Good morning, everyone, and welcome to Friday morning. It’s Stephen Whiteside here from theuptrend.com. In the pre market this morning, stock index futures are above fair value. It’s still pretty early in the morning. In this presentation, we’re going to take a look at the US market, bonds, commodities, and then we’ll finish off looking at the Canadian market.
Now, the media was pretty excited about what happened yesterday, but it was really an inside day, a pause day, a day of indecision. It wasn’t the greatest day that has happened in a couple of years. It was just traded within the previous day’s range. So we still have an elevated ViX. So we are expecting more thrashing around here.
The VIX is trading in the channel right now. So a close on Friday below 19.22 would give us a sell signal that would certainly be bullish for stocks. Now, the Dow Diamonds closed right at the previous day’s high, while the S&P 500 had an inside day. Remember, we were looking at resistance at 531.25. We got as high as 531.29 yesterday before pulling back a little going into the close now we are trading higher in the pre market and our next mathematical target is 539.06.
Now, the other day we were looking at Fibonacci retracement numbers and the first one got pretty close to our mathematical target. So 531 15, we’re closing just below that on Thursday. So we’re looking to open up around that level on Friday. If we keep going, then 537 64 is our next Fibonacci target. And that is getting pretty close to our mathematical target, which we have posted on the website.
So it was an inside day for the equal weighted S&P 500. Yesterday it was in the inside day for the Nasdaq 100. I think the high of the day was like a penny off of the previous day’s high high. We’re finding support at the 200 day moving average, so we may see resistance at the hundred day if we start moving up from here. And of course, we’re now below the flypaper channel, so that channel is going to act as resistance.
So not getting overly bullish here. We certainly have seen some stocks pop over the past couple of days, but the overall market yesterday had an inside day. Now, our next mathematical target for the Nasdaq 100 is 453.13. Now, right now, coming into Friday’s trading action, you can see that the pros down here are not that close to taking control on Fridays. Looking at the Russell 2000, it had an inside day, small caps, micro caps, had an inside day on Thursday.
Then looking at the Semiconductors, they also had an inside day on Thursday. Now an area of the market I watch closely, but I don’t trade is the financials and in that world we had an inside day for financials, for banks, for regional banks and for insurance companies on Thursday. Now moving over one of the reasons that the market has moved up over the past couple of days. As we’ve seen bond prices come down sharply over the past couple of days. Whether you’re looking at the TLT or on the TSX, you’re looking at the XBB.
And we’ve also seen money come back into the junk bonds, high yield bonds. They have moved up over the past couple of days. Again, that’s an inside day for the a junk bond ETF. Now looking at commodity prices, we had an inside day for copper on Thursday. Gold moved up and closed above the previous day’s high, so that could be bullish going into Friday’s trading action.
No joy for platinum, still on a sell signal here. And we had an outside reversal day for silver, making a new low for this move on Thursday. Looking at the energy sector, we’ve got crude oil moving up into the channel. So a close above $77 on Friday would give us a new buy signal and that would join natural gas futures which closed on Thursday. Back on a buy signal, let’s finish off looking at the Canadian market.
And the TSX did not close above the previous day’s high, unlike the TSX 60, which did. And that got some love for not only Shopify, which closed above the previous day’s high, and so we’re looking for resistance there at the high from back in July. But we saw a big move up in Canadian Tire yesterday and that helped move the TSX 60 above the TSX on Thursday. The mid caps, small caps and micro caps had an inside day on Thursday. So just like their us counterparts, we did see energy stocks move up into the channel.
So if we get crude oil continuing to move higher on Friday, we could end the day on a buy signal for the energy sector. The Canadian financials, just like the us financials, had an inside day. It was an inside day for the Bank of Montreal, for Intact Financial and for Manulife. Now this Manulife chart is looking pretty bearish. We had a high put in a lower high.
We were looking to see if the recent low would hold. It didn’t then you expect this low to hold and that didn’t. So we’re making a lower high and a lower low. That is a bearish chart pattern. That was an inside day yesterday for the gold sector, inside day for Barrick and then the industrials also had an inside day.
We saw an inside day for Air Canada. I have no idea why it’s in the industrial sector. Inside day for bombardier, but not an inside day for CN which actually made a new low for this move on Thursday. Now infotech stocks were up. We know Shopify continued to move higher yesterday.
We also saw a new high for the telecom sector with all of the telecoms doing fairly well right now. Inside day for BCE, new high for Cogeco Cable. We saw a new high for Quebec core and a new high for this move for Rogers. On the other hand, Telus had a fairly quiet day. Made a new high four days ago.
Still on a buy signal here. No change in trend for Telus. Okay folks, that’s all for this morning’s presentation so far. It looks like the market wants to do a little buying at the open on Friday morning. Enjoy the rest of your day.
Enjoy the rest of your weekend. And for members, I’ll be back on the weekend to look at the weekly charts.
Stephen Whiteside
TheUpTrend.com
Friday, August 9, 2024
