Good morning, everyone, and welcome to Tuesday morning. It’s Stephen Whiteside here from theuptrend.com dot. In the pre market this morning, stock index futures are slightly below fair value. Commodities are mixed, with gold trading down over $30, while crude oil is slightly higher on Tuesday morning. Now, this is month end. Month end usually has a bullish bias to it. There’s lots of numbers coming out this morning. None are that important until we get to consumer confidence, which comes out after the market opens. And then the world will be focused on the new, the latest Fed meeting. And of course, volatility expands after 02:00 p.m. Wednesday afternoon. Now, the VIX continued to move lower yesterday. That’s supported for higher stock prices. That would change on Tuesday with a close above 17.62. Now, the Dow, still treading water here, has not taken out last week’s high. That is also true for the TSX. Notice that the TSX 60 is holding up much better than the Dow at the moment. That has a lot to do with anything commodity related. So whether you’re looking at base metals, gold stocks, the global mining stocks, or even materials or the energy sector, they’re all holding up fairly well at the moment.
And certainly no weekly sell signals in any of those. Copper made a new high on Monday, and that is a sign of global economic health. It’s also a sign of inflation. Inflation. Gold is still on a sell signal. Silver’s still on a sell signal. They are trading lower in the premarket this morning. Crude oil still on a sell signal. Pros are starting to give up control on crude oil, so we may see it start to trend lower soon. And natural gas still treading water here, still on a sell signal. No change for natural gas. Then. Looking at the US markets, there’s the S&P 500. Fairly quiet day yesterday, moving up slightly. That’s also true for the Nasdaq. The big winner for the S&P 500 and the Nasdaq 100 was Tesla, which popped yesterday up over 15%. Trading up to our next channel line and heading towards the 20313 level, which is where we peaked back in February. The high yesterday was 198.87. So there are probably some sell orders in there, up at 200, holding Tesla back at the moment. We are coming up to the 200 day moving average. We are in the flypaper channel at the moment.
So it’s going to be hard for Tesla to continue to move higher. But it may want to run up and retest the February highs. Then looking at the Russell 2000, the small caps and the micro caps, they’re all back on buy signals as of Monday’s close. Then looking at financials, they’re struggling here. We got back on a buy signal last week and haven’t gone anywhere. That’s also true for us. Banks closing back in the channel, and the regional banks also slipped back into the channel on Monday. Looking at canadian financials, you can see we’re right in the channel for the financial index, and we are at the lower end of the channel for the banking sector. So not a good sign there. We want these stocks to continue to move higher to help prop up the rest of the market. Now, I was scanning through the Dow 30 stocks this morning, and even with the Dow on a buy signal, there isn’t a lot of love here at the moment. So there’s lots of opportunity. On the upside, for the past month, only nine of the Dow 30 stocks are actually positive for the month, and the pros certainly have not come back to take control.
Now, one of the Dow 30 stocks is apple. Apple popped yesterday, ended the day up just under 2.5%, which is pretty good for Apple. It gapped higher. Not a lot of enthusiasm after it opened, but it certainly held the opening. It opened at $173.37 and it closed just above that at $173.50. So it didn’t lose anything. But, you know, from the time it opened to the time it closed, there wasn’t a lot of additional commitment there. It certainly traded higher during the day, but gave up those gains going into the close. So, yes, we gapped higher. Haven’t taken out the previous high just yet, but certainly Apple is back on a buy signal. Now. What’s not working on the Dow? Well, intel’s the big loser, down nearly 30% inside day yesterday. Then we have IBM down over 12% for the last month. Fairly quiet trading. Might be putting in a bottom here. Now, we talked about Home Depot last week as a potential buy setup, down over 12% for the last month. Now, here’s a mistake I made last week. I posted this chart of lumber, and I didn’t realize that our system had screwed up and was going after the wrong contract and went back to 2021.
So unfortunately, I was just looking at the right side of the screen, not even looking down below. And sometimes you just do that when you’re scanning through charts. The real chart looks like this. So, yeah, totally different picture for lumber, much more in sync with Home Depot. And I guess the lack of demand in lumber is one of the reasons Home Depot stock trading lower at the moment. Now, Boeing’s down over 10% for the month. And you can see we are back on a buy signal. As of Monday’s close, we’ve got Salesforce down over 8%, still on a sell signal. No joy for Disney, down over 8%. What’s working? Well, not that many stocks are working and what do you know, it’s a commodity stock which is leading the Dow higher and is up over five and a half percent for the month. And that is chevron. Then we’re looking at American Express, up just under 5%. And you can see all the gains have been made in the last week or so. Three M is still treading water here. It’s up over 4% for the month, but has been that way for quite a while.
And then now we’ve got Goldman Sachs making a new high yesterday for this move, up over 3% for the month even with the big move in the last week. And again, another stock that has made most of its gains, gains just in the last few trading days. We talked about Coca Cola being the big Dow winner last week and it has taken out the previous highs and continue to move higher, but only up 1.41% for the month. So not that impressive if you are holding for the last month, but at least you’re making something. Okay, we are coming into month end and the VIX is still falling. That is supportive for higher stock prices. As we know traders in Chicago, the options traders in Chicago are not that concerned about the future. But of course we have to get over the Fed meeting before the clouds start to part. So it’ll just take a day or two before we figure out which way the market wants to go next. Enjoy the rest of your day. Next time you’ll hear my voice is on Wednesday morning.
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Stephen Whiteside
TheUpTrend.com
Tuesday, April 30, 2024
