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6/30/2017 Investment House Daily
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Investment House Daily Subscribers:
Targets hit: QRVO
Entry alerts: None issued
Trailing stops: None issued
Stop alerts: SIMO
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Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.
Monday a Market Summary video, new plays, play table annotations.
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If any market circumstances arise where we see additional plays we want to
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of the day of the week.
- Sluggish session ahead of a long time off, indices hold same relative
- President leaning toward steel tariffs, full ACA repeal.
- Western central banks working together to hike rates, re-engineer their
- All indices continue holding support, SOX lagging but at a deeper support
- Confidence growing in consumers, market advisors. Certainly more upside
- Still leaders in many sectors.
- New money can push the market higher, but now we are officially in summer
and a slower time.
If there was ever a session that could be discounted, Friday was the
session. With Independence Day celebrated Tuesday and a half session
Monday, none of the brokerage houses and funds had a full crew, not close.
Thus very low trade, and while there was some movement, most of it simply
held the same flavor as the recent action. In other words, no meaningful
Stocks started higher, at least for the large cap NSYE indices, following
higher futures. At the open, however, stocks sold the gains, taking SP500
and DJ30 to flat while NASDAQ was even weaker than the pre-market
indications. Nothing was out of hand, however, no really heavy selling.
Stocks bottomed over 1.5 hours, bouncing just after the European markets
closed midmorning. A steady recovery to the last few minutes. Stocks
surged to a new session high then reversed violently in the last 15 minutes
to close back near the early session lows.
Up to open, down quickly, a long recovery, then a sharp drop. Sure looks
like a lot of end of quarter positioning driving the ups and downs. Again,
all this action was contained within the recent action and trends of the
various indices. Nothing changed on the session, leaving the new quarter as
the next driver.
Sometimes new money comes in to start a quarter. After this kind of
downside leading into the quarter end the market could see some money push
back in to start Q3 and bounce stocks initially. After that, well, you are
in Q3, and while July can be fine, even August, September is often
SP500 3.71, 0.15%
NASDAQ -3.93, -0.06%
DJ30 62.60, 0.29%
VOLUME: NYSE +2%, NASDAQ -17%. NYSE trade edged higher to just above
average on the upside session. Given volume was supposed to be quite light,
that is a testament to some buying in those stocks, the more 'old economy'
stocks. NASDAQ trade was at least lighter and below average as those stocks
A/D: NYSE 1.6:1, NASDAQ -1.01:1.
The news was more of the same as well? Not really.
The personal spending and incomes rose 0.1% and 0.4%, respectively, in line
more or less with expectations.
The real news Friday and on the week involved central banks and
politicians -- just as it has for over 8 years now.
Steel Tariffs: Reports are that the President has grown tired of listening
to Goldman throw offs and how he should not do anything to rock the boat in
terms of international trade, trade relations, etc.
In a Thursday night meeting, President Trump and a small handful of advisors
bucked most of the cabinet in pushing for a 20% steel tariff on China.
Apparently frustrated with the liberal Goldman Sachs advisors (that he put
in place mind you) as well as seeing his base numbers slipping because Trump
was doing little on the big issues he campaigned on, Trump appears to be
going back to his own instincts, e.g. bashing China. When the meeting
adjourned, those against border taxes, tariffs, and other trade barriers
appeared resigned that some kind of trade sanctions were coming.
Healthcare: The Senate buffoons are heading home, raring to get back to
work -- once they are done not working. Unable to garner support for his
super secret healthcare bill, McConnell did what a master politician and
wily legislator does: he went home. There are calls from within the Senate
(and more without) that they should not take recess without getting
something done to warrant taking a break. The circus just witnessed is not
So, Trump got back to basics again, tweeting that if the Senate cannot pass
a replacement, then repeal it and start over. Now he is talking. That is
what is needed as outlined Thursday: get the jobs and business killer
repealed, then get together and craft a plan that utilizes the health
communities many doctors are putting together on their own -- and work with
fantastic success -- uses the savings from the massive, massive medicare and
Medicaid payments and creates HAS accounts or pools to cover the costs in
the health communities or other physician of choice, craft rules to promote
inexpensive catastrophic plans that were plentiful and cheap and very good .
. . before the ACA came along.
Do that and then you can take a well-deserved break. Otherwise, get your
lousy butts back to DC and do your job.
Central Banks want lower stock prices to undo some of their handiwork?
CNBC and other outlets Thursday and Friday talked of central bank
coordination, at least in the US, Canada, and Europe, regarding raising
rates. They want higher rates. Why? Because in reality they need higher
rates so they can at least fake stimulus at the next economic crisis. The
question is, will they foster the next crisis by hiking rates when the US
and Canadian economies are not that solid?
They don't think so. Okay, so what about stocks? Will hiking rates lower
stock prices? It can if done as did Greenspan in 2000. The pundits like to
point out that usually stocks rise after the Fed stats hiking rates. Oh
yes, first there is a selloff but they then rise because the Fed would not
hike unless all is well.
Sure they rise. They did for Greenspan . . . after the massive selloff that
finally bottomed and gave way to the upside at the end of Q1 2003!
Apparently, however, the line the Fed is taking is that it doesn't mind if
stocks fall. Williams on Tuesday stated that the market was running on
fumes as it was priced to perfection -- but the Fed still was going to hike
It was as if he did not mind stocks falling, and frankly that is what you
hear between the lines of the central bank comments. Fed and central bank
policies managed to help the wealthiest in society become even
proportionately wealthier. By a big margin.
Now that the economies are so strong, so clearly never going to have another
financial crisis in our lifetime as Chairman Yellen said Tuesday, it seems
the central banks want to undo what they wrought and bring stock prices
lower and by extension reduce the wealth gap.
Wow is that stupid. The way to reduce the wealth gap is to bring those at
the lower end UP through growth policies that even the playing field skewed
to the large corporation's favor through regulations, through special
contracts, through barriers to entry, through legislation such as the ACA
that penalizes the small companies that cannot match the economies of scale.
And if the big companies still feel they need more, well, just give them a
waiver from the law.
This is the sad state of the western economies. Executives that circumvent
the basic laws and restrictions, legislative branches that don't seem to
care, agencies that write hundreds of thousands of regulations with the
force of law, all to the benefit of those in place, and the detriment of the
smaller players or those with a good idea wanting entry into a market.
This must change, and that is what November was all about. The powers that
be, however, e.g. the old curmudgeons in the Congress, refuse to act
according to those that the people voted in during the last election cycles.
They know better. Thus you have McConnell today, in response to the
President's tweet to repeal the ACA if the Senate bill cannot pass, stating
the HE is uncomfortable with repealing the ACA without a replacement.
Hello? The market is the replacement. Anything these bozos come up with
will just be another form of government control of our health. In the UK a
10 month old child is going to die because the government, the ones in
charge of dolling out healthcare, have decided that life support must be
withdrawn even though the parents have the wherewithal to travel overseas to
obtain the needed treatment.
Insane: it is too expensive in the UK so the socialized medicine won't pay
for it, but the parents are barred from going elsewhere to try and save
their child. The government has determined the child should die. Do we
want that in the US? It is the inevitable outcome if the government takes
control of healthcare. Is that what America was founded upon, i.e. the
government making those kind of life or death decisions for your children
without regard to your wishes? Ask anyone who voted for the adoption of the
There was no relative change in position or trend. SOX remains weak and
sold more. The other indices tested support yet again. No big changes to
end the week and no real surprises there.
SOX: Continued the downside below the 50 day MA after breaking below that
support Thursday. Lower but still right at the 78% Fibonacci retracement of
the May to early June run and can definitely put in an ABCD pattern. It may
not look as if chips want to rise, but you have to respect the technical
pattern, and if SOX posts a solid upside move, you have to lean toward a
bounce higher of a D point.
NASDAQ: Still sluggish, but still hanging in at the 50 day MA. The pattern
is less than lovely for the upside, but as noted before, if NASDAQ can hold
in at that level then it can rescue itself . . . or more aptly, have the PPT
step in and buy and prime the buyers to take more positions.
DJ30: Up modestly on the session, but gapping upside to show a tight doji
just over the 20 day EMA. DJ30 is holding near support in this test of the
mid-June new high. A bit volatile to end the week but as with the other
indices, it held where it needed to hold.
RUTX: Holding position very well at the 10 day EMA with a tight doji. That
leaves RUTX at the top of the range and right below a new high. If any new
money comes in at all RUTX moves to a new high. It is certainly not acting
as if the economy is struggling.
SP400: Similar to RUTX, just a bit lower below the highs. Trending up the
50 day EMA, in a four month bullish base. Put in a higher low at the 50 day
MA and remains poised to make a move higher.
SP500: After bouncing off the 50 day MA on the Thursday low SP500 gapped
modestly higher. Still easily over the 50 day MA, trending higher similar
to SP400, and not in any real danger.
Not a lot of change. Chips still struggling for the most part, the other
leaders are holding support for the most part.
Financial: Down modestly Friday but this after nice post-stress test gaps
Thursday. C, JPM. GS is a disappointment, gapping Thursday but giving much
back and then fading to the 50 day SMA Friday. Overall, however, still very
Biotechs/Drugs: DVAX in a very nice test of its last surge. IMGN rested
after an excellent second week to the upside. ARRY, VVUS, AGEN still super.
CELG testing the 10 day EMA and the prior high. These look nice.
Materials: Still nice. CX in a solid pattern. USCR in a very nice
breakout test over the 10 day EMA. MAS still testing the 20 day EMA.
Machinery: Solid moves back up after the test, e.g. CAT, CMI. Like how TEX
Metals: CENX fading to end the week after a good break higher. AKS faded
to the 10 day EMA Friday. FCX holding its move up and through the 50 day
with a lateral move. SCHN continues its move.
China: Struggled on the week but the leaders are still in patterns. SINA
in a double bottom at the 50 day MA and the mid-May gap point. NTES testing
back to the 50 day EMA after a good rally; used this to bounce last rally.
SOHU is still working on its pattern and the 50 day EMA has just about
caught up to the lateral move. BABA showing a doji at the 10 day EMA.
Struggled some on the week but still look promising to rally again.
Chips: Weak week though the stocks did recover off the lows. AMAT gapped
below the 50 day EMA and continued lower through Friday. LRCX the same.
AVGO closed the week below the 50 day MA. SIMO broke down through the 50
day MA on volume. NVDA was a buy according to some, but it likely will test
the 50 day EMA or close to it before it is ready. AMD sold back to the 50
day EMA as of Friday; perhaps it is now ready to bounce again. HIMX still a
very good pattern as not all are terrible but the leaders have sold.
Software: CALD started higher on better volume Friday after a 10 day EMA
test. Nice. DATA struggled all week and closed over the 50 day MA where it
founds support in mid-June. RHT is in a very nice 10 day EMA test after the
breakout gap on earnings.
FAANG: Struggled all week but most closed in a position where they could
bounce. FB is at the 50 day MA and in position to move higher as it did in
May and early June. AMZN is also at the 50 day EMA. AAPL is still working
laterally below the 10 day EMA and 50 day MA. NFLX sold on the week, closed
at a lower June low Friday, but also showing a doji near the early June
support. GOOG looks bad, flopping Friday to a lower low on this selling;
2.4B euro fines can do that.
Stats: +62.6 points (+0.29%) to close at 21349.63
Stats: -3.93 points (-0.06%) to close at 6140.42
Volume: 2.01B (-16.6%)
Up Volume: 904.45M (+166.72M)
Down Volume: 1.07B (-570M)
A/D and Hi/Lo: Decliners led 1.01 to 1
Previous Session: Decliners led 1.69 to 1
New Highs: 66 (-9)
New Lows: 23 (-8)
Stats: +3.71 points (+0.15%) to close at 2423.41
NYSE Volume: 915M (+1.67%)
A/D and Hi/Lo: Advancers led 1.59 to 1
Previous Session: Decliners led 2.33 to 1
New Highs: 67 (-3)
New Lows: 18 (-9)
VIX: 11.18; -0.26
VXN: 17.61; -0.82
VXO: 10.13; -0.3
Put/Call Ratio (CBOE): 1.13; +0.15. Big jump but most likely rolling out
positions to another quarter.
Bulls and Bears: Back and forth week to week the past two months though
holding near the top of the range. Bears similarly holding the same range,
just off the lows.
Bulls: 54.9 versus 51.5
Bears: 18.6 versus 19.4
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: 54.9 versus 51.5
51.5 versus 50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1 versus
58.7 versus 58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8 versus 49.5
versus 56.7 versus 53.4 versus 57.7 versus 63.1 versus 61.2 versus 61.8
versus 62.7 versus 61.8 versus 58.2 versus 60.6 versus 58.6 versus 60.2
versus 59.8 versus 59.8 versus 59.6 versus 58.8 versus 56.3 versus 55.6
versus 51.0 versus 42.9 versus 41.7 versus 47.1 versus 42.9 versus 46.1
versus 46.7 versus 45.2
Bears: 18.6 versus 19.4
18.6 versus 18.3 versus 19.2 versus 18.3 versus 17.1 versus 17.3 versus 17.9
versus 17.9 versus 18.3 versus 17.5 versus 18.3 versus 18.1 versus 17.3
versus 13.75 versus 17.3 versus 16.5 versus 17.5 versus 17.6 versus 16.7
versus 17.6 versus 17.5 versus 17.3 versus 18.3 versus 18.4 versus 19.6
versus 19.6 versus 19.2 versus 19.6 versus 22.3 versus 21.6 versus 23.5
versus 25.7 versus 24.3 versus 23.1 versus 23.8 versus 23.1 versus 22.8
versus 23.1 versus 24.3
Bonds: 2.304% versus 2.268%. Down all week after gapping to a rally high
Monday. Over the 50 day EMA and the mid-April peak. Important test now
that the world central banks, at least US, Canada and European, are
supposedly on the same page.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.268%
versus 2.20% versus 2.140% versus 2.140% versus 2.148% versus 2.165% versus
2.156% versus 2.191% versus 2.155% versus 2.162% versus 2.209% versus 2.21%
versus 2.21% versus 2.19% versus 2.176% versus 2.14% versus 2.183% versus
2.154% versus 2.21% versus 2.20% 2.26% versus 2.255% versus 2.252% versus
2.287% versus 2.254% versus 2.233% versus 2.229% versus 2.223% versus 2.32%
versus 2.34% versus 2.34% versus 2.393% versus 2.401% versus 2.394% versus
2.381% versus 2.354% versus 2.322% versus 2.289% versus 2.322% versus 2.30%
versus 2.31% versus 2.33% versus 2.275% versus 2.236% versus 2.234% versus
2.21% versus 2.15% versus 2.248% versus 2.232% versus 2.264% versus 2.30%
EUR/USD: 1.14208 versus 1.14422. Pausing after a 3-session surge out of a
6 week pattern.
Historical: 1.14432 versus 1.13786 versus 1.13409 versus 1.11834 versus
1.11928 versus 1.11484 versus 1.11670 versus 1.11346 versus 1.11419 versus
1.11968 versus 1.11466 versus 1.12213 versus 1.12086 versus 1.11930 versus
1.11965 versus 1.1199 versus 1.12491 versus 1.12798 versus 1.12684 versus
1.12811 versus 1.12181 versus 1.12547 versus 1.11768 versus 1.11810 versus
1.12148 versus 1.12240 versus 1.11868 versus 1.12390 versus 1.11916 versus
1.23077 versus 1.10985 versus 1.11557 versus 1.10862 versus 1.09833 versus
1.09328 versus 1.08655 versus 1.08671 versus 1.08843 versus 1.09286 versus
1.09994 versus 1.09086 versus 1.08923 versus 1.09284 versus 1.090984 versus
1.08987 versus 1.08691 versus 1.09093 versus 1.09358 versus 1.08449 versus
1.07255 versus 1.07255 versus 1.07188 versus 1.0717 versus 1.07304 versus
1.06431 versus 1.06138 versus 1.0671 versus 1.06068 versus 1.05984
USD/JPY: 112.413 versus 111.993. Challenging the 200 day SMA again but not
breaking through thus far.
Historical: 111.993 versus 112.340 versus 112.24 versus 111.943 versus
111.299 versus 111.357 versus 111.278 versus 111.470 versus 111.729 versus
110.873 versus 110.854 versus 109.560 versus 110.060 versus 109.97 versus
110.334 versus 110.299 versus 109.355 versus 110.038 versus 110.446 versus
111.595 versus 110.909 versus 111.086 versus 111.217 versus 111.828 versus
111.678 versus 111.835 versus 111.076 versus 111.534 versus 111.271 versus
111.584 versus 111.167 versus 112.414 versus 113.074 versus 113.749 versus
113.349 versus 113.759 versus 114.263 versus 113.771 versus 113.217 versus
112.683 versus 112.495 versus 112.782 versus 112.779 versus 111.793 versus
111.524 versus 111.197 versus 111. 177 versus 111.234 versus 109.704
Oil: 46.04, +1.11. Picking up speed after breaking below the bottom of the
range then reversing back up into the range. It is picking up speed as it
continues the move, moving past the early May low.
Gold: 1245.80, 0.00. An identical pattern to Thursday, tapping the 200 day
SMA on the low, rebounding to flat and a doji. Okay, STILL an important
test for gold.
A half session Monday and then a closed market Tuesday for Independence Day.
Not expecting any relative change Monday either, but Wednesday is when
things start getting interesting as new money could enter the market.
Consumer sentiment is higher, bullish investors and advisors are up again --
confidence in the market is up.
The index patterns are not bad at all though SOX is questionable, and there
is still leadership. So surely up and away.
Surely or not. There are still setups that can make good upside money. If
they make the moves we want to play them.
We also have downside plays working and others than can be put into play if
the downside continues. The time of the year is a typical weaker period.
In 2016, after a rally into early July the market flattened through most of
July and all of August, dropping in September on into early November. Then
the big rally started post-election.
The thing that would keep the move working, so it seems, would be healthcare
and tax reform. That hope continues to help support the market. Trump is
pretty good at playing the news game and keeping hope alive. Ultimately it
has to pay off or the ruse is up.
For now, again, there are good upside patterns to play in addition to those
sectors to the downside that are losing money to other sectors. We will
continue to be opportunistic and play really good downside plays such as
SWKS, QRVO, AMAT, but also play those areas that are getting the money
pushed their way even as other sectors fall.
Have a great Fourth!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6140.42
6341.70 is the all-time high.
6205 is the late May all-time high
The 50 day EMA at 6134
The 2016 trendline at 5997
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows
The 200 day SMA at 5688
5661 is the late January upper gap point
5601 is the January lower gap point
The November prior all-time high at 5404
5340 is the September and October 2016 twin peaks
5287.61 is the September 2016 high
5271.36 is the August 2016 intraday prior all-time high
5231.94 is the 2015 all-time high
5170 is the October intraday low.
5162 is the early November peak, 5176 is the December intraday peak
5100 from the April peak and early May peak
5042 is the March 2015 high
5008.57 is the early March 2015 post-bear market high
5007 is the 12/31 upper gap point from that big gap lower
S&P 500: Closed at 2423.41
2439 is the early June prior all-time closing high
2453.46 is the all-time closing high
The 50 day EMA at 2410
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
2329 is the March and April twin lows
2322 is the March 2017 low
2319 is the 78% Fibonacci retracement
2301 is the late January 2017 high
2298 is the late January 2017 high
The 200 day SMA at 2294
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 21,349.63
21,535 is the all-time high
21,169 is the March 2017 all-time high
The 50 day EMA at 21,116
20,553 is the lows of the week of May 15
20,547 is the lower gap point from late April 2017
20,412 is the March 2017 low
20,400 is the mid-April 2017 low.
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
The 200 day SMA at 19,974
19750 is the lows of the December/January range
19,732 is the January 2017 low
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
End part 1 of 3
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