Saturday, April 22, 2017

The Daily, Part 1 of 3, 4-21-17

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4/21/2017 Investment House Daily
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The REPORT SCHEDULE is as follows:

Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.

Monday a Market Summary video, new plays, play table annotations.

Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.

Access to all current videos will remain assessable each day using the play
links in the reports.

If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.

MARKET SUMMARY

- Talk, promises of tax and healthcare reform keep the market afloat late
week.
- Expiration rather lackluster, stocks close lower but hold their moves for
the week.
- Recovery keeps several indices in more bullish patterns, but can they do
anything with the recovery this time?
- French election has the status quo worried.
- Can the market make anything out of the hold of support?

But you made me promises, promises . . . that you knew you would not keep .
. .

That line from the Naked Eyes song 'Promises, Promises' appears apropos to
the political, economic, and market situations as of Friday. Once more
there were promises of tax and healthcare reform, but we have heard that
before. This time is different was the apparent view Thursday as stocks
rallied purportedly on Mnuchin statement as to tax reform, but Friday, even
as the administration pressed harder, stocks were less than impressed,
closing lower. Modestly lower, but they certainly received no push from the
promises.

SP500 -7.15, -0.30%
NASDAQ -6.26, -0.11%
DJ30 -30.95, -0.15%
SP400 -0.19%
RUTX -0.31%
SOX -0.46%

VOLUME: NYSE +4%, NASDAQ -2%. Expiration so higher volume is expected.
Got just a whisker higher trade as volume remains quite light.

A/D: NYSE -1.2:1, NASDAQ -1.4:1.


What was promised? Given that Paul Ryan is the Speaker of the House and has
an entirely different agenda and plan for America than what he reveals to
his constituents and the President, the administration is promising the
moon. We hear the Freedom Caucus is about ready to flip to favor a new
healthcare bill that does not repeal the ACA as promised, and likely will do
nothing to change the healthcare plight for working US citizens. But that
does not matter now does it? Control healthcare, control the people. That
is what Ryan, Graham, McCain, Flake, Schumer, and on and on want to
maintain. Repeal the ACA? It will never happen unless Trump balks at the
Ryan plans and takes the case to the people a la Ronald Reagan.

As for taxes, we were promised another 'biggest tax cut ever' to be unveiled
next week. Well, the 2-3 week unveiling promised back in February kind of
passed its deadline, and now we hear it is finally will be revealed next
week. Yet, from what we hear, no one in Congress we know of has seen it.

There is likely a reason for that: Trump worked with Ryan on that hideous
Ryan-Care bill and Ryan and others told Trump it easily had the votes. Then
it didn't. Then Ryan sets out on his own agenda that apparently does not
include tax reform or healthcare reform. So, the White House decided it was
burned by trusting or trying to use the oily Congressman from Wisconsin and
is now taking it upon itself to drive legislative agendas. Good luck with
that. That market was obviously not buying it Friday.


THE MARKET

The indices traded up one day, down the next all week long. Friday it was
the downside's turn, but it was not much of a drop. The indices held their
patterns. That is not the greatest compliment, but after a very rocky end
to the prior week, the indices executed rather well in working on firming up
at support. Given all of the 'great news' about healthcare and tax reform I
suppose they should have performed better. There is still plenty of reason
to be concerned about the upside prospects, but once again the indices
turned some ugly patterns into something the upside can work with.

CHARTS

SP500: Managed to close the week over the 50 day EMA and the March low as
SP500 continues in a 2 month consolidation. The pattern is not bad at all,
holding at the 78% Fibonacci retracement on the lows after the February
rally, forming a pennant/triangle over that support. Sure is a lot of angst
about the market for such a decent upside pattern.

DJ30: Similar to SP500 but the Dow had to overcome IBM and VZ earnings
issues. It did, holding near the 61% Fibonacci retracement with that
potential double bottom still intact. As noted early in the week, this is
the same kind of consolidation shown in December to early January ahead of
the February rally. It has now matched that consolidation in the number of
weeks. As with SP500, a lot of angst over a not so terrible pattern with
upside potential.

NASDAQ: Started the week at the 50 day MA after selling the prior Friday.
NASDAQ rallied right back up to the top of its 9 week range and put in a new
closing high Thursday. Decent volume Wednesday to Friday. NASDAQ is trying
to provide the leadership higher, and it managed to hold SP500 and DJ30 at
support, perhaps even helped SOX back over the 50 day MA.

SOX: Appeared to have broken with a gap lower and drop through the 50 day
MA's and trendline into the prior Friday. Then it reversed, gapped back
over the 50 day EMA Wednesday, and rallied over the 50 day SMA Thursday. A
test Friday, but holding the 50 day. That said, SOX is now at the February
interim peak before the run into March. Meaning? SOX is potentially at the
apex of a right shoulder to a head and shoulders pattern. We will see. The
sellers had it cold but SOX recovered over support. Perhaps a failed
breakdown. Again, we will see.

SP400: Held the March low and rebounded to the top of its 4 week range.
Not overly impressive; it recovered but it is still at a resistance point.

RUTX: Very similar to SP400, rallying off the bottom of its range (and the
range from December to early February) back up near the top of those ranges.
Head and shoulders pattern, but those often form and never consummate. As
with SOX, this index and the other indices have to show if they can continue
after they saved themselves at support.


LEADERSHIP

Recovered with the indices but still wobbly. Earnings season is, despite
some high visibility misses (IBM, VZ), not hurting and stocks are holding
up. After investors get comfortable the results, given the indices have
weathered the selling attempts, they are in position to move higher.

Semiconductors: A good week for the sector overall as it recovered. A
really good week for some as they broke out, e.g. MVIS, AMKR, BRKS. Other
chip leaders continued to work as SWKS recovered and QRVO moved back up to
test the early April higher high. PLAB moved well off its 200 day SMA test.

FAANG: FB rallied to a higher high on the week, pausing Friday. AMZN
bounced off a 20 day EMA test, faded the rest of the week but holding the 10
day EMA. AAPL is trying to bounce up off a 2 week test over the 50 day SMA.
GOOG surged Monday then trended modestly higher to close the week at the
late January high. NFLX sold hard midweek, recovered modestly. These
stocks are decent, are moving up, and that is helping NASDAQ move to a
higher high.

Biotechs/Drugs: Mixed week with big moves up and down. XOMA was strong,
breaking over the 200 day SMA. CNAT rallied very nicely. IMGN and SPPI
surged. Others struggled. IMMU flopped. BLUE looked good but then faded
and is struggling. Others yet look as if they can still move: FOLD, AUPH.

Oil: Really struggling with oil prices as OPEC cannot get its story
straight about a production cut extension. Many sold on the week,
continuing some selling form the prior week. CRK, AMD, APC, CVX. Long
list.

Financial: Earnings are out and the stocks are still slogging along in a
range below the 50 day MA. C, BAC, JPM. Managing to hold support but that
is about all.

Industrial: Some good moves on earnings, e.g. UTX, HON. Machinery is still
problematic as CMI and DE look weak.

Retail: HD and LOW are starting to break higher from consolidations.
Restaurants/eateries broke higher on the week: WEN, BWLD, MCD, DRI. The
leadership in retail is spreading out.


MARKET STATS

DJ30
Stats: -30.95 points (-0.15%) to close at 20547.76

Nasdaq
Stats: -6.26 points (-0.11%) to close at 5910.52
Volume: 1.705B (-1.81%)

Up Volume: 660.84M (-639.16M)
Down Volume: 939.84M (+567.93M)

A/D and Hi/Lo: Decliners led 1.39 to 1
Previous Session: Advancers led 2.53 to 1

New Highs: 100 (-38)
New Lows: 44 (+5)

S&P
Stats: -7.15 points (-0.3%) to close at 2348.69
NYSE Volume: 900M (+3.91%)

A/D and Hi/Lo: Decliners led 1.18 to 1
Previous Session: Advancers led 2.49 to 1

New Highs: 112 (-11)
New Lows: 16 (-7)


SENTIMENT INDICATORS

VIX: 14.63; +0.48
VXN: 14.87; +0.41
VXO: 13.36; +0.69

Put/Call Ratio (CBOE): 1.04; +0.14. Jumped over 1.0 on a rather calm
session. Likely just expiration causing additional rolling out given the
market's rebound on the week.


Bulls and Bears: After peaking over 60 and holding that level for 7 weeks,
bulls fell as the market struggled. That kind of spike leads to selling.
The market has sold -- modestly.

Bulls: 51.9 versus 56.3. Market fell, bulls fell.

Bears: 18.3 versus 17.5. And bears rose as you would anticipate.

Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.





Bulls: 51.9 versus 56.3
56.3 versus 55.8 versus 49.5 versus 56.7 versus 53.4 versus 57.7 versus 63.1
versus 61.2 versus 61.8 versus 62.7 versus 61.8 versus 58.2 versus 60.6
versus 58.6 versus 60.2 versus 59.8 versus 59.8 versus 59.6 versus 58.8
versus 56.3 versus 55.6 versus 51.0 versus 42.9 versus 41.7 versus 47.1
versus 42.9 versus 46.1 versus 46.7 versus 45.2 versus 44.6 versus 49.0
versus 52.5 versus 55.9 versus 56.7 versus 56.2 versus 54.3 versus 52.9%
versus 53.9% versus 54.4% versus 52.5% versus 47.1% versus 41.6%

Bears: 18.3 versus 17.5
17.5 versus 18.3 versus 18.1 versus 17.3 versus 13.75 versus 17.3 versus
16.5 versus 17.5 versus 17.6 versus 16.7 versus 17.6 versus 17.5 versus 17.3
versus 18.3 versus 18.4 versus 19.6 versus 19.6 versus 19.2 versus 19.6
versus 22.3 versus 21.6 versus 23.5 versus 25.7 versus 24.3 versus 23.1
versus 23.8 versus 23.1 versus 22.8 versus 23.1 versus 24.3 versus 22.6
versus 22.8 versus 20.6 Versus 20.2 versus 20.0 versus 20.9% versus 21.2%
versus 21.6% versus 23.3% versus 24.7% versus 24.5% versus 23.8% versus
23.2% versus 23.5% versus 23.8% versus 23.7% versus 24.0% versus 21.7%
versus 21.6% versus 21.7 versus 20.6% versus 21.7% versus 27.8% versus 27.8%
versus 28.9% versus 27.8% versus 30.3% versus 35.4%


OTHER MARKETS

Bonds (10 year): 2.236% versus 2.234%. After gapping and running through
the base interim highs, TLT paused to test Wednesday to Friday, holding the
10 day EMA. Normal test of a good breakout, suggesting bonds still have room
to rally though likely the French election has had an impact upside for
bonds and likely will have an impact after Sunday.

Historical: the last sub-2% rate was in November 2016 (1.867%). 2.236%
versus 2.234% versus 2.21% versus 2.15% versus 2.248% versus 2.232% versus
2.264% versus 2.30% versus 2.36% versus 2.37% versus 2.34% versus 2.33%
versus 2.34% versus 2.33% versus 2.35% versus 2.40% versus 2.41% versus
2.382% versus 2.418% versus 2.376% versus 2.40% versus 2.41% versus 2.40%
versus 2.43% versus 2.463% versus 2.50% versus 2.529% versus 2.502% versus
2.602


EUR/USD: 1.07255 versus 1.07188.

Historical: 1.07188 versus 1.0717 versus 1.07304 versus 1.06431 versus
1.06138 versus 1.0671 versus 1.06068 versus 1.05984 versus 1.05906 versus
1.0645 versus 1.06760 versus 1.06804 versus 1.06702 versus 1.06584 versus
1.06855 versus 1.07546 versus 1.0815 versus 1.08640 versus 1.07894 versus
1.07670 versus 1.07920 versus 1.08117 versus 1.0748 versus 1.07395 versus
1.07710 versus 1.0732 versus 1.06070 versus 1.0636 versus 1.06746 versus
1.06746 versus 1.05384 versus 1.0566 versus 1.05764 versus 1.06266 versus
1.05214


USD/JPY: 109.00 versus 109.357

Historical: 109.357 versus 108.974 versus 108.525 versus 109.150 versus
109.170 versus 108.926 versus 109.691 versus 110.704 versus 111.096 versus
110.85 versus 110.794 versus 110.705 versus 111.386 versus 111.255 versus
111.114 versus 110.581 versus 111.335 versus 111.242 versus 111.295 versus
111.502 versus 112.289 versus 112.707 versus 113.349 versus 113.447 versus
114.726 versus 114.833 versus 114.807 versus 115.259 versus 114.563 versus
113.498 versus 113.966 versus 114.042 versus 114.169 versus 113.951 versus
112.966 versus 223.982 versus 112.169 versus 112.745 versus 113.324 versus
113.399 versus 112.906 versus 113.356 versus 113.880 versus 114.306 versus
113.65 versus 113.856 versus 113.265 versus 113.401 versus 112.207 versus
112.332 versus 111.815


Oil: 49.62, -1.09. Oil bombed lower on the week with big moves lower
Wednesday and Friday. That landed oil at the 200 day SMA on the low.
Important level for oil after failing a the same resistance to start the
week.


Gold: 1289.10, +5.30. Continued higher early week then tested the 10 day
EMA into Thursday. Friday gold started back up off the test. Gold is a bit
worried about the world conflicts, the French election, general economic
issues as well.


MONDAY

Who will the French vote for? If the 'wrong' people get clear majorities
world markets could sell, giving something of a 'Trump election'
opportunity? Perhaps. It will not be the end of the world, markets, or
anything other than perhaps a bloated bureaucracy of control that is the EU.
Let's face it, the EU is more about control for those in power versus better
markets for its constituents. It is like the UN: lofty stated ideals that
are a cover for corruption and the most heinous of actions against people
who it is supposed to help (e.g. sexual assault on children, slavery rings).
Concentrate too much power in too few and you get corruption.

Ok, off the soap box. The status quo won't like threats to the status quo
so the reaction is initially negative but the markets figure out it won't be
the end. Wasn't for the UK, wasn't for the US, won't be for France.
Indeed, if France STAYS in the EU the death of its people and culture is
more assured. Just look at the Greeks: 7 years of economic collapse, no
improvement, no hope of improvement. The birth rate has plummeted as
surveys show again and again that the people have no hope for the future.
Truly a Greek tragedy.

Once again the US stock market will be influenced by outside factors, but
again, I think that just as with Brexit and the US election, the fears are
much overblown.

The issues are more with world economies and whether things are as rosy as
we are told. I believe the US has negative growth right now and that Q1 was
actually negative (as we will see when it is revised in the future). Fed
surveys indicate Q2 has slowed even more than late Q1; that only bolsters my
argument the US is likely in recession as a weaker Q2 would likely be a
second of negative growth.

And why would things be improving? There was a lot of hope post-election
and even in the weekly word from the administration that tax and healthcare
reform are on their way. Yet, NO policies have been passed or implemented
and it does not appear that any are close to being ready to implement. Yes
there was a burst of post-election activity, but that has not carried over
to 2017, and the longer it takes, the less people believe in it and the less
they will go out on a limb ahead of actual policy passage and make
expenditures.

That is, however, just opinion. How the market reacts is always the true
read.

As noted before, lots of pessimism about the market's prospects. At the
same time the indices are not in bad shape, at least SP500, DJ30, NASDAQ,
SOX (thanks to its recovery), and there is leadership as well as some new
arrivals such as the restaurants joining other retailers.

Not in bad shape, but still have to prove they can do more than just rebound
off selling as they did this past week. The proof is in the stocks moving
higher, so we will look at more upside plays for the break higher, but also
keep some downside ready to go as well, though those plays that broke lower
are trying to rebound just as IWM (RUTX ETF) rebounded.

Have a great weekend!


SUPPORT AND RESISTANCE

NASDAQ: Closed at 5910.52

Resistance:
5937 is the all-time high from April, hit intraday

Support:
The 50 day SMA at 5853
The 50 day EMA at 5816
5800 from the February consolidation lows
The 2016 trendline at 5767
5661 is the late January upper gap point
5601 is the January lower gap point
The 200 day SMA at 5443
The November prior all-time high at 5404
5340 is the September and October 2016 twin peaks
5287.61 is the September 2016 high
5271.36 is the August 2016 intraday prior all-time high
5231.94 is the 2015 all-time high
5170 is the October intraday low.
5162 is the early November peak, 5176 is the December intraday peak
5100 from the April peak and early May peak
5042 is the March 2015 high
5008.57 is the early March 2015 post-bear market high
5007 is the 12/31 upper gap point from that big gap lower


S&P 500: Closed at 2348.69

Resistance:
The 50 day SMA at 2357
The 2016 trendline at 2388
2390 is the March interim recovery high
2401 is the all-time high

Support:
The 50 day EMA at 2342
2329 is the March and April twin lows
2322 is the March 2017 low
2319 is the 78% Fibonacci retracement
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The 200 day SMA at 2234
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
2135 is the May 2015 all-time high
2130 is the June 2015 peak
2126 was the April 2015 prior all-time high
2120 is the June 2016 peak
2119 is the September 2016 low; February 2015 intraday high
2116 is the November 2015 high
2111 is the April 2016 recovery high
2104 is the December 2015 high
2094 is the December 2014 high
2079 is the intraday all-time high from November 2014


Dow: Closed at 20,547.76

Resistance:
The 50 day SMA at 20,705
21,100 is the March interim recovery high
21,169 is the all-time high

Support:
The 50 day EMA at 20,541
20,412 is the March 2017 low
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
The 200 day SMA at 19,320
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
18,288 from March 2015
18,262 is the upper gap point from the Monday gap lower.
18,247 is the August 2016 low
18,168 is the April 2016 recovery high
18,100 to 18,181: interim peaks in the December 2014 to July 2015 range
18,016 is the June 2016 peak
17,992 is the early September low
17,978 is the November 2015 peak
17,960 is the October intraday low
17,600 is the rough bottom of the April to June range.
17,351 is the September 2014 all-time high.

End part 1 of 3
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