Stock Market Trends- 09182023

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Good morning, everyone.

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Welcome to Monday morning.

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It's Stephen Whiteside here from theuptrend.com.

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Well, last week was an interesting week.

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It turned out to be an inside week of the

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previous week, which was also an inside week.

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So two inside weeks in a row for the S&P 500 and for the Nasdaq 100.

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Price activity contracted last week and

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we're looking for a breakout of not last week's high or low or the previous weeks,

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but we have to go back three weeks and we're looking for a breakout or a

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breakdown of that bar to tell us which way the market wants to go next.

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An inside week, just like an inside day is a pause.

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It's a time of indecision where the market

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really doesn't know where it wants to go next.

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It's looking for a clue and that clue may

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come this week from the Fed, which meets on Tuesday.

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Then, of course, the announcement comes out on Wednesday.

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Now, the commodities, on the other hand, helped the TSX move up.

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It was up five days in a row last week and

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traded right back up to previous resistance.

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You can see that this level has held us in check all year.

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We were able to trade a slightly above it

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back in the start of the year and we're going to be looking to see if we can take

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out the early 2023 highs and that would open up a move up to 21,250 on the TSX.

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Looking at the VIX, it was down slightly on the week.

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It's still on a weekly sell signal that is

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supportive for the market going higher on a long term basis.

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That would change this coming Friday if the VIX were to close above

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$16.70. Now, if you're trading the market on Monday, we're looking for the VIX to

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close above $14.67. It made a new low on Friday, then

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it reversed and closed higher on the day back in the channel.

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We did see some selling in the U. S.

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Markets on Friday.

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Now, if the stock market is going to have a major correction in September or

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October, as these are seasonally weak times for the stock market historically.

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We're going to need to see the VIX start

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breaking out above the 200 day moving average.

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That's what held us in check back in August.

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So far, we're nowhere near that level.

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We're still trading below the 100 and 50-day moving averages.

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The options market is not overly concerned

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about the stock market going forward at this time.

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Now, what might not be good for the stock

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market right now is the US dollar index continues to move higher.

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We also saw bond yields move up last week.

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That open gap is not holding us in check any longer.

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We are now trading above it.

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The trend for bond yields and interest rates is still pointing higher.

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Now everybody's expecting the Fed to pause.

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I'm not sure they should given the fact

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that inflation is still out of control for a lot of people.

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Of course, their models do not directly

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reflect how the consumers have to deal with inflation.

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But we saw crude oil continue to move up

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last week up another three and nearly a half %, 3.45 % on the week.

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We're continuing to move higher on crude oil.

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Now, the price of gold also moved up last

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week, just $3.50, but that was enough to help the Canadian stock market.

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We also saw the price of silver, which reversed on the week, had a bullish

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reversal week and closed higher on the week.

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So both of those commodities helped the Canadian stock market moved higher.

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Now, speaking of inflation, we saw cattle, live cattle make a new high last week.

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We also saw a new high for cocoa.

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We also saw a new high for frozen orange juice and for the price of sugar.

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So it's pretty obvious that some

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commodity traders haven't got the memo from the Fed to help fight inflation.

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Now, on the other hand, we traders have

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been very supportive of the Fed and we made a new loaf for wheat on Friday.

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Remember when Russia invaded Ukraine, the

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price of wheat popped dramatically as the world was concerned about the global wheat

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market being disrupted by the war in Ukraine.

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All of those fears have seemed to have

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dissipated and not really an issue at the moment.

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Now looking at the seasonality chart for

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the S&P 500, you can see that we historically peak in the middle of the

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month and sell off going into the end of the month.

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Did that start on Friday?

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Well, only time will tell.

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This week may start out quiet, but it may end rather violently, either to the upside

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or to the downside, depending on what the Fed does on Wednesday.

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Now what didn't work last week?

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Well, in the US market, it was home builders back on a weekly sell signal.

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We had Biotechs down last week, so they've

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been on a sell signal for a few months now.

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Semiconductors have been on a sell signal for over a month.

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Then we've got industrials on the second week of a sell signal for industrials.

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What worked? Well, in the Canadian market, it was base

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metals were up nicely followed by marijuana stocks.

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Marijuana stocks is not a big component of the Canadian stock market.

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And then we've got utilities up nicely,

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almost trading up to the upper channel line.

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So we don't have far to go to generate a weekly buy signal for utilities.

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And then we've got information technology, which was up just under one % on the week.

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Now looking at the energy sector, energy

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stocks on this side of the border moved up last week.

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We're stuck here, trapped, holding on to the 17.19 level.

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We're trying to break out above the high from early 2022.

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That's holding us in check right now.

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If we can start breaking out above that

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high, then 18.75 comes into play for the XEG.

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Now looking at the XLE in New York, we did

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make a new high for this move last week before pulling back, just four cents.

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We're trying to break through the 93.75

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level, which is held us in check for in 2022.

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We got as high as 93.69. So getting pretty close to that 93.75 level,

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if we can take that out, then $100 does come into play or resistance could do what

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it's supposed to do, which is hold us in check.

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This might be the time and place where energy stocks start to top out.

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Let's finish off today's presentation looking at some numbers for Monday.

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We've already looked at the VIX.

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The iShares for the TSX is up five days in a row last week.

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We need a close blow of $30.56 on Monday.

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Not expecting that to happen, of course,

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and that lower channel is going to continue to move higher daily.

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Well, where did we end the day on Friday?

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Well, our next price target was $31.25, and we closed at $31.25.

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Now, if we can move higher from here, then 31.64 is our next price target.

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Now, the S&P 500 ended Friday on a sell signal.

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And so we're coming into Monday with a new sell signal for the S&P 500.

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Things would change on Monday with a close above $448.51 for the SPY.

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In the premarket this morning, we are trading lower.

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Looking at our price targets, you can see

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that 453.13 held us in check in the month of August, and now we're

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going to look to see if 437.50 can act as support in the month of September.

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Then looking at the Nasdaq-100, the Triple Qs ended Friday on a sell signal looking

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for a close on Monday above 376.23. Not expecting that to happen from

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what we're seeing in the premarket this morning.

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Now we're starting to move down from 375.

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We haven't really broken away from it just yet.

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The high on Friday was 376.32, so we haven't broken away.

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If we start to break down below the previous week's low, then 359.38 would be

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our next target to the downside for the triple queues.

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Then looking at semiconductor,

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semiconductors are starting to close just below the $200 level.

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If we take out the August lows, then

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187.50 is our next price target for the semiconductor ETF, which is the XSD.

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Okay, folks, that is all for this morning's presentation, expecting to see a

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little selling at the open at the same time.

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Commodity prices are moving up slightly on Monday morning.

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Have a great day.

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

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