Good morning, everyone, and welcome to Tuesday morning. It’s Stephen Whiteside here from .TheUpTrend.com In the pre-market this morning, stock index futures are down across the board, being led lower by the Nasdaq. Now, we do have US CPI numbers coming out at 8:30 this morning. That could certainly change the direction of the market. We do have commodities trading higher this morning, and that could help hold up the Canadian market on Tuesday. Now, the VIX is back on a buy signal as of Monday’s close. That, of course, is negative for stocks. Based on our recent trading patterns, the market’s not going to get overly upset until the VIX starts breaking out above 15. Bitcoin’s in the news this morning. It’s trading up over 50,000. It hasn’t done that in quite a while. We’ve got Ethereum trading closely behind, looking to retest the January high. And then crypto-related stocks on the TSX are all on buy signals right now. There’s Bitfarm. We’ve got Galaxy Holdings trying to break out above the recent highs. Then we’ve got Hive, third day of a buy signal. And then we’ve got Hut8, second day of a buy signal. Then let’s take a quick look at the US market.
The DOW made a new high yesterday, new high for the S&P 500 before a pullback. And of course, we’re trading lower this morning. Then the Qs made a new high and pulled back yesterday, did not close below the previous day’s low. So our next daily and weekly target was 437.50. We hit that yesterday and then started to pull back. That may be significant going forward. Now, what really worked on Monday was the mid-cap and micro-cap stocks. The micro-cap sector actually led the North American markets higher on Monday. It might be a little too late, but we’ll just have to see. In both cases, we’re trading up towards the December highs, and we’ll have to see if these areas of the market can break out above those and make higher highs. That would certainly be bullish. Looking at the Canadian market now, the TS The TSX, the TSX-60 sitting right on the edge of new daily buy signals. Mid-caps traded up to the upper channel line yesterday. No buy signal. We did get a buy signal for small caps, but not for micro caps. That’s one way to slice up the market by capitalization. Then looking at what worked yesterday and what didn’t work, well, it was the energy sector that worked, and Infotec did not work on Monday.
Looking at the energy sector, we’re down at the bottom of the Panic Zones. We’re coming off a small Pressure Zone there, but it has been a series of lower highs and lower lows. We recently made a lower low below the previous, but not below the significant low in December. A little bit of bullish magic there, but you can see we’ve had lots of false starts over the last year for the energy sector. Here we are once again. We’re back on a buy signal. The pros are taking control. That has happened before as well. We do have crude oil on a buy signal. It is up in the pre-market this morning. Unfortunately, natural gas is not a help at all at the present time. Then looking at Bayex, we’re back on a buy signal here. We’re back on a buy signal for a Whitecap. We’re already on a buy signal here for Athabasca. Tamarack is on its third day of a buy signal. No joy for Canadian Natural Resources, still trading and closing below the lower channel line. We’ve got Cenovus. It’s been on a buy signal for a few weeks now. No change there.
And We’ve got Suncor trading in the channel, looking for a close above $43.84 on Tuesday to give us a buy signal. Suncor is working its way into a triangle here, working its way into a corner, looking to see which way it can break out to the upside or to the downside. What didn’t work on Monday? Well, it was IT. It is still on a buy signal, coming off a new high, but unfortunately, we’ve got Shopify trading sharply lower in the pre-market this morning, so we may see some selling across the board in this sector. Now, we’ve got Celestica making a new high on Monday before pulling back. The first thing we look for, of course, is do we close below the previous day’s low? That certainly did not happen. Then Shopify. Shopify reversed yesterday. We’re trying to break out above 125. We have not been able to test 125 just yet. Now, we are trading down in the pre-market, and we are trading down in the channel at the moment, looking for a close below $110.68. On Tuesday to give us a sell signal for Shopify. And then we’re looking at CGI, looking for a close on Tuesday below $149.88. For Converge, we’re looking for a close below $4.43. For Dye & Durham, we’re looking for a close below $13.
Then for Descartes, we’re looking for a close below $118.24. For Constellation Software, we’re already on a sell signal. We would need We’re going to see a close above $3,736.10 on Tuesday to give us a buy signal. No joy for Blackberry. It traded up to the upper channel line yesterday. We need a close above $3.86 on Tuesday. We closed at 3.79 on Monday. And then last up, Lightspeed. Lightspeed got walloped last Thursday, continued to move lower on Friday and on Monday. Now, we’ve seen quite a few examples of stocks falling out of the sky during earnings season. Right now, and this, unfortunately, was one of them. And hopefully, it’ll get back on its feet at some point, but it’s certainly not going to do that on Tuesday morning. When I started this presentation this morning, stock index futures were down across the board, being led lower by the Nasdaq. Since that started, Shopify has come out with earnings. The stock is down currently $9 in the pre-market in the US. Convert that over to Canadian dollars, and you can see that that’s going to have an impact on the TSX at the open on Tuesday morning.
At the same time, we’re looking for higher energy prices here and higher energy stock prices, and hopefully that trend will continue. Have a great day, folks. Next time, you’ll hear my voice is on Wednesday morning, and at that time, we’ll take a closer look at the US stock market.
Stephen Whiteside
TheUpTrend.com
Tuesday, February 13, 2024
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