Canadian Stock Market Timing 20191002

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 premarket this morning, stock index futures are below fair value on both sides of the border, so we are looking for some selling at the open on Wednesday morning.


Let's start off our presentation as we normally do with a quick look at the US market. The VIX was already on a buy signal coming into this week and so that of course was negative for stocks. Looking up, we are trying to break out above an open gap. We ran up to the bottom of it last week, and we ran up to it again yesterday, and so now we're looking to see if we can close that open gap on Wednesday. Of course, if the VIX moves higher, then we expect stocks to move lower. The S&P 500 and all the major indices were already on daily sell signals coming into yesterday's trading action. Monday was an inside day so we're looking to see if we could break out of Friday's range.


We certainly did that both on the upside and the downside. In regard to market cap, it was the microcap stocks that got hit the hardest yesterday, down over 2%. If you watched yesterday's presentation, there was I think 30 charts in yesterday's presentation, only two of them changed trends last night. So we're on the right side of the market trends for the majority of the major indices in the sectors that we follow closely, and so now we've got the financials back on a sell signal and we saw materials rollover yesterday. Both had been trading in the channel for the past week, and then we finally broke down yesterday. What really got hit hard yesterday was the broker-dealers, the stockbrokers. They got whacked yesterday, and so now we've got financials, we've got the major banks back on a sell signal. And all the stockbrokers whether you're looking at E-Trade or Schwab or TD Ameritrade, they all got whacked yesterday.


Next up, let's take a look at the Canadian market and the TSX was down over 1% yesterday. It came into Tuesday's trading action already on a sell signal as did the TSX 60. What got hit the hardest on Tuesday were small-cap stocks down at nearly 2%. Then we've got financials and the financials just like in the US back on a sell signal. Now the major Canadian banks, for the most part, are holding up better than the overall financial index. Bank of Montreal is still on a buy signal. Bank of Nova Scotia, CIVC are back on sell signals as of Tuesday's close while the National Bank and the World Bank are still on buy signals and then the TD bank is back on a sell signal. Now looking at financials, of course, there's a couple of insurance companies in the TSX 60. That includes Manulife and Sun Life. Both back on sell signals as of Tuesday's close.


Let's finish off today's presentation. Just looking at our Horizon BetaPro Bear ETFs, we're currently long in the bear for the TSX. We hit 488 yesterday, so if you had an order in to get filled at that level you got filled yesterday, and then 498 is our next target to the upside. Looking at the bear for the S&P 500, we haven't had a lot of movement here yet. I wouldn't be taking money off the table until we got to 1367. We may get there on a Wednesday. And then for the NASDAQ, we're long in the bear at NASDAQ, and again, we haven't had a lot of movement yet. So the first place I'd take money off the table is 547 and then 566.


Okay, folks, that is all for Wednesday morning. Looking over my shoulder, the stock index futures are down near the lows of the morning, so we are expecting to see some selling at the open. I'll be back on a Thursday morning to take a look at some of the most actively traded North American stocks. Have a great day, and we'll talk again on Thursday morning.


Stephen Whiteside


  • .VIX, VIX S&P 500
  • SPY, SPDR S&P 500 ETF
  • IWC, iShares Russell Microcap Index
  • XLF, SPDR Financial
  • .XBD, AMEX Broker/Dealer Index
  • BAC, Bank of America
  • AMTD, Ameritrade Holding
  • ETFC, E*TRADE Financial
  • SCHW, Charles Schwab
  • .GSPTSE, TSX Composite Index
  • .TSE60, TSX 60 Index
  • .SPTSES, TSX Smallcap Index
  • .SPTTFS, TSX Financial Services Index
  • BNS.TO, Bank of Nova Scotia
  • CM.TO, CDN Imperial Bank
  • NA.TO, National Bank of Canada
  • RY.TO, Royal Bank of Canada
  • TD.TO, Toronto Dominion Bank
  • MFC.TO, Manulife Financial
  • SLF.TO, Sun Life Financial
  • HXD.TO, HBP TSX 60 Bear 2x
  • HSD.TO, S&P 500 Bear 2x
  • HQD.TO, NASDAQ-100 Bear 2x


Canadian Stock Market Timing