Sunday, July 30, 2017

The Daily, Part 1 of 3, 7-29-17

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7/29/2017 Investment House Daily
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MARKET ALERTS:

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

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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.

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

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If any market circumstances arise where we see additional plays we want to
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MARKET SUMMARY

- Stocks calm down after the Thursday action but still sluggish, hanging
onto support.
- Dow continues higher unfazed while the other indices decently save
themselves.
- Healthcare goes down in defeat. Now time to get serious and cut the
insurance company payoffs.
- Bulls top 60, indicating an overexcited market, but the rollover goalie is
still there to save the day.
- A bit more volatile, but the patterns remain solid for many leading
groups.
- Rotation returned on the week, and thus far more of the zero sum type.

The summer games continue with national USATF and AAU this weekend and into
next week. We are still on the go as my son jumps in nationals. As a result
the reports will be pared down some, i.e. no video. I appreciate your
understanding during this crunch time when all the training comes to bear.
Thank you!

Thursday the stock indices turned choppy with SP400 and NASDAQ still trying
to spit the bit on new highs. With this market's track record for giving up
new highs as fast as they are hit, that was worth some worry. Some, but
perhaps not a lot: even when they reversed sharply from new highs, the
selling was not long-lived as the powers that be do not want and indeed
cannot afford a prolonged market selloff.

Friday things calmed down a bit, but just a bit. All but the Dow lost
ground, but a half percent on SP400 was the largest decline. Not bad
considering AMZN missed on its earnings, though there were not many viewing
the miss as anything deeply nefarious about AMZN's prospects. The market
overall was down, but certainly not in a full dive after AMZN's results.

SP500 -3.32, -0.13%
NASDAQ -7.51, -0.12%
DJ30 33.76, +0.15%
SP400 -0.49%
RUTX -0.30%
SOX -0.39%

The indices all gapped lower, but DJ30 turned positive. The others opened,
sold farther, then managed varying degrees of recovery.

SP400 showed the most wear and tear, and not surprisingly it is one of the
indices that appears to have a real aversion to new highs over the past many
months. It does not completely roll over after a new high -- the PPT and
Fed help avoid that -- but it does tend to hit the highs only to
significantly jolt downside. After rallying off the low Thursday SP400
could not capitalize on the bounce, instead gapping lower again Friday. It
managed a small recovery, but still closed below the 20 day EMA as well as
the June prior recovery high. Last selling the 50 day MA held as support
and that level may come into play again.

RUTX has sold 3 sessions the same as SP400, but RUTX is very contained,
showing a doji with tail over the 20 day EMA. It is also holding over its
June prior high. This looks more like a rally to a new high being tested.
Likely if RUTX manages a good bounce off this test, SP400 can do likewise.

NASDAQ: Thursday NASDAQ gapped to a new high an then unceremoniously
reversed. A bounce off the 20 day EMA closed it over the 10 day and out of
harm's way, but Friday NASDAQ gapped lower again. Managed to recover to
basically flat, even with the AMZN earnings issues. That leaves NASDAQ
sitting on the June high as well. Got a bit squirrely around the new high,
but that is also somewhat par for the course in these rallies.

SOX: Reversed Thursday at the recent lower highs. Managed to hold the 20
day EMA and showed a doji Friday right on the 20 day. Not leading the way
for certain, but it is holding its own and trying to perhaps build an
inverted head and shoulders.

SP500 also bucked some at a new high, but it is far from reversing,
recovering nicely Thursday off the intraday weakness to hold the 10 day EMA
and holding that level again Friday on light trade. Nothing really out of
the norm here.

DJ30 is the index that shows the most comfort with success, hitting
successive higher highs Wednesday through Friday. Decent volume as well.
Not great, but it was very solid Thursday.


LEADERSHIP

Financial: Post-Yellen the banks suffered but the pullbacks have been
contained, at least for the banks. Now they are showing some good setups,
e.g. C, BAC.

China stocks: A bit volatile Thursday, but hung on and bounced, e.g. NTES,
BABA, SOHU, SINA.

Chips: Struggling some, but after their runs, this is more like a normal
pullback: LRCX, SWKS, AMAT, AMD.

Metals, materials: After very good strength they had issues. CX fell to the
50 day EMA but held. LPX looks good at the 20 day EMA, showing a doji. AKS
is bombing lower. STLD tanked. CENX is struggling in aluminum.

Drugs/biotechs: Some big names felt the pressure last week though did not
break down. CELG, AMGN. IMGN is surging in a good move. AGEN came under
fire itself. Very mixed, but some good looking setups.

FAANG: FB looks very good to continue its breakout over the channel line.
AAPL sold into Friday but is holding the 50 day SMA. AMZN gapped lower on
earnings but was contained over the 50 day SMA. NFLX held the 10 day EMA
test. GOOG gapped below the 50 day EMA but managed to hold it on the close.


MARKET STATS

DJ30
Stats: +33.76 points (+0.15%) to close at 21830.31

Nasdaq
Stats: -7.51 points (-0.12%) to close at 6374.68
Volume: 1.87B (-24.9%)

Up Volume: 784.07M (-166.88M)
Down Volume: 1.04B (-480M)

A/D and Hi/Lo: Decliners led 1.18 to 1
Previous Session: Decliners led 2.04 to 1

New Highs: 65 (-127)
New Lows: 55 (+9)

S&P
Stats: -3.32 points (-0.13%) to close at 2472.1
NYSE Volume: 772M (-14.22%)

A/D and Hi/Lo: Advancers led 1.18 to 1
Previous Session: Decliners led 1.22 to 1

New Highs: 87 (-76)
New Lows: 26 (+1)


SENTIMENT INDICATORS


VIX: 10.29; +0.18
VXN: 15.91; +0.02
VXO: 8.26; -0.13

Put/Call Ratio (CBOE): 0.83; -0.11


Bulls and Bears: Bully. After a surge of 8 points the prior week, bulls
continued the charge, moving back over 60 for the first time since early
2017. This is again putting out a caution flag for the upside, so much so
that Investor's Intelligence issued an alert on this showing in its survey.
The market tried to roll over several times since that bout of 60+ readings
in early 2017, but the selling was blunted by the PPT, then the buyers could
come back in and rescue the market. They did. Now with this reading, you
have to start watching for rollover attempts. Late last week could be one,
but it was not much, at least not yet.

Bulls: 60.2 versus 57.8

Bears: 16.5 versus 16.7

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: 60.2 versus 57.8
57.8 versus 50.0 versus 52.5 versus 54.9 versus 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: 16.5 versus 16.7
16.7 versus 18.6 versus 18.8 versus 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


OTHER MARKETS

Bonds: 2.291% versus 2.303%. Bonds still attempting to bounce off the 200
day SMA test.

Historical: the last sub-2% rate was in November 2016 (1.867%). 2.303%
versus 2.287% versus 2.330% versus 2.255% versus 2.241% versus 2.270% versus
2.261% versus 2.318% versus 2.331% versus 2.346% versus 2.316% versus 2.361%
versus 2.375% versus 2.375% versus 2.368% versus 2.34% versus 2.304% versus
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%


EUR/USD: 1.17497 versus 1.1683. That one-day dollar bounce sure didn't
last.

Historical: 1.1683 versus 1.17419 versus 1.1646 versus 1.1637 versus 1.16640
versus 1.16271 versus 1.15280 versus 1.15549 versus 1.14735 versus 1.14672
versus 1.13986 versus 1.14335 versus 1.14682 versus 1.13964 versus 1.14010
versus 1.14220 versus 1.13508 versus 1.13710 versus 1.13510 versus 1.14208
versus 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


USD/JPY: 110.704 versus 111.07

Historical: 111.07 versus 111.166 versus 111.897 versus 111.176 versus
111.128 versus 111.863 versus 111.89 versus 112.096 versus 112.582 versus
112.536 versus 113.314 versus 113.152 versus 113.929 versus 114.063 versus
113.913 versus 113.126 versus 113.253 versus 113.270 versus 112.413 versus
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


Oil: 49.71, +0.67. Oil continues upside, now at the 200 day SMA and the
upper channel line in the down channel. That said, 52-53 is the top of the
range. Getting close, another important test ahead.


Gold: 1268.40, +0.67%


MONDAY

Healthcare 'reform' was shot down by one vote from McCain as he is into
legacy building, wanting to be the man who 'stood' for working with the
other side to craft legislation. Of course that was not the case when he
wanted war and the democrats did not. Priorities, right? Now, perhaps,
Trump will do the right thing, finally, and stop subsidizing the insurance
companies to write bad insurance in the ACA 'markets.' That will bring
about the end to the majority of those plans in a hurry, requiring the need
to take action.

Then the BIG question faces America: do we go full socialism (a government
payor) or do we get back to what has made us great (still, not again) and
free up markets to be the efficient mechanisms they are AND provide for
those instances where cancer or other multi-year/lifetime ailments strike.
Those people cannot be abandoned just because of the hand they were dealt.
There ARE ways to do this and I have discussed some before. The question is
whether those in power want to relinquish their power over this aspect of
our lives and thus relinquish power back to The People.

Weighty stuff, but the market is not that concerned. Earnings are getting
longer in the tooth and now AAPL comes next week to try and get the animal
spirits back on track. The indices got a bit squirrely last week, reversed
off of some new highs, but they did not roll over.

Moreover, there are still good patterns to move on if they show good breaks.
The financials, drugs/biotechs/healthcare, materials in nice pullbacks, some
retailers making moves.

The point: still good patterns to drive the market higher -- as long as
money gets pushed there way.

The rub: this past week there was the more vicious type of rotation, i.e.
one area rises, one falls as money is yanked. That makes the market more of
a zero sum game as the algos move money around. Fortunately many stocks
continue to hold their patterns regardless, and we will try to focus on
those.

Have a great weekend!


SUPPORT AND RESISTANCE

NASDAQ: Closed at 6374.68

Resistance:

Support:
6341.70 is the all-time high from early June.
The 20 day EMA at 6320
6300 is the mid-June interim high
6205 is the late May all-time high
The 50 day EMA at 6230
The 2016 trendline at 6110
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 5783
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 2472.10

Resistance:

Support:
The 20 day EMA at 2458
2453.46 is the June prior all-time closing high
2439 is the early June all-time closing high
The 50 day EMA at 2435
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
The 200 day SMA at 2322
2319 is the 78% Fibonacci retracement
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The 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 21,830.31

Resistance:

Support:
21,535 is the all-time high
The 20 day EMA at 21,575
The 50 day EMA at 21,367
21,169 is the March 2017 all-time high
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.
The 200 day SMA at 20,292
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
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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