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4/20/2016 Investment House Daily
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Targets hit: None issued
Entry alerts: GS; NBL
Trailing stops: AGEN
Stop alerts: NKE
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- Modest gains as indices stretch higher, look a bit tired near term.
- Another oil rumor, another refutation, another oil surge nonetheless.
- Recent leaders pause after 1.5 weeks upside.
- Earnings are great? Still very familiar issues, but if you can buy back stock with virtually free money, you too can beat the bottom line.
- Perhaps a pause to the weekend to give the recent leaders a rest.
- As long as the Fed (aka Yellen) stays the course, stocks have bids.
Another day, more oil rumors/false reports, more upside. Big name NASDAQ stocks were off their feed but the real leaders of late were leading, more or less, once more. There were some stellar moves even outside of earnings, e.g. NGL, UNT, but earnings didn't hurt as we picked up some GS as it continued its post-earnings run.
An up day yes, but as noted, even the leaders of late were so-so. The index results reflected the rather mediocre performance.
SP500 1.06, 0.08%
NASDAQ 7.80, 0.16%
DJ30 42.67, 0.24%
VOLUME: NYSE +9.5%, NASDAQ +10%. Up volume on an upside session generally speaks to accumulation, but with some resistance near at hand after a run higher, perhaps a bit of churn, i.e. turnover as sellers sell as fast as the buyers buy.
A/D: NYSE 1.3:1, NASDAQ 1.2:1. Matched the indices' mediocrity.
After 6 of 7 sessions upside for the NYSE indices, however, a bit of lethargy setting in is normal. Thus the doji on SP500, SP400, RUTX are not that worrisome though a bit of backfilling is likely.
Wow, what a change the backing of the central bank makes. Money is staying in the market versus leaving, rotating and keeping the moves going. Money keeps finding 'old economy' stocks that put in their bear market while NASDAQ big names rallied to new highs. Money moving versus leaving because it believes the Fed has its back. Doesn't matter what Rosengren says about the market not properly factoring in the Fed's resolve. He is not Yellen, at least the last time anyone checked.
Indeed, after a respite the past five sessions where it moved laterally after breaking resistance, NASDAQ may now try to make a break higher once more. AMZN is pausing in a test after its last run, AAPL has faded to the 50 day EMA after worries regarding its suppliers. GOOG is at the 10 day EMA but it has earnings out Thursday after the close; last time it was torched off its results and it is again near the top of its 5 month range. That makes it problematic. FB is attempting a bounce from the 50 day MA. If they move, NASDAQ moves. If they break lower, NASDAQ and SOX become the black sheep of the market.
Earnings someone dominated the action, particularly with respect to specific stocks. Nothing new there. INTC announced it would can 11% (12,000) of its workforce so they could go get some of those food service industry jobs this economy is so good at creating, and INTC posted a solid 1.27% gain as it moved off the 50 day EMA. KO was KO'd as worldwide volume fell, gapping below the 50 day MA.
Of course the bald guy on CNBC sees silver linings everywhere in the earnings of the big corporations even as guidance tumbles after revenues have tumbled massively in the past year. Every one of his big corporate loves are credited with a great job because it beat the bottom line even while revenues, in many cases, tumbled -- as if stock buy backs have no impact on earnings per share. Buy stock back and you can raise your bottom line even if revenues fall. Happens every quarter. Hey, we live in a world of alternate reality right now where the central banks control markets, accounting slight of hand puffs up results, and only a select few have the keys that grant access to the free money so they can this.
Oil's story of the day . . .
Oil was up on the day. Big. 44.18, +1.71. This even with the dollar rallied against the euro and the yen. What on earth?
Oh yes, the daily oil rank rumor. A story circulated that an OPEC meeting was scheduled for May in Russia. Not sure where it was supposed to take place, but let's just say Sochi for the heck of it. Where did it come from? Who knows? Russia almost immediately refuted the story, flatly stating no meeting in May and indeed "doubts any agreement is possible in the near futures." Earlier in the day Russia stated it could raise its production if it wanted.
Even after Russia's denial, oil didn't flinch. As noted, it closed 4.03% higher. Hey, a rank rumor sparked a turn at 26.10 in February, and with a new recovery high off Wednesday off of that low, it looks as if bogus stories are still working their magic. To a willing audience, of course.
You would think the world central banks are behind this. They like higher oil because they believe the market likes higher oil and, by golly, they may just be able to rescue the US fracking industry and get some of those 250K+ high paying jobs lost back in the mix. With all of the bogus stories floating around each week, it deserves at least a 'hmm.'
Something of a stall, a day off of sorts as the market took a moment. Up yes, but nothing strong. Indeed, some doji on the candlestick charts and a bit higher volume. Some buyers moving in, but sellers selling just about as fast. After a good run the past 1.5 weeks and with SP500 touching the November 2015 peak, perhaps time for a pause that perhaps refreshed.
SP500: As noted, SP500 moved to the November peak, eclipsing the closing high by 2 points on the session high. Faded to a doji, higher, almost average volume. Just a bit of churn as the sellers moved in at that prior peak. Nothing major, nothing trend-changing. MACD is a bit lower, the move is still on overall low volume. The big top is still in place. There is every technical reason to believe the move is over, but then again, there are non-technical factors at play, namely the Federal Reserve and its unwillingness to let financial markets get in trouble, particularly after something scared the willies out of the central banks with that February second dive lower on the heels of the January plunge.
DJ30: A higher high on the recovery, taking out the late December 2014 high, the last high before the February 2015 and May 2015 all-time high. Faded that move, unable to hold on. As with SP500, there is no reason for this move to have gone so far, the volume is putrid the past 2 months, but there is the Fed. Still, a bit of a test after a solid 1.5 week move to the penultimate high before the all-time high is normal. Normal as can be in this situation.
NASDAQ: Five days lateral after breaking over resistance the prior Wednesday. Working along the 10 day EMA, holding the gains. AMZN, AAPL, GOOG have pulled back to test. If they kick it in gear again, NASDAQ can follow the other large cap indices higher. Even so, not a ton of money moving toward tech right now. Perhaps some more earnings can pry open some wallets.
RUTX: Modestly higher though stalling at the Tuesday intraday high. That also is right in the middle of the August to December trading range.
SP400: Same action as RUTX with the pair of doji but did clear the November/December peaks. Now bumping the bottom of the February to August 2015 range formed before the August meltdown.
SOX: Tuesday looked pretty grim as SOX broke lower but Wednesday it held the bottom of the April range and bounced. Not powerful, but held where it needed. Of course it still has massive resistance from the October-December head and shoulders as well as the top of the range it has built for itself the past four weeks.
Metals: As with the indices, a pause here as well with closes off the highs (AKS, NEM) or doji (CENX). Others are still working quite well, e.g. FCX.
Energy: Some slowing a bit (WLL, SWN), others still working well (NGL, ETP, NBL, CVX).
Drugs/Biotechs: Nothing fancy, but hanging in. BMRN tried to make a break but gave some back. ZIOP is holding up, CRMD is taking a break from its surge. CELG still looks as if it can break higher. BIIB struggled.
Financial: Excellent action. We picked up some GS as it continued higher. MS, JPM, BAC are examples of solid moves.
Stats: +7.8 points (+0.16%) to close at 4948.13
Volume: 2.078B (+9.74%)
Up Volume: 1.05B (+242.57M)
Down Volume: 689.16M (-309.35M)
A/D and Hi/Lo: Advancers led 1.23 to 1
Previous Session: Advancers led 1.17 to 1
New Highs: 0 (-86)
New Lows: 0 (-28)
Stats: +1.6 points (+0.08%) to close at 2102.4
NYSE Volume: 961M (+9.58%)
A/D and Hi/Lo: Advancers led 1.33 to 1
Previous Session: Advancers led 2.29 to 1
New Highs: 114 (-61)
New Lows: 4 (-3)
Stats: +42.67 points (+0.24%) to close at 18096.27
VIX: 13.28; +0.04
VXN: 16.31; -0.12
VXO: 13.62; +0.57
Put/Call Ratio (CBOE): 0.88; +0.26
8 of the last 21 above 1.0. After a spike of several 1.0 sessions, a streak of sub-1.0. Short interest getting burned off and no one speculating downside or buying protection.
Bulls and Bears: Bulls are fading again, apparently not that impressed by the indices near higher highs. Bears held steady at decent levels. Lots of skeptics but more relying on the Fed even with the drop in bulls.
Bulls: 41.2 versus 45.4
Bears: 27.8 versus 27.8
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.
45.4% versus 43.3% versus 47.4% versus 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.
27.8% versus 28.9% versus 27.8% versus 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.
Bonds (10 year): 1.85% versus 1.79%. Wow what a bomb lower. Did someone just decide the Fed was going to hike? Or, is someone dumping US treasuries? China trying to tie gold to its yuan in a bid to take over as reserve currency and perhaps dumping treasuries? Or, how about Saudi Arabia doing what it said it might do, just as Obama arrives as a kind of poke in the eye?
Historical: 1.79% versus 1.77% versus 1.75% versus 1.79% versus 1.76% versus 1.77% versus 1.72% versus 1.72% versus 1.691% versus 1.75% versus 1.72% versus 1.77% versus 1.79% versus 1.77% versus 1.82% versus 1.80% versus 1.88% versus 1.90% versus 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%
EUR/USD: 1.1299 versus 1.1360. Dollar jumping back up as euro puts in a lower high.
Historical: 1.1360 versus 1.1317 versus 1.1285 versus 1.1264 versus 1.1278 versus 1.1389 versus 1.1410 versus 1.1397 versus 1.1370 versus 1.1396 versus 1.13792 versus 1l1392 versus 1.1391 versus 1.1382 versus 1.1339 versus 1.1295 versus 1.1195 versus 1.1178 versus 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
USD/JPY: 109.688 versus 109.135. Nice surge as the dollar rebound off the double bottom continues.
Historical: 109.135 versus 109.06 versus 108.762 versus 109.65 versus 109.29 versus 108.505 versus 107.95 versus 108.175 versus 108.425 versus 109.84 versus 110.45 versus 111.313 versus 111.620 versus 112.60 versus 112.415 versus 112.71 versus 113.425 versus 113.612 versus 112.83 versus 112.445 versus 112.298 versus 111.90 versus 111.605 versus 111.46 versus 112.58 versus 113.11
Oil: 44.18, +1.71. Blasting over the March high to a new recovery high off the February low. At some resistance from the September/October 2015 lows, but next serious resistance is 46.50.
Gold: 1254.40, +2.60. Surged pre-market but was more contained at the close. Still has to get through 1264 with some power to make a good clean upside break.
The stock indices may be a bit stretched near term. It would appear they are stretched longer term as well, but a lot of sectors are not. Thus, despite the index gains, they are still working higher. Even some of those, e.g. metals, are a bit overdone near term.
Thus, perhaps a bit of pullback into the weekend. It likely would not hurt anything and it gives some NASDAQ names a chance to get some money and perhaps resume some moves. NASDAQ and SOX remain questionable, and if they rejoin the market has even more upside impetus. It may be a stretch to think they will start pitching in again, but with earnings and some pullbacks to support by some big names, the right news can bounce them in a still overall positive market. Even if they cannot make that move, after a bit of a rest, the recent leaders will be ready once more.
Again, the overall move appears to be reaching levels that would suggest the move stalls. Technically there are issues; there have been issues all along such as low volume. Yet, favorable central bank action or the belief central bank action will remain favorable is a powerful force to overcome.
Now IF the Fed, and by Fed I mean Yellen, comes out and says the market has priced in too much Fed largesse or makes some other indication the market is too optimistic regarding Fed actions, then the house of cards is revealed. Then the technical heaviness would slam the move.
That is a seriously weird way to have to look at markets, but those are the markets the Fed and the government have given us. Therefore, as long as Yellen sticks to the current chorus, the money stays in the market and stocks will move higher.
Have a great evening!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 4948.13
4960 is the September 2015 intraday high, an important reversal point for NASDAQ.
4999 is the October upper gap point
5007 is the 12/31 upper gap point from that big gap lower
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
4920 is the lower gap point from mid-October 2015, the January 2016 lower gap point
4916 is the mid-November 2015 low
4899 - 4902 from the September 2015 peak, July 2015 low
4894 is the September 2015 closing high
The 200 day SMA at 4851
4836 is the March 2016 peak
The March 2015 lows at 4843 and 4825
4815 is the December 2014 peak
4811 is the November 2014 peak (intraday)
The 50 day EMA at 4792
4774 is the January 2-15 high
4751 is the January 2015 lower high
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 2102.40
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
2094 is the December 2014 high, the prior all-time high
2079 is the intraday all-time high from November 2014
2062 is the January 2015 lower high
2046 is the July 2015 closing low
2040 is the March 2015 closing low
The 50 day EMA at 2026
2023 is the November 2015 low
2020 is the September 2015 intraday high
The 200 day SMA at 2014
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
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 18,099.59
18,100 to 18,181: interim peaks in the December 2014 to July 2015 range
18,288 from March 2015
18,351 is the all-time high from May 2015
17,978 is the November 2015 peak
The March low at 17,786
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 50 day EMA at 17,369
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 17,119
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
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
April 18 - Monday
NAHB Housing Market , April (10:00): 58 actual versus 59 expected, 58 prior
April 19 - Tuesday
Housing Starts, March (8:30): 1089K actual versus 1170K expected, 1194K prior (revised from 1178K)
Building Permits, March (8:30): 1086K actual versus 1200K expected, 1177K prior (revised from 1167K)
April 20 - Wednesday
MBA Mortgage Index, 04/16 (7:00): 1.3% actual versus 10.0% prior
Existing Home Sales, March (10:00): 5.33M actual versus 5.30M expected, 5.07M prior (revised from 5.08M)
Crude Inventories, 04/16 (10:30): 2.08M actual versus 6.634M prior
April 21 - Thursday
Initial Claims, 04/16 (8:30): 263K expected, 253K prior
Continuing Claims, 04/09 (8:30): 2171K prior
Philadelphia Fed, April (8:30): 9.9 expected, 12.4 prior
FHFA Housing Price I, February (9:00): 0.5% prior
Leading Indicators, March (10:00): 0.4% expected, 0.1% prior
Natural Gas Inventor, 04/16 (10:30): -3 bcf prior
End part 1 of 3
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