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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 and commodities are down across the board. Dow futures currently down 200 points. Yesterday was a fairly lightly traded day.
Canadian markets were closed. Yesterday was an inside day for many of the major indices including the VIX. On Tuesday we’re looking for the VIX to close below $14.19. That would change us from being short term bearish to being short term bullish and at the moment doesn’t look like that’s going to happen on Tuesday. Now it’s very easy to notice that the S&P 500 had an inside day on Monday trading within the previous day’s range.
That of course is a day of indecision. Of course the headlines are very positive, but that’s not exactly what happened. Looking at the Nasdaq, the Nasdaq actually dipped slightly below Friday’s low before recovering and volume was very light. The queues on Monday only traded 37 million shares and change on Friday that was 61 million. So a lot more people interested in selling on Friday than buying on Monday.
There’s the Russell 2000 closing higher yesterday, making a new low for this move. Very quiet day for the chips on Monday. Still on a sell signal, no change there. Apple continued to move lower on Monday and since the rebalancing, Apple isn’t having as much of an effect on the market as it previously did, we are coming into the Fly Paper Channel. This is a place we’d look to see if Apple could find some footing here and find new buyers.
We are down at the 100 day moving average, heading towards the 200 day moving average. Our next mathematical target is 175 and just above that is an open gap. So that is certainly a legitimate target for Tuesday. Looking at Tesla, Tesla made a new low yesterday before recovering. Still closing lower on the day it regained the $250 level.
At the close there is an open gap not too far below where we are right now. And if that gap doesn’t hold, then 218 75 would be our next mathematical target to the downside. And you can see the 100 and 200 day moving average is around the 225 level and you can see that that would take us into the Fly Paper Channel as well. So looking for places to find support at the moment. And so far the market has not stopped moving lower.
Now the TSX 60 was up $6.95 on Friday. It is down $4.10 in the pre market. So not going to catch any of Monday’s positive trading action on Tuesday morning. We do have commodities down across the board. Crude oil pulled back yesterday.
Remember 81.25 was our top of our projected trading range. We’ve now expanded that and looking to see if we can continue higher. We’re not going to do that on Tuesday morning. Natural gas had a great day on Monday. Back up to the 2.73 level on the futures contract and unfortunately, it’s pulling back a bit in the pre market this morning.
Now energy stocks in the US. Were up just slightly on Monday and so I would expect that energy stocks on both sides of the border will be down on Tuesday. And then looking at gold, it was down yesterday, it’s down in the pre market this morning. Silver is also down in the pre market this morning. I don’t think that’s going to help gold and silver stocks and the GDX was down yesterday a little over three quarters of a percent.
I would expect the XGD to be down one or 2% on Tuesday. Last up this morning biggest loser on Monday were biotech stocks and that probably had something to do with Moderna, which was down over 6% on the day. So certainly no change in trend for either of those. Okay everyone, that is all for Tuesday morning. As you can see, while Monday got some very positive headlines, it really didn’t do anything.
The trade is still to the downside and not expecting any trend changes on Tuesday, but we may see some additional sell signals. Enjoy the rest of your day. Next time you’ll hear my voice is on Wednesday morning.
Stephen Whiteside
Tuesday, August 8, 2023
