Friday, March 25, 2016

The Daily, Part 1 of 3, 3-24-16

* * * *
3/24/2016 Investment House Daily
* * * *

Happy Easter!

MARKET ALERTS:

Targets hit: None issued
Entry alerts: None issued
Trailing stops: None issued
Stop alerts: None issued

The market alert service is a premium level service where we issue intraday
alerts relating to the general market conditions, when stocks hit action
points (buy, stop, target, etc.), and when we see other information
impacting the market or our stocks. To subscribe to the alert service you
can sign up at the following link:
http://www.investmenthouse.com/alertdaily.html

********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.

TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4

TO VIEW THE Economic SUMMARY VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/eco/eco.mp4

TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/ts/ts.mp4

TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************

The REPORT SCHEDULE is as follows:

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

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

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

- Stocks sell further Thursday but then recover to flat. More market buy on
the dips or just getting square ahead of the Easter weekend and potential
terror attacks?
- Economic data remains disappointing as durables miss. GDP beats, but at
these levels it is like comparing a C- to D+
- Same leadership situation, big names getting some money.
- Indices show no relative change so post-Easter tells more of the story of
DJ30, NASDAQ resistance.

Stocks started lower in a second session of selling as DJ30 and NASDAQ both
touched important next resistance and faltered. Just a bit. Heading into
the weekend stocks were faltering some after a good run. DJ30 was off
100ish. It touched the 10 day EMA, however, and reversed. Surprise! Once
again they found a bid.

The economic data was again weak early on with Durable Goods February
flipping back negative after a brief one-month bump positive (-2.8% versus
4.2%), and capital investment tumbled back negative (-1.8% from 3.1%),
continuing the investment downtrend. Even the prior month's gains were
written lower from the original report. Lovely.

That appeared to weigh on stocks along with oil as it lost ground, hitting
near 38/bbl on the low. Bad news appeared to be bad news.

The Atlanta Fed released a revision to its Q1 GDP forecast, writing it down
to 1.5% from the rather wishful 2.7% it first opined. From the yearly
average of the past 10 years that was thought to be so good (mind you the
first 10 year period below 3% since the Great Depression) to a very European
1.5%. That woke the market. Hey, this is really bad news. Surely the Fed
will not, cannot hike. Possibly after that even more stimulus?

Bad news was bad news as investors and traders bought into the line we are
told by the Keynesian economists, the Fed, and the Administration
soothsayers about how solid the economy now is. Reality seemed to take hold
and the sentiment turned, however, when the Atlanta Fed revision hit. Even
the Fed it seemed, is now not that sure at all if the economy is growing or
slowing. Perhaps stimulus indeed.

Stocks bottomed, oil bottomed. SP500 bounced off the 200 day SMA. DJ30 off
the 10 day EMA. NASDAQ rebounded to the 10 day EMA. Nothing major, but
enough to close up the week flat.

SP500 -0.77, -0.04%
NASDAQ 4.64, 0.10%
DJ30 13.14, 0.08%
SP400 0.12%
RUTX 0.36%
SOX -0.05%

VOLUME: NYSE +3%, NASDAQ -9%. Mixed volume, mixed session, still showing
trade well below average.

A/D: NYSE flat, NASDAQ 1.1:1. All things flat ahead of the Easter weekend.

The action left the indices still at next resistance, leaving, as we
expected, the litmus test of this test unanswered Yes they again came back
from some selling, but that did not alter the relative position for DJ30 and
NASDAQ. Both remain at a key level after six week runs. DJ30 is not far
from the prior all-time highs but still at a lower high as in November 2015
when that run off the August low peaked out with a lower high.

Litmus test? Inflection point? Decision point? Can more central bank and
Fed intervention/manipulation/easing/stimulus drive prices higher or is the
economic weight too heavy for just a notion of less rate hikes to drive
stocks higher after this 10+% run?

The Friday GDP figures likely do little to change the notion the data is not
great. At 1.4% versus the 1.0% expected from the second reading it was
better but so pathetic nonetheless. Being happy with this beat is like
being happy you got a D+ versus a D.

The top in place speaks to an end to the rally on the Fed's and world
central banks' largesse. They have pushed financial markets higher but at
the same time have bifurcated wealth in the once wealthiest nation on earth.
It has bifurcated the economy into large corporations with protection of law
and regulation, and favor of free money. Small businesses cannot bear the
cost of the ACA and other regulations and their access to capital is a
veritable maze through the SBA as banks no longer lend to small businesses
as the return is just not there.

Thus there is now a dearth of money, of wealth in the middle of the
socioeconomic spectrum and accordingly no new businesses of note are created
and indeed we are still losing businesses after six to seven years of
supposed recovery. Real wages are lower. Tax collections are up, but those
working are not seeing the benefits of the money taken. Middle class jobs
are disappearing at an increasing rate even as we are told economic times
are better. US citizens lose good jobs to foreign imported workers with
less skills, as the fired US citizens are forced to train their replacements
or lose their severance. Disney, a 'great' American company is doing this
to Americans. Then it says it will pull out of states that pass legislation
regarding freedom of religion because it might in some way give the
perception of discrimination against certain groups. Seriously? Does the
company not see the irony of this holier than thou talk as it destroys the
lives of good, highly trained, loyal workers?

The middle and former middle class does. That is why the outsiders in both
parties are so popular. The people feel betrayed and they are acting up,
scaring the establishment. They are not stupid; they see the problems.
Their only choice is to toss those who have been in power the past 30 years
and let this come about.

Ah, I digress, but it is with a purpose. The market rally is built on money
that is ruining the economy and thus US society. As I have long argued,
most Americans did not participate in this 7 year market run. They were
washed out after the financial crisis. They could not rebuild in the
recovery because their jobs were gone and the replacements were low pay,
hourly jobs. You cannot rebuild a portfolio when you don't have enough
money to pay the bills. New reports this week show this is the case. We
were an ownership society in the 1980's and 1990's, but that is gone because
they were betrayed by the gamblers on the Fed and the companies that gambled
their pensions away. Thus the lack of money and with nowhere else to turn,
they are going to candidates that even many of these people think are out
there. A socialist? A bomb throwing tycoon? Pendulum swings are strange
things.

Anyway, that is an explanation of why this is a market top based upon the
economy post-FOMC QE. The outcome hangs in the balance of whether the Fed
and central banks can continue holding financial markets higher in spite of
a US and world economies that simply do not support prices this high.
Moreover, earnings are going to fall and profits are already falling. The
top is still in place despite the February/March rally and again, DJ30 and
NASDAQ are at important resistance levels that will further define which
side wins. We are still awaiting the next phase after this rally.


THE MARKET

CHARTS

To view charts, click on link or paste URL into browser.

http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg

DJ30 and NASDAQ remain at the key resistance levels after the rally from the
February lows. SP500 and SOX are similarly situated, just not as well
defined. Thursday did not change the analysis one bit.

LEADERSHIP

Most of the leaders of late held their position and indeed many that
struggled Wednesday rebounded Thursday, e.g. metals, energy, biotechs,
materials, industrial machinery. Interestingly, the big NASDAQ names appear
to be getting money once again thrown their way.

To wit: AMZN is impressive, moving up on the week and then surging past the
March highs Thursday. Looks as if an inverted head and shoulders may be
consummating. GOOG was lower Thursday but after a week of upside. Still not
bad. AAPL forming a nice flag test of the 10 day EMA, setting up the next
move. FB not blasting off, but up all week. MSFT was up Thursday as well
as it recovered off last Friday's drop.


MARKET STATISTICS

NASDAQ
Stats: +4.64 points (+0.1%) to close at 4773.5
Volume: 1.544B (-8.78%)

Up Volume: 805.69M (+371.43M)
Down Volume: 774.49M (-505.51M)

A/D and Hi/Lo: Advancers led 1.15 to 1
Previous Session: Decliners led 3.71 to 1

New Highs: 30 (+3)
New Lows: 54 (+13)

S&P
Stats: -0.77 points (-0.04%) to close at 2035.94
NYSE Volume: 887M (+2.84%)

A/D and Hi/Lo: Advancers led 1.04 to 1
Previous Session: Decliners led 2.85 to 1

New Highs: 49 (-4)
New Lows: 23 (+8)

DJ30
Stats: +13.14 points (+0.08%) to close at 17515.73


SENTIMENT INDICATORS

VIX: 14.74; -0.2
VXN: 17.31; -0.44
VXO: 14.91; -0.11

Put/Call Ratio (CBOE): 1.06; +0.02

Third straight 1.0+ reading, the first 1+ readings in over a week. This even
as the market is at a high after 5+ weeks of upside. Betting the downside?
If so, that is bullish. Goodness.

About 50-50 over 1.0/under 1.0 the past 50 sessions. No real indication now
but already did its work.


Bulls and Bears: Bulls continue their surge but still well below the 60ish
that is bearish. Bears are back below 30 and as such are not growling.

Bulls: 47.4 versus 44.4. Roaring back upside.

Bears: 27.8 versus 30.4. Definitively breaking below 35%. Plummeting.

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: 47.4%
44.4% versus 39.4% versus 36.4% versus 34.7% versus 26.5% versus 24.7% 34.0%
versus 29.2% versus 26.8% versus 28.6% versus 34.7% versus 36.7% versus
37.8% versus 44.9% versus 41.2% versus 45.4%

Background: Bulls hit their lowest level in late 2015 and 2016 since the
2008 and 2009 market plummet.

Bears: 27.8%
30.3% versus 35.4% versus 34.3% versus 35.7% versus 39.8% versus 39.2%
versus 38.1% versus 35.4% versus 36.1% versus 35.7% versus 31.6% versus
29.6% versus 29.6% versus 27.6% versus 26.8% versus 26.8% versus 28.9%
versus 28.1% versus 29.2% versus 31.3% versus 31.2% versus 34.4% versus
35.1% versus 30.2% versus 26.8% versus 27.9 versus 26.8% versus 22.5% versus
18.4% versus 18.6% versus 17.5%

Background: Finally back below 35% after spiking to 39.8 three weeks back.


OTHER MARKETS

Bonds (10 year): 1.90% versus 1.88%. As the data got worse, fears of a Fed
hike faded and bonds bounced off the 50 day EMA it has tested all March.
Gapped upside big Thursday but faded to the close.

Historical: 1.88% versus 1.94% versus 1.92% versus 1.89% versus 1.90% versus
1.91% versus 1.97% versus 1.966% versus 1.979% versus 1.927% versus 1.88%
versus 1.82% versus 1.91% versus 1.88% versus 1.83% versus 1.84% versus
1.82% versus 1.74% versus 1.757% versus 1.70% versus 1.74% versus 1.74%
versus 1.76% versus 1.75% versus 1.74% versus 1.81% versus 1.78% versus
1.75% versus 1.64% versus 1.69% versus 1.73% versus 1.76% versus 1.85%
versus 1.85% versus 1.88% versus 1.86% versus 1.96% versus 1.93% versus
1.99% versus 2.019%


EUR/USD: 1.1178 versus 1.1177. After a week of euro declines to the 20 day
EMA, virtually no change Thursday. The euro fell as the belief the Fed would
hike grew. Now the market is not so sure.

Historical: 1.1177 versus 1.1217 versus 1.1243 versus 1.1272 versus 1.1313
versus 1.1227 versus 1.1112 versus 1.1103 versus 1.1149 versus 1.1106 versus
1.1107 versus 1.1017 versus 1.0999 versus 1.0961 versus 1.0865 versus 1.0866
versus 1.0880 versus 1.0940 versus 1.102 versus 1.1016 versus 1.1039 versus
1.1130 versus 1.1103 versus 1.1124 versus 1.1275 versus 1.1154


USD/JPY: 112.83 versus 112.445. Dollar rallied all week, paused a bit
Thursday.

Historical: 112.445 versus 112.298 versus 111.90 versus 111.605 versus
111.46 versus 112.58 versus 113.11 versus 113.795 versus 113.78 versus
113.15 versus 113.396 versus 112.58 versus 112.965 versus 113.795 versus
113.70 versus 113.45 versus 113.896 versus 112.76 versus 113.965 versus
112.90


Oil: 39.46, -0.33. Tanked below 38 (38.33 low) but recovered to hold the
10 day EMA. Looks like a shakeout. At the 10 day EMA after a three day test
of the last break higher.

Gold: 1221.60, -2.40. Down a bit more after the sharp Wednesday plunge.
Still over the 50 day EMA but testing lower.


MONDAY

Next week starts where the market left off Thursday. And Wednesday. And
Tuesday, and Monday. The prior week's move took DJ30 and NASDAQ to
resistance and this past week was a rather normal test after a move.

I am reminded of a story from my childhood, 'The Lady or the Tiger?' The
story ended with the hero opening the door that would lead to the lady or
the tiger; we could only speculate what the outcome was. I remember telling
my teacher it was the tiger because I had also read a story that said
nothing compared to the scorn of a woman. Still, that was conjecture on my
part.

We will get to see the outcome of this choice: up with the Fed or down with
the economy. We have upside plays, we have downside plays and we plan on
throwing the weight to the side that wins this battle at DJ30 and NASDAQ
resistance. There are still leadership groups looking good, especially with
the Thursday recoveries. NASDAQ Big Names look better though the patterns
are not all necessarily buys. There are downside setups as well if the
market fails at resistance.

So, we are seeing what is the stronger market driving force, the Fed with
fewer rate hikes but nowhere near more QE, or the economy sliding out from
under the market even as some bald pundits claim, much the same as the
fictitious President Starkey from 'The Postman' that 'stuff's getting
better, stuff's getting better every day.' Someone asked if he was a
democrat or republican. The Postman replied 'parties are over with. It's an
individual that counts.' Hmmm, lessons for today?

If the market rolls over here it likely rolls over big. If it does not, the
risk/reward upside is still overall less than ideal given such a solid
upside run. We will need to look at those groups coming off the lows as we
have, now including biotechs and perhaps some internet stocks.

We have plays on both sides of the ledger ready to go, and we will look at
more for Monday as we play the way the market breaks. We don't have to be
on the initial move, particularly if the move is lower. If so, the move
will likely be long-winded and give plenty of opportunity. Nonetheless,
those early plays will yield big returns so yes, we will be venturing in if
we see the market break lower.

Have a great Easter weekend!


SUPPORT AND RESISTANCE

NASDAQ: Closed at 4773.50

Resistance:
4811 is the November 2014 peak (intraday)
4815 is the December 2014 peak
The March 2015 lows at 4843 and 4825
4836 is the March 2016 peak
The 200 day SMA at 4866
4902 is the July 2015 low
4916 is the mid-November 2015 low
4920 is the lower gap point from mid-October
4894 is the September 2015 closing high
4999 is the October upper gap point
5008.57 is the early March 2015 post-bear market high
5042 is the March 2015 high
5100 from the April peak and early May peak
5162 is the early November peak, 5176 is the December intraday peak

Support:
4774 is the January 2-15 high
4751 is the January 2015 lower high
The 50 day EMA at 4681
4637 is the February intraday high
4736 is the early January lower gap point downside, the last downside gap in
the selloff.
4620 is the February 1 closing high
4615 from September 2014 highs, October 2014 upper gap point, late August
2015 low.
4517-4506 from the September 2015 and August 2015 closing lows
4485 are the twin July 2014 peaks
4471 is the January 2016 closing low
4425 is the late February intraday low
4363 is the February upper gap point
4352 is the March 2014 peak
4313 is the January 2016 intraday low
4292 is the August 2015 low
4212 is the February intraday low
4116 is the October 2014 low


S&P 500: Closed at 2035.94

Resistance:
2040 is the March 2015 closing low
2046 is the July 2015 closing low
2062 is the January 2015 lower high
2079 is the intraday all-time high from November 2014
2094 is the December 2014 high, the prior all-time high
2104 is the December 2015 high
2116 is the November 2015 high
2119.59 is the February intraday prior all-time high
2126 was the April prior all-time high
2130 is the June 2015 peak
2135 is the May 2015 all-time high

Support:
2023 is the November 2015 low
2020 is the September 2015 intraday high
The 200 day SMA at 2017
2011 is the September prior all-time high
1995 is the September 2015 recovery peak
1991 is the July 2014 high
The 50 day EMA at 1981
1972 is the December 2014 low
1947 is the February 2016 intraday high, the late February peak
1940 is the January 2016 recovery bounce peak closing high
1913 is the early September 2015 closing low testing the bounce from the
August selling
1905 is the August 2014 low
1902 from early May was the intraday all-time high.
1897 is the prior all-time high hit in April 2014
1891 is last week's intraday low prior to the miraculous reversal.
1872 is the September 2015 test low of the August low
1867 is the August 2015 low
1862 is the October 2014 closing low
1859 is the January 2016 closing low
1820 is the October 2014 intraday low
1815 is the April 2014 low
1812 is the January 2016 intraday low
1772 are the Q4 2013 highs and lows


Dow: Closed at 17,515.73

Resistance:
June 2015 low at 17,715
17,748 is the mid-April China margin selloff and the bottom of the 5 month
trading range
The March low at 17,786
17,978 is the November 2015 peak

Support:
17,351 is the September 2014 all-time high.
17,265 is a December 2015 closing low
17,245 is the November 2015 closing low
17,152 is the mid-July post bear market high
The 200 day SMA at 17,131
17,068 is the early July 2014 peak
17067 is the December 2014 low
16,970 is the June 2014 former all-time high
16,946 is the June 2014 peak
16,933 is the September 2015 recovery intraday peak
The 50 day EMA at 16,926
16,740 is the mid-September peak and potential apex for a right shoulder to
a head and shoulders pattern
16,736 is a prior all-time high from May 2014
16,670 is the December 2014 peak and the recent August 2015 relief bounce
peak.
16,665 is the late August 2015 closing high
16,632 is the April 2014 peak
16,621 is the late February 2016 peak
16,589 is the December 2013 former all-time high
16,526 is the early January resistance
16,511 is the January 2016 intraday high
16,506 is the March 2014 peak
16,466 is the January 2016 recovery closing peak.
16,368 is the August 2014 low
16,117 is the October 2014 closing low
16,058 is the early September 2015 low
16,026 is the April 2014 low
15,855 is the October 2014 intraday low
15,766 is the January closing low
15,666 is the August 2015 closing low
15,450 is the January 2016 intraday low
15,372 is the February 2014 low
15,370 is the August 2015 low


ECONOMIC CALENDAR

March 21 - Monday
Existing Home Sales, February (10:00): 5.08M actual versus 5.37M expected,
5.47M prior

March 22 - Tuesday
FHFA Housing Price I, January (9:00): 0.5% actual versus 0.5% prior (revised
from 0.4%)

March 23 - Wednesday
MBA Mortgage Index, 03/19 (7:00): -3.3% actual versus -3.3% prior
New Home Sales, February (10:00): 512K actual versus 511K expected, 502K
prior (revised from 494K)
Crude Inventories, 03/19 (10:30): 9.357M actual versus 1.317M prior

March 24 - Thursday
Durable Goods -ex tr, - (8:30)
Initial Claims, 03/19 (8:30): 265K actual versus 268K expected, 259K prior
(revised from 265K)
Continuing Claims, 03/12 (8:30): 2179K actual versus 2218K prior (revised
from 2235K)
Durable Orders, February (8:30): -2.8% actual versus -2.9% expected, 4.2%
prior (revised from 4.9%)
Durable Goods -ex tr, February (8:30): -1.0% actual versus -0.2% expected,
1.2% prior (revised from 1.8%)
Natural Gas Inventor, 03/19 (10:30): 15 bcf actual versus -1 bcf prior

March 25 - Friday
GDP - Third Estimate, Q4 (8:30): +1.0% expected, +1.0% prior
GDP Deflator - Third, Q4 (8:30): +0.9% expected, +0.9% prior

End part 1 of 3
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Sunday, March 20, 2016

The Daily, Part 1 of 3, 3-19-16

* * * *
3/18/2016 Investment House Daily
* * * *

MARKET ALERTS:

Targets hit: XEC
Entry alerts: BIDU; JPM; MS; VMW
Trailing stops: None issued
Stop alerts: None issued

The market alert service is a premium level service where we issue intraday
alerts relating to the general market conditions, when stocks hit action
points (buy, stop, target, etc.), and when we see other information
impacting the market or our stocks. To subscribe to the alert service you
can sign up at the following link:
http://www.investmenthouse.com/alertdaily.html

********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.

TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4

TO VIEW THE Economic SUMMARY VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/eco/eco.mp4

TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/ts/ts.mp4

TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************

The REPORT SCHEDULE is as follows:

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

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

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

- With the Fed adopting a new 'rates lower regardless' policy, stocks are
still rallying.
- Rally built on central bank intervention continues in its fifth week.
- Big names struggle, same areas rallying continue rallying.
- Economic data shows tantalizing improvement in manufacturing PMI's, but
the rest of the data continues to weaken.
- DJ30, SP500 test into the November/December range.
- Still playing the solid upside plays, cognizant of the market's long
winded rally.

Stocks closed out the session, week, and for most of the indices, year,
higher. All of the stock indices we follow posted new post-February selloff
highs. Five and one-half weeks of almost straight rallying. Miraculous.
No. Manipulation.

To wit: Bank of Japan going NIRP and intervening in the yen frequently.
OPEC engaging in its own market manipulation (oil of course) with rumors of
production cuts and freeze agreements, the latest one announced Wednesday
for April 17. The People's Bank of China setting the yuan peg lower and
lower, acting as a very serious and rational reserve currency nation. The
ECB upping QE and lowering a key borrowing rate making US-style share
buybacks, and thus higher EPS and higher share prices, much more likely.
The crowning moment was the US Fed altering its hiking policy, and indeed
the entire monetary policy philosophy of the Fed, indicating it was not that
concerned about an inflation speed limit and implying it would actively hold
rates lower as the new norm versus the usual case of leaving rates alone
except in times of extreme financial stress. When the Fed makes official it
is altering its mandate to maintaining interest rates low even if it
requires full-time intervention, that is going to have an impact.

So, stocks were higher again, moving for the most part into positive
territory for 2016. NASDAQ is not there nor is RUTX, but they are following
the rest of the indices. With this rally about stimulus (formerly the rally
about nothing), it may not be long before NASDAQ and RTUX follow the other
indices to new 2016 highs.

SP500 8.83, 0.43%
NASDAQ 20.66, 0.43%
DJ30 117.04, 0.67%
SP400 0.57%
RUTX 0.95%
SOX 1.36%

VOLUME: Shot higher as S&P rebalanced Friday on expiration. So, already
higher volume was even higher. NYSE +112%, NASDAQ +38% Fibonacci
retracement. Expiration, S&P rebalance.

A/D: NYSE 1.6:1, NASDAQ 1.8:1. Not a broad rush higher Friday, but there
was plenty of advancing breadth on the week.


NEWS/ECONOMY

The economic data was mostly lower for the week and calls for writing down
rather 'lofty' Q1 GDP expectations of 2.5%ish. Retail Sales for February
came in negative while January's aberrant seasonal adjustments were
reversed, thus actually showing the decline that we pointed out at the time
sans the adjustments. Industrial production and Capacity utilization
tumbled. Prices jumped. At least the regional PMI's from New York and
Philadelphia turned positive when expected to show more negative readings.
Hopefully that starts a trend higher in these numbers. They have shown
improvement in the past only to turn out to be just blips in the decline.

On top of that corporate profits are lower and still falling, while earnings
expectations are falling as well. No worries, mate. Janet the Generous,
the Easy Money Madame, is in charge. What, me hike? That should be the
inscription below her picture in the Federal Reserve. Stocks have responded
appropriately.


What, me worry? A.E. Yellen mask It's not my money!

Jim Bullard surfaced in the afternoon and helped push stocks lower for that
mid-session dip when he put his hawk's beak back on, talking of a 'prudent'
move to 'edge rates toward normal levels.' Recall as the market sold off in
February he started a lot of the manipulation upward when he switched to a
dove, labeling "tightening unwise." After the FOMC statement Wednesday that
declared rates low forever, however, the impact was muted.


'I regard it as unwise to continue It's 'prudent policy to
edge rates toward
a normalization strategy; February 17 normal levels.' Friday,
March 18



THE MARKET

Some of the leaders of late struggled to close the week and expiration.
Metals were down, energy struggled, but nothing major. Big names, however,
struggled with MSFT, AMZN falling. Other big names stalled moves at
potentially key levels. Retail performed well, e.g. ROST, TJX, DDS.
Financial stocks enjoyed a nice jump, e.g. C, JPM, MS. It is their time I
suppose, though with the Fed going on low rate bias forever status, it would
seem the banks were not the favored few.

The indices are still climbing with DJ30 approaching the highs from the
November/December 2015 range. After five weeks upside, making it to this
level is the next market tell in terms of the next move within the move.
Nothing has stood in the way of the market rally yet. Friday showed some
rotation from big names to some of the same leading groups, but nothing that
altered the current status. Again, the actions here at the top of the range
are the next market move tell.

CHARTS

SP500: Higher still, closing at a 2016 high as now this large cap index
moves well into the November/December 2015 range that led to the January
selloff. 2050 to 2075 is all resistance, but nothing has stopped the move
yet. Nothing as even slowed it down.

DJ30: Powering higher again to 17,600ish where next resistance resided. As
with SP500, however, pretty much everything from here to 18,000 is
resistance. After that it shoots for the old all-time high.

NASDAQ: Up but still lagging as NASDAQ approached the November and December
2014 twin highs and several gap points clustered around the 4800-4810 level.
A heck of a run, but this sure looks like a point that, if it were inclined
to fail, it would fail. The big names are struggling some and if they start
to break once more, NASDAQ loses its most significant leaders. For now AAPL
is still moving higher while GOOG is hanging in well enough. AMZN is
selling and others such as NFLX, FB are at critical levels in their
patterns. Which way those throw in will tell much of the tail.

RUTX: Broke to a higher recovery high, moving past the early March peak.
Now at the August 2015 low, still recovering but still a long, long way
below the November/December peaks. Even so, the small caps continue their
march toward 1140-1150 (closed at 1101).

SOX: Chips surged again, closing rapidly on the October to December head
and shoulders top that sent it to the lows. Nothing stopping it right now.

SP400: The midcap index cleared the 200 day SMA and the late December 2015
peak. Ready to test the summer 2014 double top at 1445 (closed at 1430ish).
The very choppy range from August to December 2015 has not slowed it one
bit.


LEADERSHIP

Big names: Not in dire straits but not doing well. AMZN was clocked again,
closing below the 200 day SMA. MSFT dropped over 2% after a decent week.
GOOG is fine though was off Friday. FB is at an important retracement
level. NFLX is also at an important level, testing the early March rebound
peak. SBUX posted a low volume rally last week but showed a tombstone doji
Friday on volume. Again, not breaking, but some key names are on hard times
as others are not following the market move higher.

Financials: The interesting group Friday as they finally started moving
higher. JPM, C, TCBI, MS showed some nice upside moves.

Energy: Mixed but overall solid as oil enjoyed a strong week as the dollar
fell gratis the Fed. XEC hit our initial target Thursday. OII surged
Thursday, rested Friday. WLL had a tough Friday after a great week to that
point. CVX still solid. Service companies remain in good shape, e.g. HAL,
ESV.

Industrial Equipment: A solid week even with CAT's earnings painting a
picture of gloom. But heck, even CAT rallied after those results. CMI hit
our initial target and we banked some excellent gain.

Materials: Solid. CX is surging for us. EXP surged higher to the 200 day
SMA.

Retail: Some real winners, e.g. TJX, ROST, DDS. Not dead yet.

Chips: Some very good moves. SWKS rallied 2.8% for us while QRVO jumped 3%
and those moves were just Friday.

Software: Mixed. BLKB has jumped upside. ADBE reported strong earnings
and bolted higher. ORCL surged on earnings and is still running. MSFT,
however, sold hard Friday.


MARKET STATISTICS

NASDAQ
Stats: +20.66 points (+0.43%) to close at 4795.65
Volume: 2.55B (+38.12%)

Up Volume: 1.94B (+750M)
Down Volume: 872.76M (+187.67M)

A/D and Hi/Lo: Advancers led 1.79 to 1
Previous Session: Advancers led 2.17 to 1

New Highs: 88 (+23)
New Lows: 35 (-34)

S&P
Stats: +8.99 points (+0.44%) to close at 2049.58
NYSE Volume: 2.147B (+112.15%)

A/D and Hi/Lo: Advancers led 1.58 to 1
Previous Session: Advancers led 3.88 to 1

New Highs: 131 (-34)
New Lows: 13 (-5)

DJ30
Stats: +120.81 points (+0.69%) to close at 17602.3


SENTIMENT INDICATORS

VIX: 14.02; -0.42
VXN: 17.2; -0.45
VXO: 14.66; -0.5

Put/Call Ratio (CBOE): 0.78; +0.1


About 50-50 over 1.0/under 1.0 the past 50 sessions. No real indication now
but already did its work.

Bulls and Bears: Bulls are surging though at 44 still well below the 60ish
that is bearish. Bears are back below 30 and as such are not growling.

Bulls: 44.4 versus 39.4. Third week back over 35%

Bears: 30.3 versus 35.4. After bouncing last week, bears plummeted.

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: 44.4%
39.4% versus 36.4% versus 34.7% versus 26.5% versus 24.7% 34.0% versus 29.2%
versus 26.8% versus 28.6% versus 34.7% versus 36.7% versus 37.8% versus
44.9% versus 41.2% versus 45.4%

Background: Bulls hit their lowest level in late 2015 and 2016 since the
2008 and 2009 market plummet.

Bears: 30.3%
35.4% versus 34.3% versus 35.7% versus 39.8% versus 39.2% versus 38.1%
versus 35.4% versus 36.1% versus 35.7% versus 31.6% versus 29.6% versus
29.6% versus 27.6% versus 26.8% versus 26.8% versus 28.9% versus 28.1%
versus 29.2% versus 31.3% versus 31.2% versus 34.4% versus 35.1% versus
30.2% versus 26.8% versus 27.9 versus 26.8% versus 22.5% versus 18.4% versus
18.6% versus 17.5%

Background: Finally back below 35% after spiking to 39.8 three weeks back.


OTHER MARKETS

Bonds (10 year): 1.89% versus 1.90%. Hit 1.87% on the high then backed
off. Bonds are stronger post-FOMC of course given the Fed's rate hike
passion is not as fervent. Of course Bullard said Friday that it was time
to start normalizing again, one month after saying to do so would be unwise.
My, things have changed that much in a month? Oh yes, the market is not at
2016 highs versus diving lower. So much has changed.

Historical: 1.90% versus 1.91% versus 1.97% versus 1.966% versus 1.979%
versus 1.927% versus 1.88% versus 1.82% versus 1.91% versus 1.88% versus
1.83% versus 1.84% versus 1.82% versus 1.74% versus 1.757% versus 1.70%
versus 1.74% versus 1.74% versus 1.76% versus 1.75% versus 1.74% versus
1.81% versus 1.78% versus 1.75% versus 1.64% versus 1.69% versus 1.73%
versus 1.76% versus 1.85% versus 1.85% versus 1.88% versus 1.86% versus
1.96% versus 1.93% versus 1.99% versus 2.019%


EUR/USD: 1.1272 versus 1.1313. After surging Wednesday and Thursday
post-FOMC, the euro took a day off Friday after the euro hit the February
peak, the highest peak since October 2015 and the subsequent selloff.

Historical: 1.1313 versus 1.1227 versus 1.1112 versus 1.1103 versus 1.1149
versus 1.1106 versus 1.1107 versus 1.1017 versus 1.0999 versus 1.0961 versus
1.0865 versus 1.0866 versus 1.0880 versus 1.0940 versus 1.102 versus 1.1016
versus 1.1039 versus 1.1130 versus 1.1103 versus 1.1124 versus 1.1275 versus
1.1154 versus 1.1249 versus 1.1322 versus 1.1293 versus 1.1294 versus 1.1197
versus 1.1159 versus 1.1206 versus 1.1110 versus 1.0916


USD/JPY: 111.605 versus 111.46. Dollar plunged to the bottom of the 6 week
trading range, then held there Friday. An epic battle between the BOJ
trying to weaken yen and the Fed trying to weaken the dollar.

Historical: 111.46 versus 112.58 versus 113.11 versus 113.795 versus 113.78
versus 113.15 versus 113.396 versus 112.58 versus 112.965 versus 113.795
versus 113.70 versus 113.45 versus 113.896 versus 112.76 versus 113.965
versus 112.90 versus 112.11 versus 112.435 versus 112.65 versus 113.25
versus 114.04 versus 114.33 versus 114.747 versus 113.29 versus 112.39
versus 113.36 versus 115.085


Oil: 41.14, 0.94. Tremendous end of the week with a Wednesday to Friday
surge gratis the weaker dollar gratis the Fed. Hit near the 200 day SMA
Friday then faded. That puts oil at the late November peak and the October
low; some pretty serious resistance at that range and on up to 46-48.

Gold: 1254.30, -10.70. Gold is still undecided. Hit a new high just over
a week back, but started to struggle. Faded into the FOMC meeting then of
course rebounded on the result. Now it is stuck below the recent highs with
lower MACD. A tremendous move, but losing some momentum.


MONDAY

A short week with Good Friday on . . . Friday.

As the rally continues, even though in its fifth week, new stocks from new
groups are stepping up. Friday we picked up some of those financials as
well as BIDU, VMW. They go well with QIWI, BITA, and FFIV picked up earlier
in the week, all moving well.

The rally continues with DJ30 bumping closer and closer to the
November/December range peaks. That remains the big tell for the coming
next move, i.e. whether stocks breakout in a continued celebration of the
new Fed monetary policy self-mandate or if the market tops and resumes the
selling it wanted to continue before a month+ of intervention and
manipulation began. At the time we called it the silent hand. It became
more pronounced and open as the month continued.

Now, just as the excitement is drawing people back in the market after a big
run, Bullard changes his tune to a 'rate hike is prudent' and the financials
start to break higher. Is the Fed so quickly turning back after Wednesday
opting not to hike and cutting its Fed Funds forecast to just two 2016
hikes? Does not seem likely, but what is noteworthy is the market rally was
roughly coincident with Bullard's shift to dove status from hardliner.

Given the moves quality patterns are showing, despite a fifth week upside,
we picked up new positions this past week, and they look good. As long as
the move continues showing good patterns making good breaks higher, we play
them.

Still you have to be aware of the overall market position and factor that
in. After a 5 week move back up near the highs that preceded the February
selloff, keep in mind the overall top. While the Fed wants the market to
hold its gains and maintain whatever fiction of a 'wealth effect' the Fed
feels is created, the Fed might not want it to create its own bubble just on
this rally. The Fed and its counterparts around the world managed to stem
the selling and indeed produce a five week 10+% surge in US stock indices.
Even IF they want to keep it running, it is highly unlike this move
continues much farther before taking a more serious rest.

With that in mind, we plan on playing the move with solid patterns coming
off the lows, patterns that have suffered their own bear markets and are in
recovery mode. Money is more likely to continue rotating to them, and as
long as that continues we will play them. Accordingly, we play the move,
bank gain when it is there, but if it runs into trouble, we know the market
is sitting on a big bounce in an overall top so we close them up, and play
the moves the market presents.

Have a great weekend!


SUPPORT AND RESISTANCE

NASDAQ: Closed at 4795.65

Resistance:
4811 is the November 2014 peak (intraday)
4815 is the December 2014 peak
The March 2015 lows at 4843 and 4825
The 200 day SMA at 4872
4902 is the July 2015 low
4916 is the mid-November 2015 low
4920 is the lower gap point from mid-October
4894 is the September 2015 closing high
4999 is the October upper gap point
5008.57 is the early March 2015 post-bear market high
5042 is the March 2015 high
5100 from the April peak and early May peak
5162 is the early November peak, 5176 is the December intraday peak

Support:
4774 is the January 2-15 high
4751 is the January 2015 lower high
The 50 day EMA at 4662
4637 is the February intraday high
4736 is the early January lower gap point downside, the last downside gap in
the selloff.
4620 is the February 1 closing high
4615 from September 2014 highs, October 2014 upper gap point, late August
2015 low.
4517-4506 from the September 2015 and August 2015 closing lows
4485 are the twin July 2014 peaks
4471 is the January 2016 closing low
4425 is the late February intraday low
4363 is the February upper gap point
4352 is the March 2014 peak
4313 is the January 2016 intraday low
4292 is the August 2015 low
4212 is the February intraday low
4116 is the October 2014 low


S&P 500: Closed at 2049.58

Resistance:
2062 is the January 2015 lower high
2079 is the intraday all-time high from November 2014
2094 is the December 2014 high, the prior all-time high
2104 is the December 2015 high
2116 is the November 2015 high
2119.59 is the February intraday prior all-time high
2126 was the April prior all-time high
2130 is the June 2015 peak
2135 is the May 2015 all-time high

Support:
2046 is the July 2015 closing low
2040 is the March 2015 closing low
2023 is the November 2015 low
2020 is the September 2015 intraday high
The 200 day SMA at 2017
2011 is the September prior all-time high
1995 is the September 2015 recovery peak
1991 is the July 2014 high
1972 is the December 2014 low
The 50 day EMA at 1970
1947 is the February 2016 intraday high, the late February peak
1940 is the January 2016 recovery bounce peak closing high
1913 is the early September 2015 closing low testing the bounce from the
August selling
1905 is the August 2014 low
1902 from early May was the intraday all-time high.
1897 is the prior all-time high hit in April 2014
1891 is last week's intraday low prior to the miraculous reversal.
1872 is the September 2015 test low of the August low
1867 is the August 2015 low
1862 is the October 2014 closing low
1859 is the January 2016 closing low
1820 is the October 2014 intraday low
1815 is the April 2014 low
1812 is the January 2016 intraday low
1772 are the Q4 2013 highs and lows


Dow: Closed at 17,602.30

Resistance:
June 2015 low at 17,715
17,748 is the mid-April China margin selloff and the bottom of the 5 month
trading range
The March low at 17,786
17,978 is the November 2015 peak

Support:
17,351 is the September 2014 all-time high.
17,265 is a December 2015 closing low
17,245 is the November 2015 closing low
17,152 is the mid-July post bear market high
The 200 day SMA at 17,136
17,068 is the early July 2014 peak
17067 is the December 2014 low
16,970 is the June 2014 former all-time high
16,946 is the June 2014 peak
16,933 is the September 2015 recovery intraday peak
The 50 day EMA at 16,817
16,740 is the mid-September peak and potential apex for a right shoulder to
a head and shoulders pattern
16,736 is a prior all-time high from May 2014
16,670 is the December 2014 peak and the recent August 2015 relief bounce
peak.
16,665 is the late August 2015 closing high
16,632 is the April 2014 peak
16,621 is the late February 2016 peak
16,589 is the December 2013 former all-time high
16,526 is the early January resistance
16,511 is the January 2016 intraday high
16,506 is the March 2014 peak
16,466 is the January 2016 recovery closing peak.
16,368 is the August 2014 low
16,117 is the October 2014 closing low
16,058 is the early September 2015 low
16,026 is the April 2014 low
15,855 is the October 2014 intraday low
15,766 is the January closing low
15,666 is the August 2015 closing low
15,450 is the January 2016 intraday low
15,372 is the February 2014 low
15,370 is the August 2015 low


ECONOMIC CALENDAR

March 18 - Friday
Michigan Sentiment, March (10:00): 90.0 actual versus 92.2 expected, 91.7
prior

March 21 - Monday
Existing Home Sales, February (10:00): 5.37M expected, 5.47M prior

March 22 - Tuesday
FHFA Housing Price I, January (9:00): +0.4% prior

March 23 - Wednesday
MBA Mortgage Index, 03/19 (7:00): -3.3% prior
New Home Sales, February (10:00): 511K expected, 494K prior
Crude Inventories, 03/19 (10:30): 1.317M prior

March 24 - Thursday
Durable Goods -ex tr, - (8:30)
Initial Claims, 03/19 (8:30): 268K expected, 265K prior
Continuing Claims, 03/12 (8:30): 2227K prior
Durable Orders, February (8:30): -2.9% expected, +4.9% prior
Durable Goods -ex tr, February (8:30): -0.2% expected, +1.8% prior
Natural Gas Inventor, 03/19 (10:30): -1 bcf prior

March 25 - Friday
GDP - Third Estimate, Q4 (8:30): +1.0% expected, +1.0% prior
GDP Deflator - Third, Q4 (8:30): +0.9% expected, +0.9% prior

End part 1 of 3
_______________________________________________________
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Monday, March 14, 2016

The Daily, Part 1 of 3, 3-12-16

* * * *
3/12/2016 Investment House Daily
* * * *

MARKET ALERTS:

Targets hit: None issued
Entry alerts: SWKS; THC
Trailing stops: None issued
Stop alerts: GOOG; MYL

The market alert service is a premium level service where we issue intraday
alerts relating to the general market conditions, when stocks hit action
points (buy, stop, target, etc.), and when we see other information
impacting the market or our stocks. To subscribe to the alert service you
can sign up at the following link:
http://www.investmenthouse.com/alertdaily.html

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Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.

TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
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The REPORT SCHEDULE is as follows:

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

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

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

- A day later and stocks show a Mario the Magnificent rally.
- The rally built on false stories, silent anti-plunge intervention, and now
overt Central Bank intervention, hits its fourth week with a new breakout.
- Money still rotating into the silent majority bear market stocks.
- Investor and trader dilemma: new breakout, money rotating, still good
patterns to play, BUT four weeks up, at resistance, overall market top still
in place, economy is still weakening despite best attempts to frame it
otherwise.

Friday investors decided they liked what Mario and his money printers
announced Thursday. Stocks gapped higher and never took one look over the
shoulder. New breakouts after a short test on all US indices as the rally
about nothing hit four weeks upside. Sharply upside.

SP500 32.62, 1.64%
NASDAQ 86.31, 1.85%
DJ30 218.18, 1.28%
SP400 1.89%
RUTX 2.22%
SOX 1.94%

VOLUME: NYSE -4.5%, NASDAQ -5.7%. Lower trade on a new rally high. NASDAQ
showing 1 above average volume session in 18. DJ30 is still looking for its
first above average volume session in 16. Not the strongest move and you
can understand the skeptics given the overall market picture, i.e. still a
15 month top firmly in place.

A/D: NYSE 5:1, NASDAQ 3.7:1. Powerful breadth on the move even if no
volume. That is this market's MO: lots of stocks moving higher, just not a
ton of buyers. BUT, lots more buyers than sellers of late.

This move started four weeks back on a UAE claim that OPEC had agreed to a
production cut. Flimsy and unconfirmed, the story nonetheless stopped
another market rollover in progress and bounced stock and oil prices for the
following week. Over the next three weeks, several sessions appeared to be
a repeat of the rollover session, but again with each ugly selloff the
market received a helping hand. The BOJ would intervene on the yen. The
PBOC would adjust its yuan peg. A Fed governor would go dovish. Another
OPEC member would claim another meeting and cut was ahead, even as the
initial production cut report devolved into a production freeze that key
players repudiated.

At the time, we posited that the move would not last (wrong), but after a
second rollover attempt was stymied in its tracks by sudden sovereign
buying, I noted that if the move could extend laterally and consolidate,
bottoming patterns could be build that would help propel the market higher.
This even as the prior market leaders continued to struggle and sell. Why?
Because if money was leaving those leaders but not leaving the market,
stocks already beaten down in their own bear markets as those leaders led
the final rally's charge could enjoy their own runs, using the small bases
formed to propel them.

Retail, industrial machinery, industrials in general turned and rallied.
Metals and materials followed. Now financials and energy have done the same
while drugs/biotechs, Chinese stocks, telecom and others try the same. More
than that, some stocks didn't even base, just turned and rallied straight
up.

All of this was enough to maintain the market levitation ahead of the main
events of the March ECB and FOMC policy meetings. Expectations were high
for Mario the artful dodger Draghi, and that set the stage for
disappointment. But, Draghi the Dodger became Draghi the Deliverer as he
and the ECB backed up the truck to the markets and unloaded a plethora of
market inspiring devices. Sure it took a day for the market to pinch itself
and decide it was real, but on Friday the US stock indices broke out to
higher recovery highs after a few sessions of stumbling. Even a Friday
story that totally confirmed Nigeria's story of a March OPEC/NOPEC meeting
was utter fabrication did not hurt the stock advance. Once again, when it
looked as if some key areas could break, they did not.

Thus the stock rally built on a rank and obviously manufactured rumor of
phantom OPEC meetings has lasted not a week, not two weeks, but a whole
month. It has brought DJ30 back up to the bottom of the late December 2015
series of three tops. It has SP500 at 2020 and the 200 day SMA, right at a
next level of resistance many consider key. Yes, another one.

Despite the move that has more than outdone any expectations (certainly on
our part), it has not changed the overall market character. Yes it
converted a selloff that was on the verge of becoming a major crash into a
mother of all short squeezes. It did so with the obvious hand and
coordination of central banks, OPEC, and who knows who and/or what else.

It has not, however, alleviated the market's negative overall condition.
The 15 month top post-QE is still in place. The US economy, despite what
you hear from the headline manipulators in our government and the compliant
headline readers on the news services, is overall trending lower. Yes Q1
2016 will show a bump in activity, but the trend remains in place. The
policies in place have hollowed out the economy, and while there are short
bursts of more activity, the economy that has bumped along for years similar
to the 1970's is now stalling out. Jim Rodgers says there is a 100% chance
of US recession this year. The data is not good.

Okay, so the prognosis is not great bigger picture. Here is the rub. You
knew it was coming.

In looking at stocks, LOTS of stocks, they are not suggesting this move is
over. The late 2015 recovery in stocks off the summer selling was led by
the Big Names. Most of the stock market had already sold off, was already
down 20% or more as most stocks suffered their own bear markets.

That leaves the dilemma an investor and trader is always put in at certain
times in the market. The move is overdone. The overall market pattern and
economic picture do not support a breakout to new highs. YET, there are
many, many stock patterns that not only are the kind that show accumulation,
but are ready to breakout, or have broken out but are nowhere near peaking
their run. This after four weeks of straight up, 10+% gains on the major
indices.

And there is the dilemma: the macro picture is not conducive to a lot more
upside as the indices bump into the bottoms of the hold highs, and the short
term market condition in terms of the indices is really overbought.
Further, the Fed is highly unlikely to change its current hiking stance
given the ECB's kitchen sink actions, the economic headlines it tells the
public it uses in its policy decisions, and yes the stock market action
itself that has provided the Fed all the cover it needs.

Yet, more patterns are in good shape to move higher and are indeed in the
process of making new breaks higher, either initial breakouts from bottoming
patterns or new rallies after testing that initial breakout (e.g. AKS, WLL).
These are very solid patterns showing money rotation and accumulation, e.g.
double bottoms, inverted head and shoulders for the longer patterns, and
cups with handles. As noted the past week, money is not wholesale leaving
the market and thus setting up a massive failure when this rally fizzles. A
lot of it is being diverted to these other stocks already beaten way, way
down. This gives this move the unexpected life AFTER the silent hands of
the world central banks and OPEC lies regarding production cut meetings
staved off a massive world market crash.

So, the question for us is, after four weeks of straight upside in a fairly
obvious short squeeze, there is nonetheless real and sustained buying in
several areas. Despite our belief the market bounce would fail earlier than
it did, it did not, and we have suffered with some downside plays. At the
same time we have made great money on KORS, QRVO, VRSN, AKS, WLL, FCX, FEYE,
CX, CENX -- most in areas that showed the bottoming action, set up good
patterns and broke higher in textbook fashion.

We still see a lot of these plays setting up either for initial runs or
after testing that first break higher. At the same time, the number of
really good downside plays, despite the run, is not that great. Yes there
are stocks that ran higher the past four weeks, but they don't look to be
imminently rolling over. Even the big names that continue to struggle, e.g.
AMZN, NFLX, GOOG (even though it gapped and rallied Friday), SBUX, are not
rolling over.

So, do you continue moving in on the upside even after a four week rally
straight off the bottom when DJ30 is bumping key resistance that includes
the bottoms of the last trading range before the January plunge? Or,
despite the good looking patterns, are you moving in just to see the big
money players pull the plug and scuttle the move for all stocks? If you
have been at this any time at all you know that a rally often looks good
right up until it does not, i.e. good plays keep setting up and are ready to
move higher long after the initial leaders have made their moves. They were
ready to go, it is just that the money was no longer ready to buy them.

On top of that this week is the FOMC meeting, the likely culmination of the
series of central bank events and silent hands feeding the market rally.
The Fed is forced by these events to hold to its rate hiking course it so
carefully laid out and began JUST AS the stock market finished its big top
and crashed. Even if the Fed is compliant with the rest of the central
banks, just how much more good news can this rally absorb with higher and
higher prices?

What we are going to do. Keep looking at the solid upside patterns for
opportunity, but not going too deep four weeks into the rally. There are
good financials, drugs/healthcare, Chinese stocks, chips, energy -- many
areas -- that sport excellent patterns. We have upside positions already
and we can add new positions as they show the moves, but it is a fact the
move is four weeks old, straight up, bumping into resistance, and has been
helped by fabricated stories, silent central bank intervention and highly
publicized central bank intervention (after the silent work kept the markets
propped up). If the plug gets pulled and the market makes a sharp downside
kick, we need to be ready to jump ship quickly and not look back or second
guess. So, we are going to buy good patterns but know the move is getting
stretched. Take logical gains, lighten up by so doing, and not expect the
move to continue just because things look good near term.

That is the life of investing and trading in world markets where the central
banks are desperately trying to hold the stimulus induced financial market
rallies of the past 7 years together. My word, after 7 years of recovery,
if you were dropped in from any other time in US history, you would be very
confident the Fed was NOT acting at all, that rates would be normalized,
that the Fed's balance sheet would be show at worst nominal debt. Instead
the rates are effectively below 0%, the Fed just started acting, its balance
sheet is in the trillions, and the Fed is still extremely hesitant to act.
We are in a whole new world where central banks have usurped power from many
areas, and I am not sure if I will see this change in my lifetime, and I
plan on living another 50+ years.


THE MARKET

CHARTS

DJ30: Broke through the 200 day SMA Friday on rising but still below
average volume. That puts the Dow at the 78% Fibonacci retracement of the
selloff from the late December lower high as well as at the lows form
November and December 2015. Very key levels, but those levels have not
stopped the move yet. Indeed, Friday was a breakout after a three day flag
test of the last leg higher. Okay, that is well and good, but always,
always watch for a false move when this occurs. Four weeks straight up, the
last three weeks of the move (out of four) on below average volume. Nothing
has stopped the move thus far but the setup is one that could do that.
Cannot discount it.

SP500: Gapped out of a three day flag test of its own, moving just past the
200 day SMA on the close. SP500 is also at the November and December 2015
range lows, also at the 78% Fibonacci retracement of the selloff from that
November/December 2015 range. Broke out as well but on lower, below average
volume Friday, lower than the consolidation volume. Still moving higher but
as with the Dow, it is in a scenario that you have to at least be cognizant.

NASDAQ: Gapped and rallied to the prior Friday's intraday high. New closing
high on the rally, putting NASDAQ just inside the last gap lower from the
12/30 to 1/7 series of downside gaps. Meaning? NASDAQ is just now getting
to the business of filling those gaps, and there are 300+ points of gaps in
that series. Friday renewed the rally from an inverted head and shoulders
breakout from the start of March. Heading higher, but still below average
volume on all but one session in the past 17 sessions. Friday's breakout was
on very low trade.

RUTX: Surged to end the week following a sharp Tuesday selloff that turned
into a routine 10 day EMA test. Still at the September 2015 low, still at
the 61% Fibonacci Retracement, but a nice test and moving higher on a MACD
breakout. After leading the downside, small caps are trying to lead upside
but have a lot of catching up to do.

SOX: Gapped to a higher recovery high Friday, moving well into the second
gap lower from late December. Huge move, getting bigger as SOX is well into
the October to December trading range, about one-third in.

SP400: Higher recovery high after a three session test of the surge. SP400
is halfway into the late August through December range. The 200 day SMA is
about 15 points higher.


LEADERSHIP

Many of the same groups and some new ones are setting up those bottoming
patterns and surging.

China: Newly returned. SINA surged on earnings. WUBA surged through the
200 day SMA Friday, breaking from a 7 week inverted head and shoulders.
VIPS is attempting a bottom. ATHMA and BITA made an initial move and are
testing. BIDU looks really solid.

Financial: Still looking good with classic patterns. JPM is still forming
the cup with handle. TCBI ditto, starting to break higher. BAC sports an
inverted head and shoulders.

Metals: AKS started breaking higher again Thursday though rested Friday.
FCX ditto. ZEUS, TX, etc. all show the same action.

Energy: OII surging through the 50 day MA's. WLL gapped to a higher
recovery high. CVX capped a good week, gapping to a doji. HAL gapped off a
3 day test to the 10 day EMA. Still solid recoveries ongoing.

Tech: VASD has put in an inverted head and shoulders bottoming pattern.
FEYE looks ready to move higher once more. QRVO moving up off a 10 day EMA
test after a strong move higher. FFIV has a nice lateral consolidation in
place after moving off the low.

Drugs/Biotech: AGEN bouncing on strong trade. BMRN looking ready to move.


MARKET STATISTICS

NASDAQ
Stats: +86.31 points (+1.85%) to close at 4748.47
Volume: 1.78B (-5.67%)

Up Volume: 1.5B (+765.78M)
Down Volume: 277.58M (-892.42M)

A/D and Hi/Lo: Advancers led 3.7 to 1
Previous Session: Decliners led 1.82 to 1

New Highs: 43 (+12)
New Lows: 23 (-23)

S&P
Stats: +32.62 points (+1.64%) to close at 2022.19
NYSE Volume: 974M (-4.42%)

A/D and Hi/Lo: Advancers led 5.01 to 1
Previous Session: Decliners led 1.35 to 1

New Highs: 77 (+7)
New Lows: 10 (-7)

DJ30
Stats: +218.18 points (+1.28%) to close at 17213.31


SENTIMENT INDICATORS

VIX: 16.5; -1.55
VXN: 19.65; -1.84
VXO: 17.26; -2.1

Put/Call Ratio (CBOE): 1.01; +0.02. Over 1.0 on a surge as short
positions were closed.

Recent history: 8 of 18 sessions over 1.0.
16 of 26 sessions below 1.0, 28 of the last 50 sessions above 1.0.


Bulls and Bears: Bulls recovered a bit of ground after falling the prior
week from over 30. Bears remain very skeptical with their numbers rising
despite a market bounce. Still in a crossover position. This indicator is
strongly suggesting a bounce, but this is not a timing indicator.

Bulls: 39.4 versus 36.4. Second week back over 35%

Bears: 35.4 versus 34.3. Surprisingly moved back over 35 on a market
upside week. Apparently the bears believe the move is topping out.

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: 39.4%
36.4% versus 34.7% versus 26.5% versus 24.7% 34.0% versus 29.2% versus 26.8%
versus 28.6% versus 34.7% versus 36.7% versus 37.8% versus 44.9% versus
41.2% versus 45.4%

Background: Bulls hit their lowest level in late 2015 and 2016 since the
2008 and 2009 market plummet.

Bears: 35.4%
34.3% versus 35.7% versus 39.8% versus 39.2% versus 38.1% versus 35.4%
versus 36.1% versus 35.7% versus 31.6% versus 29.6% versus 29.6% versus
27.6% versus 26.8% versus 26.8% versus 28.9% versus 28.1% versus 29.2%
versus 31.3% versus 31.2% versus 34.4% versus 35.1% versus 30.2% versus
26.8% versus 27.9 versus 26.8% versus 22.5% versus 18.4% versus 18.6% versus
17.5%

Background: Finally back below 35% after spiking to 39.8 three weeks back.


OTHER MARKETS

Bonds (10 year): 1.979% versus 1.927%. The back and forth flopping stopped
Friday as bonds broke lower and yields jumped as the ECB's actions appear to
cement the Fed continuing its rate hiking. TLT broke below the 50 day MA's.

Historical: 1.927% versus 1.88% versus 1.82% versus 1.91% versus 1.88%
versus 1.83% versus 1.84% versus 1.82% versus 1.74% versus 1.757% versus
1.70% versus 1.74% versus 1.74% versus 1.76% versus 1.75% versus 1.74%
versus 1.81% versus 1.78% versus 1.75% versus 1.64% versus 1.69% versus
1.73% versus 1.76% versus 1.85% versus 1.85% versus 1.88% versus 1.86%
versus 1.96% versus 1.93% versus 1.99% versus 2.019%


EUR/USD: 1.1149 versus 1.1180.

Historical: 1.1106 versus 1.1107 versus 1.1017 versus 1.0999 versus 1.0961
versus 1.0865 versus 1.0866 versus 1.0880 versus 1.0940 versus 1.102 versus
1.1016 versus 1.1039 versus 1.1130 versus 1.1103 versus 1.1124 versus 1.1275
versus 1.1154 versus 1.1249 versus 1.1322 versus 1.1293 versus 1.1294 versus
1.1197 versus 1.1159 versus 1.1206 versus 1.1110 versus 1.0916


USD/JPY: 113.78 versus 113.15

Historical: 113.15 versus 113.396 versus 112.58 versus 112.965 versus
113.795 versus 113.70 versus 113.45 versus 113.896 versus 112.76 versus
113.965 versus 112.90 versus 112.11 versus 112.435 versus 112.65 versus
113.25 versus 114.04 versus 114.33 versus 114.747 versus 113.29 versus
112.39 versus 113.36 versus 115.085


Oil: 38.50, +0.58. Still trending higher ahead of the 10 day EMA, filling
the gap from early December.


Gold: 1259.40, -13.70. Surged to a higher high then reversed. Held the 10
day EMA but getting very volatile with back and forth moves each session.
Volatility typically spells trouble for a trend. With the Fed set to stay on
its hiking bias, gold loses some of its luster. It has not, however, broken
its uptrend and is holding over the 10 day EMA. That is a pretty strong
trend, but again, watch the volatility.


MONDAY

ECB is in the bag and now the FOMC meets to tell the world on Wednesday
afternoon that while it is a bit cautious given inflation expectations and
the rest of the world, it still sees risks fading for the US. It will have
more data to use, e.g. retail sales than will be adjusted positive similar
to how January was adjusted from a loss of billions to a gain of millions.
PPI, New York Fed, CPI, Industrial Production, Capacity, even oil
inventories are all out before the FOMC decision. It won't be data poor,
that is for sure.

The stock indices broke higher Friday, moving to higher recovery highs.
First, as noted before, be a bit wary of a low volume breakout on a Friday
in the fourth week of a short covering move. With some indices at key
resistance, it is worth noting so if the unlikely occurs and it reverses, we
are aware of what just happened.

Second, almost three days ahead of the Fed gives some time to get into some
upside as some areas have been ripping off big moves, and frankly all areas
that have set up those bottoming patterns are producing big moves when they
finally start upside. So, we can look at more of those for some upside.

Will it hold post-FOMC? We expect the Fed to stay its course, to still
commit to rate hikes versus anything else, but it may not give a time for
the next hike and the vast majority think it won't put in its second one on
Wednesday. Perhaps that keeps the market going as perhaps that was all
factored in on Friday's rally after a lukewarm reception to the ECB on
Thursday's announcement.

At this juncture we will still pursue upside positions on solid stocks that
can make us money in fairly decent timeframes. You know what we are talking
about, e.g. WLL, AKC, FCX. But there is also FEYE, OII, MRO, BIDU -- plenty
of stocks are setup quite nicely. This move may be based on a bunch of
fabrications and silent hand assists, but it has survived, and as noted last
weekend, STILL nothing is standing in its way in terms of sellers. Until
they show up with vigor, we look to play some sensible, rational upside that
the market is presenting. Oh, and we still think selling will show up with
some vigor, but the fat lady has not yet sung on this rally.

Have a great weekend!


SUPPORT AND RESISTANCE

NASDAQ: Closed at 4748.47

Resistance:
4751 is the January 2015 lower high
4774 is the January 2-15 high
4811 is the November 2014 peak (intraday)
4815 is the December 2014 peak
The March 2015 lows at 4843 and 4825
The 200 day SMA at 4880
4902 is the July 2015 low
4916 is the mid-November 2015 low
4920 is the lower gap point from mid-October
4894 is the September 2015 closing high
4999 is the October upper gap point
5008.57 is the early March 2015 post-bear market high
5042 is the March 2015 high
5100 from the April peak and early May peak
5162 is the early November peak, 5176 is the December intraday peak

Support:
4736 is the early January lower gap point downside, the last downside gap in
the selloff.
The 50 day EMA at 4640
4637 is the February intraday high
4620 is the February 1 closing high
4615 from September 2014 highs, October 2014 upper gap point, late August
2015 low.
4517-4506 from the September 2015 and August 2015 closing lows
4485 are the twin July 2014 peaks
4471 is the January 2016 closing low
4425 is the late February intraday low
4363 is the February upper gap point
4352 is the March 2014 peak
4313 is the January 2016 intraday low
4292 is the August 2015 low
4212 is the February intraday low
4116 is the October 2014 low


S&P 500: Closed at 2022.19

Resistance:
2020 is the September 2015 intraday high
The 200 day SMA at 2020. Okay, broke it but not definitively.
2040 is the March 2015 closing low
2046 is the July 2015 closing low
2062 is the January 2015 lower high
2079 is the intraday all-time high from November 2014
2094 is the December 2014 high, the prior all-time high
2104 is the December 2015 high
2116 is the November 2015 high
2119.59 is the February intraday prior all-time high
2126 was the April prior all-time high
2130 is the June 2015 peak
2135 is the May 2015 all-time high

Support:
2011 is the September prior all-time high
1995 is the September 2015 recovery peak
1991 is the July 2014 high
The 10 day EMA at 1985
1972 is the December 2014 low
The 50 day EMA at 1956
1947 is the February 2016 intraday high, the late February peak
1940 is the January 2016 recovery bounce peak closing high
1913 is the early September 2015 closing low testing the bounce from the
August selling
1905 is the August 2014 low
1902 from early May was the intraday all-time high.
1897 is the prior all-time high hit in April 2014
1891 is last week's intraday low prior to the miraculous reversal.
1872 is the September 2015 test low of the August low
1867 is the August 2015 low
1862 is the October 2014 closing low
1859 is the January 2016 closing low
1820 is the October 2014 intraday low
1815 is the April 2014 low
1812 is the January 2016 intraday low
1772 are the Q4 2013 highs and lows


Dow: Closed at 17,213.31

Resistance:
17,245 is the November 2015 closing low
17,265 is a December 2015 closing low
17,351 is the September 2014 all-time high.
June 2015 low at 17,715
17,748 is the mid-April China margin selloff and the bottom of the 5 month
trading range
The March low at 17,786
17,978 is the November 2015 peak

Support:
The 200 day SMA at 17,153
17,152 is the mid-July post bear market high
17,068 is the early July 2014 peak
17067 is the December 2014 low
16,970 is the June 2014 former all-time high
16,946 is the June 2014 peak
16,933 is the September 2015 recovery intraday peak
16,740 is the mid-September peak and potential apex for a right shoulder to
a head and shoulders pattern
16,736 is a prior all-time high from May 2014
The 50 day EMA at 16,691
16,670 is the December 2014 peak and the recent August 2015 relief bounce
peak.
16,665 is the late August 2015 closing high
16,632 is the April 2014 peak
16,621 is the late February 2016 peak
16,589 is the December 2013 former all-time high
16,526 is the early January resistance
16,511 is the January 2016 intraday high
16,506 is the March 2014 peak
16,466 is the January 2016 recovery closing peak.
16,368 is the August 2014 low
16,117 is the October 2014 closing low
16,058 is the early September 2015 low
16,026 is the April 2014 low
15,855 is the October 2014 intraday low
15,766 is the January closing low
15,666 is the August 2015 closing low
15,450 is the January 2016 intraday low
15,372 is the February 2014 low
15,370 is the August 2015 low


ECONOMIC CALENDAR

March 15 - Tuesday
Retail Sales, February (8:30): -0.1% expected, 0.2% prior
Retail Sales ex-auto, February (8:30): -0.2% expected, 0.1% prior
PPI, February (8:30): -0.2% expected, 0.1% prior
Core PPI, February (8:30): 0.1% expected, 0.4% prior
Empire Manufacturing, March (8:30): -9.5 expected, -16.6 prior
Business Inventories, January (10:00): 0.0% expected, 0.1% prior
NAHB Housing Market , March (10:00): 59 expected, 58 prior
Net Long-Term TIC Fl, January (16:00): -$29.4B prior

March 16 - Wednesday
MBA Mortgage Index, 03/12 (7:00): 0.2% prior
CPI, February (8:30): -0.2% expected, 0.0% prior
Core CPI, February (8:30): 0.1% expected, 0.3% prior
Housing Starts, February (8:30): 1137K expected, 1099K prior
Building Permits, February (8:30): 1204K expected, 1202K prior
Industrial Production, February (9:15): -0.3% expected, 0.9% prior
Capacity Utilization, February (9:15): 76.9% expected, 77.1% prior
Crude Inventories, 03/12 (10:30): 3.88M prior
FOMC Rate Decision, March (14:00): 0.375% expected, 0.375% prior

March 17 - Thursday
Initial Claims, 03/12 (8:30): 266K expected, 259K prior
Continuing Claims, 03/05 (8:30): 2225K prior
Philadelphia Fed, March (8:30): -1.4 expected, -2.8 prior
Current Account Balance, Q4 (8:30): -$116.0B expected, -$124.1B prior
Leading Indicators, February (10:00): 0.2% expected, -0.2% prior
Natural Gas Inventor, 03/12 (10:30): -57 bcf prior

March 18 - Friday
Michigan Sentiment, March (10:00): 92.2 expected, 91.7 prior

End part 1 of 3
_______________________________________________________
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Tuesday, March 08, 2016

The Daily, Part 1 of 3, 3-7-16

* * * *
3/7/2016 Investment House Daily
* * * *

MARKET ALERTS:

Targets hit: AKS; CX; FCX; FEYE; VRSN
Entry alerts: FB; INFI; VIP
Trailing stops: None issued
Stop alerts: None issued

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MARKET SUMMARY

- No news, stocks start slow, mostly recover.
- Big names struggle, sell on high volume, acting as a drag even as other areas continue to rally.
- Most stocks head higher. Still.
- Money leaving some areas, rotates to others, rally stays alive.

A somewhat different day in the stock market and then again, a somewhat same day. First, there was no news, particularly juxtaposed to last week's data dump. A couple of merger maybes (BTI desires RAI, BASF wants to steal DD from DOW), some attempts at Fed-Speak. That was it. No news.

The similar: The indices traded around the flat line after a lower open. Futures were down since the early morning but did not erode any farther. With no increasing pressure, stocks started lower but then worked back to the upside as the low to high market bias remained in place. The moves was almost scuttled when Fed Vice Chair Fischer said he saw the 'first stirrings' of inflation, but even that did not stymie the recover as stocks rallied back in the last hour. Further, small caps continued to lead the upside move while the large cap indices remained somewhat stymied.

The different: The NASDAQ big names struggled as NASDAQ was the lone downside index outside of NASDAQ 100 that was significantly lower than overall NASDAQ. Some 2+% losses on the likes of FB, GOOG, AMZN, NFLX weighed those indices down though even those stocks managed a comeback off the lows. Indeed, that rebound in the afternoon kept SBUX from losing 2% with the other big names.

The result: Low to higher action, fighting off an afternoon dip along the way. That kept SP500 at 2000 and NASDAQ at the January lower gap point, both some resistance levels, but they also once more fought off the downside and recovered.

SP500 1.77, 0.09%
NASDAQ -8.77, -0.19%
DJ30 67.18, 0.40%
SP400 0.45%
RUTX 1.13%
SOX 0.32%

VOLUME: Down from the Friday large volume but not a shrinking violet. NYSE -18% though still above average, NASDAQ -7.5%, also still just above average. Perhaps a bit of churn after the moves upside as volume moves higher as the indices have bumped some resistance (at least SP500 and NASDAQ) and are at least momentarily stalled.

A/D: NYSE 2:1, NASDAQ 2.2:1. Definitely smaller cap led as NASDAQ was down thanks to the weight of the large cap names.

Chart-wise it was mostly more of the same. DJ30, RUTX, SP400 continued higher. SOX was up, but had to bounce off a 200 day SMA test first. It did. SP500 tested lower but recovered to hang on at 2000; at least it did not just roll over and burn. NASDAQ gapped lower, reached above the Friday close, but then stalled out.

Nothing major, no rollovers, but NASDAQ and SP500 do look as if there is a bit of churn here at the next resistance level. Maybe NASDAQ is just working on a lateral consolidation, but the elevated volumes are a bit of concern. The other indices? Not showing any real wear and tear.

So, another Monday with some selling. This one, however, was not exactly like the prior Monday's sharp selloff. Perhaps that means the rebound is even stronger. Of course all that was down was NASDAQ thanks to the big names. Hey, no problem with the big names selling off and the rest of the market posting gains.


THE MARKET

CHARTS

SP500: Closed over 2000! Up just 1.77 points but over 2000. That leaves SP500 at the December lows, the last ones before SP500 melted down into January. Okay, slowing a bit, but that after a breakout Tuesday and drift higher into Monday. Now it is testing next resistance that dials in the next move in the breakout. This range runs up to 2025 (200 day SMA at 2022).

NASDAQ: Down on the session, but barely. Gapped lower, recovered to near flat. Basically holding the move at the downside gap point from early January, the last gap lower from the late December peak. Big names are struggling, acting as the drag, but NASDAQ overall is still in decent shape, working laterally, consolidating the break higher from the inverted head and shoulders. A bit of churn as the volume jumped Friday and Monday as NASDAQ struggled, but nothing major.

SOX: Held Friday's break through the 200 day SMA, bounced off that test to a higher closing high. Still working upside, MACD still leading as SOX not tests the first large gap lower from the late December peak that rolled over into the NASDAQ January selloff.

DJ30: More low volume but a continued move higher, now at the early December lows and just 100 points off the 200 day SMA. Nothing slowing it as CAT and company continue posting gains.

RUTX: Small caps impressed again with the only gain approaching 1%. Crazy move. 3+ weeks upside without barely a pause. 1116 is the next resistance (closed at 1094).

SP400: Started lower, reversed to a gain and the mid-November low. Starting to run into resistance but still going strong.


LEADERSHIP

Biotechs enjoyed a pretty solid session as they try to join the other groups that formed nice rounded bottoms and broke higher (e.g. retail, metals). INFI moved well, BMRN, KITE and others look ready. CLDX hurt us as it revealed a failure to hit its targets in a test of one of its main drugs. Overall, the group looks pretty solid.

Metals rallied again but also closed off the highs just as on Friday. Materials rallied again. Industrial equipment jumped again, e.g. CMI, CAT. Financial struggled a bit but more like a test of the recent moves. V did knife lower, however.

Big names struggled, and while GOOG looks bad, NFLX as well, the others mostly salvaged their skins, e.g. AMZN, SBUX. For now.

Financial: For the most part took a day off but also still quite solid. JPM is putting in a nice lateral move over the 50 day EMA after breaking that resistance. GS paused after its move. V broke sharply lower on volume. Banks are okay, credit services, not so much given revolving credit came in far less than expected.

Telecom: Stronger session. VIP jumped. MBT rallied nicely. MOBI is breaking upside.

Energy: Continued the reversal off the lows. XEC, WLL. HAL.


MARKET STATISTICS

NASDAQ
Stats: -8.77 points (-0.19%) to close at 4708.25
Volume: 2.142B (-7.55%)

Up Volume: 1.31B (+10M)
Down Volume: 740.96M (-120.1M)

A/D and Hi/Lo: Advancers led 2.18 to 1
Previous Session: Advancers led 1.46 to 1

New Highs: 36 (-3)
New Lows: 29 (-3)

S&P
Stats: +1.77 points (+0.09%) to close at 2001.76
NYSE Volume: 1.11B (-17.78%)

A/D and Hi/Lo: Advancers led 1.97 to 1
Previous Session: Advancers led 1.84 to 1

New Highs: 51 (-29)
New Lows: 6 (-8)

DJ30
Stats: +67.18 points (+0.4%) to close at 17073.95


SENTIMENT INDICATORS

VIX: 17.35; +0.49
VXN: 21.61; +0.8
VXO: 18.37; -0.05

Put/Call Ratio (CBOE): 0.85; +0.01. Did its job, now there is a markedly lower put market as the indices stretch the upside move past three straight weeks. Always buying at the top, selling at the bottom. Getting closer to a top of this run.

Recent history: 7 of 14 sessions over 1.0.
13 of 22 sessions below 1.0, 27 of the last 46 sessions above 1.0.


Bulls and Bears: Bulls recovered a bit of ground after falling the prior week from over 30. Bears remain very skeptical with their numbers rising despite a market bounce. Still in a crossover position. This indicator is strongly suggesting a bounce, but this is not a timing indicator.

Bulls: 36.4 versus 34.7. As anticipated, after that surge the prior week from 26.5, Bulls moved back over 35%. Did the work, market has rallied, now moving back to a more normal level.

Bears: 34.3 versus 35.7. Also as expected after that huge drop from 40ish, Bears moved back below 35%, also to a more normal level.

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: 36.4%
34.7% versus 26.5% versus 24.7% 34.0% versus 29.2% versus 26.8% versus 28.6% versus 34.7% versus 36.7% versus 37.8% versus 44.9% versus 41.2% versus 45.4%

Background: Bulls hit their lowest level in late 2015 and 2016 since the 2008 and 2009 market plummet.

Bears: 34.3%
35.7% versus 39.8% versus 39.2% versus 38.1% versus 35.4% versus 36.1% versus 35.7% versus 31.6% versus 29.6% versus 29.6% versus 27.6% versus 26.8% versus 26.8% versus 28.9% versus 28.1% versus 29.2% versus 31.3% versus 31.2% versus 34.4% versus 35.1% versus 30.2% versus 26.8% versus 27.9 versus 26.8% versus 22.5% versus 18.4% versus 18.6% versus 17.5%

Background: Finally back below 35% after spiking to 39.8 three weeks back.


OTHER MARKETS

Bonds (10 year): 1.91% versus 1.88%. Holding over the 50 day EMA, still holding an ABCD pattern.

Historical: 1.88% versus 1.83% versus 1.84% versus 1.82% versus 1.74% versus 1.757% versus 1.70% versus 1.74% versus 1.74% versus 1.76% versus 1.75% versus 1.74% versus 1.81% versus 1.78% versus 1.75% versus 1.64% versus 1.69% versus 1.73% versus 1.76% versus 1.85% versus 1.85% versus 1.88% versus 1.86% versus 1.96% versus 1.93% versus 1.99% versus 2.019% versus 2.01% versus 2.01% versus 2.05%


EUR/USD: 1.1017 versus 1.0999. Euro still recovering after the selloff from early February. At the 200 day SMA after the Monday close.

Historical: 1.0999 versus 1.0961 versus 1.0865 versus 1.0866 versus 1.0880 versus 1.0940 versus 1.102 versus 1.1016 versus 1.1039 versus 1.1130 versus 1.1103 versus 1.1124 versus 1.1275 versus 1.1154 versus 1.1249 versus 1.1322 versus 1.1293 versus 1.1294 versus 1.1197 versus 1.1159 versus 1.1206 versus 1.1110 versus 1.0916 versus 1.0905 versus 1.0836 versus 1.0939 versus 1.0899


USD/JPY: 112.965 versus 113.795. Dollar turned down hard at the 20 day EMA.

Historical: 113.795 versus 113.70 versus 113.45 versus 113.896 versus 112.76 versus 113.965 versus 112.90 versus 112.11 versus 112.435 versus 112.65 versus 113.25 versus 114.04 versus 114.33 versus 114.747 versus 113.29 versus 112.39 versus 113.36 versus 115.085 versus 115.74 versus 116.83 versus 116.76 versus 117.88 versus 120.04


Oil: 37.98, +1.65. Dollar is on a strong run, now about to clear the late December recovery high.


Gold: 1268.00, +7.90. Gold running higher with oil and stocks. Some strange bedfellows. These are going to diverge at some point.


TUESDAY

Monday was not a great day and the big names did struggle a bit. To put things in perspective, however, the prior Monday was ugly. Stocks sold hard, on volume, closing at session lows. By comparison, this Monday was a pleasant stroll with a few potholes to walk around. The indices didn't do anything to hurt themselves, just some slight issues on NASDAQ and SP500. Thus the upside still appears the direction of least resistance, but it will require SP500 and NASDAQ to break this next resistance that is quietly exerting enough pressure to push the big names lower and on some strong downside volume.

There are some very interesting downside moves in some of the names, but some upside also looks good in drugs, biotechs, telecom -- there remain groups that are acting just as if they have bottomed and intend to rise for awhile even as some of the big names that broke but rebounded with the market are starting to struggle once more. That is rotation and as noted last week, it tends to keep market upside moves working.

We will continue looking at some more upside plays as those continue to set up and run, but also some downside as we did with FB. That makes logical sense. If money wants to move into new areas, it typically leaves other areas. Thus the big names can break while new areas continue higher, as the new areas get the money leaving the old leaders.

Have a great evening!


SUPPORT AND RESISTANCE

NASDAQ: Closed at 4708.25

Resistance:
4736 is the early January lower gap point downside, the last downside gap in the selloff.
4751 is the January 2015 lower high
4774 is the January 2-15 high
4811 is the November 2014 peak (intraday)
4815 is the December 2014 peak
The March 2015 lows at 4843 and 4825
The 200 day SMA at 4888
4902 is the July 2015 low
4916 is the mid-November 2015 low
4920 is the lower gap point from mid-October
4894 is the September 2015 closing high
4999 is the October upper gap point
5008.57 is the early March 2015 post-bear market high
5042 is the March 2015 high
5100 from the April peak and early May peak
5162 is the early November peak, 5176 is the December intraday peak

Support:
4637 is the February intraday high
The 50 day EMA at 4632
4620 is the February 1 closing high
4615 from September 2014 highs, October 2014 upper gap point, late August 2015 low.
4517-4506 from the September 2015 and August 2015 closing lows
4485 are the twin July 2014 peaks
4471 is the January 2016 closing low
4425 is the late February intraday low
4363 is the February upper gap point
4352 is the March 2014 peak
4313 is the January 2016 intraday low
4292 is the August 2015 low
4212 is the February intraday low
4116 is the October 2014 low


S&P 500: Closed at 2001.76

Resistance:
2011 is the September prior all-time high
2020 is the September 2015 intraday high
The 200 day SMA at 2022
2040 is the March 2015 closing low
2046 is the July 2015 closing low
2062 is the January 2015 lower high
2079 is the intraday all-time high from November 2014
2094 is the December 2014 high, the prior all-time high
2104 is the December 2015 high
2116 is the November 2015 high
2119.59 is the February intraday prior all-time high
2126 was the April prior all-time high
2130 is the June 2015 peak
2135 is the May 2015 all-time high

Support:
1995 is the September 2015 recovery peak
1991 is the July 2014 high
1972 is the December 2014 low
The 50 day EMA at 1949
1947 is the February 2016 intraday high, the late February peak
1940 is the January 2016 recovery bounce peak closing high
1913 is the early September 2015 closing low testing the bounce from the August selling
1905 is the August 2014 low
1902 from early May was the intraday all-time high.
1897 is the prior all-time high hit in April 2014
1891 is last week's intraday low prior to the miraculous reversal.
1872 is the September 2015 test low of the August low
1867 is the August 2015 low
1862 is the October 2014 closing low
1859 is the January 2016 closing low
1820 is the October 2014 intraday low
1815 is the April 2014 low
1812 is the January 2016 intraday low
1772 are the Q4 2013 highs and lows


Dow: Closed at 17,073.95

Resistance:
17,152 is the mid-July post bear market high
The 200 day SMA at 17,176
17,351 is the September 2014 all-time high.
June 2015 low at 17,715
17,748 is the mid-April China margin selloff and the bottom of the 5 month trading range
The March low at 17,786
17,978 is the November 2015 peak

Support:
17,068 is the early July 2014 peak
17067 is the December 2014 low
16,970 is the June 2014 former all-time high
16,946 is the June 2014 peak
16,933 is the September 2015 recovery intraday peak
16,740 is the mid-September peak and potential apex for a right shoulder to a head and shoulders pattern
16,736 is a prior all-time high from May 2014
16,670 is the December 2014 peak and the recent August 2015 relief bounce peak.
16,665 is the late August 2015 closing high
16,632 is the April 2014 peak
The 50 day EMA at 16,629
16,621 is the late February 2016 peak
16,589 is the December 2013 former all-time high
16,526 is the early January resistance
16,511 is the January 2016 intraday high
16,506 is the March 2014 peak
16,466 is the January 2016 recovery closing peak.
16,368 is the August 2014 low
16,117 is the October 2014 closing low
16,058 is the early September 2015 low
16,026 is the April 2014 low
15,855 is the October 2014 intraday low
15,766 is the January closing low
15,666 is the August 2015 closing low
15,450 is the January 2016 intraday low
15,372 is the February 2014 low
15,370 is the August 2015 low


ECONOMIC CALENDAR

March 7 - Monday
Consumer Credit, January (15:00): $10.5B actual versus $16.5B expected, $6.4B prior (revised from $21.3B)

March 9 - Wednesday
MBA Mortgage Index, 03/05 (7:00)
Wholesale Inventories, January (10:00): -0.2% expected, -0.1% prior
Crude Inventories, 03/05 (10:30): 10.374M prior

March 10 - Thursday
Continuing Claims, 02/27 (8:30): 2251K expected, 2257K prior
Initial Claims, 03/05 (8:30): 275K expected, 278K prior
Continuing Claims, 02/27 (8:30): 2251K expected, 2257K prior
Natural Gas Inventor, 03/05 (10:30): -48 bcf prior
Treasury Budget, February (14:00): -$192.4B prior

March 11 - Friday
Export Prices ex-ag., February (8:30): -0.8% prior
Import Prices ex-oil, February (8:30): -0.2% prior

End part 1 of 3
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