well, it was materials and energy were the big winners,

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while infotech and utilities were the big losers yesterday.

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Now when we look at materials, that really

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means anything that's mined out of the ground.

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And so the materials index was up yesterday.

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We saw base metals up, we saw the Global Mining index up, we saw gold stocks up

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nicely right into the channel, trading right up to the upper channel line.

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So there could be buy signals in any of these sectors on Friday.

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If we look at major gold stocks,

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Agnico Eagle traded into the channel, we've got Barrick trading up to the lower

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channel line, then we've got Kinross trading into the channel, we've got

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Wheaton trading right up to the upper channel line yesterday.

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So there could be buy signals in any of those stocks on Friday.

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And then looking at Teck Resources,

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Teck traded right up to the upper channel line and closed just below it.

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So we're looking for a slightly higher

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close on Friday to give us a buy signal for Teck .

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Now, energy stocks moved up yesterday,

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they are not on a buy signal at the moment.

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We saw crude oil move up nicely yesterday, it's up again in the pre market now.

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Unfortunately, natural gas is continuing

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to move lower and it's lower again in the pre market on Friday morning.

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So we've got Cenovus trading up into the channel, we've got Imperial Oil trading up

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into the channel, and we've got Suncor trading up into the channel.

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So any of those stocks could generate a buy signal on Friday.

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Now, looking at the financial sector, when

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we look at the panic zone charts, you can see that the overall financials have not

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broken down below the previous low, unlike bank stocks.

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So bank stocks still looking fairly weak

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right now, would certainly consider buying any of them if they started to move up.

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Now in the financial sector.

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The TSX itself is doing very well at the moment.

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It's had a very nice year so far.

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Some of the regional banks have come back over the past few days.

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We've got Canadian Western and Laurentian coming back nicely.

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Laurentian had a huge big update

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yesterday, so I guess they surprised Laurentian investors on Thursday.

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Then we've got insurance companies, so we've got SunLife, we've got Great West,

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we've got Fairfax, we've got Industrial Alliance, all still on buy signals, unlike

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Manualife, which is still on a sell signal.

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Had an inside day on Thursday.

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Looking at the banks themselves.

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Bank of Montreal trying to hold the lows from back in March.

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Then the Bank of Nova Scotian and CIBC holding up fairly well.

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They're both on sell signals, but they haven't been hit too hard.

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Then looking at the National Bank, which has come down sharply over the past couple

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of days, and the Royal Bank, which broke down below the March lows a while ago.

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And then we're looking at the TD Bank.

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And the TD Bank is trying to hold the March lows at the moment.

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Last up technology stocks, and some of them aren't doing well.

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The overall technology sector, which is

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heavily weighted to shopify, is holding up okay.

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But Nuvei had an inside day yesterday after making a new low for this move on

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Wednesday, trying to hold the lows from early March.

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Then we're looking at Payfare, which had

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an inside day on Thursday after making a new low on Wednesday.

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And then Telus International made a new low on Thursday.

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Now looking at a couple of the winners.

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Celestica.

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There was a time when Celestica was the Shopify of the Canadian stock market, and

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it was a stock we used to talk about every day.

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Boy, times have changed.

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Celestica, if you had a bought it just

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above $15, you've had several opportunities to take money off the table.

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We ran up to the highs from back in February and started to fade.

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So once we got up to the $18 level, we started to pull back.

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Been down the last four days in a row.

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Looking at Open Text after the big pop, I wouldn't have chased it.

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It's still on a buy signal here.

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No change in trend.

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BlackBerry, which had a big month in the month of May, still on a buy signal.

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That would change on Friday with a close below 699.

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Then looking at Coveo, it apparently is an

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AI stock now, and so it's had a nice run over the past couple of days.

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And then looking at shopify.

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Shopify popped at the start of May.

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Not something I would have chased.

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It's been on a sell signal for over a week now.

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So no change in trend there.

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

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US employment numbers came out.

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They're very strong.

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And the stock market is continuing to trade higher this morning.

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I'm not sure why it's good for the stock

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market, because it's telling the Fed that they still haven't done their job yet.

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They still haven't slowed down the overall economy.

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And so that tells me they probably want to continue to raise interest rates.

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But on Friday morning, the stock market doesn't seem to care.

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Enjoy the rest of your day. Enjoy your weekend.

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Next time you'll hear my voice is on Sunday.

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