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[00:00:00]: Introduction and Market Overview
[00:00:23]: TSX 60 and Energy Stocks on Buy Signal
[00:00:44]: Commodities Update and Potential Gold Buy Signal
[00:01:07]: Silver and Copper Market Analysis
[00:01:38]: Market Outlook and Inflation Numbers
[00:01:57]: Tech Stocks on Buy Signal with Some Pullbacks
[00:02:18]: Dollar Index and Bond Yields Impact on Stock Prices
[00:02:58]: Market Leadership and Sector Analysis
[00:03:26]: Stock Analysis through Fly Paper Channel
[00:04:11]: Analysis of Broken Stocks and Resistance Levels
[00:04:54]: Energy Stocks and Gold Stocks Analysis
[00:05:18]: Financial Institutions and Oil Stocks Analysis
[00:05:45]: Gold Stocks and BCE Analysis
[00:06:21]: Conclusion and Market Outlook
Good morning everyone and welcome to Wednesday Morning. It’s Stephen Whiteside here from TheUpTrend.com. In the pre market this morning, stock index futures are above fair value, commodities are mixed. Crude oil is down while gold is up. Now we do have PPI numbers coming out this morning and of course that could potentially add some volatility to the market before it opens. Fear is falling right now.
We’ve got the VIX back on sell signal that of course is supportive for higher stock prices. Yesterday was an interesting day. The Canadian market played catch up and we’ve got the Ishares for the TSX 60 back on a buy signal. We’ve got energy stocks and we’ve got gold stocks back on a buy signal. Now I’m not sure this rally can last very long.
A lot of it is an overreaction to what happened on Monday. And if we look at the commodities you’re going to see some inside days here. Inside day for crude oil, inside day for natural gas, not an inside day for gold. It was up another $11 yesterday. Looking for a close on Wednesday above $1878 to give us a buy signal for gold.
And there we have Silver having an inside day on Tuesday as well. And then looking at the price of copper, it actually closed lower yesterday. So no overall enthusiasm from the copper market after the move up on Monday. Now besides the price of copper moving lower, there’s a lot of other stuff going on that may dampen the enthusiasm of this market. I think we may see the market move up until about the 15th and then pull back.
That would all of course depend on how the market reacts to the inflation numbers that we get today and tomorrow. We do have the Nasdaq on a buy signal. We now have semiconductors back on a buy signal. All the major tech stocks that we follow closely are all back on buy signals. But we did see some pullbacks yesterday.
We saw a little pullback for Apple, we saw a little pullback for Microsoft. Netflix pulled back still on a sell signal here. No change for Netflix. And then three of the big cap tech stocks that are in the Dow 30 also pulled back yesterday. We saw Salesforce, Cisco and IBM all pull back on Tuesday.
Now if we want a stock market rally to last for any length of time, we need a couple of things to happen. And yesterday the US dollar index gave us a sell signal, that’s supportive for higher stock prices and we saw bond yields come down. So we have the 5 year back on a sell signal, still waiting for the 10 year and the 30 year to come down, but they are moving in that direction so those things are supportive for higher stock prices. Now once again it looks like the same old story is starting to play out and that’s not helpful for the overall stock market. In the US market, the market is being held up and led higher by technology stocks once again.
In the Canadian market it’s the energy sector and for a sustainable rally to happen we need that to start to change. So if we look at the market through the eyes of the Fly Paper Channel, there are some stocks in which investors are still willing to buy the dips. Tesla is one of them, Palantir is another one. Then Advanced Micro Devices has been stuck in neutral for quite a while and is still stuck to the Fly Paper Channel. So no change there.
Investors are giving up on Rivian, just broke through the Fly Paper Channel and so now what was previously support is going to act as resistance. Bank of America most financial institutions are trading under the Fly Paper Channel so we can get a rally up to the Fly Paper Channel. It would be quite OD to expect the market to be able to break out above that at the present time. Then looking at Apple, apple’s been a drag over the past month or so and recently put in a lower low and right now we’re dealing with an open gap there that is currently acting as resistance. And then Nio is a broken stock and we’d look for a move up to the Fly Paper Channel and fill that open gap.
Another broken stock is Ford and then looking at Amazon. Amazon stuck on the Fly Paper Channel. It ended yesterday on back on a buy signal but we’ve got the Fly Paper Channel. Then we’ve got an open gap just above it. So not looking for a lot from Amazon at the moment.
Lucid’s been broken for a long time so nothing going on there. The airline stocks broke down back in July and that’s it for them. We could certainly move up to the Fly Paper Channel again. We’ve got an open gap here that could potentially act as resistance. Then looking at nvidia another stock, investors are still willing to buy the dips and it is still holding up fairly well on the TSX.
Of course, it’s been all about energy stocks and a lot of them are still holding the Fly Paper Channel such as Canadian Natural Resources. Financial institutions on the other hand, not doing so well right now. Whether you’re looking at the TD Bank or bank of Montreal, TC Energy has been in the doghouse for quite a while, so no change for that stock. Looking at Suncor. Still holding the Fly Paper Channel.
Here again, another financial institution, the Royal Bank. Yes, it can move up from here, but it’s going to face a lot of resistance into the Fly Paper Channel. Then we’ve got Enbridge. Enbridge has been a dog for a while now, continues to make lower highs and lower lows. Looking at Baytex investors still willing to buy the dip on this stock and then looking at athabasca Oil Sands and athabasca still doing very well.
Still well above the Fly Paper Channel, so investors love that stock. Investors still love Cenovus. No change there. B2gold. A lot of these gold stocks look the same.
Yes, gold stocks could rise here, but once again, they’re going to run into the Fly Paper Channel and get stuck then BCE. Kind of odd to see this series of lower highs, lower lows. And we recently just came down, and we’re finding support at $50. Yes, we could move up to 56 from where we are right now, but that would take a lot of work. Okay, that is all for this morning’s presentation.
It looks like we’re going to get a higher open from where we are right now, but then again, we’ve got PPI numbers coming. It out at 830, and that could certainly change the direction of the market. I think the rally has probably got a few more days left in it before it starts to fizzle, but we’ll just have to wait and see what the market decides to do. Enjoy the rest of your day, and next time you’ll hear my voice is on Thursday morning.
Stephen Whiteside
Wednesday, October 11, 2023
