Good morning, everyone, and welcome to Thursday morning. It’s Stephen Whiteside here from theuptrend.com. In the pre market this morning, stock index futures and commodities are trading higher. So, so far, it looks like we’re going to see some buying at the open on Thursday morning. We do have employment numbers coming out at 8:30 this morning.
That could certainly change the market’s direction. Now we’re looking at a couple of stressors in the market this week, in the bond market and in the options market. The stock market has seen a little pullback, but no major changes, certainly nothing that’s going to show up on the weekly charts. Yesterday was an inside day for the VIX. It’s still on a buy signal that’s not supportive for higher stock prices.
And what you’re seeing is some of the major indices are holding up fairly well. We’re seeing weakness in other areas of the market that could continue to push the rest of the market down. We’ll just have to wait and see. Now, we’re looking at the VIX here on Thursday. We’re looking for a close below 13.25 to give us a new sell signal that would be supportive for higher stock prices.
So far, even though the VIX has popped over the past couple of days, we’re still looking at three blue dots here. We still haven’t got all the way to four dots just yet. So still waiting for that. The Dow is still on a sell signal. The S&P 500 ETF is still on a buy signal.
That would change on Thursday with a close below $518.22. The Nasdaq 100 still on a sell signal. No change there. Now, energy stocks, the commodity sector is still holding the market up and we’ve got the energy ETF making a new high on Wednesday. Big update yesterday for the silver miners, and we’ll look at silver in a minute.
And copper miners did very well. Gold stocks were up across the board on Wednesday. So it’s really, the commodities are the, the big winners this week. But unfortunately, outside of energy, the rest of the stocks really don’t affect the US market that much. Next up, let’s take a look at the world of commodities.
And starting with the USO, crude oil made a new high on Wednesday. We had a new high for gasoline, natural gas still on a buy signal here. Very small pullback on Wednesday. Then looking at the GLD, we closed at 212.74 yesterday. The top of our projected trading range on both the daily and weekly charts is 212.50.
So we’re right up there at the top of the range. There’s certainly no reason why we can’t continue higher from here. It’s just interesting when we get up to the top of those ranges to see how many times we actually stop and turn around. Then, looking at palladium, we’re back on a buy signal as of Wednesday’s close, joining platinum already on a buy signal. And silver, which was underperforming gold for quite a while, has caught up very quickly this week.
Up another four, nearly 4% on Wednesday. Now, looking at the bond market, bonds are on sell signals right now. That of course can put upward pressure on bond yields. We had a new low yesterday for the TLT emerging market. Bonds came back nicely yesterday.
It’s the junk bonds that everybody keeps an eye on. Of course, when the junk bonds are on a sell signal, that’s considered risk off. And that of course could be a negative omen for the stock market going forward. We’ll just have to keep an eye on that. So we know that options traders in Chicago are spooked.
We also know that bond traders in Chicago are also spooked at the moment. And whether that leads to stock market investors getting spooked, only time will tell. Next up, let’s take a look at what worked and what didn’t work. Yesterday it was communication services was the big winner, followed by energy, materials and industrials. There’s the communication services ETF making a new high for this move on the back of Paramount, up nearly 15% on the day.
So that stock’s been on a buy signal for the past month. Then looking at the energy sector, we looked at the major energy ETF earlier. This is small caps, up over 2% on the day. The big winner in the energy sector on Wednesday was marathon oil, up nearly 2.5%. Then looking at materials, the big winner there was Freeport and it was up a little over 2.5% on the day.
Then looking at the industrial sector, we’ve been trading in the channel for the past couple of days off the recent highs. Two stocks in this sector that have had an interesting week. UPS got the contract to support the US postal system, while FedEx lost that part of the contract. Both stocks moving in opposite directions. No new buy signal just yet for UPS, looking for a close on Thursday above $152.98.
And for FedEx, we’re looking for a sell signal with a close below $273.89 on Thursday. Then looking at consumer discretionary, it was up on the day, but it is on a sell signal right now. Consumer staples was down yesterday, over 1%. The big loser in that sector. And from a man’s point of view, I don’t think makeup is a consumer staple.
Obviously, if I was a woman, I might feel differently about that. But Estee Lauder is a consumer staple stock, and it was down hard yesterday. Still looking for a close on Thursday, below $145.36. Notice the high here. Then we had a lower high, and now we’re putting in another lower high.
That’s a bearish sign for this stock. Now we’re almost done here. We’ve got meta back on a short term buy signal as of Wednesday’s close. Now, Meta has been basically trading sideways for a while now. We got into this range back at the start of February and have made a high back at the start of March, and then a lower high in the middle of March.
And now we’re looking to see what’s going to happen next. You can see we’re projecting up to 562.50 at the moment. When you get into the situation where a stock is basically trading sideways, it means investors are waiting for some catalyst. They’re waiting for news. They’re waiting for something to happen.
You want to give the stock a little more breathing room, and you can switch over from the right side chart to the Midterm chart and use that and take a more conservative view of the stock. As you can see, momentum is drifting off here, and that is certainly true up here. We haven’t moved anywhere. We still have a little room to go before we see a sell signal for meta on the midterm chart. When we look at the Panic Zone chart, you are up at the top of the Panic Zones, which means any new buy signal up here is a high risk buy signal.
The majority of people and institutions that want to own this stock already own it, and they’re not really looking for something to cause them to jump in. Who’s usually going to jump in at this point is the public, and they’re not very good at timing the market. And they’re usually, they usually show up when the party is about to end. Now, if we look down, you can see that there’s a nice open gap there. The top of that gap and the bottom of that gap could potentially act as targets when the stock turns down.
You can see that the bottom of that open gap matches up with the bottom of our Panic Zone projection. And so at some point in the next few months, we may trade all the way down towards $400. That certainly has not started on Thursday morning. And speaking of signals, we’ve got Nvidia back on a sell signal as of Wednesday’s close again. You know, it’s a very tight close.
There’s no major sell off here. In fact, we didn’t even take out the bottom of the previous day’s low, which traded down below the lower channel. I did not close there. So if you’re still long, Nvidia, you might want to wait for the next close below the lower channel line before taking the sell signal. Okay, folks, that is all for this morning’s presentation.
So far, stock index futures are above fair value. We do have employment numbers coming out at 830. That could certainly help change the direction of the market. Have a great day, folks. Next time you’ll hear my voice is on Friday morning.
Stephen Whiteside
TheUpTrend.com
Thursday, April 4, 2024
