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Morning Market Outlook 04232024

Good morning, everyone, and welcome to Tuesday morning. It’s Stephen Whiteside here from In the pre-market this morning, stock index futures are trading above fair value. Dow futures currently up 100 points, while commodities are trading lower. Gold is down another $30 in the pre-market this morning, while crude oil is down 30 cents. We’ll break today’s presentation up into two parts, starting off looking at the US market, and then we’ll finish off looking at the Canadian market. The VIX came down It went hard yesterday. Certainly closed below the previous day’s low trading right down into the channel. On Tuesday, we’re looking for a close on the VIX below 16.27 to give us a new daily sell signal. What worked yesterday? Well, the chip sector was the big winner, but it ended up with an inside day, so really a day of indecision. After the chips, it was the regional banks, the banks themselves, and then the broker dealers. Those were the other big winners on the day. What didn’t Can you see how it worked? Well, the Dow was up nicely yesterday but didn’t generate a buy signal, so traded right up to the upper channel line.

We saw a lot of strength in some individual Dow stocks yesterday. A huge move up for Goldman Sachs. We had J. P. Morgan come back up and generated a buy signal yesterday, and then we had Procter & Gamble after generating a buy signal on Friday. It was up sharply on Monday. Procter & Gamble is not a stock that you usually see at the top of the performance list, but there it was on Monday, and coming up to a previous resistance, and I’m not sure it’s going to be able to break through that at the present time. Looking at the S&P 500, we were talking about the 5,000 level on the S&P 500 and the $500 level on the SPY. The index itself closed just above the 5,000 level while the SPY closed just below the $500 level. We certainly traded above that. During the day, we got up as high as 502.38 on the day. So no buy signal there. Now, volume was very light yesterday, and you can make a bull case, you can make a bear case based on volume. And what I mean by very light, if we go back to Friday’s action, it was 102 million shares, Thursday’s action was 74 million shares.

And then if we go back a full week, it was 92 million shares were traded last Monday. So definitely a big decline in volume on Monday. So we won’t know for a couple of days if the drop in volume is significant or not. So far, it’s not stopping the market from moving higher. Now, the Nasdaq had an inside day. Technology stocks had an inside day yesterday, so a day of indecision. The iShares for the Russell 2000 traded up to the upper channel line, so did small caps and microcaps were up on the day. No change in trend, obviously, for any of those areas of the market. It certainly looks like we’re still risk off right now. You can see that consumer staples continue to move higher. Of course, there’s a difference between the products that you have to have and the products that you might want to have. And so consumer discretionary was up on the day after making a new low yesterday. So big divergence there at the moment. That looks like risk off. And then we had money go back into financials, back into insurance companies, and back into utilities. Utilities moving up and trading just above the previous high.

So that That all looks like risk off to me. Then looking at the S&P Technology ETF, you can see yesterday was an inside day. Apple was up slightly on the day. Nvidia had an inside day, and then Tesla made a new low for this move on Monday. Now, moving over and looking at the Canadian market, it was all about gold yesterday. Gold was down $67 and change. It’s down another $30 in the pre-market. We’ve got gold and silver back on a sell signal as of Monday’s close. The index and the ETF is back on a sell signal. We’ve got a sell signal for the 2X Bull, and we’ve got a buy signal for the 2X Bear. Looking at the gold stocks, the most actively traded gold stock yesterday was Kinross. It’s still on a buy signal. That would change on Tuesday with a close below $8.66. B2 Gold already on a sell signal. No change there. No change for Barracks already on a sell signal. Big down move yesterday for G Mining Ventures. Then looking at Osisko Mining, it was closed down slightly on the day after trading in the channel. We need a close on Tuesday below $2.91. Then we’ve got IAMGold rolling over back on a sell signal as of Monday’s close.

The biggest player in this sector was down nearly 3% on the day, but no sell signal just yet. For a Agnico Eagle, we’re looking for a close on Tuesday below $84.01. Now, looking at the TSX itself, it traded up into the channel. The TSX-60 traded up into the channel. So certainly a possibility of a buy signal on Tuesday. No joy for mid-caps, small caps, or micro-caps. Now, Looking at some of the individual sectors, consumer staples is back on a buy signal as on Monday’s close. Energy stocks still treading water here in the channel. Certainly, if we move up on Tuesday, we could see a buy signal for energy stocks. Not that I would chase them. Financial industrials trading back in the channel. Certainly a possibility of a buy signal on Tuesday. That’s also true for industrials. That’s also true for Infotec. The big winner in the Infotec sector yesterday was Hut 8. It was up over 13% on the day, so back on a buy signal. No joy for Shopify. Shopify closing higher on the day, having an inside day. We’re still looking for a close above $98.97 on Tuesday to give us a buy signal.

Then we saw the telecom stocks trading rate in the channel once again, with Rogers generating a buy signal as of Monday’s close. Okay, folks, that is all for this morning’s presentation. Let’s see if volume can pick up on Tuesday, and if we can get the rally to broaden out a bit more. Unfortunately, gold is heading lower in the pre-market this morning, so we are expecting to see more sell signals in the gold and silver sector on Tuesday. Enjoy the rest of your day. Next time, you’ll hear my voice is on Wednesday morning.

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Stephen Whiteside
Tuesday, April 23, 2024

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