Good morning, everyone, and welcome to Wednesday morning. It’s Stephen Whiteside here from theuptrend.com. In the premarket this morning, stock index futures and commodities are currently trading below fair value. Dow futures currently down another 100 points. We’ve got bitcoin down over $3,000 in the pre market on Wednesday morning. Now Wednesday is going to be a jam packed day. We’ve got lots of economic numbers coming out and then we’ve got energy inventories coming out later in the morning. Yesterday was a bit of a flash crash. Somebody hit the panic button. And of course, the headline is that the Dow was down over 500 points on the day and back on a daily sell signal. It was month end, month ender supposed to be bullish. It’s supposed to have a bullish bias to it. It’s not supposed to flash crash coming into a Fed meeting. You know, we expect volatility to expand after 02:00 p.m. this afternoon. Not the day before the Fed meeting. Usually people keep their cards pretty close to their chest coming in to today, but that’s certainly not what happened. Yesterday. We saw the US dollar spike higher yesterday. We saw the price of gold and silver come down.
We also saw a reversal in the price of copper. Crude oil was down yesterday. It’s down again in the premarket this morning. Natural gas was down yesterday. That is not unusual. Then we speaking of oil, soybean oil collapsed yesterday, breaking down below the previous low. Looking at bitcoin and ethereum, they’re back in the flypaper channel right now. And with bitcoin down another $3,000 in the premarket, it looks like we’re going to start trading below the Fly Paper channel. So we peaked in early March and we’ve been making lower highs. And now we’re going to start making another lower low. Looking at the bonds, they reversed yesterday. Emerging markets back on a sell signal. Junk bonds down sharply yesterday. Now when I show these bond ETF’s, I’m not expecting too many people to be trading them. The volatility is very low. You can see the big down bar that we had yesterday in the junk bond ETF. That only equates to a little over a half a percent move. So it’s very hard to make money trading these, but we want to keep track of where money is going and the emerging markets, junk bonds, it’s a good way to see if the market is willing to take on risk.
And as you can see, we had a little reversal in that yesterday. Looking at the ishares for the TSX 60, we’re back on a sell signal as of Tuesday’s close. The S&P 500 is also back on a sell signal, closing just below the lower channel line. Now there are a lot of symbols that traded down to the lower channel line like the triple QS, but did not close below it. The equal weighted Nasdaq 100 ETF did close, close below the ishares for the Russell 2000 didn’t. The small caps did and the micro caps didn’t. So there’s a lot of new sell signals from yesterday’s trading action and there’s a lot of new symbols just waiting for one more push before we get a new daily sell signal. Now, the biggest losers yesterday. Well, most of the market was down yesterday, but unfortunately it was a commodity sector that led the market lower. Us gold miners are back on a sell signal. Copper miners are still holding up. Things would change on Wednesday with a close below $45.29. Silver miners back on a sell signal. The Canadian gold miners ETF is still on a buy signal, looking for a close on Tuesday below $19.34. The TSX gold index and ETF, they’re global.
There are some international stocks in here. So it’s not only Canadian gold stocks, but it is a good way to play the gold mining sector. Then looking at energy stocks, the ETF’s are back on sell signals on both sides of the border as of Tuesday’s close. Now, the biggest winners yesterday, and there weren’t that many, but it was marijuana stocks were the biggest gainers yesterday. And there was only a couple when a couple of positive sectors yesterday. But potential change in us policy shot the Alternative Harvest ETF over up over 26%. The Horizons Marijuana Life ETF was up 16% on the day. Huge moves up. We didn’t catch these moves. Unfortunately. Most of the marijuana stocks and ETF’s were on sell signals coming into yesterday’s trading action. The most actively traded us stock yesterday was a Canadian marijuana stock. Tilray trading right up to to the top of the open gap did not fill it in the US. I think it was off by two cent. We’ll look at the Canadian version in a second. Then. The only other thing that worked yesterday were Canadian utility stocks. Otherwise everything else was down on the day.
Now, looking at what worked on the TSX 60, it was Restaurant Brands was up sharply. So that’s Tim Hortons. Then what didn’t work was Cameco, already on a sell signal, so no change in trend there. What worked on the TSX itself, well, Tilray was the big winner. It ran up, filled the gap. So that gap is no longer in play. Let’s see if they can push it higher from here. But it’s not a stock I’m going to chase at the present time. Certainly it was an overreaction to some potential change in policy. The potential hasn’t happened yet, so still got some work to do there. Then, looking at what didn’t work on the TSX, it was. Ivanhoe Mines is back, sitting right on the edge of a new daily signal. We were looking for a close below 18.65 and we closed at 18.66. So again, another symbol just sitting on the lower channel line. On the Dow, the biggest winner was 3M. It’s been on a buy signal for a while, so no change in trend there. The biggest loser was Caterpillar. No change in trend there. It has not broken down below the recent low that might happen today.
On the Nasdaq. The biggest winner was NXP. No change in trend there. Making a new high for this particular move, heading up towards the highs from early March. Then looking at what didn’t work was the GE Healthcare, which gapped lower yesterday. So on Tuesday, our system actually generated a buy signal. You come in Wednesday morning, you check what’s happening in the pre market for US stocks and ETF’s. You can usually see some pre market action in the Canadian market that isn’t really available as much to you, or if it is, it’s not easily available. So, you know, what you need to do is check the bid and ask before you put an order in, just to make sure things haven’t shifted dramatically overnight. Then, looking at what worked on the S&P 500, the big winner was Leidos, which gapped higher, making a new high for this move. And what didn’t work well, it was GE healthcare, just like on the Nasdaq. The second biggest loser on the S&P 500 was Molson Coors. Really disappointing, down nearly 10% on the day. It’s been on a sell signal for most of April. Now, yesterday was rather perplexing for a lot of reasons, but one of them was that we had that big down move in the markets, but a very small move in the VIX.
And the VIX was up on the day, but nowhere near the upper channel line. And certainly we did close above the previous day’s high, but that’s really not a lot of movement for the VIX, considering what happened to the rest of the global financial markets. So we are looking for a close above 1732 on Wednesday to give us a new buy signal for the VIX that is certainly a head scratcher, and I have absolutely no explanation why the VIX did not move with the the rest of the global markets on Tuesday. Okay folks, that is all for this morning’s presentation. So far we’ve got stock index futures trading lower. We’ve got bitcoin down over $3,000 in the pre market. We do have a lot of economic numbers coming out, and then we’ve got the Fed this afternoon. So I don’t know what’s going to happen, but what happened yesterday is not a good sign for the health of the overall stock market. Enjoy the rest of your day. Next time you’ll hear my voice on Thursday morning.
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Stephen Whiteside
TheUpTrend.com
Wednesday, May 1, 2024
