Good morning everyone, and welcome to Thursday morning. It’s Stephen Whiteside here from theuptrend.com. In the pre market this morning, stock index futures and commodities are trading above fair value. So so far it looks like the market wants to continue on its buying spree. We do have some employment numbers coming out at 8:30 this morning.
That could certainly change the direction of the market. Let’s start off with a little recap of what happened in July. The S&P 500 was up 1.21% on the month. Remember, we’re taking profits at 562.50. For the Nasdaq 100 we were down 1.68% on the month and we took profits at 500.
Looking at the Russell 2000, we were up over 10% on the month and taking profits at 225. We closed at 223.86 yesterday. Then looking at the iShares for the TSX, 60 were up over 6%, trading through the 34 38 level. Then looking at what really worked. It was the Regional Banks were up over 18% in the US.
Then Home Builders were up nearly 17% on the month. In the Canadian market it was gold stocks that were up nearly 14% on the month. What didn’t work well, the big loser was Semiconductors, down over 5%. Big outside reversal month, semiconductors. And then we had Global Base Metals down on the TSX, down a little over 2% for the month.
Now some of those losses that we saw in the technology sector in July may be erased. This morning we’ve got Meta out with earnings and it’s gapping sharply higher in the pre market. We also have Nvidia trading higher this morning. It was up nearly 13% yesterday. Not enough to give us a buy signal.
That could happen on Thursday. But at the same time Advanced Micro Devices was the story of the day. Yesterday it traded up to the upper channel line during the day and then closed below the lower channel line. So what happens in the pre market is not really reality. We’re looking to see how the market closes at the end of the day.
Now, yesterday morning we knew Microsoft was going to open lower and it opened lower, closed lower, down a little over 1%. Making a new low for this move. Pinterest was sharply lower yesterday, down over 14%, heading back towards the low from back in May. Now the VIX is still on a buy signal here, so options traders are not overly convinced at the moment, looking for a close below 14.95 to change things on Thursday. The dow traded higher yesterday, lost a lot of its gains going into the close.
The SPY traded up. Looks like it filled that open gap and close just below the upper channel line. We’re looking for a close above $552.02 on Thursday to give us a buy signal. Looking at the equal weighted S&P 500, we made a new high yesterday before pulling back and closing lower than we opened and there was a lot of that yesterday. Looking at the Nasdaq 100, it’s trading up to the bottom of that open gap and looking for a close on Thursday above $476.39.
Looking at the Russell 2000, we certainly punched through 225 yesterday and then closed just right about where we opened on the day. And there we are. We traded above the 225 level, looking to see if we can take it out. If we can, then 231.25 comes into play.
Looking at small cap stocks, they gave up a lot of their gains going into the close. We actually closed lower than we opened and then looking at micro caps. Micro caps traded up to the previous high once again and then pulled back. They’re all still on buy signals here, but this is what happens at the top of a market, not the bottom. And here we are.
Home builders. We talked about Home Builders on Tuesday. They basically closed unchanged yesterday after running up, making a new high. Similar situation for the Real Estate sector, actually closing lower on the day after making a new high and then looking at financials. Financials traded up to the previous high yesterday and then pulled back, closing slightly lower on the day.
We also saw Insurance stocks make a new high and then close slightly lower on the day. Next up, let’s take a look at the Canadian market. And there’s the iShares for the TSX 60 making a new all time high on Wednesday. Led higher by the Energy sector, which gapped higher yesterday. Of course, there’s a some mideast tension going on right now that’s put a bid into crude oil.
Then looking at Canadian Natural Resources, it’s back on a buy signal as of Wednesday’s close. Looking at the information technology sector, it is now back on a buy signal, being led higher by CGI, which was up over 4% on the day. Then looking at gold stocks, they’re back on a buy signal. Being led higher by Agnico Eagle, making a new high for this move. Then looking at the financials.
They also made a new high on Wednesday, being led higher by Intact Insurance, which gave up a lot of its gains going into the close. But if you had some orders in up there, congratulations. That was a good day to be long intact. Now some stocks I’m watching Shopify traded into the channel yesterday looking for a close on Thursday above 86.64 to give us a buy signal. The Royal Bank made a new high yesterday for this move.
So still trading above the upper channel line there. That is good for the financial sector. National Bank has come up to our next price targets. Almost filled that open gap, but stuck here at the 115.63 level. Then looking at metro Metro closing just above the upper channel line, a close below 81.01 on Thursday would give us a sell signal for Metro.
New high for hydro one on Wednesday and a new high for Cypher Pharmaceuticals. Making a new high for this move. That’s quite a run over the past couple of weeks. Okay folks, that is all for this morning’s presentation. I wouldn’t be surprised if Wednesday’s market action was the high for this particular move.
We are trading up in the pre market this morning. That doesn’t necessarily mean we’re going to close higher, but yeah, we saw a lot of reversals yesterday. So money moved back into technology and moved out of the rest of the market on Wednesday. Not enough to give us sell signals in the rest of the market just yet, but we’ll have to see if that trend continues. The trend in which money goes into a few stocks and comes out of a lot of stocks now.
We’ll be back on Friday morning. On Friday morning we’ll take a closer look at the world of commodities. Enjoy the rest of your day. And again, next time you’ll hear my voice is on Friday morning.
Stephen Whiteside
TheUpTrend.com
Thursday, August 1, 2024
