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Canadian Stock Market Outlook 01302024

Good morning, everyone, and welcome to Tuesday morning. It’s Stephen Whiteside here from In the pre-market this morning, things are fairly quiet. Stock index futures are trading a little below fair value. Commodities are mixed with crude oil flat, while gold is slightly higher on Tuesday morning. Now, this is an extremely busy week for the market. We’ve got a Fed meeting starting today. We’ve got lots of earnings coming out, and we also have lots of economic numbers coming out. So it could certainly end up being a volatile week. Now, historically, we are coming into month end. Usually has a bullish bias to it, but that just might not be the case this week with all that’s going on. Now, moving on to the Canadian market. The TSX is trading up at the top of the panic zones right now, and this is a very high-risk time to be putting new money into the market. But we are on a short-term buy signal. We saw some weakness recently. Our chart, which is designed for swing traders, our right-side chart, currently on a buy signal. That would change on Tuesday with a close below 20,902. Now, in our database, we also have a midterm chart, which is more designed for position traders, and it certainly gives the market a little more room to breathe down towards 20,600.

We’ll be watching these charts closely over the next few weeks to see if we do get any new sell signals. But right now, the market is still pointing higher. We’ve got the TSX on a buy signal, the TSX-60, mid-caps, small caps, but unfortunately, micro-caps haven’t caught up yet. That could certainly happen on Tuesday. What worked, what didn’t work on Monday? Well, Infotex, just like in the US, led the market higher while energy stocks were down on the day. That’s crazy because if you were watching the news yesterday, there’s a lot happening in the Middle East and not all good. We did see a new high for this move for crude oil before reversing. Now, it reversed but didn’t close below the previous day’s low, so not as bad as it could have been. The first sign, something new, of course, is if we close below the previous day’s low on any chart. Looking for a move up to 81.25 this week, which would take us back up to what was support back in October. And then from there we would expect to move up to 87.50. That is not happening on Tuesday morning. Now, looking at the HOU, the Leveraged ETF, it had an inside day yesterday.

And then looking at energy stocks, the XEG also had an inside day on Monday, so no change in trend for those. Suncor closed down slightly yesterday. Canadian Natural Resources has been in the channel for the last three days, so certainly the possibility of a sell signal on Tuesday with a close below 84.93. Now, we’re not expecting a trend change for Whitecap or Bayex or Cenovus . They’re all holding up fairly well. And then moving on to technology stocks. This is where all the money made on Monday. A new high for the index, new high for the XIT ETF. Then we’ve got Celestica making a new closing high yesterday. We had Shopify up over 2%. Then we’ve got Bitfarm’s back on a buy signal there. A new high for Constellation software, new high for CGI. Then we’ve got Dye & Durham back on a buy signal as of Monday’s close. New high for Enghouse here. And We’ve got Lightspeed back on a buy signal as of Monday’s close. Then we’re looking at Open Text making a new closing high yesterday. What didn’t work, unfortunately, the most followed stock on the stock house billboards, Pyrogenesis, is on its second day of a sell signal, so no joy there.

Okay, folks, that’s all I wanted to cover this morning. The winners in the tech sector, unfortunately, the losers yesterday, and not by much less than 1%. That was the energy sector, and hopefully, things can turn around for that sector, which is still on a buy signal at the present time. Have a great day, folks. Next time you’ll hear my voice is on Wednesday morning.

[00:00:00]: Market Update

[00:01:16]: Canadian Market Analysis

[00:02:29]: Energy Stocks Overview

[00:03:48]: Tech Sector Winners and Losers

Stephen Whiteside

Tuesday, January 30, 2024

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