US Stock Market Trends 20190723

Nasdaq Market Timing Service
Good morning everyone and welcome to Tuesday morning. It's Stephen Whiteside here from with today's look at U.S. stock market trends. In the pre-market this morning, stock index futures are above fair value, so we are looking for some buying at the open on Tuesday morning.

Now Monday was a fairly quiet day ahead of a lot of earnings announcements this week. You can see the VIX after generating a buy signal on Friday, pulled back into the channel yesterday. A close below $12.88 on Tuesday would give us a sell signal for the VIX. That of course would be supportive for higher stock prices.

The Dow DIA,Dow Diamonds ETF is holding up fairly well, and of course it's just 30 stocks. You look at the S&P 500 SPY, SPDR S&P 500 ETF. We generated a sell signal on Friday, inside day on Monday and of course with what we're seeing in the pre-market this morning, we could actually end Tuesday on a buy signal.

Now we saw a little more strength in the Nasdaq QQQ, Nasdaq 100 ETF yesterday and again we generated a sell signal on Friday, came back on Monday, and again if we close where we're going to open this morning, we could see new buy signals at the close on Tuesday.

Now looking at the rest of the market, there's the IWM, iShares Russell 2000 ETF on a sell signal. That didn't change. We closed lower yesterday and we closed lower for the IWC, iShares Russell Microcap ETF for the micro-cap sector.

Next up, let's take a look at the FANGS stocks and these are going to be in the news this week. We've got Facebook (FB) with an early warning signal up there. We've seen a small pullback enough to generate a sell signal on Friday. We came back on Monday and we're just 10 cents away from a new buy signal for Facebook. Then looking at AMZN, early warning signal up there. We're back on a sell signal as of Friday's close, traded up yesterday looking for a close on Tuesday above $1,998.33 to give us a new daily buy signal.

Then NFLX, Netflix continuing to move lower, so congratulations for anyone who is short Netflix at this time. And then we've got alphabet or what I still call Google GOOGL, Alphabet early warning signal up there. We traded down to the lower channel line for the past couple of days. We need to close below $1,131.05 on Tuesday to give us a sell signal. Then looking at AAPL, Apple we traded down to the lower channel line on Friday but did not close below it. Looking for a close below $202.38 on Tuesday. Our next target to the upside is 212.50. Now neither Apple or Tesla are FANG stocks, but I like to include them in this list.

There's TSLA, Tesla Motors making a new high for this move yesterday looking for close below 243.71 on Tuesday. We had a bearish engulfment day yesterday. We're just coming up to the 200-day moving average, which could potentially act as resistance. Now our next target to the upside is 281.25, but you can see the market's having trouble getting up and over the May high, so that is acting as resistance right now. If we can get it above that, then it's the 200-day moving average and then if we break out above that, look for a move up to 281.25.

Let's just finish off this morning's presentation with a look at the world of gold starting off with the SPDR Gold Shares (GLD). You can see we have a new early warning signal up there and interesting trading pattern last couple of days. We've had an inside day of an inside day, so volatility has been contracting over the past couple of days after seeing a lot of excitement after as we made the new high. Now on Tuesday, we're looking for close below 132.74. Not expecting that to happen. Our next target to the upside, if we can take out last week's high as 137.50. Now this is an interesting picture. We've got the pros and the public intertwined up here at these highs, and so it looks like the pros have stopped buying at the moment. They are not selling their positions. They're not adding to their positions. They're just sitting around, sitting on their hands right now looking for a catalyst to cause them to take action.

Next up, let's look at the VanEck Vectors Gold Miners ETF (GDX), no new early warning signal up here. Again, volatility after making that new high, volatility contracted inside day and inside day, and so we've found some resistance up here that the market is having trouble getting through. Looking for a close below 26.20 on Tuesday to give us a sell signal, not expecting that to happen, and you can see the resistance is our mathematical target of 28.13. We are looking to break out above that and that would take us up to 29.69 would be our next target to the up side. Unlike the GLD itself, the pros have no trouble buying stocks up at this level.

Now a big player in the GDX is Newmont Goldcorp Corporation (NEM). Newmont has now run up to psychological resistance at a big round number of $40. We had an early warning signal in there, but we've traded above it so that signal is no longer in play. Looking upward, we're trying to break through $40 at the moment. On the downside, we need to close below 38.60 on Tuesday to give us a sell signal. Of course, with any of these lower channel line numbers that I give you, they're only good for the day. Of course, if we don't break down below the lower channel line on Tuesday, that lower channel line's going to continue to move higher daily. Now we've got psychological resistance at $40. The high yesterday was 39.91. If we can break through $40, our next mathematical target is 40.63, and if we take a look at a weekly chart of Newmont, you can see that this is where we peaked last year.

And so of course, traders have memories, investors have memories, and this is the time and place that they will be looking to lock in some, not profits, they just want their money back. And so they have a psychological trigger to hit the sell button up at these levels. Now as you can see, the pros are still in control. They have no trouble buying the stock up here. So I'm pretty optimistic we're going to be able to get up to the previous high.

Okay, folks, that is all for this morning's presentation. Just looking over my shoulder, I see the futures and gold have moved up since I started the presentation. So it certainly does look like we're going to see some buying at the open on Tuesday morning. The next time you'll hear my voice is on Wednesday morning, and at that time we'll take a closer look at the Canadian stock market.

Stephen Whiteside