Stock Market Trends - Weekend Edition 08202023

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Hello, everyone.

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It's Stephen Whiteside here from theuptrend.

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com. I hope you're having a wonderful weekend.

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It is Sunday, August 20th, 2023.

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Now, for the last month, we've been trying to bring you in for a soft landing.

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It all started a month ago where we were posting images of the percentage of stocks

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currently trading above their 20-day moving average.

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We did that for the TSX, the S&P 500, and the Nasdaq 100.

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At that time, we were up at the top of the range.

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It's typically where the market starts to pull back.

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As I showed that it doesn't pull back automatically.

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Sometimes it takes several weeks before

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the market realizes where it has gotten itself to and then starts to pull back.

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What has happened in the last month?

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Well, when we were up there, I was saying

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the air was pretty thin and it's hard to take a buy signal up at those levels.

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I know that lots of new buy signals came up.

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Most of them have now failed.

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Not all of them, but most of them have.

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One of that we were watching closely was

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Amazon, which gapped higher and has now come back and almost filled the open gap,

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but it certainly didn't continue to move higher from the time that it popped.

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Here we are today.

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We've come down over the past couple of weeks, and this is the TSX, the percentage

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of stocks currently trading above their 20-day moving average.

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We are coming down to the bottom of the range.

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And what we're looking for is a move down below 20%.

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Now, that is not an automatic buy signal, but it certainly tells us that this is the

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time in place we should start looking for the market to start to reverse.

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So no matter how much bad news there is out there, this is the time you look for

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buy signals, no matter how much bad news is out there.

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Now, it was three weeks ago that the VIX gave us a weekly buy signal.

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And that would change this coming Friday if the VIX were to close below $13.79. And

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what do you do when the VIX gives a buy signal?

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Well, the first thing you do is you stop buying.

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You might not necessarily have to sell

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things, and over time, you may have to sell things.

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And that has certainly been the case for

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the major technology stocks that we follow.

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But you certainly want to stop buying until things start to settle down.

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Now, the VIX on a daily chart made a new high on Friday.

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Things would change on Monday if the VIX

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were to close below $15.33. Now, I've been waiting for the VIX

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to break away from the Fly Paper channel, and so far it has not done it.

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It has poked its head out above the fly

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paper channel, but we're still stuck to it.

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You can see the low on Friday is still attached to the fly paper channel.

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We traded through the 200 day moving

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average on Friday, but did not close above it.

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And we hit our next price target of

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18.75. So we may have seen the bottom for this move in the market on Friday.

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Only time will tell.

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I'm not going to do anything based on that

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information, but I'm certainly mentally prepared to take action if the market

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wants to reverse from where we are right now.

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Now, in preparation for bringing you in

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for a soft landing, we were watching the weekly bearish reversal signals.

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And for the SOX index, which has been very important in 2023, especially within

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NVIDIA, five weeks ago, we got our first bearish reversal signal.

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Then two weeks later, we got our second bearish reversal signal.

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Five weeks ago, we got a bearish reversal signal for the Nasdaq, for the Nasdaq 100.

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Four weeks ago, it was the DOWutilities.

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Three weeks ago, it was the DOW itself, then the DOW Transports, and the Russell

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2000 and the TSX60 also generated a bearish reversal week.

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Now, all of those are still in play.

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They mark the top for each of those indexes.

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Now, we're watching to see how low the market will go.

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Now looking at the TSX60, we are looking to see if we could break out above 1250.

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That didn't happen.

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We also noted that we made a high, a lower

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high, and now we've put in another lower high.

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That's a very bearish sign.

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Now we're going to have to see what happens on the downside.

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Do we start to make lower lows or does

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support, especially at the 1156.25 level, does that hold?

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Now, it's been a rough time for the Canadian stock market.

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While we've had energy stocks continue to move higher, a lot of the mining sector

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has continued to move lower, including the gold sector.

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As you can see, we're trying to hold support right along 260.

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We closed at 260.05 on Friday.

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If we start to break down and the lows from earlier this year don't hold us any

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longer, then it wouldn't be too surprising to take a run at the lows from last fall.

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Just keep an eye on the gold sector and see if the market can get its act together

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and turn around from this point, or if we continue to make lower lows from here.

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Let's finish off with a quick look at technology stocks.

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We're going to use daily charts here.

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The Apple made a new low on Friday.

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Now, we did see a lot of bullish reversal signals on Friday.

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A lot of money came into the market late

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in the day, turned the market around, giving us bullish reversal signals.

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But what you'll note is that we did not close above the previous day's high.

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So as bullish reversal signals go, it wasn't a very impressive Friday.

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Even though we had a lot of signals, they weren't very impressive.

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There's Amazon coming down and it's almost filled the open gap.

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But you can see that the day it popped on earnings and then ever since it's been

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starting to fade down and we are on a sell signal right now.

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Meta has continued to move lower, making a new low on Friday.

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It landed on our next price target of 281.25, closed at 283.25. If we take out

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Friday's low, a move down to 250 would not be surprising.

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Then looking at Microsoft, new low on Friday hit our next price target of

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312.50. So hopefully, you locked in some profits.

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If you're short Microsoft, hopefully you had an order in down there and it got

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filled on Friday and you got to buy back part of your position.

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Then, invidia hasn't been selling off

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aggressively over the past couple of weeks.

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It's still on a sell signal.

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Invidia, earnings come up very soon, and

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that will certainly be an extremely volatile day for the market.

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Then, Shopify in New York and Shopify in Toronto both made new lows on Friday.

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We've broken through 75, heading towards 68, 75.

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The top of the open gap has been broken,

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so the bottom of the open gap is above the 62.50 level, that could be a target.

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Then, of course, our mathematical target is 62.50. Last up is Tesla.

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Tesla made a new low on Friday, and we got down and traded below 218.75.

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If you had an order to buy shares back at 218.75, those got filled.

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Now we're looking to see if we continue to move lower from here.

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Of course, 200 is going to act as psychological support.

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If that breaks, then 187.50 would be our next target to the downside.

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Now, as the percentage of stocks trading above their 20-day moving average

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continues to move lower, a couple of things we need to be aware of: we are

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coming up to the end of the month and there's a bullish end of the month bias.

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We're also coming up to the September long

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weekend, and that also has a bullish bias to it.

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So I wouldn't be surprised if you were to see the market start to move up from here

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and then continue to move lower in September into October and that's where we

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could get our major buying opportunity to run up into year end.

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But right now, none of that has happened just yet.

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We're coming into Monday's trading action on a lot of sell signals, a lot of

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downtrends, a lot of new lows were made on Friday.

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And that's what's happening with the market.

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And until the VIX starts to turn around,

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I'm not going to get overly excited about looking up.

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I'm going to continue to look down from here.

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Enjoy the rest of your weekend.

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