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.
Just a friendly reminder: The sector watchlists are updated every weekend. You may want to consider dedicating time to reviewing and creating your watchlist. Also, it’s essential to keep an eye on the Daily Setups and Workspace scan results, which can provide insights into potential future additions to stay ahead of the game.
If you’re facing challenges understanding the Daily Setups or need help crafting a trading strategy, don’t hesitate to ask for assistance. You can contact us via email 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.
SYS Daily Report – Weekend Edition
Market Commentary
In a month where Wall Street’s crystal ball typically foretells ominous financial tidings, September proved itself an unyielding adherent to tradition. It seemed like nothing could stop the 2023 market rally. Then the third quarter arrived. The stock market’s performance during the month mirrored the script of years past, ultimately casting a shadow over investors’ portfolios. Closing out the month and the third quarter with a tumultuous dance, the S&P 500 bid adieu to September with further losses, a stark reminder of the capricious nature of equities. As we reflect on the year’s journey thus far, the numbers themselves tell a compelling tale. The S&P 500, once soaring with a 20% gain from its 2023 closing high in late July, now bears witness to a more modest 12% year-to-date increase.
S&P 500 Year-to-Date
The S&P 500 fell 4.9% in September, its worst month since December 2022. The benchmark index slipped 0.3% in daily trading Friday, while the Dow industrials lost 0.5%, or about 159 points. The Nasdaq Composite added 0.1%.
Intraday Index Action
Stocks initially surged on Friday morning following the release of the Personal Consumption Expenditures (PCE) price index report but later lost momentum. The data revealed that PCE, excluding the volatile food and energy components, had risen by 3.9% on an annual basis for August, marking the first time in over two years that it dipped below the 4% threshold. It’s worth noting that the Federal Reserve closely monitors the PCE price indexes to achieve a 2% inflation target.
From a technical perspective, the price was halted precisely at the horizontal resistance line when examining the weekly chart. This situation aligns with the adage, “what was once support becomes resistance,” which is vividly illustrated by this chart. To provide a closer look, I’ve also included a daily chart below for a more detailed analysis.
S&P 500 – Daily Chart
S&P 500 – Weekly Chart
The numbers were stark and unforgiving for those tallying the ledger of monthly losses. The indexes dutifully reported their September sacrifices: 3.5% for the Dow, 4.9% for the S&P 500, and a staggering 5.8% for the Nasdaq Composite. This marked the bleakest chapter of its 2023 narrative.
Monthly Index Price Movements
On the other hand, energy stocks had quite a boost thanks to rising oil prices in the third quarter. Brent crude, the worldwide measure for oil prices, surged by a substantial 27% since June, reaching $95.31 per barrel. This uptick significantly pushed the S&P 500 energy sector up by an impressive 11%. In fact, Exxon Mobil’s shares reached a record high just this week.
Quarterly Energy Price Movements
The weekly oil chart shows that price action encountered resistance from below a horizontal barrier. Price action is currently squeezed between this horizontal resistance line and an ascending 10-week moving average. A potential breakthrough above this horizontal resistance could signal the next phase in its journey toward the $100 per barrel mark. Conversely, a decline below the 10-week moving average would disrupt the current upward trend and invalidate any near-term bullish scenarios.
Crude Oil – Weekly Chart
But the stage wasn’t limited to equities and oil alone; the bond market added its voice to the financial opera. The yield on the benchmark 10-year U.S. Treasury note exhibited a remarkable surge, settling at 4.573% by month’s end, a significant uptick from its 4.090% position at August’s curtain call. This startling leap in yields marked the most substantial one-month gain since the financial echoes of September 2022.
10-Year US Treasury Yield
On Friday, Treasury yields experienced a decline following a report that showed a slowdown in core inflation, which is based on the Federal Reserve’s preferred measure, during August. Notably, the 30-year Treasury yield marked its most significant quarterly gain in 14 years.
- The 2-year Treasury yield dropped 2.5 basis points, sliding from 5.071% to 5.046% compared to Thursday’s figures.
- Conversely, yields move inversely to prices, and the 10-year Treasury yield fell by 2.4 basis points, decreasing from 4.596% to 4.572% since Thursday afternoon.
- The 30-year Treasury yield also saw a decline, slipping 1.9 basis points from 4.728% late Thursday to 4.709%.
While yields displayed mixed performance over the week, the 30-year rate concluded the third quarter with a remarkable gain of 85.6 basis points. This quarterly increase stands as the most substantial since March 2009, based on data from Dow Jones Market Data at 3 p.m. Eastern time. Notably, over the second and third quarters, the rates for the 2-year, 10-year, and 30-year Treasuries surged by nearly 100 basis points or more.
Bond Yield Visualization
Accuracy Disclaimer: StockCharts May Not Reflect Accurate Data When Compared to Dow Jones Market Data
Rising interest rates have presented significant challenges for the tech industry. In September, the tech-heavy Nasdaq faced its toughest month of the year, with a decline of 5.8%. This decline can be attributed to the fact that many tech companies are valued based on optimistic expectations of future growth, and higher interest rates have started to chip away at the perceived value of that anticipated expansion. As interest rates climb, they create a headwind that concerns the technology sector, causing the value of expected future growth to diminish.
When you glance at the weekly Nasdaq chart, there’s a glimmer of optimism to be found. The week wrapped up with price action ending on a positive note, as the weekly candle neatly rebounded off a significant horizontal support line dating back to 2020. This particular level is crucial to keep a close eye on. If price action stays above it, that could signal that things are looking up in a bullish direction. On the flip side, if price action breaches this level, it might dampen any hopes of a bullish scenario and point toward the start of a potential downtrend. So, we’ll be keeping a watchful eye on this development. Stay tuned for more insights.
Nasdaq – Weekly Chart
This change in investor sentiment became evident in the performance of tech giants like Apple and Nvidia during September. Apple’s shares dropped by 8.9%, while Nvidia’s shares experienced a more significant decline of 12%. However, it’s worth highlighting that despite these recent setbacks, both companies have still posted substantial gains for the year, with Apple’s shares up by 32% and Nvidia’s showing an impressive 198% increase in 2023.
NVDA & AAPL Price Performance vs. XOM
Despite the overall market turbulence, small-cap stocks managed to end the week in positive territory. Price action impressively clung to the horizontal support line of the Russell 2000 that we discussed in the previous weekend’s report. It’s safe to say this is a win for the Bulls, especially given the challenges of September and the quarter’s end.
Similar to the Nasdaq’s support line we mentioned earlier, this line for the Russell also holds significant importance. If price action remains above it, it could serve as a bullish signal, suggesting brighter days ahead. Conversely, if this critical level is breached, it might cast a shadow on hopes for a bullish scenario and indicate the potential beginning of a downtrend. So, as always, we’ll be closely monitoring this development. Stay tuned for more insights and updates.
Russell 2000 (ETF) – Weekly Chart
I’ve created a Green Light – Red Light system inspired by the SSI, where we combine market breadth with advancing and declining volume. This system serves as a valuable tool for identifying short-term shifts in trends. I’ve incorporated the Put Call ratio into the chart to enhance its capabilities, allowing us to monitor extremes more effectively.
I’ll share an updated chart in the weekend newsletter every week and provide real-time updates in the Daily Report whenever the system signals a green or red light. However, it’s important to keep in mind that nothing in the stock market is set in stone. This system is just another valuable addition to our toolkit.
Drawing a parallel to Greg’s strategy with the SSI, remember that a rising tide lifts all boats. When the market signals or hints at the beginning of an uptrend, one wants to step on the throttle. And when that tide starts to turn, we should be ready to catch the wave. It’s all about adaptability in this ever-changing market landscape. When the green light flashes, the watchlist that everyone has been diligently building during the drawdown phase will ideally become invaluable.
I’ll simplify this chart by reducing unnecessary clutter, making it more visually appealing and user-friendly. The goal today is to provide readers with a clear view of the effectiveness of the breadth signal by highlighting past instances when a green light or red light signal emerged.
Market Breadth Green Light – Red Light System
The dollar index, which measures the U.S. currency against six other major currencies, experienced a slight decline of 0.053% on Friday. However, it’s poised to finish the quarter with an impressive 3.13% gain, marking its 11th consecutive weekly rally. This streak is the longest it has seen in nearly nine years. It’s worth noting that the index has retreated from its recent peak of 106.47, which it reached on Wednesday, down to its current level of 105.82.
US Dollar – Weekly Chart
As stated above, the USD is trading lower heading into the weekend, and these USD losses could be attributed to temporary month-end and quarter-end flows. The dollar has inched up by 0.06%, reaching 149.41 Japanese yen, though it’s a step down from its recent 11-month high of 149.71 achieved on Wednesday. Over this quarter, the greenback has strengthened by 3.54% against the yen, following an impressive 8.66% gain in the previous quarter.
On the other side, the EUR has made gains, crossing back above the 1.06 level. These gains seem driven more by positioning and short-term flows rather than any significant fundamental shift in market sentiment. Sterling has also shown some resilience, with a 0.04% rise to $1.2206. This comes after hitting its lowest point since March 17 earlier in the week due to Friday’s data release.
Lastly, the CAD has managed to gain some ground, edging up to the low 1.36 area despite the generally softer USD.
Currencies
The TSX is still flirting with the lower trendline of the pattern and testing horizontal support, turning this situation into a binary event much like the Nasdaq and the Russell index.
TSX – Weekly Chart
The CRB index continues to resemble the chart of crude oil closely. Price action has encountered obstacles at the horizontal resistance line. Over the past four weeks, we’ve observed a small, rounded price pattern, akin to a rounded top formation, developing just beneath this resistance line. Crude oil prices are wedged between this horizontal resistance line and the 10-week moving average. As we move into the new quarter, we’ll keep a close eye on price action to gain insights into how it reacts, which will provide us with valuable clues going forward.
CRB Index – Weekly Chart
The setup of the copper chart is notably similar to that of the TSX. Price action is positioned right on the lower trendline and the horizontal support within its pattern, forming a tight apex. Encouragingly, copper prices ended the week in positive territory while testing this crucial support level. The pattern’s tight apex indicates that a directional signal may be imminent in the near future. Keep a close watch, as it could offer valuable insights into market movement.
Copper – Weekly Chart
Today, the gold price isn’t quite aligning with the expectations of investors who went long on this precious metal, hoping for it to serve as a hedge against both inflation and the potential deflation of other financial assets. Price action faced a precise rejection at the pattern’s upper trendline, as we pointed out when highlighting a potential emerging theme. It seemed like price action was setting up above the 200-day moving average and near the apex of the pattern.
The primary factor behind the pattern breakdown could be attributed to the robust performance of the U.S. dollar. Since gold is primarily priced in U.S. dollars on major global trading exchanges, the dollar’s continued strength against other major currencies is likely causing gold to become relatively more expensive for foreign investors.
Technically, this scenario serves as a valuable example of the risks associated with trying to front-run a breakout signal and underscores the importance of setting appropriate stop-loss orders. For those who may have felt the urge to jump ahead of a breakout signal, an initial stop-loss order could, and perhaps should, have been placed with either the 21-exponential day or the 50-day simple moving average.
For more conservative investors, the 200-day moving average often functions as a “red light” stop-loss level, as a breakdown below this level suggests the potential negation of an uptrend. Conversely, for pattern traders, a suitable stop-loss order could have been placed at the lower trendline of the pattern.
In any case, valuable lessons can be learned from this chart, which could easily find a place in a textbook. The first lesson is the consequence of front-running a breakout, and the second is a reminder of the importance of “expecting the expected.” This pattern provided an anticipated outcome with numerous opportunities to set stop-loss orders and manage downside risk effectively.
Gold – Weekly Chart
Silver typically exhibits a correlation with gold, and while recent price action did align, the silver chart is holding up relatively well in comparison as it tests the lower trendline of the pattern. As we move into the new quarter next week, valuable insights into the precious metals market direction could be gleaned by keeping a close eye on the movement of the U.S. dollar.
Silver – Weekly Chart
The uranium theme continues to shine brightly in the market, although Friday did witness some profit-taking. The week ahead will provide valuable insights into whether this is the beginning of exhaustion in a sector that has been performing exceptionally well since the end of July or if it’s just profit-taking as money managers lock in their gains at the quarter’s end. Monitoring price action in the week ahead will provide a clearer picture of the future of this trend.
Uranium Theme – Global X Uranium ETF
Bitcoin has been displaying remarkable resilience recently and is set to make history this month by ending September with gains. Interestingly, Bitcoin has experienced declines in each of the past six September, averaging a 6% drop each time.
While there are no clear technical signals at the moment, subtle hints are beginning to emerge. Upon closer inspection of the hourly chart, we notice an intriguing volume profile, and it appears that price action is gradually forming a modest trend. This coincides with a recent visit by crypto industry leaders to Capitol Hill, where they engaged with policymakers to advocate for regulatory measures. This interaction could potentially have significant implications for the crypto market in the future.
Bitcoin Hourly Chart
When examining the weekly chart, it becomes evident that price action is approaching a critical juncture. The weekly candle appears caught in a squeeze between each moving average. It’s worth noting that moving averages serve as dynamic trendlines drawn based on data, devoid of subjective interpretation, as seen with human-drawn trendlines.
The 10-week and 40-week moving averages are converging at this moment, forming an apex that implies a potential directional signal may be on the horizon. This juncture holds the potential to provide valuable insights into the market’s future direction. Additionally, it’s worth keeping an eye on the weekly PPO momentum indicator, which is currently showing signs of attempting to move higher from the zero line. These are key indicators to watch for potential market shifts.
Bitcoin Weekly Chart
Sector Watchlist Highlights: Weekend Chart Setups
Now, let’s explore the setup section of the report. As a reminder, our sector watchlists receive updates every weekend. It’s encouraged to review and create your watchlist based on these updates. Additionally, it’s worth noting that keeping an eye on the Daily Setups and Workspace scan results can provide insights into potential future additions that may offer a competitive edge in the market.
In this segment of the weekly report, setups from each watchlist are showcased, indicating potential momentum. You’ll find a link to each sector watchlist for reference. It’s important to consider that setups may not always be immediately evident, particularly for sectors that are currently out of favor. This is because sector correlations can fluctuate with shifts in overall market sentiment, resulting in weeks when notable setups may not be present.
Last week’s market performance once again emphasized the prevalent theme of “nothing is working.” However, Energy stood out as a consistent winner, while Discretionary and Materials also saw modest gains. On a positive note, utilities faced the most selling pressure, which typically indicates a favorable environment for the bulls. The utility sector often shines when the market takes on a defensive posture.
As we transition into the new quarter, the upcoming week holds the promise of providing clearer directional cues, shedding light on potential market trends. It’s crucial to keep a sharp eye on the Daily Setups and Workspace scan results, as they have the potential to reveal opportunities. This is particularly vital given the current circumstances where opportunities are limited, partly due to month-end volatility, and as the S&P 500 contends with resistance on its underside.
What Worked Last Week
Canadian Energy
Link – Canadian Energy Watchlist
CVE.TO – Cenovus Energy Inc.
Cenovus Energy is currently making an effort to trend higher above the horizontal resistance line, following a consolidation phase above the upper trendline of its basing pattern and horizontal resistance.
LINK TO CHART – https://schrts.co/WBBHtfZn
BDGI.TO – Badger Infrastructure Solutions Ltd.
Badger Infrastructure Solutions has reached the apex of a continuation pattern. Pay attention to the large volume by price bar, indicating accumulation during the pattern. Keep an eye out for a potential breakout.
LINK TO CHART – https://schrts.co/GfYQIXkR
BTE.TO – Baytex Energy Corp.
Baytex Energy is persistently threatening to break out from a bottoming base, accompanied by a notable increase in volume.
LINK TO CHART – https://schrts.co/mQywXvzP
Consumer Discretionary
Link – Consumer Discretionary Watchlist
CMT – Core Molding Technologies, Inc.
Core Molding Technologies is attempting to trend to new highs.
LINK TO CHART – https://schrts.co/xbQfSwSt
MOD – Modine Manufacturing Co.
Modine Manufacturing is setting up below 52-week highs. Monitor for potential upside momentum.
LINK TO CHART – https://schrts.co/CyapkJyH
OLLI – Ollie’s Bargain Outlet Holdings Inc.
Ollie’s Bargain Outlet is consolidating below new highs. Monitor for a potential continuation of the uptrend.
LINK TO CHART – https://schrts.co/hXzYQzQC
TSLA – Tesla Inc.
Tesla is curling higher from the lower trendline of a continuation pattern, with the PPO momentum indicator attempting to turn higher from the zero line. Keep a close watch for a potential continuation of upside strength that could potentially lead to a breakout.
LINK TO CHART – https://schrts.co/dAQtvAtK
WING – Wingstop Inc.
Wingstop is beginning to trend higher from a significant falling wedge continuation pattern.
LINK TO CHART – https://schrts.co/YGtifTsZ
XPEV – XPeng, Inc.
XPeng is currently making an effort to trend higher from a continuation pattern.
LINK TO CHART – https://schrts.co/ZSqQRmFt
Financial
JPM – J.P. Morgan Chase & Co.
J.P. Morgan has recently undergone a double-bottom retest of the breakout line and is forming a continuation triangle or wedge pattern. Monitor closely for a potential continuation of the uptrend.
LINK TO CHART – https://schrts.co/DVWaZygT
Healthcare
AMGN – Amgen, Inc.
Amgen is currently making an effort to trend higher after a minor bull flag retest of the recent breakout line, with price action consistently remaining above the 21-exponential day moving average.
LINK TO CHART – https://schrts.co/HxRiIKRU
HQY – HealthEquity, Inc.
HealthEquity is exhibiting an upward trend above its moving averages, with price action breaking above a key breakout line and a recent surge in bullish volume.
LINK TO CHART – https://schrts.co/YykRMwqq
Industrial
CAT – Caterpillar, Inc.
Caterpillar is currently consolidating just below its 52-week highs. Monitor for potential upside strength that could lead to a continuation of the uptrend.
LINK TO CHART – https://schrts.co/aUvnbgfP
CR – Crane Co
Crane has undergone consolidation, forming a continuation triangle. Keep an eye out for a potential breakout.
LINK TO CHART – https://schrts.co/IswVYvDE
CDRE – Cadre Holdings Inc.
Cadre Holdings continues to float above the 21-day exponential moving average as price action strives to push higher beyond a horizontal resistance line.
LINK TO CHART – https://schrts.co/xwPCfqys
FDX – FedEx Corp.
FedEx is positioning itself just below its 52-week highs. Monitor the stock for a potential breakout and the continuation of its uptrend.
LINK TO CHART – https://schrts.co/irduRnVC
INSW – International Seaways, Inc.
International Seaways is another standout chart, demonstrating relative strength as seen in setups throughout the week, and it’s currently making an attempt to trend higher from its continuation pattern.
LINK TO CHART – https://schrts.co/GXdpNXyg
HDSN – Hudson Technologies, Inc.
As indicated throughout the week in the setups report, Hudson Technologies stands out as one of the few bright spots in the current market. Price action is currently breaking out to reach a new 52-week high.
LINK TO CHART – https://schrts.co/xsdMujsE
Materials
CF – CF Industries Holdings, Inc.
CF Industries is displaying resilience in the turbulent market, with its price action consistently holding above the moving averages. Keep a close watch for the potential emergence of an upward trend from the bottoming base.
LINK TO CHART – https://schrts.co/tXiCcBIF
UAN – CVR Partners LP
CVR Partners has caught the attention of the momentum scanner this week, with price action positioning near the apex of a significant consolidation triangle. It’s advisable to include this chart on your watchlist and monitor it closely for the potential of upside momentum that could lead to a breakout. As the old saying goes, ‘the bigger the base, the higher in the space.’
LINK TO CHART – https://schrts.co/iupQBikW
Software
BSY – Bentley Systems, Inc.
Bentley Systems is currently making an effort to trend higher from a continuation pattern.
LINK TO CHART – https://schrts.co/GbjpqDUA
CDNS – Cadence Design Systems, Inc.
Cadence Design Systems is consolidating below new highs. Watch for upside momentum that could lead to a potential breakout.
LINK TO CHART – https://schrts.co/xtweayfh
CRWD – CrowdStrike Holdings, Inc.
CrowdStrike is attempting to trend higher from an area of consolidation and above a horizontal resistance line in the form of a bull flag continuation pattern.
LINK TO CHART – https://schrts.co/NdxMruPR
DUOL – Duolingo Inc.
Duolingo is attempting to breakout from a consolidation/continuation pattern.
LINK TO CHART – https://schrts.co/XHVmSSNq
DCBO.TO – Docebo Inc.
Docebo is currently retesting the recent breakout as price action strives to push above the pattern’s upper trendline with an increase in volume. Keep an eye out for a potential acceleration in upside momentum. It also traded in the US under the ticker DCBO.
LINK TO CHART – https://schrts.co/rdninTHc
Staples
BRBR – Bellring Brands Inc
Bellring Brands is currently set up in the form of a bull flag continuation pattern, positioned just below recent highs.
LINK TO CHART – https://schrts.co/CZdssUZf
COST – Costco Wholesale Corp.
Costco is consolidating below new highs. Watch for upside momentum that could lead to a potential breakout.
LINK TO CHART – https://schrts.co/qMzCygWK
SFM – Sprouts Farmers Market Inc.
Sprouts Farmers Market continues to exhibit strength, even in the face of overall market weakness.
LINK TO CHART – https://schrts.co/EKfanWqx
WMT – Walmart Inc.
Walmart is testing an area of support and the upward-sloping 50-day moving average. Monitor for a successful test that could lead to a continuation of the uptrend.
LINK TO CHART – https://schrts.co/ADaaSuAT
Technology
LYTS – LSI Industries, Inc.
LSI Industries is currently positioned below its 52-week highs within the context of a continuation pattern. Keep a close watch for a potential breakout.
LINK TO CHART – https://schrts.co/pekqpEra
UBER – Uber Technologies, Inc.
Uber is setting up off the lower trendline of a continuation pattern. Keep a close watch for a potential continuation of upside strength that could potentially lead to a breakout.
LINK TO CHART – https://schrts.co/MEgskxbq
ZS – Zscaler, Inc.
Zscaler is setting up off the lower trendline of an ascending triangle continuation pattern, with the PPO momentum indicator showing an upward curl from the zero line. Keep a close watch for a potential breakout.
LINK TO CHART – https://schrts.co/KDaRcIsx
To bring our weekend report to a close, we thank you for your engagement and insights. Your feedback is of great value, and we encourage you to share your recommendations. Stay attentive to the Daily Setup, the Workspace, and the Watchlists for emerging opportunities. Until next time, happy trading!
