Stock Market Timing - 08032023

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Good Morning, everyone, and welcome to Thursday morning.

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Well, US employment numbers just came out

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and stock index futures really haven't moved very much.

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Stock index futures are currently below fair value.

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We're not seeing any aggressive selling in the premarket.

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Commodities are mixed with the energies

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higher while the metals are lower at this particular time on Thursday morning.

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Well, yesterday we certainly saw the

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market jiggle quite a bit and bonds sold off sharply.

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Bond yields especially on the long end of the yield curve moved up sharply.

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Looking at the 30 year bonds, making a higher high here.

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Of course, US 30 year mortgages are attached to this particular chart nd so

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that's probably not a good sign for the real estate sector going forward.

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Now, currencies continued their current

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trend and the US dollar index continued higher.

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The euro continued lower and other currencies.

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Not the US dollar moved down yesterday, including the Canadian dollar.

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Looking at the major stock market indices, they rolled over yesterday.

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The S&P 500, the Nasdaq 100, and then the ishares for the TSX 60 dropped yesterday.

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What you're going to see on a lot of charts is lower highs.

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That's not a bullish sign.

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We ran up, we tried to test the high from a couple of months ago, couldn't break

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through it, and now the market has reversed.

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We were waiting for the end of the summer rally.

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The market has been overbought.

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We had a full moon on Monday.

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There's just a whole bunch of reasons why we pulled back yesterday.

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The actual reason doesn't really matter.

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It's how the market reacts to that particular situation.

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In most cases, the situation is never going to repeat itself.

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You don't need to get too hung up on

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exactly why the market decided to roll over yesterday.

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My concern right now is that the fear

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index, while it popped, it didn't pop through the top of the fly paper channel.

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Yes, that is bearish, but it would be more

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convincing if the VIX were to pop up about and start trading above 17.

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Now, we have some important numbers coming out after hours.

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The market is going to be watching Apple and Amazon's earnings tonight after hours.

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And it doesn't really matter what the earnings are.

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It's, of course, how the market reacts to

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those earnings that we really need to be concerned about.

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So we are coming into Thursday's trading

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action with Apple and Amazon both back on sell signals.

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Now, the biggest weakness in the Canadian

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market yesterday was InfoTech, and that was led lower by Shopify.

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In both cases, we put in lower highs last

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week and rolled over, and now we're taking out last week's lows.

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That is a bearish sign going forward, so we'll just have to keep an eye on that.

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Semiconductors also put in a lower high and are back on a sell signal.

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In fact, they're starting to trade below

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last week's lows, so that is no longer a potential area of support.

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Advanced Micro Devices had a wild day on

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Wednesday, trading above the previous day's high, then coming right back down

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and ending the day on a sell signal, still holding the lows from June.

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That is a positive note so far.

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Then looking at Intel, looks like we're putting in a double top.

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A close below 34.29 on Thursday would give us a sell signal for Intel,

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which would join NVIDIA, which put in a lower high last week.

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And now we're back on a sell signal as of Wednesday's close.

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Looking at commodity prices, the metals moved down yesterday.

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They're moving down in the market this morning.

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I've always got questions about gaps.

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Gaps are important.

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They're potholes in the market.

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There are areas of the market where the market didn't function.

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The market only functions if there are buyers and sellers that agree on price.

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If they don't agree on price, you get gaps.

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And if you get gaps, the market remembers those.

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So the only time you need to worry about a gap is when the gap is in front of you.

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And so when SIL was moving up, you could

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see it traded up, filled the gap, and then pulled back.

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And so here we are. We're moving down.

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The first gap has been filled and now we're continuing into the second gap

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and you can see the bottom of the second gap is down there.

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That is another potential target and a potential area of support.

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So the market will be watching that closely on the way back down.

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Now, gold stocks were down across the board.

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XGD, GDX both down sharply yesterday

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and silver miners were also down on Wednesday, making a new low for this move,

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but still looking to see what happens at the lows from early July.

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Now, energy pulled back yesterday.

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We saw a pullback in crude oil still trading or closing above the upper channel

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line while gas traded down to the lower channel line.

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We're looking for a close on Thursday

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below $70.01. Then natural gas was down again yesterday.

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We're trying to get it to hold 6.64. We closed at 6.67. If that breaks, then

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6.25 should be our next target to the downside.

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Then looking at energy stocks on the TSX,

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they still closed above the upper channel line as they did in the US.

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In the US, though, the XLE ran up to resistance at 67.50, so congratulations.

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If you had an order in it up there, it got filled.

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Now we're starting to pull back.

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The US energy sector could be putting in a double top here.

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We'll just have to wait and see. We're almost done.

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Just a couple more charts.

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Finance financials in the US traded down yesterday.

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They did not generate a sell signal.

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We're looking for a close below 35.01. We closed at 3503.

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We're sitting right on the edge of a new sell signal for the XLF.

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If we look at US bank stocks and US regional banks, they're both still on buy

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signals, no change, trading in the channel.

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Unlike Canadian banks, the financials on

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the TSX rolled over yesterday as did the bank stocks.

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We've been watching the TD Bank, which

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appeared to be the strongest bank going into the recent rally.

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It is still holding up as is the national bank.

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The weakest bank stock that we looked at recently was the Bank of Nova Scotia, and

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it is still the weakest Canadian bank at this time.

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

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So far, it looks like we're going to see a little selling at the open.

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I think the market should be fairly quiet today as a lot of participants are going

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to be watching to see what happens with Apple and Amazon after hours on Thursday.

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Enjoy the rest of your day.

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