Hello, everyone, and welcome to Tuesday morning. It’s Stephen Whiteside here from theuptrend.com. In the pre market this morning, stock index futures are slightly above fair value. Commodities are mixed with crude oil down, while gold is slightly higher on Tuesday morning. Now, we don’t have a lot of economic numbers coming out. We’ve got a jolts number, employment number coming out at 10:00 a.m. and of course, this is the first day of the Fed meeting. Now, the VIX is still on a buy signal, still trading above the upper channel line. Things would change on Tuesday if it were to close below 14.34. Not expecting that to happen. And of course, most of that hedging has to do with the magnificent seven stocks. They are still on a sell signal. They have creeped up over the past couple of days, but still trading below the lower channel line. The Dow had an inside day. The S&P 500 had an inside day. So it was really a pause day yesterday ahead of that Fed meeting. The NASDAQ closed slightly higher on the day. No change there. The Russell 2000 pulled back yesterday after trying to break out above 225.
Once again, no change for small caps. No change for micro caps. Again. Trying to make a new high here. We did yesterday, but reversed and closed below the previous day’s low. So no joy there. Then. Looking at banks.
Banks made a new high yesterday.
We saw a new high for regional banks, in both cases pulling back into the close, closing below the previous day’s low. So that could turn out to be a top for the banking sector. But we need more evidence. And we’re still closing above the upper channel line. A new high yesterday for insurance companies, a new high for broker dealers on Friday before pulling back. Now, we closed in the channel yesterday, so possibility of a sell signal on Tuesday with a close below $121.90. Then looking at pharmaceuticals, we’re putting in a double top here. We’ve had lots of opportunities to take money off the table along the way. So still no sell signal, but possibly a top for pharmaceuticals. Tesla moved up yesterday, got everybody excited. Closing right at the lower channel line. So a close above $242.98 would give us a buy signal on Tuesday. Still no joy for Crowdstrike. I was asked yesterday about Akamai. Akamai is coming up to potential resistance. And it reversed yesterday. Still closing above the upper channel line. So on one side, looking for a close on Tuesday below $95.05 to give us a sell signal.
And I would have an order in there just below dollar 100 to take some money off the table. We are coming up towards the top of the open gap, and the market might want to fill that before pulling back, but we’ll just have to wait and see. There’s no, you know, rules here written in stone. You know, both a price major price target and a big round number is a potential area of resistance. And you can see we use that as support previously. And then, of course, the top of the open gap is another potential area of resistance. You say resistance, some people say a price magnet. You know, it could work out either way. We’ll just have to wait and see. Now moving on to the Canadian market, and things aren’t looking well for the Canadian dollar right now. Making a new low yesterday. So exporters love this situation. Importers hate it. It has a lot to do with commodity prices, with crude oil and natural gas both making new lows yesterday. Copper made a new low on Thursday, closed slightly lower yesterday. We’ve got gold on a sell signal, silver on a sell signal.
So that’s not helping the commodity sector. But when you look at the TSX, it’s still holding up fairly well right now. That has a lot to do with consumer staples, financials. We’ve got the income trust making a new high for this move on Monday. Coming up to pretty close to the highs from back in May. Then looking at real estate stocks, they had a quiet day yesterday after making.
A new high on Friday. A new high for this move for telecom stocks. They’re heading up towards those highs from back in May. Then we’ve got utilities having a quiet day yesterday.
Inside day for utilities on Monday. Now the Royal Bank is still closing above 150. We’re looking for a close on Tuesday below 151.35. We had a new high yesterday for CIBC. We see Sun Life still on a buy signal here. Trading in the channel yesterday. A closed below 68.22 on Tuesday would give us a sell signal.
New high yesterday for Fortis, new high yesterday for Circle K, new high yesterday for Brookfield and new high for Cineplex. Obviously, the big movie that’s out now did fairly well on the weekend. Then we’ve got Hydro One making a new high on Friday, small pullback on Monday. And similar situation for First Service. Making a new high on Friday, a small pullback on Monday. Certainly no change in trend there. I think this is quite an unusual situation in which the Canadian stock market can be up making new highs without the commodity sector pushing the market higher. Okay, folks, that’s all for this morning’s presentation. Have a great day. Next time you’ll hear my voice is on Wednesday morning.
Stephen Whiteside
TheUpTrend.com
Tuesday, July 30, 2024
