Morning Market Outlook 02052024

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Good morning, everyone, and welcome to Monday morning.

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It's Stephen Whiteside here from TheUpTrend.

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com.

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In the pre-market this morning, stock index futures are down across the board.

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Not by a lot, but they're all pointing

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lower, and we also have commodities trading lower right now, so that could put

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extra pressure on the Canadian stock market.

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Now, there's no economic numbers coming

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out this morning, so we're not expecting any other pre-market volatility.

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Now, last week was a jam-packed week.

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We had Fed meeting, we had all kinds of

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earnings and all kinds of economic reports, and that certainly added to a lot

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of price volatility, especially in the commodity sector.

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We'll take a look at that towards the end of the presentation.

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Now, the VIX is still on a weekly sell signal.

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That's supportive for higher stock prices.

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We're still long term bullish on the overall stock market.

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That would change this week if the VIX were to start to break out above 14.

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85.

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Now, on the daily chart, we are short term

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bearish on the market with the VIX currently on a buy signal.

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The reason the VIX is elevated with the

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stock market hitting all time new highs is for one particular reason.

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We'll take a look at that in a minute.

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We would go from being short term bearish

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to short-term bullish on Monday if the VIX were to close below 13.

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27.

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Now, we've watched the VIX move up towards 15.

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63 several times over the last month,

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and you can see that that's at the top of the Fly Paper channel.

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We're really looking for a breakout above

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that level before the overall market is going to pay attention.

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Now, options traders are

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padding their accounts at the moment because of one particular reason, and it

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certainly isn't meta, which made a historic move higher on Friday.

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You probably will never see this again,

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but a stock as big as Meta moving up over 20% in one day is a historic event.

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If we move from a daily chart to the weekly Panic Zone chart, that's nothing

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but panic buying and That may actually mark the top for the technology sector.

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We'll just have to wait and see.

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Certainly no reason to abandon the technology stocks on Monday.

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The reason options traders are concerned

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is the big move down in the Regional Banking sector last week, down over 7%,

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not enough to give us a weekly sell signal.

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Certainly daily sell signals, but not a weekly sell signal.

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The Regional Banks pulled down US banks, down 4.

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66%, and Canadian banks were also lower on the week.

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Again, no sell signals here on the weekly charts for these sectors,

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but we certainly saw a lot of daily sell signals in the banking sector last week.

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Now, the TSX actually ended the week slightly lower.

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Our next daily and weekly price target was

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21,250, and we actually hit that and traded slightly above it at 21,250.

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90 before pulling back.

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Looking at the Dow, new closing high for the Dow.

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Our next price target is 39,062.

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For the S&P 500, this is the big one.

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Our next price target is 5,000.

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That's a big round number.

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You'll probably remember where you were when the Nasdaq hit 5,000 and everybody on

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Wall Street was wearing Nasdaq 5,000 baseball caps.

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You'll probably see that this week as well.

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And then looking at the Nasdaq 100 itself, our next price target was 17,500.

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We traded and closed slightly above that, and have not broken away from that level.

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So we're not heading towards 18,750 just yet.

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Now, the Russell 2000 is a little bit of a concern.

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We peaked six weeks ago on a bearish

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reversal week and we have not been able to go back to that level.

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And 2000 is back once again acting as resistance as it did throughout 2023.

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Of course, we can focus on what happened

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with Meta and the fact the major stock market indices hit new highs last week and

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the fact that the S&P 500 is within a day's trading of hitting 5,000.

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At the same time that was going on, there was a lot of stuff going on in the

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background that normal stock market traders would notice.

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Let's start off with bonds.

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Of course, the bond market is much bigger than the stock market.

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We saw money move up last week.

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We saw bonds, the 10-year note, and I'm just using the

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10-year note because they all look pretty similar.

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Buy signal on Tuesday, going into the Fed meeting, moved up, hit

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close at the high of the day on the day of the Fed meeting, continued to move higher

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on Thursday, heading towards the December high.

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Of course, if bonds are moving up, bond yields are moving down.

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And then look what happened on Friday.

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Friday, we came down hard.

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Bond yields came up sharply, and we were getting pretty close

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to retesting the December lows and even breaking them.

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And of course, breaking the December lows,

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that would be bullish for the stock market.

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If bond yields were heading down, bond yields heading down, put downward pressure

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on interest rates, can help just about every business out

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there if interest rates are dropping, but that's not how the Week ended.

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Then looking at what happened in the world of commodities.

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Copper. Look at what happened to copper.

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Copper up into the Fed meeting,

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made a new high for the week, and closed slightly lower on the day on

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Wednesday, came down hard on Thursday, hard again on Friday.

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And so that is a lower high, and That's not bullish for the copper market.

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Certainly not bullish for copper stocks

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with the Copper Miner's ETF ending the week on a sell signal.

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Now, looking at the price of gold, on

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Wednesday, we left the day on a buy signal.

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On Thursday, we closed slightly higher.

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Then Friday, we came right back down.

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On Monday, we're looking for a close below $2,040.

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20. That is certainly doable

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as we are currently trading down over $10 in the pre-market this morning.

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Now, looking at who's in control, you can see the pros were about to take control,

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and that never actually ended up happening.

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Things could change on Monday, but so far,

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coming into Monday's trading action, gold is pointing lower.

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Now, we had a big update in the gold

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miners on Thursday left us with a buy signal.

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Friday, we came in, we were opening sharply lower.

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On Monday for the GDX, we're looking for a close below $27.

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93.

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For the junior gold miners, we're just

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nine cents away, looking for a close below $33.

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92.

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Then looking at gold stocks on the TSX, we had a big up move on Thursday and then

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opened sharply lower on Friday and looking for a close on Monday below $16.

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33 for the XGD.

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Then moving on to the price of silver.

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You can see on Thursday and Friday, pretty volatile days.

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We traded on both sides of the channel.

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On Monday, we're looking for a close for the price of silver below $22.

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71.

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And similar situation for the silver miners.

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We traded down through the lower channel

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line on Friday, still looking for a close below $25.

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36 for the SIL.

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Moving on to the world of energy, and we saw big reversals here as well.

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You can see on Monday, Crud Oil hit a new high for this move and

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then pulled back the rest of the week, ending the week on a sell signal.

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We were looking for a move up to 81. 25.

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We couldn't do to that, and now we're

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looking to see if support will hold at 7,188.

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We're currently trading below that, so we could be heading towards 68.

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75 on Monday.

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Looking at natural gas, no joy here.

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Looking for a close above at $2.

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23 on Monday to give us a buy signal.

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Our mathematical target to the downside is 1.

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95, but obviously, psychological support at $2 is holding us in check.

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Then looking at energy stocks, you can see

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the big down day we had on Thursday, we saw fall through the downside on Friday.

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So Canadian energy stocks are back on a sell signal.

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Looking at Wall Street, we had an inside day on Friday.

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We saw earnings out from some major energy

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stocks on Thursday and Friday helped hold up this particular ETF, unlike small caps,

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which ended the week on a sell signal, so did the energy equipment makers and the

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explorers all ending the week on a sell signal.

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It was just some of those big cap US energy stocks, which are more global in

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nature than most of the Canadian energy stocks.

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Now, there's a couple of stocks that I'm currently following very closely.

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First one is Boeing.

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It continues to hold the $200 level.

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I traded in the channel on Wednesday, Thursday, and Friday.

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And so on Monday, we're looking for a close above $212.

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13 to give us a buy signal for Boeing.

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Looking down, if we start breaking down below last week's lows, then 187.

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50 would be our next target to the downside.

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I'm also watching Apple closely.

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Currently, we're on a sell signal right now.

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Had a wild day on Friday.

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We still ended the day closing lower on

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the day, but we ran down, actually traded below the 180 level for quickly reversing.

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On Monday, we're looking for a close above 191.

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02 to give us a buy signal for Apple.

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Then looking at Tesla, remember, Apple is the most widely held stock in the world.

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Tesla is the most traded stock in the world.

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And You can see, if we go back to the

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bottom of the open gap here, the top of that is 193.

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The first sign something new would be happening is a close above that level.

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We did trade above that level, but we haven't closed above it.

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We ended Friday, even with Metta shooting through the sky.

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We still closed down .

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95 cents on Friday.

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Coming into Monday, we're looking for a close above $200.

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10 for Tesla.

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If we take out the recent lows, then 171.

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88 That would be our next target to the downside.

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Still clustering around 187. 50.

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We closed at 187.

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91 on Friday.

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Let's finish off today's presentation

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looking at two widely held Canadian stocks starting off with BCE.

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It wasn't that long ago that we were

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looking at BCE potentially breaking out to higher highs.

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Unfortunately, this stock has rolled over.

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We were trying to get up to the 56. 25 level.

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We failed at that a couple of months ago and got as high as 56.

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17.

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It's always a good idea to put your orders in just below the price targets.

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You can see that we're currently closing just above the 53.

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13 level. If we take out Friday's low, then 51.

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56 comes into play.

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Then looking at the biggest bank in the

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country, the Royal Bank has been doing nothing for a while now.

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You can see the pros have given up control.

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We're currently on a sell signal.

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We've been in a tight trading range since

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early December and I really don't know what's going on here.

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Our current price target is 131. 25.

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We closed at 131.

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22 on Friday.

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You can see two lines down takes us back to 125.

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That could be a potential target to the downside, but really, nobody's doing

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anything with this stock at the moment, and that is a weird situation.

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Okay, folks, that is all for this morning's presentation.

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Since I started the presentation, stock index futures have come back.

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They're just slightly below fair value at the moment.

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Unfortunately, gold has not changed direction.

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It's still down about $12 at the time of this presentation.

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Have a great day, folks.

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Next time you'll hear my voice is on Tuesday morning.

Transcription