Skip to content

Canadian Stock Market Timing – 04252023

Good Morning, everyone, and welcome to Tuesday morning. My name, of course, is Stephen Whiteside from with today’s look at Canadian Stock Market Trends. In the premarket this morning, stock index futures and commodities are trading lower, so we are looking for some selling at the open on Tuesday morning. Let’s start off with a quick look at the US market. The VIX traded up into the channel yesterday before coming down, closing near the low of the day. We’re looking for a close on Tuesday above $18.41 to give us a new buy signal for the VIX. And of course, if fear starts to rise, we expect stocks to fall. We saw the DAO trade into the channel yesterday. We saw the S&P 500 trade into the channel. The Nasdaq closing in the channel, dipping below the lower channel line for the second trading day in a row. So for the Nasdaq 100 ETF, we’re looking for a close below 314.88 on Tuesday to give us a sell signal. And that would sync up with the semiconductors already on a sell signal, making a new low for this move on Monday. Now, we’re continuing to follow Tesla closely and it broke down below 160 yesterday but recovered going into the close, still trading lower on the day.

So 160 is no longer a potential area of support. Our next mathematical target is 150, but we also talked about looking back to the left, seeing that nice big open gap in which the top and the bottom may act as price magnets going forward. Now, the best performing stock on the S&P 500 yesterday was a regional bank, which I wouldn’t touch with a 10 foot pole. It closed up at over 12 % yesterday. It is down over 20 % in the premarket this morning. So what the market giveth, they taketh away. Now, moving on to the main topic this morning, and that, of course, is the Canadian stock market. I always get comments about why I don’t talk about what’s going on in the premarket in the Canadian stock market. Well, it’s not actively traded. And if you listen to the local news station, the 24 hours News station, when they do their business report, they absolutely never mention what’s going on in the pre market in the Canadian stock market. Now, there are a couple of ways to get an indication. Of course, an indication does not guarantee exactly what’s going to happen. But if we look at the TSX 60, there are futures contracts for the TSX and the TSX 60.

The TSX 60 is much more actively traded. This number is a little old since I took this picture, but this morning at 6:33 AM, the TSX 60 futures contract was trading down $4.40. Now, yesterday it was down $1.95. Down 4.40 gives us an indication that we’re going to open lower. Another way to get a reliable number is to go to New York and look at the iShares Canada ETF. Yesterday, this particular ETF closed up a penny. This morning it is down $0.21. So that’s giving us an indication that something is going on. You can see that we need to close below $35.02. Right now, we are trading at $35.02. When I took this snapshot, of course, this is an old number. It’s an old number for me. It’s going to be an older number for you by the time you see this video. So we are trading lower this morning, both in the futures contract and in the ETF. So that gives us a good indication that we’re going to expect to see some selling at the open this morning. Now, moving from the TSX 60 to the TSX itself, which is a broader index with over 200 stocks compared to the 60.

You can see it was a very small bar yesterday. So we did make a new high for this move before pulling back and closing slightly lower on the day. We are up at our price target up here. We’re just treading along. Of course, we’ve got the highs from back in January and February that could be potential targets to the upside. And you can see that that is basically a wall of resistance. So we’re having trouble moving higher up here. That doesn’t guarantee that we’re going to pull back. It’s just right now we are stuck trying to break through resistance. That’s also true for the TSX 60. You can see that the midcap stocks have started to pull back from that resistance. And then the small caps and microcaps have already left the building and have been selling off. So the riskier end of the market is tightening up and we are in a downtrend for both small caps and microcap stocks. Now looking at the cannabis sector, we actually made a new low for this move. I know that’s not news, but it’s interesting that when you look at the health care index, you’ve got a nice big pop a couple of days ago and that’s still holding up.

And that’s from one stock and that’s Bellus Health, which I guess is being taken over and nobody was suspecting that was going to happen. So congratulations for those parties keeping everything very secret. Now, moving on to the Canadian financials. They’ve had a nice recovery over the last month. Of course, they were pulled down by the US regional bank crisis. We’ve moved up. We’re trying to get to 367.19, but there’s an open gap that’s holding us in check at the moment. We are seeing a little weakness in Canadian banks. They’re starting to trade back into the channel. We do have a couple back on sell signals as of Monday’s close. So the Bank of Nova Scotia and CIBC are both back on sell signals. And of course, if you wanted to short these stocks, this is the time and place to do so. Of course, the world is focused on shorting TD Bank, which is still on a buy signal, still trading above the upper channel line. National Bank made a new high yesterday. Royal Bank made a new high on Monday. So they’re not all going in the same direction. Now, it’s been the insurance companies really holding the financials up in made a new high yesterday.

New high for manual life on Monday. And then looking at Sun Life, Sun Life has been stuck at resistance here for the last three days. Our price target is 65.63. We got as high as 65.58 yesterday. When we talk about price targets, either to the upside or to the downside, we’re also talking about buyers and sellers. We’re expecting to see some selling up here at the 65.63 level. That has certainly turned out to be the case over the last three years. Of course, if sellers outweigh buyers, then of course you get a lower close. If they don’t, we closed higher yesterday. If we can break through 65.63, then 67. 19 would be our next target to the upside. Now, gold has been on a sell signal for just a couple of days now. We have not been able to hold at 2,000. We closed at 1999.80 yesterday. We’re trading below 2,000 this morning. I assumed that traders would try to hold the magical $2,000 level, but so far they have not been able to do so. Looking at the Panic Zone chart for the price of gold, you want to be a buyer off the bottom of the Panic Zones when a pressure zone forms.

And of course, up here it gets a lot harder to make money even if we get a new buy signal. It’s a lot harder to make money, a lot more risk up here than there was down here. Down here, we’re getting rid of a lot of the sellers, a lot of people that want to be out of the gold market. They have left the building and now buyers outweigh sellers and we start to move up. Here it gets a bit more questionable. You get a lot more people wanting to take profits and that can start a new downtrend for any symbol that you’re following. Now, gold stocks, they have been trending water up here. We’ve been on a sell signal for four days now. Kinross was the best performing gold stock on the TSX yesterday up a little over 1 %. Still on a sell signal here from Friday. We are looking for a close on Tuesday above 6.93. And then Barrick is still on a buy signal that would change on Tuesday with a close below $25.76. Next up, we’re looking at energy stocks which have been on a sell signal for a couple of days now.

They traded higher yesterday. A close above 241.61 would give us a new buy signal. We still have Canadian Natural Resources on a buy signal that would change on Tuesday with a close below $80.17, which would join Suncor already on its sell signal for a week now. We’re not expecting Suncor to change direction on Tuesday. Looking at industrials making a new high yesterday that had a lot to do with the railroads, Canadian National, Canadian Pacific all doing very well at the moment. Compare that to Ballard Power and New Flyer, which are the big losers in the industrial section at the moment. Then let’s finish off with telecom stocks. They’ve been treading water up here for a couple of weeks now. We did see Bell and Telus both make new highs on Monday. At the same time, we’ve got Rogers back on a sell signal. Rogers has been extremely volatile over the last month. Okay, folks, that is all for this morning’s presentation. We’re still looking for a lower open on Tuesday morning. Obviously, nobody’s panicking on Tuesday morning. It’s just unwinding of things that happen on Monday, so no major downward pressure on Tuesday morning in the premarket.

Have a great day on Tuesday. Next time you’ll hear my voice is on Wednesday morning.
Stephen Whiteside

Print Friendly, PDF & Email