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Morning Market Outlook 06032024

Hello, everyone, and welcome to Monday morning. It’s Stephen Whiteside here from Well, today is the first trading day of June and so far things look pretty quiet out there. Stock index futures and commodities are slightly above fair value. We don’t have any major economic numbers coming out this morning, so not expecting some extra volatility in the pre market. Now, I always say that month end usually has a bullish bias to it, typically not like what we saw on Friday, which was a huge update for the market markets. The Dow had been selling off for the last week or so and had a nice recovery day on Friday closed above the previous two days highs. So that is a bullish sign. We filled a couple of gaps there. We’ll have to see if we can continue to move higher. It looked like the market was doing some bottom fishing on Friday. We had Salesforce was the big winner on the Dow, followed by UnitedHealth, followed by McDonald’s. And of course, none of those stocks generated new buy signals. There were actually two losers on Friday in the Dow 30. The first one was Amazon, and then we had Caterpillar.

Those were the only two losers on the Dow on Friday. Now, the VIX came down sharply on Friday, not enough to give us a sell signal. That would happen on Monday if the VIX were to close below 12.54. Huge reversal day for the S&P 500. We generated a sell signal based on Thursday’s close. If you took that sell signal, you sold and it actually opened slightly higher on the day on Friday. Here we are in the channel coming into Monday’s trading action. We need a close above $528.71 on Monday. Then looking at the equal weighted S&P, it actually outperformed the S&P on Friday. The S&P was up 0.91%. The equal weighted was up 1.33%. So again, we’re getting pretty close to a buy signal now. There was a huge reversal in the Nasdaq. The Nasdaq actually ended the day lower and actually ended on a daily sell signal. You can wave that off this morning and wait for the next close. Below the lower channel line. The Nasdaq 100 was down 0.19%, while the equal weighted Nasdaq was actually up nearly a quarter of a percent on the day.

And we also had the, the next generation Nasdaq stocks up just over half a percent on the day. So it was quite a while. A very wide based rally on Friday. There’s the Russell 2000 trading up, getting pretty close to the upper channel line. So a close on Monday above 206.57 would give us a buy signal for the Russell 2000. What was the big winner on Friday? Well, it was actually the Energy sector which closed just above the upper channel line again. If you want you can wait for the next close above it to confirm. That buy signal now may turned out to be a very positive month for the markets. Looking at a monthly chart of the S&P 500 ETF, we were up a little over 5% on the month, making a new high. That’s also true for the Nasdaq 100. Up a little over 6%, again making a new high for this move. Now looking at the canadian market, the ishares for the TSX 60 were up a little over 1% for the day on Friday and we’re looking for a close above $33.70 on Monday to give us a new daily buy signal.

What worked on Friday? Well, Dollarama was the big winner, up over 4%, continuing this huge rally for that stock. Then we had a couple of other consumer related stocks on the top of the winners list, starting with Canadian Tire up moving up to the lower channel line while Restaurant Brands moved up into the channel. We are looking for a close above $94.40 on Monday to give us a buy signal for Restaurant Brands. What didn’t work well, Wheaton was the big loser, back on a sell signal as of Friday’s close. Quite a reversal for the CIBC and ending the day down 2.33%. So a little bit of a reversal but no sell signal for CIBC coming into Monday’s trading action. Then First Quantum was the next big loser of the day. Still on a daily sell signal. No change there. Now looking at a monthly chart for the ishares for the TSX 60, we ended the month up 1.85% and we are still trying to get to our next price target of $34.38. We opened and closed the week pretty well at the same level at the 33.59 level, down very slightly. Just $0.04 on the week.

So no big move there coming into the month end. So 34.38 still our next target to the upside. Now looking at the seasonalities coming into June when we start off with the VIX, the VIX usually starts the month down at a new low and then we’re looking for a move up into the middle of the month and the VIX should stay elevated right into the end of the month. Then looking at the S&P 500, we usually come in on a positive note. The first week is usually pretty good. And then we get a sell off into the last week of the month. And then looking at the TSX we see coming into the month is usually pretty bullish. And then we get that ride down into the third week of June. And then this is about the point where we look for the summer rally to start through July and August. Let’s finish off looking at the Magnificent Eight. Starting off with the Mags ETF. It had a wild day on Friday, trading down through the lower channel line before recovering. Still closing slightly lower on the day, just by $0.03. So no major move there.

Apple still on a buy signal that would change on Monday with a close below $188.58. We’re still trying to get to $193.75 that has been acting as resistance. So we know there’s some sell orders in up at that level. Looking at Amazon, Amazon made a new low for this move. If you had, if you’re short Amazon and you had a buy order in at 1.75, congratulations, it got filled on Friday. Looking at Alphabet, still on a sell signal. No change there. No change for meta. Meta spent most of the day below the lower channel line before recovering. So we’re still looking for a close below $466.24 on Monday to give us a sell signal for meta. Microsoft had a huge reversal, actually ended the day slightly higher after running down. If you had a buy order in at 406.25, congratulations. That got filled on Friday. And then Nvidia was trading water on Friday. Closed the day down slightly on the day. We’re stuck here at $1125. If we take out the recent high, then $1250 does come into play. Looking at Shopify. Shopify looks like it’s going to walk into a buy signal here in New York.

We’re looking for a close on Monday above $59.34. In Toronto we’re looking for a close above $80.80. Then looking at Tesla, Tesla still treading water here. I saw a video this morning about the positive seasonality Tesla has in the month of June. You know, historically they’re all positive when you look at Tesla over the long term on a short term basis. Of course, Tesla is struggling right now. Still on a buy signal that would change on Monday with a close below $173.95. Okay, folks, that’s all I need to cover this morning. It looks like we’re going to have a slightly positive open on Monday. Friday was a wild day. A lot of looked like some bottom fishing going on. Going into month end, portfolio managers doing something with their portfolios. I don’t know, but yeah, that was a lot of money that came in to the market late in the day on Friday, and it certainly wasn’t you and me. Okay, enjoy the rest of your day. Next time you’ll hear my voice is on Tuesday morning, and at that time, we’ll walk through the most actively traded stocks on both sides of the border.

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Stephen Whiteside
Monday, June 3, 2024

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