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Morning Market Outlook 12192023

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

Good morning, everyone, and welcome to Tuesday morning. It’s Stephen Whiteside here from In the pre market this morning, stock index futures are trading above fair value. So so far, it looks like investors want to do a little buying at the open on Tuesday morning. Looking at the CNN fear and greed index, we have made it up into extreme greed.

We haven’t made it up all the way to the top. Nobody says we have to actually do that, but this is a good indication that this is not the time to be putting new money into the stock market. Now, we normally look to New York and Toronto for guidance on what’s going to happen next in the markets. But what’s been going on over the last seven weeks has a lot more to do with the people in Chicago than it does with the people in New York or Toronto. Looking at the VIX, the VIX is still on a daily sell signal.

That would change on Tuesday if we were to close above 12.96. And then looking at the bond market, we’ve got ten year yields. We are seeing panic selling at the moment. It’s currently ranked as zero. We’ve come down to the 391 level that’s currently acting as support.

And you can see that on the right side chart. We had an inside day yesterday, an inside day the day before. And so we’re looking to see if bond yields start to move back up. That would, of course, be on the back of falling bond prices. We’re currently seeing panic buying in the bond market.

The ten year note has run up to 112.50 and stopped over the last couple of days. It could continue its climb. And if it could continue to move higher, that would be supportive for higher stock prices. If we start to pull back and get a sell signal here, that, of course would be negative for the stock market. And of course, as a consumer, you can watch that in the TLT or in the XBB traded in Toronto.

If we see sell signals in either of those, that of course would be very negative for the stock market. Now, speaking of the stock market, the ishares for the TSX 60 had an inside day on Monday. The big winner on the TSX was one of the big losers from last week, and that was Dollarama. That was the big gainer. Then looking at the Dow, new high for the Dow.

And the big winner on the Dow was also one of the big losers from last week, and that was Procter and Gamble. Still, both Dollarama and Procter and Gamble are on daily sell signals. That has not changed. There’s the S&P 500 moving up yesterday, the big winner on the S&P 500 was Etsy. Still on a buy signal, no change in trend.

Then looking at the Nasdaq, the Nasdaq made a new high yesterday. What didn’t make a new high? Well, the Equal Weighted ETF actually had an inside day of an inside day. That’s also true of the Next Gen Nasdaq stocks. That ETF also had an inside day of an inside day.

Now, it was the world’s greatest amusement park that led the Nasdaq higher on Monday. And that, of course, was Costco. A couple of those next generation stocks people were asking me about yesterday, both Coinbase moving up yesterday, still on a buy signal. No change in trend. And no change in trend for Square.

Both still on buy signals. Let’s finish off today’s presentation. Looking at commodity etfs, and we’ve got the USo back on a buy signal as of Monday’s close. Joining gasoline already on a buy signal. And then we had natural gas trade up to the channel.

So a close above $5.06 on Tuesday would give us a buy signal for natural gas. Inside day yesterday for the GLD. No change in trend there. Then we’ve got palladium continuing to move higher, making a new high for this move. Platinum moved up slightly on Monday.

And then looking at the SLV we pulled back yesterday, still on a buy signal. That would change on Tuesday with a close below $21.50. Okay, folks, that is all for this morning’s presentation. We’ve talked about selling over the past week and locking in some profits. There’s no reason to completely liquidate any position until you get a sell signal, but it’s prudent that you do lock in some profits.

Stocks usually fall faster than they rise, and I wouldn’t be surprised if we saw some aggressive selling in the month of January. Enjoy the rest of your day, folks. Next time you’ll hear my voice is on Wednesday morning.

0:00 – Pre-Market Analysis
0:16 – CNN Fear & Greed Index Explained
0:32 – Understanding VIX Volatility
1:00 – Bond Market Panic Selling Impact
2:00 – TSX Index Overview
2:13 – Dow Jones Industrial Average Insights
2:29 – S&P 500 Index Fluctuations
2:41 – Nasdaq Composite Index Trends
3:19 – Investing in Commodity ETFs

Stephen Whiteside
Tuesday, December 19, 2023

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