Notice: The weekend report is provided for informational purposes only and is not intended as a stock-picking service. The charts and information provided are intended to aid research and analysis and should only be used as indicators. They should not be considered as a direct trigger to buy or sell any security. The creator assumes no responsibility for any actions readers take and strongly advises each individual to fully understand the risks and potential consequences before making any investment decisions. Please note that the charts shared are not intended as signals to buy or sell but as a tool to add to your watchlist and analyze according to your trading ability. Remember that not all charts will result in buy or sell actions at any time.
This is just a friendly reminder that it’s essential to monitor the Daily Setups and Workspace scan results, which can provide insights into potential future additions and help you stay ahead of the game.
If you’re having trouble understanding the Daily Setups or need help crafting a trading strategy, don’t hesitate to ask for assistance. You can email us at info@setyourstop.com or reach me through the Workspace. Let’s schedule a meeting to address your specific requirements and provide you with the guidance you need.
Sample Trading System
The following trading system is presented as an educational example and should not be interpreted as financial advice. Past performance does not guarantee future results, and trading involves inherent risks. Please consult with a qualified financial advisor before implementing any trading strategies.
SYS Daily Report – Weekend Edition
Market Pressure Forcing Fed’s Hand Amid Surging Volatility?
This week has provided an important example of the necessity to avoid falling for narratives and the importance of reacting to new data without letting bias interfere. Anyone adhering to system rules should hold significant cash positions, as stop-loss orders would have been triggered when price action dropped below its moving average. This systematic approach eliminates all the “I think, I feel” emotions, preventing one from getting caught in a losing position and asking, “Now what?”
Price action in the indexes looked promising on Wednesday following the Fed Chair’s speech but then reversed dramatically, leading to broad losses by the week’s end. This reversal was spurred by two new pieces of economic data suggesting the economy is weaker than expected, reigniting recession fears. The situation was exacerbated by Amazon’s earnings report, which warned of consumer headwinds. Without proper stop-loss orders, reacting quickly to the new data rather than holding stocks based on an outdated narrative was crucial. Especially if one was positioned in energy or uranium stocks as an adequately placed stop-loss order would’ve saved one a world of hurt.
The issue now is that the Federal Reserve is again late to react, with markets expecting a 50-basis point rate cut in September and at least 100 basis points by year-end. However, the market seems to be pushing the Fed’s hand, suggesting it will be forced to cut rates sooner than anticipated. If the VIX continues to surge, we could see an emergency rate cut sooner rather than later. The real question is whether it’s too late and whether a rate cut will effectively reverse the new economic data. Alternatively, how substantial will the cuts need to be to prevent a hard landing? Given current market behavior, the Fed may need to implement larger and more frequent rate cuts than they indicated just two days ago. The last two instances when the Fed enacted rate cuts exceeding 25 basis points were at the onset of the COVID-19 pandemic and during the 2008-09 financial crisis.
Regardless of the answer, this should be positive for precious metals and Bitcoin, as the Federal Reserve will be forced to print more money. And what do we often say at SetYourStop.com? What sound does the money printer make? The money printer goes, ‘brrrrrrrrrrrrrrrrr.’
Amid the current market turbulence, there’s a potential silver lining: the market fear gauge, often seen as a contrarian indicator, has surged to its highest level in over a year, hitting ‘extreme fear’ at one point intraday.
Historically, such sharp declines can signal buying opportunities, and this scenario might be no exception. However, caution is advised. Investors entering the market now could get caught in the ongoing panic. It’s prudent to be extremely cautious with new investments and to reduce exposure by offloading losing positions if prices have not yet breached stop-loss thresholds. The red-light/green-light breadth system also suggests caution as it sets up for a potential red-light signal.
The Red-Light/Green-Light Breadth System
While the indexes rebounded slightly from their Friday lows, they still suffered significant weekly losses, with no substantial recovery visible on weekly charts. Defensive sectors such as discount retail, insurance, medical, utilities, and consumer staples have shown resilience.
What Worked Last Week
Despite these market jitters, it’s essential to maintain perspective. The economy isn’t in dire straits; the second quarter saw a 2.8% annual growth in GDP, and the unemployment rate remains healthy at 4.3%.
The Week Ahead
Several key earnings reports will be closely watched in the coming week. Palantir and Super Micro are significant due to their roles in artificial intelligence. Caterpillar’s results will provide insights into the industrial sector, while Eli Lilly and Novo, leaders in the weight-loss drug market, represent another current investing theme.
When analyzing the major indexes this weekend, I’m keeping things straightforward by removing all lines and focusing on a binary event analysis, similar to a red-light/green-light system. In my personal work, I rely on Bollinger Bands, specifically the middle Bollinger Band, which corresponds to the 20-day moving average on the daily chart and the 20-week moving average on the weekly chart. This 20-week moving average often acts as a key trendline. On the daily chart, the 20-week moving average is equivalent to the 100-day moving average.
Currently, the market is situated right at this crucial moving average, which also aligns with a support level on the weekly charts. One could monitor for a potential bounce from this level. However, even if the market does bounce, it’s important to watch for any overhead resistance, as it could signify either an oversold bounce or a continuation of the uptrend. Any price movement below the key 100-day moving average would negate any short-term bullish scenario.
Remember, the next few months leading up to the election are likely to remain volatile. Therefore, even if the market bounces, expect continued choppiness until we have clarity on the election outcome and subsequent policies.
S&P 500 – Daily Chart
S&P 500 – Weekly Chart
Nasdaq – Daily Chart
Nasdaq – Weekly Chart
Dow Jones Industrial Average – Daily Chart
Dow Jones Industrial Average – Weekly Chart
Russell 2000 (ETF) – Daily Chart
Russell 2000 (ETF) – Weekly Chart
The 10-year yield dropped to 3.792%, its lowest level since March 6, 2020, confirming the head-and-shoulders topping pattern as it breached the neckline. This move triggered the TLT trade to gap higher on Friday morning, which was highlighted on Thursday in the Slack Workspace and the daily report.
10-Year US Treasury Yield
The U.S. dollar is beginning to break down below the support line we’ve had on our chart for months, with its price action continuing to correlate with the 10-year Treasury yield. One could expect further declines, especially if the Federal Reserve is forced to cut rates.
US Dollar – Weekly Chart
U.S. crude oil futures plummeted 4.7% to $73.52 a barrel last week, marking a two-month low on Friday as prices broke below a long-established support line. The past two weeks have seen significant selling pressure, accompanied by high trading volumes. When a support line is breached with high volume, it often signals a stronger bearish trend, as increased trading activity typically confirms the validity of the price move. Next week will be telling.
Crude Oil – Weekly Chart
The TSX has pulled back to retest its recent breakout level. Next week will be pivotal to see if this level can hold.
TSX – Weekly Chart
Price action in copper continues to consolidate along its 200-day moving average.
Copper – Daily Chart
Gold touched a new all-time high this week as it attempted to break out from the trading range we’ve been charting. However, Friday’s price action was somewhat discouraging, as it pulled back to retest the breakout line. Next week will be pivotal, especially if the Federal Reserve cuts interest rates. We need to watch and react to these developments to understand what happens going forward.
Gold – Daily Chart
This week, silver’s price action traded into the underside of its horizontal resistance level before rolling over, forming a bearish flag pattern. This situation presents a binary event defined by the horizontal resistance and support lines. A move above the resistance will be considered bullish, while a breakdown below support would be bearish, likely leading to a test of the 200-day moving average.
Silver – Daily Chart
Regarding our crypto charts this week, the analysis is pretty straightforward. Bitcoin and Solana are both testing their 200-day moving averages, while Ethereum has pulled back to the lower trendline of its trading range. This creates a binary event: either these levels hold, or they don’t. A decisive move in either direction could signal the next trend for these cryptocurrencies.
Bitcoin – Daily Chart
Ethereum – Daily Chart
Solana – Daily Chart
US Daily Setups
AAPL – Apple, Inc.
Apple is currently consolidating, forming what appears to be a bullish flag continuation pattern. Closely monitor for any breakout signals that could indicate further upward momentum. A bullish flag continuation pattern typically occurs after a strong upward price movement, followed by a period of consolidation. This pattern suggests the stock may resume its upward trend if it breaks above the flag formation.
LINK TO CHART – https://schrts.co/syDseTGu
AGI – Alamos Gold Inc.
Alamos Gold appears to be setting up below its recent 52-week high, supported by robust volume. Closely monitor for any potential signs of upside momentum. When a stock is supported by strong volume near its 52-week high, it often indicates sustained investor interest and potential for a breakout if positive momentum continues.
LINK TO CHART – https://schrts.co/EJxnEIEV
EXR – Extra Space Storage Inc.
Extra Space Storage has consolidated back to retest the recent breakout line in a potential bullish flag continuation pattern. This retest can often confirm the breakout level as new support, indicating the potential for continued upward movement if the pattern holds.
LINK TO CHART – https://schrts.co/sDmSezAA
RACE – Ferrari NV
Ferrari appears to be setting up on the right side of a significant multi-month consolidation pattern below its all-time high. Closely monitor for any potential breakout signals. A multi-month consolidation pattern can indicate strong support and resistance levels, and a breakout from this pattern may signal a resumption of the prior uptrend.
LINK TO CHART – https://schrts.co/buPHCngY
SJM – The J. M. Smucker Co.
The J. M. Smucker is attempting to break out from the right side of a significant bottoming pattern. A successful breakout from a bottoming pattern can indicate the end of a downtrend and the beginning of a new upward trend, suggesting potential for further gains if momentum is sustained.
LINK TO CHART – https://schrts.co/nVdIFbpd
TILE – Interface, Inc.
Interface is setting up on the right side of a multi-month area of consolidation, which is located below its 52-week highs. Closely monitor for any potential signs of upside momentum. This setup may indicate that the stock is building strength for a potential breakout, especially if supported by increasing volume.
LINK TO CHART – https://schrts.co/vViPccuE
UNH – Unitedhealth Group, Inc.
Unitedhealth continues to experience strong momentum, demonstrating relative and absolute performance in a weak market tape. The price action has now broken out to a new 52-week high and continues to move above the upper moving averages, as noted in previous reports. This breakout in a weak market environment indicates significant strength and potential for continued upward movement.
LINK TO CHART – https://schrts.co/imwDDEgz
Canadian Daily Setups
AGI.TO – Alamos Gold Inc.
Alamos Gold appears to be setting up below its recent 52-week high, supported by robust volume. Closely monitor for any potential signs of upside momentum. When a stock is supported by strong volume near its 52-week high, it often indicates sustained investor interest and potential for a breakout if positive momentum continues.
LINK TO CHART – https://schrts.co/WWYpPuDX
BCE.TO – BCE, Inc.
BCE now has its earnings report out of the way and is breaking out from the bottoming pattern we have highlighted. This breakout suggests a potential reversal from the previous downtrend, indicating the possibility of further upward momentum if the pattern holds.
LINK TO CHART – https://schrts.co/bCRhFBcE
DFY.TO – Definity Financial Corp.
Definity Financial is now breaking out from the consolidation area we have been charting following a robust earnings report. This breakout indicates potential upward momentum, suggesting that the positive earnings report has provided the catalyst for the stock to move higher.
LINK TO CHART – https://schrts.co/UacnIpDW
PLUR.V – Plurilock Security Inc.
Plurilock Security has consolidated in the form of a potential bullish flag continuation pattern. Closely monitor for any potential breakout signals. A bullish flag pattern typically indicates that after a period of consolidation, the stock may resume its prior upward trend if a breakout occurs.
LINK TO CHART – https://schrts.co/NTFqhgGX
T.TO – TELUS Corp.
TELUS also has its earnings report out of the way, with price action breaking out from the bottoming pattern that we recently highlighted. This breakout suggests a potential reversal from the previous downtrend, indicating the possibility of further upward momentum if the pattern holds.
LINK TO CHART – https://schrts.co/SwxcUHcy
VLE.TO – Valeura Energy Inc.
Valeura Energy is showing up on scan results heading into its earnings date on the 8th. Closely monitor for any potential signs of upside momentum. Remember, holding through an earnings date can be risky due to the possibility of disappointing results, which could lead to a gap lower and significant damage to your account.
LINK TO CHART – https://schrts.co/hDvYugkR
To conclude our report, we thank you for your engagement and insights. Your feedback is valuable, and we encourage you to share your recommendations. Stay attentive to the Daily Setups, the Workspace, and the Watchlists for emerging opportunities. Additionally, be sure to explore the PDFs of Friday’s scan results provided below. Until next time, happy trading!
US Scanner Results
Click on the CandleGlance chart to view it in full size. Find a chart that matches your criteria or interests. You can easily save it to your watchlist on StockCharts.com for further analysis and tracking or copy and paste the ticker list into your chart provider.
EXPORT – US Watchlist Scan – 2024-08-03
AAPL, ABT, ACGL, ADP, AEE, AEP, AGI, AJG, ALNY, AMCR, AMK, AMT, AON, AWK, AZN, AZO, BAESY, BALL, BDX, BF/B, BFAM, BMY, BR, BRO, CAG, CBOE, CCEP, CCI, CINF, CL, CLX, CME, CNC, COKE, COR, CPB, CPT, CWAN, D, DGX, DORM, DUK, DVA, DXCM, EA, ED, EFX, EGO, EIX, ELV, ENSG, ES, ETR, EVRG, EXC, EXLS, EXR, EZPW, FICO, FLR, GDDY, GEHC, GIL, GILD, GIS, GSHD, GSK, GVA, GWW, HOLX, HRL, ICFI, IESC, IHI, INVH, JKHY, JNJ, JNPR, K, KDP, KHC, KMB, KMPR, KNSL, KO, LH, LHX, LIN, LNT, LTH, MAA, MATX, MCD, MCK, MDLZ, MDT, MELI, MKC, MKTX, MO, MOH, MSI, NEE, NI, NOC, NVS, O, ORLY, PAYX, PEP, PFSI, PG, PGR, PLMR, PM, PNW, POST, PPL, PSA, PSN, RACE, RBLX, REG, RMD, RNR, RSG, RYAN, SAFE, SBAC, SJM, SKWD, SO, SRE, STE, SYY, TFX, TIGO, TILE, TMUS, TRV, TSN, TYL, UMH, UNH, VICI, VIRT, VTR, VZ, WCN, WEC, WELL, WRB, XEL, XLP, XLRE, XLU, YUM
Canadian Scanner Results
Click on the CandleGlance chart to view it in full size. Find a chart that matches your criteria or interests. You can easily save it to your watchlist on StockCharts.com for further analysis and tracking or copy and paste the ticker list into your chart provider.
EXPORT – Canadian Scanner Results – 2024-08-03
AAPL.NE, ACO/X.TO, AGI.TO, ALS.TO, APM.V, BCE.TO, BDI.TO, BFM.V, CAR/UN.TO, CG.TO, CHP/UN.TO, CRR/UN.TO, CRT/UN.TO, CSH/UN.TO, CU.TO, DC/A.TO, DFY.TO, ELD.TO, EMA.TO, ENB.TO, ETG.TO, FIH/U.TO, FTS.TO, GDC.TO, GIL.TO, H.TO, HRX.TO, IFC.TO, JNJ.NE, KRR.TO, LIF.TO, LNF.TO, LUG.TO, MCDS.NE, MFI.TO, MRG/UN.TO, NOVC.TO, PLUR.V, PLZ/UN.TO, PMZ/UN.TO, PSU/U.TO, QBR/B.TO, RCI/B.TO, SIA.TO, STLC.TO, T.TO, UNH.NE, VERS.NE, VLE.TO, WCN.TO, WFG.TO, XAU.TO, ZTL.NE