This video has been translated into Arabic, Chinese, French, German, Hindi, Japanese, Korean, and Spanish.
Good morning, everyone, and welcome to Friday morning. It’s Stephen Whiteside here from theuptrend.com. In the premarket this morning, things are looking pretty good. Stock index futures and commodities are trading above fair value. Unfortunately, we’ve got employment numbers coming out at 8:30 this morning, and of course, we’re in opposite land. Good numbers are going to be bad for the stock market. Bad numbers are going to be good for the stock market. We’ll just have to wait and see how the market reacts to those numbers. Now, we saw a lot of bearish reversal signals on Thursday. We can use the Dow Diamonds as an example. You can see an outside reversal day. We actually traded higher above the previous day’s high and closed below the previous day’s low, ran up to resistance and reversed. That gives us a bearish reversal signal. Notice that the pros have not taken control in the Dow just yet. This is the time and place where we look for fall through to the downside. Now, we’re not seeing that in the premarket this morning. Of course, it’s in more important how the market closes than how it opens. We’ll just have to wait and see.
Now, what pulled the DAO down on Thursday? Well, three stocks that were already on sell signals starting with UnitedHealthcare, followed by Boeing, followed by American Express. Those were the three biggest losers on the DOW. Now, fear is still falling. We saw the VIX continue to move lower yesterday. So yesterday’s trading action isn’t going to scare us too much. And of course, we’re coming into the long weekend. Now, for the month of August, it was a negative month, but certainly no long term damage was done. A lot of short term damage, but not a lot of long term damage. The biggest winners in North America for the month of August were the marijuana stocks. Now they have lost an enormous amount of their value from their highs a few years ago. At the same time, they’re extremely volatile, so they can often show up as the best performer or the worst performer on any given day, week, or month, and that will continue for quite a while. Here’s a weekly FlyPaper channel chart, and you can see when the market started to really break down back in 2021, and it has not come back. Of course, if you’re trading marijuana stocks, they’re certainly tradable as a long-term investment.
I think they’re still extremely risky even at these price levels. Now, what didn’t work in the month of August? Well, Transports were the biggest loser. As you can see, no major damage done there. Regional Banks, of course, have been in a downtrend for quite a while, so no joy there. Then last up, the TSX Global Base Metal Index was the biggest loser. In the Canadian market, down 7.37% for the month of August. Now looking at the seasonality chart, and this is a long term seasonality chart, you can see we get a nice run up into the middle of September, and then we get a pullback into late September, and then another pullback into October. If you look at recent performance, and this chart is from stock charts, you can see September is typically the worst performing month of the year, even after that big rally during the middle of the month. Now, looking at the iShares for the TSX 60, we’re stuck here at resistance and certainly it’s not permanent. We can certainly break out on Friday and head up towards 31.25. Looking at the SPY, you can see we’re still stuck at resistance here. There’s no reason why we can’t break through it on Friday and head up towards those highs from early July.
The Nasdaq is trying to do that so far. It has broken out above the 375 level, heading towards those July highs. Then looking at the semiconductors, we’re still stuck at resistance. You can see if we start breaking out from here, 225 is our next target to the upside. Let’s finish off today’s presentation, taking a look at a couple of technology stocks starting with Shopify. Shopify gapped higher on Thursday. Oddly enough, I actually saw Shopify run a TV commercial during a national U. S. News program on Wednesday night. I have no idea if that’s a normal thing and I have no idea if that was the first time they did it. But just oddly enough on Wednesday night, I saw a commercial. On Thursday, the stock popped. Now, if you had an order in ‘81.25 or 87.50, both of those got filled at the open on Thursday. Where did we open on Thursday? Well, we opened right at 87.50, so your order got filled. If you’ve got an order at 93.75, I would make it a little lower, just below where we peaked back in July. That would probably be a great place to place an order to sell and lock in some more profits on Shopify.
Now, Shopify, gapping higher like that took the TSX Information Technology Index back up to just below the highs from July. If we can continue to move higher on Friday, we could be able to take out those highs. Then looking at ARK Innovations, 43.75 is our next price target, and that’s where we’re stuck. That’s where we closed yesterday. You can see that 45.31 is our next target to the upside. Adobe is right up at the top of our projected trading range, so we could continue to move higher towards 625 if we break out above that on Friday. Then Apple stuck here at 187.50, right at the bottom of the open gap and looking to see if we can move higher and fill that gap on Friday. Then looking at BlackBerry. Blackberry’s had a great week and has moved up and it started to break out above the June highs. And 7.81 is our next price target for BlackBerry. And on the weekly charts, if we want to keep going from here, then 9.38 would be our next target. If you look at what’s been going on, we put in a low back in the fall of 2022.
We’ve put in a series of higher lows in 2023. Now we’re looking to see if we can break out and make a higher high. On a long term basis, 938 would be our next major target. Then looking at Salesforce, a big pop yesterday. But to look at what happened, the public bought up here. The Pros sold it all the way back down here. We’re still a bullish day. Even though if it shows up as a bearish reversal day, it’s still bullish because we certainly did not close below the previous days low. Then looking at price targets, if you had an order in a 225, it got filled at the open and then we came back down and traded through it. It actually opened at 228. That’s where your 225 order would have got filled. 237.50 is our next target, and we certainly hit that back in July. That is still a legitimate target to the upside. Looking at nVidIA, we’re still up here at the previous high, still having trouble breaking through 500. If we can do that, then 531.25 would be our next target. And last up, Tesla. Tesla hasn’t been too excitable this week.
We are trading above the 250 level, but notice the pros have barely come back to take control. Not a lot of enthusiasm for Tesla over the past trading week, but maybe September will change things. Okay, folks, that is all for this morning’s presentation. Again, this presentation is being done before the employment numbers come out at 8:30. Of course, good numbers are bad, bad numbers are good. We’ll just have to wait and see how the market reacts. I think most of the volatility in the market is going to be right at the open and then a lot of people are going to head off for their long weekend vacation. That’s all from me. The next time you hear my voice this weekend will be on Monday. I’ll be posting a video on Monday, and then we’ll get back to a regular schedule next week. Again, have a great day. Have a great long weekend. Keep safe and we’ll talk to you again soon.
Stephen Whiteside
Friday, September 1, 2023
