Hello, everyone, and welcome to Monday morning. It’s Stephen Whiteside here from theuptrend.com. In the pre market this morning, stock index futures are trading above fair value. We are coming up to month end. That usually has a bullish bias to it. But this month end also coincides with a Fed meeting. So that could certainly add some volatility to the market on Wednesday. Now, bitcoin is trading higher this morning. It’s on a buy signal right now. There was a bitcoin conference, and there’s a divergence between Bitcoin and Ethereum right now, which is still on a sell signal. Now, the VIX is still on a buy signal. That should be negative for stocks, but it’s just negative for a handful of stocks. The rest of the market seems to be doing quite well at the moment, looking for a close on Monday below $13.95. And of course, the big cap tech stocks in the Magnificent Seven are heavily weighted in the market. They’re huge companies. And that’s why you’ve got the VIX on a buy signal and you’ve got those big cap tech stocks on, on a sell signal at the moment. Now, the Dow got some love on Friday.
It turned around on Thursday a little, and then Friday was a big update for it. It generated a sell signal on Wednesday. So on Thursday, we had IBM shoot into the sky and held those gains on Friday, an inside day, down just $0.23. It was 3M on Friday that really kicked the Dow higher up just under 23%. That is not something I don’t think we’ve ever seen before in my lifetime. But what an incredible move for three m. Now, there’s some other non AI stocks that have recently seen some gains and have helped hold the Dow up. You’ve got Johnson and Johnson making a new high on Friday. You’ve got Coca Cola making a new high on Friday. Walmart unfortunately pulled back on Friday and closed just below the lower channel line. So if you’re still long Walmart, if you still have some shares left, you probably want to wait for the next close below the lower channel line before exiting that position. Now, looking at the TSX most actives, and we’re looking at volume weighted this morning. So these are the stocks with the most money trading on Friday. Not the most shares, but the most money.
And looking at this particular group of stocks, it’s heavily weighted in the banks. Those are the biggest companies in Canada, and most of them are doing fairly well at the moment. You’ve got the Royal Bank, which dipped below the lower channel line on Thursday, but did not close below that level. And we closed above the upper channel line on Friday. So no change in trend there. No change in trend for the Bank of Montreal or for the TD Bank. No change in trend for TC Energy. Making a new closing high on Friday. New closing high for CIBC on Friday. So most of the banks are doing well. There’s one that is not Bank of Nova Scotia. Still on a daily sell signal. No change there. A nice big update for Constellation Software on Friday. No joy for Canadian Pacific. Still on a sell signal here. That would change on Monday with a close above $114.26 for Canadian Natural Resources. Still on a sell signal, no change there. And no change for Enbridge, making a new high for this move on Friday. Now moving on to the US most actives from Friday. And again, we’re looking at volume weighted stocks here.
Not just individual share transactions, but shares times price. And this list is totally made up of completely different stocks than the Canadian market, which was heavily weighted in banks. We’re heavily weighted here in technology stocks. We’ve got one conglomerate, we’ve got one automaker, which is pretty well a technology company itself. But you can see why the VIX is on a buy signal right now. The only ten we have here is 3M. Otherwise the rest of the stocks look like they’re on sell signals. And we have both Alphabets, both Googles in this particular list. So starting off looking at Nvidia, no change there. When I’m looking at these charts, I’m not concerned about a new buy signal showing up until we see the stock at least trade into the channel. So that’s why I don’t blurt out the numbers required to generate a buy signal or a sell signal unless we’re trading in the channel. And that is also true for Tesla. Tesla’s found some love at the 218.75 level and the top of that open gap that’s acting as support right now. We may dip down, fill the open gap and come back. If we don’t do that, then look two lines down, 187.50. That would be our next target to the downside.
And otherwise look up two lines, that takes us up to 250. That is our current playing field at the moment. No joy for Microsoft on Friday. No joy for Apple. Apple’s reporting earnings this week had an inside day on Friday. Look at Advanced Micro Devices inside day on Friday after big down day on Thursday coming down to the 137.50 level. If we break that, then of course 125 would be our next target. No joy for the first Alphabet, new low on Friday. We saw money come back into meta on Friday, but nowhere near a buy signal on Monday. That’s also true for Amazon. And there’s the other Alphabet, making a new low on Friday. And last up, we’ve got three m now for three m coming into Friday’s trading action. This is what our price target chart looked like on the daily chart. So we were up at the top of the projected trading range, 106.25 acted as resistance back in May. We were not expecting this stock to move out above that level anytime soon. And what happened on Friday? Well, it broke through. So now we’ve got a new set of price targets.
If you just were lucky enough to own three m on Friday, I would certainly be locking in some profits at the open on Monday morning. Otherwise, our next price target is 134.38 for 3M. Okay, folks, that is all for this morning’s presentation. So far, it looks like we’re going to see some buying at the open on Monday morning. There’s no major economic numbers coming out this morning, so nothing to really stop us from doing that. And of course we’re going to work our way into that Fed meeting, which concludes on Wednesday. And of course, you know, the volatility starts to expand after 02:00 p.m. Wednesday afternoon. Whether expands to the upside or to the downside, only time will tell. Have a great day, and next time you’ll hear my voice is on Tuesday morning.
Stephen Whiteside
TheUpTrend.com
Monday, July 29, 2024
