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Good morning, everyone, and welcome to Wednesday morning. It’s Stephen Whiteside here from theuptrend.com. In the premarket this morning, stock index futures are very quiet. They’re slightly above fair value. Commodities are also quiet on Wednesday morning. We’ve got some inflation numbers coming out tomorrow, the market might be on pause until those numbers come out. Now, yesterday was an interesting day. We put in a lower-low, and we did end up with a lot of bullish reversal signals. It was a strange day. We were down in the premarket. We traded much lower during the day and then came back, still closing down at pretty well the same levels we were in the pre-market. Now we did generate a lot of bullish reversal signals. They’re very weak bullish reversal signals because at the end of the day, most of the symbols that receive bullish reversal signals also closed lower on the day. Those are not the most impactful signals that you can get. If we had have closed higher on the day, then I would be beating the drums that we put in a bottom yesterday, but that is not the case at the present time. Now the opposite is also true.
The VIX put in a bearish reversal day, but at the end of the day, still closed higher on the day did not break down and closed below the previous days low. So as a bearish reversal signal, again, it’s weak. We’re looking for more movement to the downside to tell us that yesterday was a top for the VIX, and we don’t have that at the present time. Now, on Wednesday, we’re looking for a close on the VIX below $14.44 to give us a new daily sell signal, and that would be supportive for higher stock prices. The Dow traded back into the channel yesterday. The S&P 500 traded up to the lower channel line. The Nasdaq didn’t get that high, made in a new low yesterday. You’ll see a lot of new lows for this move made on Tuesday. Then you can see for the iShares for the Russell 2000, definitely a lower low yesterday and closing below the lower channel line. Similar situation for the micro caps. Looking at the Canadian market, the iShares for the TSX60 put in a low yesterday, but higher than the low from Friday. That could mark a bottom. We’ll just have to wait and see.
Then banks were in the news yesterday. We got news out that very negative news on the US banking sector. At the end of the day, though, we did not see the banks or the regional banks actually generate a sell signal. In both cases, we traded through the lower channel line, but did not close below it. We’re still on a buy signal here, even with that bad news. Now, Canadian financial is still on a sell signal here. Canadian bank is making a new low on Tuesday. The story hasn’t changed. Bank of Nova Scotia is still the weakest, TD Bank still the strongest. The TD bank, we need to close below 85.40. We closed at 85.42, so just three cents away from generating a new sell signal on Wednesday. Looking at those big cap technology stocks, Apple had a very quiet inside day on Tuesday, so no change in trend there. No change in trend for Amazon still coming off that gap higher from a couple of days ago. Meta may generate a sell signal on Wednesday. We’re looking for a close below $308.65. No change for Microsoft making a new low on Tuesday. No change for Alphabet, inside day on Tuesday.
And no change for NVIDIA, very quiet trading on Tuesday. While Shopify headed down, where did it head to? Right down to our next price target of $75. And that was support back in May. And so we’re going to be looking closely to see if that holds on Wednesday or if we break down and head towards that nice big open gap. Then looking at the Tesla inside day on Tuesday. A day of indecision for Tesla, still a lot of sell signal, no change there. Then looking at commodities, we saw copper drop sharply yesterday. It didn’t really affect the mining stocks too much. Metals and mining ETF made a new low for this move before recovering and closing down just two cents on the day. Similar situation in Toronto with the Global Mining Index making a new low before recovering. And yeah, it was down 49 cents, but less than half a % on the day. Now, compare that to the GLD and the SLV, so gold and silver, both making new lows yesterday. And then if we look at the stocks, the XGD was down yesterday, didn’t make a new low, unlike the GDX, which made a new low yesterday.
And the SIL for silver miners also made a new low on Tuesday. Then looking at Barrick, the biggest Canadian mining stock did make a new low yesterday, but only closed down two cents on the day. And not as much love for new month making a new low, actually, gapping lower on Tuesday. Then looking at the energy sector, we saw the USO move up nicely, making a new closing high for this move on Tuesday. Gasoline was up, natural gas was up. Natural gas starting to break out above 7.42. Our next target is 7.81. That’s going to be significant, first of all, if we can get up there. But secondly, are we going to break through it? Then, of course, if we want to be bullish on natural gas, we want to break through the high from back in June. Then looking at the stocks, US energy stocks had a wild day. They actually traded below the lower channel line before we’re covering closing up just under half a %. On the TSX, we actually closed up one % on the day. The most actively traded energy stock on the TSX was Suncor and made a new closing high yesterday.
In the US, the most actively traded energy stock was Southwestern Energy, and it closed basically unchanged just down a penny on the day. Still on a buy signal here, still closing above the upper channel line. Okay folks, that is all for Wednesday morning. It’s fairly quiet out there still. DOW future is up 48 points. We may see some volatility in the energy sector as energy inventory has come out at 10:30 this morning. Enjoy the rest of your day and next time you’ll hear my voice is on Thursday morning.
Stephen Whiteside
Wednesday, August 9, 2023
