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Morning Market Outlook 05092024

Good morning, everyone, and welcome to Thursday morning. It’s Stephen Whiteside here from In the pre market this morning ahead of jobless claims coming out at 8:30. We do have stock index futures and gold trading lower in the pre market, while crude oil is trading slightly higher on Thursday morning. Well, yesterday we saw the VIX continue to move lower, so we know options traders aren’t worried about the future at the moment. That would change on Thursday if the VIX were to close above 1549. Now, the Dow continued to move higher. I think it’s up six days in a row. The big winner on the Dow on Wednesday was Amgen, followed by Boeing, followed by JP Morgan. What didn’t work yesterday? Well, the usual suspect intel made a new low on Wednesday. Moving on to the S&P 500. Had a very quiet day yesterday, ending the day just up a nickel. We’re still stuck to the 500 1563 level. Notice above that, we’ve got a wall of resistance from March into early April. If we can take out the recent high, then 531.25 would be our next target to the upside. Now, we did talk about resistance for the S&P 500 index up at 5200.

We saw the market reverse from that level the other day. Yesterday we got as high as 5,191.95. So we have not gone back to retest that level just yet. Yet. Then looking at what worked yesterday on the S&P 500, it was Arista Networks, followed by Globe Life, followed by Ericsson. Ericsson ending a month long downtrend with a huge day yesterday. So if the S&P 500 had a very small bar, Ericsson had a huge wide bar yesterday. Then looking at what didn’t work well, Uber gapped lower yesterday on earnings, and we’ve seen a lot of stocks do that recently, and I think that’s going to continue. Then looking at the Nasdaq 100, it pulled back slightly yesterday after making a new high for this move on Tuesday. And of course, we also have a wall of resistance up here that ran through from late February all the way into the middle of April and looking to see if we can break out above that. Our next mathematical target, if we can break away from the 437.50 level, is up there at 445 31. Now, what worked yesterday? Well, Datadog came back after a huge gap down day on Tuesday.

That was the big winner in percentage terms, followed by Constellation Energy. And then it was Amgen, which we’ve already looked at. And following Amgen was Vertex Pharmaceuticals. Then what didn’t work on the Nasdaq 100 was the Trade Desk. It traded back into the channel yesterday, gapping lower, looking for a close on Thursday below 85.03 to give us a new daily sell signal. Then moving on to the Canadian market. You can see the ishares of the TSX 60 had a very wide bar day on Wednesday, mirroring what happened on Monday. And then on Tuesday it was just incredibly quiet for some reason as it traded up to the previous high and stopped. Now if we can take out Tuesday’s high then 34.38 would be our next target to the upside. Now, looking at what worked and what didn’t work yesterday, well, it’s kind of a mirror of what we were looking at in the US on Tuesday’s trading action with Utilities and Consumer Staples the big winners. What didn’t work? Well, it was Information Technology down over 4% on the day. We’ll take a look at that in a second. There’s Utilities making a new high.

We saw money continue to go into Consumer Staples on Wednesday. What didn’t work? Well, it was the Infotech sector and it was the big elephant in the room, Shopify, which unfortunately after being up 12345 days in a row ended Wednesday down gapping lower in the pre market that continued throughout the day. So no recovery. We may see some recovery today. If we take out yesterday’s low, then 81.25 and then $75 would be our next two targets. To the downside, what worked well, Kinross was the big winner on the TSX 60, up nearly 5% on the day, followed by WSP. What didn’t work? NextGen was the big loser, down over 12% on the day. And that’s quite a wide range bar for next gen. What also didn’t work well, Bausch continued to move lower, making a new low on Wednesday. What worked yesterday? Well, banks were up on the day and the big winner was Bank of Nova Scotia, up 1.47%, making a new high for this move. And in today, what we’ve got to look forward to is earnings from Canadian Tire, from Cineplex and from Telus. And coming into today, all three of those stocks are currently on buy signals.

Okay, folks, that is all for this morning’s presentation. Have a great day. Next time you’ll hear my voice is on Friday morning. And at that time we’ll take a closer look at the commodity sectors.

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Stephen Whiteside
Thursday, May 9, 2024

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