Canadian Stock Market Trends 20190731

Well, good morning everyone, and welcome to Wednesday morning. It's Stephen Whiteside here from theuptrend.com with today's look at Canadian stock market trends. In the pre-market this morning, stock index futures and commodities are above fair value. So it looks like we're going to see some buying at the open on Wednesday morning.

 

Just a quick reminder, our offices will be closed next week for summer vacation, so no charts, no reports, no videos from next Monday to Friday.

 

Today is the second day of a Fed meeting. So the excitement starts after 2:30 this afternoon. Everybody's expecting a rate cut. We'll just have to see how the market reacts to what the Fed says. Ah, looking at the US market, the VIX came back on a buy signal yesterday, so the options traders in Chicago, a little nervous about today. The S&P 500 traded down yesterday, as did the NASDAQ 100, no change in trend in either of those. And nice big update for the iShares for the Russell 2000 and the iShares for the micro cap sector. They had good days on Tuesday.

 

Now looking at the Canadian market, we've been trying to break out above those April highs for some time now. Still have not been able to do so. In fact the TSX and the TSX 60 are back on sell signals, but we're seeing a lot more interest in mid cap and small cap stocks and even micro cap stocks at the moment, and that certainly has a lot to do with the gold sector. When we look at the sectors, it is the gold sector leading the Canadian market at the moment. We are stuck at resistance up here at 237.50 on the gold index, looking to see if we can break out to 250. Now when we look at stocks within the gold sector, most of them are going to look pretty similar to the index itself, and if your gold stock hasn't been keeping up with what's been going on in the whole sector, next time around, you probably shouldn't be following that gold stocks.

 

And so just some examples, Agnico Eagle Mines Limited (AEM.TO), B2Gold Corp. (BTO.TO), Detour Gold Corporation (DGC.TO, Eldorado Gold Corporation (ELD.TO), IAMGOLD Corporation (IMG.TO), Kinross Gold Corporation (K.TO), NovaGold Resources Inc. (NG.TO)and the stock that I follow, Yamana Gold Inc. (YRI.TO), have all done fairly well over the past couple of months. Now Yamana is a great example, remember we were down at the bottom of the panic zones when the pressure zone formed, and our first buy signal was a false start, and a lot of people get hung up on the fact, it's not the fact, is just the reality, that there's a buy signal and then a few days later you got a sell signal, and then you got a buy signal. A lot of people don't take that next buy signal cause they're still thinking about the small loss they took a couple of days ago, and they just get overwhelmed by the small loss, and they give up on the fact that you're down at the bottom of the Panic Zones with the Pressure Zone forming. That is the only time and place to be taking buy signals.


So if this stock was your stock and the stock that you wanted to own when it was moving higher, than this is the time in place to be involved in that. And you've got wave off those small losses as a cost of doing business. And just take all the buy signals you can off the bottom of the panic zones with the pressure zone forming. Now, why isn't the Canadian market breaking out above the May highs while bank stocks and financial services are not helping at all? And then of course we've got the energy sector still in the tank. We saw as a few a short term buy signals in some stocks last night, but then the telecom sector is also not helping at all. So whether you're looking at BCE Inc. (BCE.TO) or Rogers (RCIB.TO) or TELUS Corporation (T.TO), none of them are going in the right direction to help the Canadian market breakout above those April highs.

 

Let's finish off today's presentation with a quick look at commodity prices. Starting off in the energy sector, we've got crude oil back on the buy signal as of Tuesday's close. No joy for natural gas, making a new low for this move on Tuesday. No joy for copper. Is copper still treading water? Closing lower yesterday on a sell signal. And last up we've got the price of gold is still on a buy signal, trying to break out above 1437.50. If we can do so, then $1,500.00 does come into play. Okay, folks, that is all for today's presentation, and that's all for me for this week. Have a great day. Have a great week and a the next time you'll hear my voice is two weeks from today.

 

Stephen Whiteside

 

Canadian Stock Market Trends