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Stock Market Timing 09292023

This video has been translated into Arabic, Chinese, French, German, Hindi, Japanese, Korean, and Spanish.

Good morning, everyone, and welcome to Friday morning. It’s Stephen Whiteside here from Well, this is the last trading day of the month, and what do you know? The futures are trading higher this morning. We’ve got stock index futures and commodities trading up in the premarket. We do have economic numbers coming out at 8:30 this morning that could certainly change the overall direction of the market. But of course, month end usually has a bullish bias to it, and that’s exactly what we’re seeing right now. Now, the stock markets traded higher on Thursday, and they got a little support from the US dollar index that had a small pullback on Thursday. We also saw a small pullback for bond yields after making a new high, and then we had a small pullback in crude oil. Crude oil was down $1.71 yesterday. It’s up a dollar last time I checked in the premarket. So not looking for a sell signal for crude oil on Friday. Now looking at the seasonality chart for the S&P 500, we are expecting buying into the middle of September and then selling going into the end of September. That’s pretty much what we saw.

Then we’re looking for some buying into the first week of October. That may have started yesterday, and then additional selling and possibly a lower low in October before the market starts to move up into the end of year seasonality trend that takes us higher into year end. Now, just a different version of this chart. This chart is up to date, whereas this one is from 1990 to 2009. The reason I want to show you this is that the last 13 years or so has really smoothed out this chart and has taken a lot of the emphasis off weakness in October. We used to fear October a lot more than we feared September, and now they’re basically equal. This chart doesn’t even include the crash of ’87, which happened in October. Previously, the market was a lot more concerned about October than it is today. Well, hopefully, that’ll be the case this year. The sell in May and go away crowd, of course, they’re going to sell on May first and come back on November first. Why are they coming back on November first? Well, seasonally, the period from November to the end of the year is very strong and we certainly want to participate in that when the market does turn around and that may have started yesterday.

We’ll just have to wait and see how much follow through to the upside we get. Now, the VIX made a new high on Wednesday, pulled back on Thursday, closed below the previous days low. So that’s bearish for the VIX and bullish for the stock market. We don’t have the VIX back on a sell signal just yet. We don’t have the VIX below the Fly Paper channel just yet. But this is the time and place where things like this could start. We’ll just have to wait and see. Now looking at the major US index ETF starting with the Dow, we did close above the previous day’s high for the Dow, but the S&P 500 and Nasdaq certainly did, as did the Russell 2000. There is some bullishness out there, not enough to start a new trend, but enough to get people’s attention on Thursday. Microcaps also traded up and closed above the previous day’s high. This could be the making of a bottom for the market? Only time will tell. Now, retail stocks were the big winners in the US on Thursday. Oddly enough, a couple of big retailers made 52-week lows yesterday. We’ll take a look at that in a minute.

Utilities were the big losers in the US. What didn’t work and what worked on the Dow? Well, the big winner on the Dow was Intel followed by Caterpillar. Caterpillar needs a close above 278.47 to give us a buy signal on Friday. You can see we held the August lows for Caterpillar, so that could be bullish going forward. Then looking at what didn’t work on the Dow, well, Boeing was the biggest loser followed by IBM. Then making 52-week lows yesterday, Advanced Auto Parts continues to drift lower day after day. Then we also saw a Dollar General and target make 52-week lows, even though retail was the big winner on Thursday. Then just a stock, you call it Chewy or call it Pets.Com. They both look pretty similar. And if you haven’t been in the market for a long time, pets. Com was one of those big stocks that blew up during the dot com bubble and crashed and burned and went away. And of course, Chewy could be continuing that tradition today. Now, Newmont also made a new 52-week low yesterday, as did some other gold stocks. Looking at the Canadian market, not as much enthusiasm as we saw in the US market.

The TSX had an inside day, little more strength for the TSX 60. Then mid caps, small caps, and micro caps were all up on the day, but not a major trend change for any of those areas of the market. Now, base metals was the big winner on Thursday, and the big loser was marijuana stocks. The gold stocks ended the day after making a new low, ended the day up a penny, looking at the iShare’s global gold ETF. Then energy stocks ended the day up three cents after making a new high. They’re still on a buy signal. Now, the big winner on Thursday was Teck, which is back on a buy signal followed by CCL Industries, which needs a close $57.41 on Friday to generate a buy signal. A new low for this move for TC Energy and then Algonquin Power had another bad day. It made a 52-week low on Thursday. B2Gold, when I mentioned, Newmont. Previously, Newmont in Canada also made a new low yesterday. B2gold made a 52-week low on Thursday. Now, the TD Bank appears to still be the strongest Canadian bank, while Bank of Nova Scotia continues to look like the weakest Canadian bank.

Right now it is holding its August lows, so that could be a good thing going forward. We’ll just have to wait and see. Shopify made a new low yesterday. It’s holding 6,875. If that breaks, our next mathematical target is 6,250, but you’ll see that the bottom of the open gap is just above that. That could also act as a price magnet if Shopify starts breaking down below 6,875. Let’s finish off with a quick look at the major telecom stocks. They all had inside days on Thursdays after making new lows on Wednesdays. So BCE, Rogers, and TELLUS all looking pretty similar at the moment. Okay, folks, that is all for this morning’s presentation. Enjoy the rest of your day. Enjoy your weekend. Next time you’ll hear my voice is on Monday morning.

Stephen Whiteside
Friday, September 29, 2023

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