Canadian Stock Market Timing 20190821

Well, good morning everyone and welcome to Wednesday morning. It's Stephen Whiteside here from with today's look at Canadian Stock Market Trends. In the pre-market this morning, stock index futures are up on both sides of the border, so far it looks like we are going to see some buying at the open on Wednesday morning. In commodities, we've got the energy's higher while gold is down slightly in the pre-market on Wednesday morning.


Let's start off today's presentation as we always do with a quick look at the US market. The VIX is still on a sell signal. That can be supportive for higher stock prices. Still waiting for the DIA,Dow Diamonds ETF to generate a buy signal that would join the SPY, SPDR S&P 500 ETF and the QQQ, Nasdaq 100 ETF that are both on buy signals right now with a pullback yesterday. The US market hasn't generated buy signals for midcap IWM, iShares Russell 2000 ETF, smallcap, and microcap stocks IWC, iShares Russell Microcap ETF just yet. Now with an elevated VIX, we've had a volatile month in the month of August, and so we're now looking for a breakout of that range, a breakout of the August highs or a breakdown of the August lows. So we're looking on Wednesday to see if we can break out above $294.15 on the S&P 500, SPDR ETF. If we could do that, that would certainly be a very bullish sign for the overall market.


Let's move on and take a look at the Canadian market. On that Tuesday we saw a pullback in the TSX and in the TSX 60. Now, the TSX is still on a sell signal. The TSX 60 generated a buy signal on Monday. We were down over $7.00 on Tuesday. We're up over $4.00 in the pre-market this morning, so we would still be trading in the channel today. Now while the bigcap stocks were down on Tuesday, midcap, smallcaps, and microcap stocks all traded higher on Tuesday.


S&P/TSX Composite index (^GSPTSE)

S&P/TSX 60 Index (TX60.TS)

S&P/TSX Canadian MidCap (SPTSEM)

S&P/TSX SmallCap Index (^SPTSES)

S&P/TSX Venture Composite Index (^SPCDNX)


Next up, let's take a look at some sectors, and what's not working at the moment, the Health Care Index is down. Had an inside day yesterday, while the marijuana stocks made a new low on Tuesday. If we walk through the major marijuana stocks that we have in our database, you can see they're all on sell signals at the moment. Now, what's working is anything interest rate related. Bonds continue to move higher and so do income trusts, REITs, real estate, and utility stocks. Gold stocks were up nearly 3% on Tuesday. Hopefully, you've taken the time to lock in some profits up here. Then we had Infotech higher on Tuesday even though the NASDAQ was lower. Then after making a new high on Monday, consumer staples pulled back. Still trading and closing above the upper channel line.


.GSPRTCM TSX Income Trust Index


.GSPTTRE TSX Real Estate Index

.GSPTTUT TSX Utilities Index

.SPTTGD TSX Gold Index

.SPTTTK TSX Information Technology Index

.GSPTTCS TSX Consumer Staples Index


Next up, let's take a look at commodity prices. It's rather odd that we've got crude oil and natural gas both on buy signals right now, but we can't get a bid into the energy sector. Energy stocks had an inside day on Tuesday so a day of indecision. We saw copper continue on its sell signal. No change in trend there. Now, the price of gold has had a couple of early warning signals over the past week or so. We're still on a buy signal. Yesterday was an inside day for the price of gold. Down in the pre-market this morning, looking for a close below $14.86 to give us a sell signal on Wednesday.


Let's finish off today's presentation with a quick look at the Canadian banking sector. Starting off with the Royal Bank, the Royal Bank reported earnings this morning. The headlines seemed to be pretty good, but, of course, that doesn't matter. It's what were people expecting, and so we're down at the bottom of the panic zone. The pressure zone has formed. This is the time and place you look for a buy signal. We need a close above $101.07 on Wednesday to give us a new buy signal for the Royal Bank. Now interesting trading patterns for the past couple of days. We opened and then closed below the open. We opened on Monday, closed below the open. We opened on Tuesday and closed below the open. So the pros have been selling into any buying here, and so they were not expecting any miracles. It'll be interesting to see what happens, of course.


RY.TO    Royal Bank of Canada


Then this sector, there's a couple of very weak stocks in this sector. The Bank of Montreal, Bank of Nova Scotia, CIBC have been weak for some time. Now due to the interest rate concerns that we've seen over the past couple of weeks, the National Bank has come down off making a new high just a couple of weeks ago and a similar situation for the TD Bank which was up retesting highs not so long ago, now down at the bottom of the panic zone with a pressure zone forming. If you are waiting to buy any of these banking stocks, this is the time and place to look for a new buy signal. Of course, we don't have any of those on Wednesday morning.


BMO.TO Bank of Montreal

BNS.TO Bank of Nova Scotia

CM.TO  CDN Imperial Bank

NA.TO   National Bank of Canada

TD.TO Toronto Dominion Bank


Okay, folks. That is all for this morning's presentation. Futures are up on both sides of the border. Crude oil and natural gas are higher. Gold is lower in the pre-market on Wednesday morning. I just got my reminder, I'm going to be donating blood a week from now. Have you gotten your reminders? Please, I encourage all of you to donate blood especially the men. It can help out your long-term health. If you've got any cardiovascular issues, donating blood is one of the best things you can do to stay healthy. Thank you very much for your time and attention folks. The next time you'll hear my voice is on Sunday. At that time we'll look at protecting your portfolio.


Stephen Whiteside


Canadian Stock Market Timing