Good morning, everyone, and welcome to this Morning’s Market Outlook for Friday, May 24, 2024. Well, it’s early on, and in the pre market we do have stock index futures trading above fair value. Commodities are mixed. We’ve got crude oil lower, while gold is slightly higher on Friday morning. Now, it is a Friday and we are coming into a long weekend, which usually has a bullish bias. Obviously, it did not have that yesterday, but today should be a fairly quiet day. A lot of traders will be have already left the building or will be leaving early this afternoon to get away for the long weekend. And so I expect volumes to be rather light on Friday. Now, speaking of light volumes, the Canadian market will be open on Monday while the us market is closed. It’s going to be very light trading on Monday. We’re going to take the day off. If for some reason there’s a global event and the TSX is either up or down over 200 points, we will come back and do charts on Monday night. Otherwise, as a Canadian investor, I would ignore anything that happens in the Canadian market on Monday.
Starting off looking at the VIX, the VIX popped yesterday, traded up to the upper chain line, but did not close above it on Friday. We’re looking for a close above 13.20 to give us a new buy signal for the VIX. That, of course, would be negative for stocks. Now, we were recently celebrating Dow 40,000. That apparently has come, come and gone for the time being. We’re down nearly 1000 points from the high, and it was a very big down day for the Dow on Thursday. And coming into yesterday’s trading action, we already had one early warning signal on the Panic Zone chart. Yesterday. We got another and we came right down to the previous price target. There’s a nice open gap down here that needs to be filled at some point. It doesn’t have to be filled, but I’m sure the traders want to come down and fill it. They won’t be doing that on Friday, but they may do that in the not so distant future. Now, the reason the Dow was so wonky yesterday was because of Boeing. Boeing traded up to the Flypaper channel and reversed. I didn’t know or anticipate it was going to come down this quickly.
But here we are heading back down to retest the previous lows, and that could happen over the next week. There’s Boeing trading up to the first price target of 187.50. And then yesterday came right back down to the previous price target, down at 171.88. We took a run down towards 156.25 back in April, but people came in and bought it down above that level. So that recent low could be our next price target if we start trading below 171.88. What else didn’t work on the Dow? Well, the Dow stocks across the board were down yesterday. Intel was the next biggest loser. Back on a sell signal. We talked about the fact that this stock was probably going to walk itself into a buy signal, and then we had the bottom of the open gap here has acted as resistance as that’s what gaps often do. Speaking of losers, McDonald’s was next up on the list of losers yesterday. New low for McDonald’s for this move. And then we talked about the Dow Transports being possibly the canary in the coal mine. It kept going lower yesterday and was a big down day for upS, joining FedEx and old Dominion freight, making new lows on Thursday.
Taking a look at the Dow Utilities, they’re also back on a sell signal as of Thursday’s close. So you got the Dow, the Transports, Utilities, all on sell signals right now. Canadian Utilities traded below the lower channel line but did not close below it. So technically we are still on a buy signal here. The Canadian market, the TSX, is back on a sell signal as of Thursday’s close. Now, yesterday morning I said if you were looking at the ishares for the TSX 60, it was on a very soft sell signal. You might want to wait for the next close below the lower channel line. Well, if you took that advice, there’s the next close below the lower channel line. So sorry about that. Looking at Nvidia, it was the stock everybody was watching yesterday, and maybe last year it would have propped the market up. But that’s not what happened yesterday. So huge, big update for Nvidia. If you had an order in around $1,000, 999, 998, it got filled at the open up there at 1020.28. And when I say gets filled up there, your order will get executed after the open. But not sure exactly what price is going to be, but it’s going to be around 1020.
Taking a look at the Semiconductors themselves, they made a new high yesterday before pulling back. We saw some sell signals in the semiconductor sector on Thursday, even though Nvidia was continuing to move higher, the S&P 500 traded back in the channel yesterday. On Friday, we’re looking for a close below $523.98 on the S&P 500. The big winner after Nvidia was international paper, which was up nearly 5% on the day. So that trend continues. What didn’t work well, Live Nation was a big loser yesterday, and here’s a company I wouldn’t miss if it went out of business tomorrow. And then we’ve got Caesar Entertainment continuing its downtrend, making a new low for this move. And then, speaking of semiconductors on semiconductor is back on a sell signal as of Thursday’s close. Then looking at the Nasdaq 100, we put in a new high yesterday before reversing. So an outside reversal day for the Nasdaq 100. We’re still trading above the upper channel line, so not concerned about a possible sell signal on Friday. PDD holdings was the big winner yesterday, while global foundries was the big loser. Back on a sell signal as of Thursday’s close.
Now, if we go back and look at the Nasdaq 100 itself, it was down just a little under half a percent. When we look at the equal weighted Nasdaq 100, it was down a little over 1%. So twice the losses for the Equal Weighted ETF, a close below $121.61 on Friday would give us a sell signal there. And then when we look at the Next Generation Nasdaq 100 stocks, they were down a little over one and a half percent. So you can see the smaller the stock, the bigger the loss yesterday. So that ETF is back on a sell signal. Then, looking at the venture exchange, it was down yesterday, pretty close to what the Next Generation Nasdaq stock was, just a little more in percentage terms. And we’re still on a buy signal here. But we saw a similar selling in Canada as we did in the US. Now, looking at what commodity traders were doing on Thursday, we’ve got Crude Oil on its second day of a sell signal. Natural Gas put in a new high yesterday, ran up to the 200 day moving average, and then pulled back. Did not close below the previous day’s low.
Last time I checked, it was unchanged in the pre market this morning. Looking at Canadian Energy stocks, we’re still on a buy signal here. Us stocks second day of a sell signal for the energy sector. Copper is sitting right on the edge of a new daily sell signal on Friday. We’ve got gold back on a sell signal as of Thursday’s close. Silver coming into the channel on Thursday. A close below $29.53 would give us a new sell signal for Silver on Friday. Looking at the stocks themselves, Copper stocks second day of a sell signal there. US Gold stocks back on a sell signal as of Thursday’s close. Joining Canadian Gold stocks also on a sell signal as of Thursday’s close. Silver stocks. The Silver Miners ETF still on a buy signal. That would change on Friday with a close below $33.55. Let’s finish off this morning’s presentation. Taking a look at a couple of the most actives from the TSX on Thursday. Enbridge still on a sell signal, no change there. Suncor putting in a new high before pulling back. Still on a buy signal. No change for Cenovus. Just treading water here. I guess they’re waiting for a catalyst of some sort.
Manulife, treading water up here at our price target. So we’re trading right around $36 right now. Obviously investors feel fairly comfortable in that area. And then unfortunately, the TD Bank rolled over yesterday. So still on a sell signal, no change in trend for the TD Bank. Now, walking through the New York most actives, we’ve already covered some of them, but there’s Advanced Micro Devices having an outside reversal day yesterday. Looking for a close on Friday below $158.05. We closed $160.43 yesterday. So just a couple of dollars away from a sell signal. Nio back on a sell signal as of Thursday’s close. Tesla trading right down to the lower channel line yesterday, looking for a close on Friday below $173.45. Then we’ve got Sofi. Last week, Sofi generated a buy signal. I said I wouldn’t take it, I wouldn’t chase it, looking for a breakout above these previous highs. So here we are. Sofi, second day of a sell signal this week. Then looking at Apple. Apple came right down to the lower channel line. So a close on Friday below $186.87 would give us a new sell signal for Apple. We’ve had several opportunities to lock in profits on the way up here.
So it’s been a very profitable trade, trading Apple over the last month. Okay, folks, that is all for this morning’s presentation. Again, we’re coming into a long weekend. Historically, that has a bullish bias to it. Historically. It’s also usually a fairly quiet day as a lot of people are heading off for the us long weekend. Again, Canadian markets will be open on Monday. We don’t really care. There’s going to be very thin trading, no guidance from the futures contracts out of the US, and certainly no live commodity trading. There will be electronic trading, but not live trading. So that is a big difference. And as a Canadian investor, I just basically don’t even look to see what happens on Monday. If, as I mentioned earlier, for some reason there’s a global event and there’s a disturbance in the force on Monday, we will come in on Monday night and print Canadian charts. But otherwise, you should do what we’re doing. Take the day off and don’t take a look at the Canadian market. Okay, have a great day. Have a great weekend. And next time you’ll hear my voice is on Tuesday morning.
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Stephen Whiteside
TheUpTrend.com
Friday, May 24, 2024
