Morning Market Outlook 01082024

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Good morning, everyone, and welcome to Monday morning.

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It's Stephen Whiteside here from the uptrend.com. In the pre market this

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morning, stock index futures and commodities are trading below fair value.

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Gold's down $22.

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Crude oil is down $2.

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The Dow is down, leading the stock index futures lower.

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And that has a lot to do with one stock, and that is Boeing.

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And Boeing's down over 8% in the pre market on Monday morning.

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So that's where you're getting a lot of the weakness from.

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Now, last week was all about technology

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stocks with semiconductors leading the tech sector lower.

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You can see that on Tuesday we gapped lower.

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On Wednesday we gapped lower.

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And on Thursday we gapped lower.

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So a lot of aggressive selling in the semiconductors last week.

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If we look at where we can get support, we're currently holding support at the 50

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day moving average at the top of the Fly Paper Channel.

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And you can see that there is a lot of potential support down of the $200 level.

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So we may be heading in that direction this week.

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Now, Apple was a big loser last week as well.

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And of course, being the biggest company in the world, it is going to have an

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effect on all the major stock market indices.

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And that is certainly what happened last week.

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We're trying to hold 180.

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If 180 breaks, then 175 is our next target to the downside.

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Now, looking at the weekly chart of the VIX, the VIX was up last week over 7%.

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We're still going to remain long term bullish on the market as long as the VIX

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does not close above 15.39 this coming Friday.

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Now, if you're watching the market on

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Monday, we're coming into Monday's trading action with the VIX on a buy signal.

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So short term, we're bearish on the market.

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That would change on Monday if the VIX were to close below 12.87. Now, even with

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Apple being in the Dow, the Dow actually held up fairly well last week.

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So we're still on a buy signal.

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That will probably change on Monday if the Dow diamonds close below 373.56.

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And we've got the ishares for the TSX 60

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still trading and closing above the upper channel line.

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So holding up very well last week when you

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compare that to the S&P 500 already on a sell signal.

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And of course, technology stocks in the Nasdaq led the market lower last week.

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And we saw weakness in the Equal Weighted and the Next Generation Nasdaq 100 stocks.

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We also saw weakness in the Russell 2000 and the micro cap sector.

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So a lot of weakness across the board, outside of the Dow 30 and the TSX 60.

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Then, looking at a weekly chart of the

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S&P 500, we did close below the previous week's low.

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We do have an early warning signal on the weekly panic zone chart.

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And the pros are starting to turn down.

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They're nowhere near giving up control this week.

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But that's not a very bullish looking chart at the present time.

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Now, looking at the Canadian stock market, yes, we have held up over the past week.

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We've been stuck at resistance here, looking at the TSX composite index.

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If we can take out the recent high, then

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our next mathematical target is 21,250, both on the daily and the weekly charts.

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And so that is certainly doable, but not

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on Monday, because we're seeing a little selling in the commodity sector, and

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that's not going to help the Canadian stock market on Monday.

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Now, there's a big difference between the canadian stock market and the US stock

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market, even though we're holding up fairly well right now.

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When we look at the Nasdaq 100 and we're

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looking at a weekly Fly Paper Channel chart, you can see that

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we started to turn up in early 2023, and that trend is still heading higher.

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We're making new highs up here, and we're using the Fly Paper Channel as support.

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So if we were to pull back, we would look for a pullback to the Fly Paper Channel

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and then look for buying opportunities from that point.

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Now, you can see that the Nasdaq 100 has been trending higher.

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It's kind of hard to see that upward trend

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on the TSX, the TSX 60, or the mid caps or even small caps.

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Small caps definitely trending lower, and micro caps certainly trending lower.

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So the canadian market has a couple of

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pockets that have been doing well, but otherwise, it's not looking very good.

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Now, energy stocks, of course, have been

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in the news all through 2023, and we made a high in 2022.

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We haven't been back there yet.

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Now, this is a very confusing chart because it's got something for everybody.

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For the bears, we've made a series of lower highs.

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So that's very bearish.

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There's a high lower high, lower high now for the bulls.

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Hey, what have we got?

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We got higher lows, and it looks like we recently put in another higher low.

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So something for everybody here.

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We're still using the Fly Paper Channel as support.

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That hasn't broken yet.

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So looking for buying opportunities in the energy sector that might not see any

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follow through on Monday given what commodity prices are doing now.

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Financials over the past couple of weeks popped out of the top of the

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Fly Paper Channel and took a run at the highs from early 2023.

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And so it'll be interesting to see if we can get any fall through to the upside.

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We might be able to if bank stocks can keep going.

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They're stuck on the Fly Paper Channel,

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but we still got some room to go to get back up to those 2023 highs.

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And so that is certainly doable at this time.

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Move up to the 420 area, then looking at gold stocks.

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We're stuck in the Fly Paper Channel right now.

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And again, remember, we're looking at weekly charts here.

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We've also got the base metals stuck in the Fly Paper Channel.

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The industrials are still using the Fly Paper Channel as support.

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And there is certainly a trend higher here that is very obvious.

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And we've also got a trend higher in the infotech sector.

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This chart looks very similar to the Nasdaq 100.

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So you can see that, yes, we did get some

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action in the tech sector last year, but tech sector is a lot smaller in the

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canadian market than it is in the US market.

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And then materials in the Fly Paper Channel, no joy there.

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No joy for real estate, no joy for the telcos.

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So canadian market looking much different than the US market at the present time.

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The TSX 60 is holding up very well, but certainly we're not getting

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the kind of excitement they're getting in the US from the tech sector.

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Let's finish off with the big five charts.

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And we were wanting to see the US dollar index continue to move lower.

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That didn't happen last week.

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So the US dollar index moved up.

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That put downward pressure on stocks.

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We also wanted to see bonds continue to move higher.

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They had a pullback last week that put upward pressure on bond yields.

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We didn't want to see that happen.

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That's not good for stocks.

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So hopefully those trends can reverse.

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Then looking at the price of gold down $22

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on the week, it's down another $20 in the pre market this morning.

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So still trading above $2,000.

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That of course will be a psychological breaking point if we start trading back

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down below $2,000 and then looking at crude oil.

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Crude oil was up on the week.

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It's down about that amount in the pre market this morning.

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So no joy for the energy sector.

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The energy sector falling can certainly help the consumer.

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But for stock investors, we were hoping that crude oil could head up from here and

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help push energy stocks back up once again.

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

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So far.

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It looks like we're going to see some selling at the open on Monday morning.

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And with the VIX on a buy signal right

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now, that's kind of what we're expecting to happen at the present time.

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Enjoy the rest of your day.

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

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