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Good morning, everyone, and welcome to Thursday morning. It’s Stephen Whiteside here from TheUpTrend.com. In the premarket this morning, stock index futures are trading slightly below fair value. Crude oil continues to move lower in the premarket this morning. Well, on Wednesday, we saw a lot of inside days. We saw a lot of lower lows and we also saw the price of crude oil tank down over 5%, third day of a sell signal. Third day of a sell signal for the USO, while gasoline started to sell off a couple of weeks ago and was down sharply yesterday, nearly 7% on the day. That’s a sign that the economy is weakening, that gasoline demand is starting to evaporate. It could also help the Fed in its quest to fight inflation. Looking at energy stocks, we’ve been on a sell signal for the energy ETFs on both sides of the border. Energy stocks came down sharply yesterday, of course, and Canadian Natural resources back on a sell signal as of Wednesday’s close, joining Suncor already on a sell signal. Cenovus back on a sell signal, and then we’ve got athabasca Oil Sands sitting right on the edge of a new daily sell signal.
Any lower close on Thursday would give us a new sell signal. Baytex, third day of a sell signal there. Then looking at US energy stocks, Chevron was the biggest loser on the DOW on Wednesday. Then we’ve got Baker Hughes down sharply. We’ve got Diamondback Energy. And last up for the energy sector, Marathon down nearly 5% on the day. Now getting back to the overall stock market, we saw the VIX make a new high yesterday before pulling back. We need a close on Thursday below $16.46 to give us a sell signal. A move down below that level would certainly be supportive for higher stock prices. Looking at the major stock market index ETFs in the US, the Dow made a lower low yesterday. We had an inside day for the S&P 500 and the Nasdaq 100 and the transports. Now we had a lot more sector ETFs having inside days. We also had a lot making new lows, including the Russell 2000, the iShare’s Microcap ETF. We saw a new low for Consumer Staples. We saw a new low for the Real Estate sector and the banks, US Banks. We also saw biotechs and pharmaceuticals make new lows.
And we also saw a new low for industrials on Wednesday. Now moving on to the Canadian market and of course, the energy sector, which we already covered, makes up a much bigger component of the Canadian market than it does the US market. Now the TSX made a new low, as did the TSX60 on Wednesday, but they both ended the day slightly higher with the financials turning around midday. Mid-cap, small caps and microcap stocks all made new lows on Wednesday and all closed lower on the day. We saw a new low for the financials, but they reversed going into the close as did the banking sector, which is within the financial sector. Gold stocks held up fairly well yesterday. They did close slightly lower on the day, but it looks like we might be putting in a base here. Then we saw a lower low for income trust, for health care, for global mining, for global base metals, and for materials. Not a very productive day on the TSX. Last up this morning, one stock stood out yesterday, the most actively traded stock in the US generated a buy signal, and that, of course, is Tesla.
Tesla is in a triangle at the moment. We are finding support at the FlyPaper channel and now looking to see if we can go up and take out that downtrend line and the recent high from a couple of weeks ago. That’ll be very interesting to watch. Tomorrow, we’ll take a look at all the major technology stocks that we follow. We’ll do that on Friday. Okay, folks, that is all for this morning’s presentation. Have a great day. The next time you’ll hear my voice is on Friday morning.
Stephen Whiteside
Thursday, October 5, 2023
