The Stock Market Newsletter - Published  Thursday December 13, 2012 8:45 AM ET

 

                        Good morning, it’s Thursday, December 13, 2012. My name’s Stephen Whiteside. I’m your host this morning for today’s edition of Stock Market Time in Television.  

                        In the premarket this morning, coming up to 8 a.m. on the east coast, stock index futures are essentially flat while commodity futures have dropped a bit. We’ve got gold down about 20 bucks in the pre-market this morning. The U.S. market should open flat. The Canadian market should open lower. 

                        Last time we talked was Tuesday morning. We were coming into our fed meeting. Fed meeting’s a two day event which is capped with the release of the minutes of the meeting. Now more recently, they’ve added a press conference afterwards. 

                        Going into the fed meeting, is usually fairly quiet. This year we saw some buying, which was unexpected. On Tuesday morning, what we were looking at, looking at our road map we were trying to figure out where we’re going to head next. 

                        If we took out the recent resistance up at 1,421 and change, we were looking at our mathematical target on the 60-minute chart of 1,437.50. We were also looking at the previous peaks up at 1,434.27.  

                        What happened while we traded through those peaks, right up to the 1,437.50 level, reversed up there, created a new intraday bearish reversal signal, which also gave us a lot of daily bearish reversal signals, including for the Dow 30, and the NASDAQ, and quite a few other indexes. 

                        Yesterday may have been the top for this particular move in the market. We’ll have to wait and see if we get confirmation on Thursday. So far what we’re seeing in the pre-market this morning, there isn’t a rush out of stocks to follow through from yesterday’s reversal. 

                        Given that a bearish reversal signal is a one-day event that needs to be confirmed, things are still looking fairly bullish. We’re still on a buy signal for the S&P 500 of course. A daily close below 1,407.22 would change that on Thursday. A close below 2,639.43 would give us a sell signal for the NASDAQ 100.  

                         

                        The NASDAQ composite itself actually generated another bearish reversal signal yesterday. The NASDAQ 100 is stuck up here trying to get through 2,695.31. You can see that resistance was also back in October. We’ve tried several times to break through this level.  

                        Of course, when you’re up at 2,695.31, the overhead resistance that the public is looking is the 2,700 level. We’ll have to see if we can get through that. 

                        Looking at the TSX, it had a nice up day, yesterday. A daily close below 12,149 would give us a new sell signal on Thursday. The VSX is on a sell signal right now which is supportive for higher stock prices. A close above 1,656 on Thursday would change that. 

                        Global Dow moved higher yesterday. Looking at the Shanghai market, it was down overnight. It looks like it’s starting to roll over here making a series of lower highs over the last couple of days. 

                        Looking at the Australian market, we were looking to see if we could take out the October highs. That has not happened so far. We’ve traded above them, but not closed above them. Last night was an inside day.  

                        The bond market was lower yesterday. The bond market actually closes before the stock market does. The bond market did not witness the selling in stocks that we had going into the close yesterday. A close above 151.62 would give us a buy signal on Thursday. Bonds being on a sell signal is supportive for higher stock prices.  

                        The U.S. dollar on a sell signal is supportive for higher stock prices. We had quite a reversal there yesterday. A close above 80.40 would give us a buy signal on Thursday.  

                        The euro back on a buy signal is supportive for higher stock prices. A close below 129.40 would give us a sell signal on Thursday. 

                        The Canadian dollar continued to move higher. That’s supportive for higher stock prices. The venture exchange, still nothing going on there even though we saw commodities rise yesterday. People are still not willing to buy micro-cap stocks. The stock market is not that healthy. 

                        Taking a look at commodity prices using the futures contracts no changing trend in the energy sector yesterday. We had crude oil trading into the channel. Coal moved lower. Gasoline traded into the channel. Heating oil traded into the channel, but no change in trend. Natural gas continued to trade lower yesterday. 

                        Looking at copper, had an up day for copper. No change there. No change for gold. Gold traded up through the channel, but did not close above the upper channel line. It’s down, back trading below 1,700 in the pre-market this morning a similar situation for the GLD. 

                        The SLV, more strength in the silver futures contract. We’ll stay on a buy signal there until we close below 3,295. For the SLV, we traded up, but did not close above the upper channel line. We need a daily close above 3,237.80 on Thursday. 

                        Looking at U.S. stocks starting with my five stocks Apple Computer, no change there. No change for the [CME  00:05:05]  group. No change for Google. No change for Goldman Sachs, still on a buy signal. No change for Visa. 

                        We did see some volatility in the gold and silver sector. The XAU is back on a daily buy signal, of course very suspicious about this. It had more to do with not necessarily gold stocks, but silver stocks. They certainly pulled the market higher. We do have some gold stocks on buy signals. For the most part it is silver stocks leading this rally.  

                        We’re seeing a reversal in gold in the pre-market this morning. I don’t know if that will have a direct effect on this sector or not. Intuition tells you it will. We’ll just have to wait and see.  

                        This sector is one of the few sectors that’s really over sold right now, so a lot of short selling over the past few weeks. This is a time and place where you can expect a rally. Whether that rally will be just for stocks or if we need the commodities themselves, that will have to be determined. 

                        Coeur D’Alene, Pan American, Silver Standard, Silver Wheaton, all on buy signals right now. That’s putting upward pressure on the gold and silver sector. 

                        Taking a look at the Canadian market, starting off with Barrick.  Barrick is now back on a buy signal as of Wednesday’s close.  

                        The TSX gold index, while we moved up to the upper channel line, we still need to close above 305.36 to give us a buy signal. We did get a sell signal for the Horizon BetaPro Bear ETF for this sector. We have not received a buy signal yet. We still need to close above 773 on Thursday to give us a new buy signal for that ETF. 

                        For some of the other gold stocks, we’re still waiting for a close above 3,823 to give us a buy signal for Goldcorp.  

                        For IM Gold, we’re on a buy signal as of Wednesday’s close. For Kinross, we’re on a buy signal as of Wednesday’s close. For Humana, a long way away from a buy signal. 

                        Taking a look at Imperial Oil still on a sell signal here, no change. Still on a sell signal for Rainy River, no change there. Still on a buy signal for Rogers.  

                        The Royal Bank made a new high for this particular move yesterday. We’re still up at resistance. If we can take out resistance, then we’re looking for a move up to 60.94.  

                        Last, up in the Canadian marketplace of course Research In Motion moved sharply higher yesterday. That, of course, had a lot of upward pressure on the TSX and will still remain long on Research in Motion as long as we don’t close below 11.34. 

                        It’s the day after a fed meeting. The market is still pretty beaten up. It’s still trying to figure out what was said, what it means now, what it’s going to mean later and trying to resolve the new information that came out yesterday. 

                        Looking at the 60-minute fly paper channel charts, the VSX is below the flat paper channel, which is bullish for the market, if it can hold that. S&P 500, NASDAQ are above the fly paper channel. Fly paper channels are still pointing up. That’s bullish. 

                        Looking at the XAU, XAU popped up just above the channel. That is reflected in the daily charts. That’s what you need to get daily buy signals. I’m not that confident it’s going to be able to hold. That’s what it is at the moment.  

                        Looking at the 60-minute right side chart for the VSX, generally we trend and we trend. Look at the volatility from around the fed day, up, down, up. Here we are trying to see which way the market’s going to go. 

                        If we keep going higher today, of course the market’s going to go lower. The S&P 500 came down, closed right at the lower channel line yesterday. If we start closing below 1,428.33 at 10:30 that would give us a new sell signal. 

                        NASDAQ’s on a sell signal. We need to close above 2,686.84 to give us a buy signal on Thursday. XAU is on a buy signal. An hourly close below 165.37 would change that on Thursday. 

                        Looking at the TSX, broke away from the fly paper channel yesterday. We’re on a buy signal right now. An hourly close below 12,303 would change things on Thursday. 

                        Looking over my shoulder, futures are still fairly flat. It’s coming up to 8:20 this morning, so not a lot of guidance from the futures in the pre-market this morning. 

                        Yesterday, we saw a reversal going into the close, looking to see if we get fall through to the downside. We saw a lot of volatility in the bond market in currencies, yesterday, all trying to get ahead of the fed announcement and then react to the fed announcement. We’ll have to see how those resolve themselves on Thursday. 

                        Have a great day. I’ll talk to you again next on Friday morning. 

 

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