Good morning, everyone, and welcome to Monday 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 that certainly tells us that there was no market shaking events that happened over the weekend that we may have missed. So the market seems to be pretty happy and looking to do some buying at the open on Monday morning.
Now this is a jam packed News week for the market, so we’re expecting lots of price swings this week. We’ve got PPI numbers coming out on Tuesday. We’ve got CPI numbers on Wednesday, and on Thursday we’ve got jobless claims and retail sales. So lots of numbers this week that could shake the market. Now the VIX came down after peaking on Monday, came down throughout the rest of the week.
And looking, we’re looking for a close blow 19.73 on Monday to give us a sell signal and that would be supported for higher stock prices. If you’re long, the VIX, ETF’s, they came down hard last week. We had lots of opportunity to take money off the table. We hit lots of price targets last week. So if you’re still long, you should just have a few shares left.
Looking at the VXX, we’re looking for a close on Monday below $55.16. And for the HUV, we’re looking for a close below $9.26 to give us a sell signal on Monday. Now looking at the major indices, starting off with the Dow, the Dow Diamonds traded back into the channel on Friday. We were looking at Dow stocks yesterday and we’ve got eight of the 30 stocks on buy signals right now. So still waiting for 22 of them to move up.
We may see that this week. Looking at the Dow diamonds, we need to close above $400.12 on Monday. And of course, we look at $400 as a potential area of resistance. The SPY traded back in the channel yesterday. We’ve talked about potential areas of resistance for this ETF several times over the past couple of days and certainly there’s an open gap just ahead of us there.
So we’re looking for a close on Monday above $538.94 to give us a new buy signal. For the Q’S, we’re looking for a close above $458.21. No joy for the rest of the market, though. We’ve got the Russell 2000 treading water on Friday, closing down on the day. Now the iShares for the TSX 60 moved into the channel on Friday.
We’ve got a nice big open gap there ahead of us and then a close above $34.28 would give us a new buy signal on Monday. Now, a lot of things broke down last week. A lot of things held up fairly well through all of the volatility. And if we look at the Flypaper Channel and looking at the iShares for the TSX 60, they look like a lot of the other major indices where we came down to the bottom of the Flypaper Channel and held support and started to move back up. Now we’re still in the Flypaper Channel and that of course is sticky.
It’s hard to get out of. When we’re trading above it, we’re in a bull market where when we’re in it, the market is neutral and when we’re below it, of course that’s a bear market. So when we look at what worked and what didn’t work last week the Q’S traded down below the Flypaper Channel. They came back on Friday into the channel but it’s going to be hard for them to get through that level of resistance now. What held up fair and Canadianly well, US financials, Canadian financials, they did not break down last week.
Things that broke down in the US, it was Consumer Discretionary. We saw Retails trade down through the bottom of the Flypaper Channel. We’ve got Oil and Gas Equipment, we’ve got Oil and Gas Exploration not doing well, metals and mining not doing well and Technology stocks broke down below the Flypaper Channel. You can see we’ve got a gap there before we get to the channel, so that’s not very helpful. And Semiconductors really got hit hard last week, so that’s not a pretty picture.
Looking at the Transports before we broke down, we were putting in a lower high here and another lower high compared to these highs from back here. So that was a bearish setup before it broke down and made a lower low. Looking at the Canadian market, it was a Venture Exchange that really got hit hard last week and did not recover. Clean Energy stocks not doing well. We saw the Global Mining sector start to break down.
Base Metals certainly broke down hard last week and looking at the Energy stocks, they traded below the Flypaper Channel and then came back. This is a wall of resistance here, and then above that we’ve got another wall of resistance. So I think it’s going to be very hard for the Energy sector to make, to get any mileage going forward at this particular time. And last up we’re looking at the Gold sector and it held up fairly well, bouncing off the top of the Flypaper Channel last week. So we’re looking to see if we could go back up and at least retest those highs, if not put in higher highs.
Now, looking at the Magnificent Eight, things are not looking pretty right now. We’re still on a sell signal. We moved back into the channel on Friday. A close above $43.53 would give us a new buy signal for the MMetaagnificent ETF. Now, two stocks that were on buy signals, I waved both of them off because of current market conditions.
Both Meta and Shopify held up fairly well going into the end of the week. Now, a couple of stocks broken at the moment, Amazon and Alphabet, both the below the Flypaper Channel. We’ve also got Microsoft in that condition. Now, Nvidia and Tesla are still stuck to the Flypaper Channel. Even though they traded below it, they’re still stuck to it.
So that’s acting as resistance at the present time. Let’s finish off looking at Commodity ETF. Starting off with crude oil, we’re back on a buy signal as of Friday’s close. Gasoline is back on a buy signal, joining natural gas already on a buy signal. We’re still waiting for the pros to take control.
We’ve been on a buy signal for a couple of days now. Hopefully they’ll do that on Monday. Then, looking at the GLD, we’re back on a buy signal. As of Friday’s close, palladium generated a buy signal on Thursday, pulled back into the channel on Friday. No joy for platinum or silver.
We’re still on sell signals here. And last up this morning, a quick look at copper. And copper is known as the barometer of global economic health. It’s not looking very pretty at the moment. We’re still on a sell signal here after making new lows.
Now looking at who’s in control, you can see the pros. It looks like they’ve stopped selling right now. So they may not be ready to take control, but it does look like they’ve stopped selling. Now notice that this line representing the public is fairly flat and doesn’t really move that much. And that’s because in the futures market, the public really doesn’t have a lot of participation.
It’s mostly the industries, the companies that are involved in this sector, they’re the ones that are pulling the strings here. The public really doesn’t have much influence over the copper market. Okay folks, that is all for this morning’s presentation. So far. It looks like the market wants to do a little buying at the open.
They may be a little cautious because of all those numbers that are ahead of us this week. And of course, those numbers, depending on how the market takes them, could add some extra volatility this week. Enjoy the rest of your day. Next time you’ll hear my voice is on Tuesday morning.
Stephen Whiteside
TheUpTrend.com
Monday, August 12, 2024
