Good morning, everyone, and welcome to Tuesday morning. It’s Stephen Whiteside here from theuptrend.com. In the pre-market this morning, so far, things are fairly quiet. Stock index futures are slightly below fair value. Crudol is higher by a couple of pennies, while gold is down a few cents in the pre-market. Now, we don’t have any major US economic numbers coming out this morning, so not expecting a lot of pre-market volatility. Now, unfortunately, the TSX rolled over yesterday. So the composite, the TSX-60, the mid-caps, small-caps, and micro-caps are all back on a sell signal as of Monday’s close. Now, in 2023, we witnessed a huge divergence between the US and the Canadian market, and that had a lot to do with technology, especially NVIDIA. As you can see in 2024, that has not changed at all. Of course, now we’ve got the weight of Meta adding to the divergence, and the Meta gapped sharply on Friday. No real change on Monday. An inside day for meta on Monday. Now, there is some concern in the US about regional banks. As you can see, there was two inside days on Friday and then again on Monday. Investors We’re waiting for more data to come out.
Of course, inside days are days of indecision, so nobody’s winning or losing at the moment. We’re still on a major sell signal for the regional banks, and that has put some downward pressure on Canadian banks. They haven’t broken down yet, but this usually is a happy time for Canadian banks, being that it’s retirement savings plan season. Now, the US dollar index moved sharply higher yesterday. Of course, that puts downward pressure on the Euro, and it also put downward pressure on the Canadian dollar and the Australian dollar, two currencies that are heavily linked to the world of commodities. And Monday was not a great day for the commodity world. Now, we’re still looking at the S&P 500 potentially hitting 5,000. That would certainly be a big round number. We’re a day or two away from hitting that target. It doesn’t look like we’re taking a run at it on Tuesday morning. Now, looking at bonds, bonds continue to sell off on Monday. We’re back on a sell signal. We’re back on a buy signal for yields, and that could put downward pressure on certain sectors of the stock market. Looking at Monday’s activity in the Canadian market, it was down across the board being led lower by Infotec.
Now, if we look at the iShares Info Tech ETF, you can see that, yes, we sold off yesterday down 2.22%, not enough to give us a sell signal. That would happen on Tuesday with a close below $54.31. Now, here are some technology stocks that rolled over on Monday. Constellation Software is now back on a sell signal as of Monday’s close. Big down day for Enghouse, dropping more than down three and a half % on the day. We’re also back on a sell signal for OpenText, which had a wild day on Friday and then settled down on Monday, generating a sell signal. We’re also back on a sell signal for Bitfarms as of Monday’s close, and we saw a new low for Blackberry on Monday. At the same time, we saw a new high for Celestica on Monday. So not everything went down on Monday, and certainly the sector is not back on a sell signal as of Monday’s close. Next up, let’s take a look at the world of commodities. Crude Oil was up yesterday. It was up 50 cents. It’s up 30 cents last time I checked in the pre-market. It looks like the pros aren’t that enthusiastic about this sector at the moment.
Then looking at natural gas, we’re still holding $2 as support, and you can see the pros have no interest in taking control on Tuesday morning. Now, looking at energy stocks using the iShares ETF, we made a new low for this move yesterday. We’re trying to hold 14.84. If that breaks, then you can see 14.45 and 14.06 would be our next targets to the downside. Looking at the Fly Paper channel chart, it’s a bit easier to see that we’re making a series of lower highs across the board. Chart, and yesterday, we made a lower low. So that’s a pretty bearish chart pattern for the energy sector. We saw a new low yesterday for Birchcliff, for Tourmaline. We saw a new low for Whitecap. Canadian Natural Resources made a new low on Monday. Also saw a new low for Crescent Point. Now, two big cap energy stocks that are still on buy signals include Cenovus, we’re looking for a close on Tuesday below 21.08. For Esso, we’re looking for a close below $75.72. Let’s finish off this morning’s presentation taking a look at the world of mining, starting with copper, which continued its decline, had a big reversal day last week and has continued to move lower.
So we’re back on a sell signal. That’s not supportive for many mining stocks. Then gold was down yesterday. Yes, it traded through the lower channel line but did not close there. So there’s still hope here. Looking for a close on Tuesday below and $2040. And of course, if that happened, that would join silver, which is back on a sell signal as of Monday’s close. Now, looking at the TSX Global Gold Index ETF, we’re back on a sell signal here, trying to hold 16.02. If that breaks and we take out the recent low, then 15.63 and 15.23 come into play. Agnico Eagle made a new low on Monday. We saw B2Gold trade lower. We’ve got a new low for Barrick for Monday’s trading action. Kinross, back on a sell signal as of Monday’s close. Newmont Gold Corp, new low for that stock on Monday. New low for NovaGold on Monday. Now, not all gold stocks move down on Monday. Not all gold stocks are back on a sell signal, but certainly the major ones certainly are. And so that’s not helpful for the Canadian stock market. Okay, folks, that is all for Tuesday’s presentation.
Looking for lower prices at the open on Tuesday morning. Have a great day. Next time, you’ll hear my voices on Wednesday morning, and at that time, we’ll take a closer look at the US stock market.
Stephen Whiteside
TheUpTrend.com
Tuesday, February 6, 2024
