Good morning, everyone, and welcome to Monday morning. It’s Stephen Whiteside here from theuptrend.com. In the premarket this morning, stock index futures are trading higher. It seems to be a bit of a relief rally based on what happened in the Middle east over the weekend. I would imagine the people that went short at 359 on Friday afternoon are trying to cover their positions in the premarket on Monday morning. Now, commodities are trading lower in the premarket, so that may not help the Canadian market on Monday. Let’s start off looking at the VIX of the fear index. And it was up on the week, up nearly 8%. So that’s our second week of being on a VIX buy signal. And that, of course, is bearish for stocks. Looking at a daily chart of the VIX, you can see we made a new high on Friday and closed up over 16% for the day. And of course, Friday was a wild day for the market. So things would change on Monday if the VIX were to close below 14.41. And so far, we’re not expecting that to happen. Now, over the weekend, we updated the website with over 34,000 new charts.
Those were daily, weekly and monthly charts. In this presentation, we’re mostly going to focus on weekly charts, but we’ve got a few daily charts mixed in. I’ll tell you when we get to those. Of course, when we looking at weekly charts, you’re looking at the market from a long term investors point of view. You’re using the weekly charts to help filter out everything that happened from Monday to Friday. Because there certainly was a lot of drama last week. There was enough drama to give us a sell signal for the Dow, but not the S&P 500 and certainly not the Nasdaq, which was only down half a percent for the week and had an inside week, we did see some weakness in Semiconductors, down over 2%, but still on a buy signal. And then when we look at the S&P sectors, and these are those major sectors that break up the S&P 500, we’re back on a sell signal for Consumer Discretionary, Consumer Staples, for Healthcare, for Real Estate, they’re all back on weekly sell signals. When we look at the subsectors, we’ve got Retail back on a weekly sell signal.
We’ve got Transports on a weekly sell signal. We’ve got Insurance companies on a weekly sell signal and Bank stocks. And remember, on Friday we were looking at bank earnings. So we’ll flip back to daily charts. A huge down day for Blackrock on Friday. A wild day for citigroup. Look, it traded above the upper channel line, but then finally came down and closed lower on the day. Big down day for Goldman Sachs. A huge down day for JP Morgan. Down over nearly 6.5% on the day, gapping lower. That was quite a surprise. And then Morgan Stanley, which rolled over on Thursday, closed slightly lower on Friday, having an inside day, holding Thursdays low. I’m sure long term Morgan Stanley investors are really hoping that we can hold Thursday’s low. State Street had a wild day, traded above and below the channel line, and then ended the day higher. Still not on a buy signal here, but certainly had a positive day on Friday. And then Wells Fargo, which has been treading water for a while now, certainly traded lower on Friday, ended the day just down 0.39% on the day and closed above the 56.25 level.
So this stock really doesn’t want to move from this level at all. We closed at 56.47 on Friday. Now, my favorite us financial stock is visa. Visa, still on a sell signal, closed up a dime on Friday. So nobody’s going to really notice that on Monday. I’m looking for a close above 278.94 to give us a buy signal for visa, and that could certainly happen on Monday. Looking at the Canadian market, the iShares for the TSX 60 had an outside reversal week, closing at the upper channel line. So we’re not near a sell signal coming into Monday’s trading action. What worked? What didn’t work? Well, what didn’t work was InfoTech is back on a sell signal. As of Friday’s close, we saw BlackBerry up nearly 10% on the week. But BlackBerry’s market cap is not big enough to really shift things around these days. What didn’t work? Well, it was Bitfarms and Hut8 were the two biggest losers in percentage terms. But the one that everybody’s watching is Shopify, which is back on a weekly sell signal as of Friday’s close being down nearly 6% on the week. Now, telecom stocks have been in the doghouse for a while now.
They had an inside week still closing lower on the week, a little over 1%. So no change there. Telecom stocks trying to hold those lows from last fall, we have dipped below them, but we are trying to find some support there. And you can see we haven’t really broken away from that level just yet. But certainly it’s still looking very weak for Telecom stocks. Then looking at the energy sector, we had a bearish reversal week, but did not close below the previous week’s low. So not overly concerned just yet. We were trying to get to 312.50 got as high as 307.77 and that was the height of our projected weekly trading range. So we’ll have to see if the market wants to run up and tag that. On the other hand, gold stocks ended the week at the 312.50 level. We certainly traded above it, but gave up those gains going into the end of the week looking for a move up to 347.75. Is that realistic? Well, that’s where we peaked at this time last year. So yes, it is certainly realistic. And we talked about this on the weekend, that this is a nice seasonal run.
Last year we did this. This year we’re doing it. The previous year we did it. Last year we peaked in April. The previous year we peaked in March. And so this is the time and place where we should run out of steam and start coming back down. But that certainly has not started yet. Then looking at financials, they had a rough week, down nearly 2.5%. Biggest loser was great west life and then followed by the regional banks. We’ve got Laurentian now back on a sell signal, joining Canadian Western Bank already on a sell signal. Then looking at the industrials are still holding up fairly well. We were down on the weak but still closing above the upper channel line. So not concerned about industrials coming into Monday’s trading action. Okay folks, that is all I wanted to cover in this morning’s presentation. We could go on forever. Of course we could drill down to the daily charts, but I really wanted to give you an overview that the market is starting to break down here. The kings have not rolled over yet, but all the pawns are starting to roll over, so we’ll have to see if that continues this week.
So far we’re seeing a relief rally in the pre-market on Monday. That’s really not going to change anything unless everybody gets overly bullish during the day. But we are up about 20% to 30% of Friday’s losses. So Monday could turn out to be an inside day. We’ll just have to wait and see. You enjoy the rest of your day and next time you’ll hear my voice is on Tuesday morning. And at that time we’ll take a closer look at the markets using daily charts.
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Stephen Whiteside
TheUpTrend.com
Monday, April 15, 2024
