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Canadian Stock Market Outlook 03052024

Good morning, everyone, and welcome to Tuesday morning. It’s Stephen Whiteside here from In the pre-market this morning, US Stock Index futures are trading below fair value. At the same time, commodities are trading higher, which could put a bid into the Canadian market on Tuesday. Starting off by looking at the US market and looking at the VIX, the VIX is still on a sell signal that’s supportive for higher stock prices. Things would change on Tuesday if the VIX were to close above 14.29. Then Semiconductors continued to move higher on Monday. We saw a new high for NVIDIA, hitting our next price target of 875 before pulling back. The DOW had a very quiet day. It had an inside day on Monday. Very quiet day for the S&P 500. The big winner on the S&P 500 was HPE, Hewlett-Packard Enterprise, and it was up over 10% on the day. What didn’t work yesterday was Tesla. Tesla rolled over. It is back on a sell signal as of Monday’s close. Still dealing with that open gap from January. Then looking at the Nasdaq 100, very quiet day. Apple continued to move lower yesterday. Our next price target was 175.

We closed at 175.10. If we take out yesterday’s low, we would assume that we would head down to 168.75. Now, the most actively traded US stock on Monday was the Regional Bank, New York Community Bank Corp, which was down another 23%. The market doesn’t seem to be as worried about this regional bank falling apart as it did last year, but we’ll just have to wait and see what happens. And of course, if this Regional bank implodes, we don’t know what other financial institutions it’s going to take down with it. Looking at the Canadian stock market, starting off looking at the iShares for the TSX-60, it was an inside day on Monday, so no change there. What worked on Monday? Well, it was materials, and of course, that includes the gold stocks. Our real estate industrials and financials were the winners. What didn’t work? Well, it was the rest of the market, and we’ll take a look at the energy sector in a second. Taking a look at gold stocks, We saw the TSX Global Gold Index lead the North American markets higher on Monday, up over 4% on the day. The price of gold continued to move higher on Monday, so did the price of silver.

Looking at the most actively traded gold stocks, it was a Kinross was the number one, then followed by B2Gold, then Barrick, then a Agnico Eagle. Now, gold stocks may get some US attention this time. Newmont, which is in the S&P 500, it’s the only gold stock in the S&P 500 was actually the second best performer on the S&P 500 on Monday. Looking at the energy sector, we saw the iShares for the TSX Energy sector pulled back. Yesterday had an inside day, did not close below the previous day’s low. We had a similar situation for the price of crude oil. We saw natural gas up over 4% on the day. Natural gas is on a buy signal right now. Then looking at the stock house bullboards, the stock that people are watching the most is Bayex, which is on its third day of a sell signal. Then we had Whitecap make a new high for this move. We had an outside reversal day for Suncor. It shows up as a bearish reversal day here, and you can see where we’ve had bearish reversal days before. Bearish reversal signal is a one-day event. We’re looking to see if we get follow through to the downside on Tuesday.

Then looking at Athabasca, a new closing high for that stock, and We’re up at our next price target of 5.08. And then looking at Tamarack, a new high there. Hit our next price target of 3.52. So congratulations. Then Kelt was the best-performing energy stock on the TSX on Monday, up at 2.14% for the day. Let’s finish off looking at financials and looking at the iShares for the financial sector. Still on a buy signal here. Then looking at the BMO Bank ETF, a new high for this move on Monday. Bank of Nova Scotia, which for a lot of 2023 was the dog of the banking sector, made a new high for this move. We also saw a new high for CIBC. Fairfax, which had a huge A huge pullback a couple of weeks ago when some short sellers took a run at it, has completely recovered and on Monday made a new high for this move. Then the TSX also made a new high. It’s one of my favorite Canadian financial stocks. On the other hand, TD Bank rolled over. It is back on a sell signal as of Monday’s close. Okay, folks, that is all for this morning’s presentation.

It looks like we’re going to have a mixed open. The Nasdaq is leading the US indices lower. At the same time we have gold and crude oil trading higher on Tuesday morning, and that could help the Canadian market. Have a great day, folks. Next time you’ll hear my voice is on Wednesday morning, and at that time, we’ll take a closer look at the US stock market.

Stephen Whiteside
Tuesday, March 5, 2024

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