Hello everyone and welcome to Thursday morning. It’s Stephen Whiteside here from theuptrend.com in the pre market this morning things are very bullish. Everybody’s following nvidia higher. Nvidia popped after earnings last night and that has certainly put a bit into technology stocks on Thursday morning. It looks like the TSX might get a little love on Thursday as well.
The Royal Bank had an inside day yesterday. It’s in the pre market this morning in New York, currently trading up around that level. So not enough to give us a buy signal, but certainly enough to start to turn the Canadian financial sector around. Looking at the VIX, the VIX traded down yesterday, not enough to give us a sell signal, but the VIX is starting to break down below that uptrend line. We were hoping the VIX would continue to break out above the Fly Paper Channel and it never did that.
It did trade above it. And then of course, if we was really going to take the market down, we would have expected the VIX to start trading above the May highs and that didn’t happen. You can see traders use the 200 day moving average as their stopping point. And so the market’s not going to have a more aggressive sell off unless the VIX starts breaking out above the 200 day moving average. Now this time of year should be bullish for the market.
We are coming up to month end. We’re coming up to a three day long weekend. Both of those have a bullish bias and so traders don’t usually like to trade against that unless something terrible happens. Looking at the major exchange traded funds for the major indices starting off with the Sox index or the semiconductors, we certainly traded higher yesterday up over 2%, right on the edge of a new daily buy signal. The Nasdaq 100 is back on a buy signal.
Still waiting for more effort from the S&P 500 which it looks like we’re going to get on Thursday. And then really the Dow is a real laggard at the moment and it’s trading lower last time I checked in the pre market. Looking at the TSX, we traded up to the lower channel line yesterday. There could be a buy signal for the TSX on Thursday if other financials move up with the Royal Bank looking for a close for the Ishares for the TSX 60 above $30.52 on Thursday. Then looking at what worked yesterday, well it was all about infotech but materials following up fairly closely.
Energy was the only laggart and it was down slightly on Wednesday. There’s the Infotech index moving up. It was Bit Farms was the big winner in percentage terms. Of course. The big elephant in the room is Shopify, which is now back on a buy signal.
Then looking at the energy sector, it pulled back closed in the middle of the channel. The worst performing energy stock on the TSX was Birchcliff Canadian Financials had an inside day on Wednesday being led up by Brookfield, which also had an inside day. Gold stocks are back on a buy signal. The big winner on the TSX yesterday was WesDome. At the same time, Barrick, which traded through the upper channel line but did not close above it.
So we’re still waiting for a buy signal for Barrick with a close on Thursday above $21.87. Looking at the US. Market, the big winner again was Infotech, as you would expect, followed by Communication Services. And down at the bottom is Energy, which was down just a third of a percent yesterday. There’s technology stocks moving up.
Back on a buy signal, still waiting for semiconductors. Microsoft is back on a buy signal. Netflix is back on a buy signal, but Tesla is not. Still waiting for a close on Thursday above 237.99. And from what we’re seeing in the pre market, we’ll probably see that on Thursday.
Looking at the ARK ETFs, none of them generated a buy signal on Wednesday. It looks like the market wants the Industrials, which we need to close above $54.25 on Thursday. Peloton continued to move lower. It looks like it’s going to be a penny stock in the not so distant future. Looking at energy stocks still on a sell signal here we’ve got Hess making a new low for this move.
We saw a new low from Occidental and a new low for this move. For Exxon, taking out the previous week’s low. Foot Locker continued to move lower. What an interesting chart pattern. We traded sideways for months, gapped lower.
Traded sideways for months, gapping lower. And I guess we’re going to trade sideways for months before continuing to gap lower. A couple of other retail stocks, Abercrombie and Finch, gapped higher yesterday, continuing the trend. It looks like Nordstrom might have put in a new low yesterday and reversed. So we’ll be watching that stock to see if it can take out that open gap that was created just a couple of days ago.
And my favorite company, Costco, still on a sell signal. No change from Wednesday’s trading action. Let’s finish off with commodities. And we had crude oil, gasoline and natural gas all trade down. Natural gas trying to hold this level.
Then looking at the metals, we have gold back on a buy signal, joining silver, which generated a buy signal a couple of days ago. And we’ve also got the silver miners back on a buy signal. Looking at the other metals, we’ve got palladium and platinum both on buy signals at the moment. Okay, folks, that is all for this morning’s presentation. Looks like we’re going to have quite a bullish day on Thursday.
Enjoy your day. Next time you’ll hear my voice is on Friday morning.
Stephen Whiteside
Thursday, August 24, 2023
