Good morning, everyone, and welcome to Monday morning. Thanks for joining me for breakfast. It’s Stephen Whiteside here from the uptrend.com dot. In the premarket this morning, stock index futures and commodities are currently trading above fair value. Dow futures currently up 120 points. We have no economic numbers coming out this morning that are going to really affect the market. Now, Friday was an interesting day. It brought the VIX down to close just below the lower channel line. That gives us a weekly sell signal for the VIX and turns us from being long term bearish to being long term bullish on the markets. I got questions about that, but the reality is we closed below the lower channel line, joining the daily VIX already on a sell signal. So we remain short term bullish on the market. Now, what happened on Friday leaves me a bit perplexed, but that’s just the way it is. We have to deal with the cards that were dealt. Now, a lot happened on Friday, but unfortunately it was just focused on two major stocks, and we’ll get to those in a second. You were with us last week. We were looking to see if the markets could trade and close above the recent highs.
And sometimes you get what you ask for, and that’s exactly what happened on Friday, with the Dow actually gapping higher on Friday. The Dow doesn’t usually gap very often, but it certainly did on Friday. And unfortunately, most of those gains came from just two individual stocks. Now, you can see the difference when you look at the canadian market. That does not include those two stocks. Yes, we traded higher on Friday. It was a nice day, not enough to give us a buy signal, and we certainly didn’t break out above the recent highs. Now, the first stock we need to talk about is apple. We knew about that in the pre market. Apple had news out Thursday night. And since the news came out, the market was trading sharply higher and Apple was up nearly six, closed up nearly 6% on the day. It blew through our first price target of 181.25. And if you had an order in around there, so let’s say 181.25 ish, it got filled at the open at 186.55. So congratulations. We’re still trying to get to 187.50. You can see the big red bar telling us that we closed lower than we opened.
So the market was willing to sell off going into the close, but certainly not enough to fill the gap. Now, that big up move helps break the pattern of lower highs and lower lows. So things could be looking up for Apple going forward. We’ll just have to wait and see. Now, the bigger story on Friday was actually Amgen, which ended the day up nearly 12%. It blew through our first price target of 296.88, ran up to the next price target of 312.50. So lots of money to be made there. And of course, if you had an order in at 296.88 ish, it got filled at the open up there at 313.39. So congratulations to anyone trading Amgen. From here, we’re looking to see if we can move up to our next price target, which is a realistic target. We were there a couple of months ago, up at 328.13. So just keep your order in there for the time being. Now, Amgen earned itself a triple play on Friday. Not only was it the best performing stock in the dow, but it was also the best performing stock on the Nasdaq 100 and the S&P 500.
So lots of money was moving Friday, and both of those major indices closed above the recent high, which is bullish. I’m a little concerned about a possible pop and drop for both of those stocks, Apple and Amgen. If we look at a couple of stocks that recently popped, and there’s Alphabet, you can see for the next two days, we traded lower. And for Tesla, for the next two days, we traded lower. And so those stocks, Apple and Amgen, having such a big impact on Friday, I’m kind of concerned that they roll over and head down for the next couple of days, which could pull out all of the enthusiasm that the market gained on Friday. We’ll just have to wait and see. Now, looking at the weekly charts, starting off with the ishares for the TSX 60, we ended the week almost unchanged. For the Dow, we traded up into the channel up 1.17%. The S&P 500, not so much, up 0.6 of a percent. Trading back in the channel, getting pretty close to a weekly buy signal. Then, looking at the triple qs, we were up over 1% on the week. But if you look at the equal weighted triple qs, you can see we’re up only a quarter of a percent on the week.
So you take out the emphasis on those big cap tech stocks like Apple, like Microsoft, Facebook, Tesla…, And then look at the next generation of Nasdaq stocks. What happened to those? Well, they ended the week unchanged, so not phased at all by what happened with Apple and Amgen. At the other end, you’ve got the Russell 2000, and it was up nearly 2%, 1.78% on the week. So a nice move for the Russell still on a weekly sell signal. Now, we’ve been talking about the time shift. We were expecting a big pop in the VIX in March. That didn’t happen. It happened in April. And so is the market going to be on a time shift for the rest of the year, or is it going to get back in sync with the seasonalities that we normally expect? We should expect a May pullback for the S&P 500, for the Nasdaq and for the TSX, and that should start right about now. It certainly doesn’t look like it’s starting on Monday morning, but that’s what the market usually does in May. So don’t be surprised if we get a pullback here. But it certainly hasn’t started this morning.
Now, what didn’t work last week or anything commodity related? We had canadian energy stocks down over nearly 4%. We had us energy stocks down three and a third percent, both on weekly buy signals. Still no change there. No change for gold stocks, down over 3% in the US, down over 3% on the TSX. And then we had us financials. So when you get past all the commodity ETF’s moving lower, it was really us financials, which were down two thirds of a percent, still on a weekly buy signal, and then canadian banks down a third of a percent and sitting right on the edge of a new weekly sell signal. So a little weakness in financials last week. Then let’s finish off looking at commodities. Starting off with the energy sector, we had crude oil come down sharply on the week, nearly 7% back on a weekly sell signal. If you remember, we were stuck in a range here between 87.50 down to 81.25. And we finally broke down below that, heading towards $75 and then possibly 68.75. We’re not heading in that direction at the open this morning, but we’re only up slightly in the pre market.
Now looking at natural gas, we were up just under 6% on the week, which you really won’t notice on the natural gas chart. We’re starting to indicate that we’re putting in a bottom here. And on the weekly chart we’re looking for a close above $2.61 this coming Friday to give us a buy signal. Now, if you look at the daily midterm chart, 2.61 comes in right around what we’re looking for, the midterm chart as well. And you notice we haven’t had any love for natural gas since way back here in October. Look across the bottom here. We are starting to make higher lows and getting pretty close to breaking out. So if momentum starts to break out here and we get a close above 261, that might be the start of something new for natural gas. But up to this point, natural gas is still a disaster. Moving on to the metals, copper hit a new high before pulling back. Closing lower on the week did not close below the previous week’s low. We hit our next price target. If we can take out this week’s high, then, yeah, we could certainly move up to the next price target.
That’s a big round number. Then, looking at the price of gold, we ended the week down $38.60. We’re up $20 in the premarket. We didn’t close below the previous week’s low, unlike the price of silver, which was down on the weekend, did close below the previous week’s low. So a little more weakness for silver at the moment. Okay, folks, that is all for this morning’s presentation. Stock index futures still trading higher this morning. A little concerned about a pop and drop. We’ll have to see if we can build on what happened on Friday or if that’s the end of this particular move. We’ll just have to wait and see. But it’s kind of 50 50 at the moment. But so far, stock index futures are trading higher. Enjoy the rest of your day. Next time you’ll hear my voice is on Tuesday morning. And at Tuesday morning, we’re going to take a closer look at the canadian stock market.
Thank you for watching today’s presentation. If you found this video useful, please consider hitting the like button, sharing it, and subscribing to our channel to ensure you never miss a video. We look forward to having you join us for our next daily market update.
Stephen Whiteside
TheUpTrend.com
Monday, May 6, 2024
