Hello, everyone, and welcome to Wednesday morning. It’s Stephen Whiteside here from theuptrend.com. Well, we’ve got a lot to cover in today’s presentation. What’s going on in the pre market this morning? Well, stock index futures are above fair value. United Airlines is the stock in the news this morning, and it’s up trading in the channel. Not enough to give us a buy signal so far. Of course, United should not be confused with Delta, which is still on a buy signal at the present time. Now, looking at what happened yesterday, we’ve got the VIX making a new high on Tuesday. Things would change on Wednesday if the VIX were to close below 14.95. Not expecting that to happen. The Dow had an inside day yesterday. The transports made a new low. The utilities made a new low. We had a new low for the S&P 500, a new low for the Nasdaq 100, but closed slightly higher on the day. So no change there. We had a new low for the Russell 2000, for the TSX and for the ts. So no joy for any of the major indices on Tuesday. Looking at the bond market, we had a new low for the TLT, new closing low for the XBB, and then emerging markets.
And junk bonds continued to sell off sharply on Tuesday. Next up, let’s take a look at the world of commodities using the major us commodity ETF’s, starting with the USO. We’ve been trading in the channel for the past couple of days. Things could change on Wednesday with a close below 80.43. Now we’ve got us inventory numbers coming out later this morning, and this particular sector is going to be watching those numbers closely. Gasoline still on a buy signal. No change there. And then unfortunately, natural gas is back on a sell signal, so no joy for natural gas. Now, crude oil seems to be holding up fairly well. Energy stocks are seeing a little pullback here. The XEG in Toronto is on a sell signal. So is the XLE in New York. So we’re seeing a pullback in stocks ahead of a pullback in the commodities themselves. And remember, at the end of the day, if you’re buying stocks, they’re stocks, they’re not actually commodities. And then the GLD still on a buy signal here and close slightly higher yesterday. And at the same time, we saw some major gold stocks generate sell signals on Tuesday.
Then looking at Palladium, we’re back on a sell signal as of Tuesday’s close. Platinum starting to trade in the channel, looking for a close below $87.16 on Wednesday. Then the Silver ETF, the SLV still trading above the upper channel line, so no change there. Let’s move on and take a look at the New York most actives from Tuesday’s trading action. And it’s a sorry looking list at the moment. One thing that’s quite unusual is a gold stock actually showed up on the list and unfortunately it’s for the wrong reason, but it showed up anyways. Looking at Tesla. Tesla making a new low for 2024 and unfortunately it rolled over on Monday, fall through the downside on Tuesday. Now Tesla has been in the doghouse for a while when you look at the midterm chart. So more conservative investors would be using this. And it broke down right at the start of the year. When we look at the Fly Paper Channel chart, you can see when it started to break down. So we went from being in a bull market to a bear market. And Tesla didn’t spend too much time above the, the Fly Paper Channel.
And of course at that time it was making a lower high, which is a bearish sign. So we knew that ahead of time. Compare that chart to Bank of America which is now pulling back into the channel. So once again we’re trying to find support in the Fly Paper Channelfor bank of America. If that breaks down, then we know something else is going on. If investors are not prepared to once again buy the dip they have previously and now we’re going to see if they will do it again. On the other hand, Apple investors are selling any rips into the Fly Paper Channel. And once again we rolled over, got up to the 200 day moving average and then started to pull back. And now we’re back on a sell signal. As of Tuesday’s close, we’re still at support at 168.75. If that starts to break, then 162.50 would be our next target. To the downside, looking at Ericsson had a wild day yesterday and closed higher on the day, but did not close above the previous day’s high. So no change there. We saw a new low for Ford yesterday for this move. It’s still holding support from the February and March lows.
We are certainly projecting lower prices here, but we have to get through those lows. And then there’s the potential area support here from the January low. So it got to break through some support before we get down towards the $10 level, which is where we’re projecting to at the moment. No joy for Advanced Micro Devices still trading and closing below the lower channel line. Trying to hold the Fly Paper Channel here and we would have expected the market to come in and have bought this stock by now. But that’s not what’s happening. We’re still on a sell signal and may start to break down below the Fly Paper Channel and the 100 day moving average. Of course, the market’s next target to the downside would be the 200 day moving average. Then Rivian, no joy. Fairly quiet trading yesterday. Then we’ve got Barrick back on a sell signal as of Tuesday’s close. So we had a bearish reversal signal at the top there. We ran up above the highs from back here in December. The air got very thin when we got up there. Bears reversal day fall through to the downside the next day. And what do you know, a sell signal on the next day.
Looking at the TSX most actives from Tuesday’s trading action, and we have some better looking stocks here. Some commodity related stocks are still holding up fairly well, but there are a few zeros on this list. Starting off with Toronto Dominion Bank, which made a new low for this move yesterday. A big down day for Enbridge, making a new low. Then we have Cenovus still on a buy signal here. That would change on Wednesday with a close below $28.34. Then we’ve got a new low for TC Energy on Tuesday. There’s Barrick back on a sell signal as of Tuesday’s close. There’s b two gold back on a sell signal as of Tuesday’s close. Then looking at Canadian Natural Resources. Second day of a sell signal. No change there. No change for the Royal Bank. Making a new low for this move. Third day on a sell signal. Then looking at Suncor. Suncor traded up into the channel yesterday, so a sell signal on Monday, a little bit of a gain on Tuesday. A close above $52.56 would give us a new buy signal on Wednesday. I wouldn’t be chasing that. We’re up at the top of the panic zones already.
We had trouble getting over the 53.13 level. We’ve spent a week trying to break out above that. If we could, then 56.25 would certainly come into play. But this is not the time and place to be jumping back into this stock. If have you taken money off the table, then you should sit on your hands and wait for other opportunities to come up. Then looking at CIBC. New low for this move, no change there. We’ve come down below the 65.63 level. We filled the first gap. Now our next target to the downside is 62.50. Okay, everyone, that is all for this morning’s presentation. We cover quite a few topics this morning. Remember, when you’re looking for a market to start to change direction, the very first thing you have to see is just to close above the previous day’s high. That’s not a reason to do anything. That’s not a reason to buy. But that is certainly reason to pay attention and to anticipate that the market may continue to move higher. If the market continues to close below the previous day’s low, that is a very bearish sign, and we certainly saw a lot of that yesterday.
And you know, when the market wants to start to turn around, the first thing we’ll be looking for is, did we close above the previous day’s high? And again, that’s not a reason to be a buyer. That’s just a reason to pay attention and to start to change your mindset from being overly bearish to potentially being bullish. Okay, next time you’ll hear my voice is on Thursday morning, and at that time, we’ll take a closer look at the canadian stock market.
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Stephen Whiteside
TheUpTrend.com
Wednesday, April 17, 2024
