Sunday, November 19, 2017

The Daily, Part 1 of 3, 11-18-17

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11/18/2017 Investment House Daily
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NOTE: This weekend there is no video. Jon Johnson is traveling and under
the weather at the same time and has basically lost his voice. Videos will
return to start the week when Mr. Johnson and his voice show back up.

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- Thursday break higher was set up, but Friday stocks stalled, some reversed
strong early surges.
- Mueller subpoenas blamed for the selling, but regardless the cause, stocks
- Some FAANG other large cap techs suddenly show weakness after solid moves.
- Friday expiration may be behind the less than stellar upside action, but
these stocks have to show that was the case.

Friday was a rather strange session, somewhat disappointing, not just in
that the indices sported losses in some cases but some of the moves by the
big names was not a continuation of the Thursday recovery rally. Indeed,
some of them, e.g. GOOG, AMAT, reversed that move and more.

After a solid move Thursday and futures rallying after the Thursday close,
the morning saw a story that special prosecutor Mueller had issued subpoenas
to high ranking trump campaign members, some supposedly in the White House.
That is credited for turning futures lower, and when you look at the story's
timing and futures, there is correlation. Stocks were, however, recovering
into the open. They even looked as if they could turn the news into a rally
thanks to some good earnings in retail and elsewhere, but that was not to

It was not a meltdown as the stocks did not roll over, but it was without
doubt disappointing they found it so hard to advance. Yes, after such a
strong move I said the market could take a day off. For many, that is what
Friday was. For some, however, it was not just a pause, but giving back
what Thursday gave.

Now it was November expiration. Perhaps that had something to do with the
early strength turned weakness in some of the big names. We will see if
that is the culprit; the last thing you want to see for the upside is that
the leaders, and leaders that broke out relatively recently in the bigger
picture, roll over their moves.

It was not a bad day for all sectors. Retail stocks again showed some solid
moves as earnings continue to surprise. After the beatings they suffered,
you would think a bit of news would help a recovery, and it is. GPS, ROST,
KORS, RH, HD are helping push the retail sector.

Could it be some rotation from some areas to others? Always possible. We
don't see, however, a lot of wholesale changes to new groups, just as we
don't see a lot of wholesale selloffs of leaders. Some nasty intraday pulls
from high to low that show there WAS some dumping of these stocks at higher
highs (LRCX, AMAT) but not enough break them. THAT remains to be seen this
coming week. That the moves occurred on expiration does suggest they were
less rotational and more positioning heading into the year end.

SP500 -6.79, -0.26%
NASDAQ -10.50, -0.15%
DJ30 -100.12, -0.43%
SP400 +4.35, +0.24%
RUTX +5.94, +0.40%
SOX -6.18, -0.48%
NASDAQ 100 -24.63, -0.39%. NASDAQ large caps were the targets.

VOLUME: NYSE +12%; NASDAQ -5%. Volume Friday was tied to expiration so you
cannot read that much into it. I will say that NYSE trade rose as the small
and midcaps scored gains. Not bad. NASDAQ trade faded as some names sold,
also not bad.

ADVANCE/DECLINE: NYSE 1.9:1, NASDAQ 1.5:1. Not horrid at all for the day,
indicating that smaller issues were moving a bit better. But, of course, a
few big names can send NASDAQ lower even if breadth is positive. Look at
NASDAQ 100 versus NASDAQ overall: -0.39% versus -0.15%.



NASDAQ: After a gap and rally to a new closing high Thursday, NASDAQ backed
down some and volume faded. Okay, price/volume action was more or less in
line. NASDAQ 100, where much of the NASDAQ selling occurred, was not bad
either, easily holding over the 10 day EMA. Big rip, modest selling. At a
new high, however, the volume was quiet Thursday, and you want to see the
modest Friday expiration indecision return to buying next week.

RUTX: Unlike NASDAQ, RUTX continued the Thursday break higher. While it is
not at a new high, it is looking much better after going ahead with a test
closer to the 38% Fibonacci retracement and the July peak. Buyers entered
off that intraday test Wednesday, and buyers have been active since.

SP400: No new closing high here either, but getting close. SP400 also
continued the Thursday rally and is within spitting distance of a new high.

SOX: Gapped higher Friday, continuing the Thursday gap and rally off that
doji just over the 20 day EMA. Earnings from AMAT helped at first as that
stock gapped upside, but as AMAT reversed to a loss at the 10 day EMA and
INTC faded to the 20 day EMA, SOX lost its mojo. It closed lower but also
easily held over the 10 day EMA. Not a rollover but how those big names
react this week now that expiration is over is important for the index, and
given SOX' market importance, important for the market as well.

SP500: SP500 also gapped and rallied Thursday off a doji, the Wednesday
doji below the 20 day EMA. SP500 moved back up through the 10 day EMA but
not to a new high. Friday a test that held near both the 10 and 20 day EMA.
Not a rollover, but as with NASDAQ, not a lot of volume on the move that
tests the recent high that didn't show a ton of volume either.

DJ30: Similar action, falling to the 20 day EMA after the Thursday gap
above the 20 day and rally. DJ30 volume less than constructive of late and
even though the Thursday move looked promising to avoid a 50 day MA test,
DJ30 remains flirting with that larger dip after such a good rally higher.


Semiconductors: Thursday I noted that INTC and NVDA did not rally, keeping
SOX from leadership that day. Others did move well, e.g. LRCX, AMAT.
Friday INTC was down harder, NVDA went nowhere, and AMAT and LRCX, after
good breaks higher, reversed those moves. VSH was higher again, AVGO held
its gain from Thursday, CREE was up and MU was good enough, but it was not
good enough for SOX overall. The group still has some good stocks but some
key names have to show the Friday action was just an expiration thing. AMAT
and LRCX hit new highs then coughed them up with sharp reversals. Watching
those closely this week.

Financial: The Wednesday moves were head fakes as the group was weak again.
Not tanking just a false move as interest rates fell again.

FAANG: Similar to AMAT and LRCX, after good moves Wednesday, some FAANG
reverse the gain. GOOG was the clearest culprit as it returned near the 20
day EMA after the Thursday gap off a doji at the 20 day. FB was down
marginally, holding the 10 day EMA; fine. AMZN gave up the Thursday bounce
but still over the 10 day and volume remained low. AAPL faded off the
Thursday gap to a doji at the 10 day; not the best move Thursday as noted at
the time. NFLX faded from the 20 day MA, still caught between that level
and the 50 day MA's. Looked promising; we will see.

Software: Still solid as a group. CRM added 0.51%, VMW 0.45%. FFIV broke
higher and we moved in. TTWO testing modestly as is GLUU. MSFT
disappointed, dropping back to the 20 day EMA.

Big Names: MMM still solid, showing good upside volume Friday. JNJ
continued lower toward the 50 day MA. CAT holding the 20 day EMA still.

Retail: Excellent week. WMT gave some back Friday, but that was after a
solid upside move. GPS, ROST gapped on earnings. SKX up again. HD looks
ready to move again. CONN could make a move. Even TGT, after its
disastrous earnings call, jumped 5.5% Friday, coming way off that Wednesday


Stats: -10.50 points (-0.15%) to close at 6782.79
Volume: 1.9B (-5%)

Up Volume: 1.17B (-470M)
Down Volume: 800.27M (+453M)

A/D and Hi/Lo: Advancers led 1.5 to 1
Previous Session: Advancers led 3.29 to 1

New Highs: 132 (-11)
New Lows: 32 (-7)

Stats: -6.79 points (-0.26%) to close at 2578.85
NYSE Volume: 861.4M (+11.55%)

A/D and Hi/Lo: Advancers led 1.84 to 1
Previous Session: Advancers led 2.96 to 1

New Highs: 113 (-8)
New Lows: 28 (-18)


VIX: 11.43; -0.33
VXN: 13.79; -0.52
VXO: 9.75; +0.27

Put/Call Ratio (CBOE): 0.80; -0.15

Bulls and Bears: Bulls dipped a bit but still over 60.0 for now six weeks.
That is certainly putting in the time for a top. Bears rose, indicating it
was not just a dip in bulls but bears are a bit more concerned.

Bulls: 63.5 versus 64.4

Bears: 15.4 versus 14.4

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: 63.5 versus 64.4
64.4 versus 63.5 versus 62.3 versus 60.6 versus 60.4 versus 57.5 versus 54.3
versus 50.5 versus 47.1 versus 49.5 versus 49.5 versus 48.1 versus 50.5
versus 57.5 versus 60.0 versus 60.2 versus 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

Bears: 15.4 versus 14.4
14.4 versus 14.4 versus 15.1 versus 15.2 versus 15.1 versus 17.0 versus 17.1
versus 19.0 versus 20.2 versus 19.1 versus 19.1 versus 18.3 versus 18.1
versus 17.0 versus 16.2 versus 16.5 versus 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


Bonds: 2.345% versus 2.37%. A wild two weeks for bonds that saw bond prices
end a 3 week upside move, gap sharply lower through the 50 day MA, then
Wednesday gap back over the 50 day MA's. Closed the week holding that move.
Why are yields lower if all is well and the Fed is hiking? The next two
weeks will be important to see if bonds settle down and if they sell.

Historical: the last sub-2% rate was in November 2016 (1.867%). 2.37%
versus 2.336% versus 2.375% versus 2.407% versus 2.402% versus 2.34% versus
2.326% versus 2.316% versus 2.32% versus 2.332% versus 2.349% versus 2.358%
versus 2.378% versus 2.37% versus 2.419% versus 2.456% versus 2.435% versus
2.421% versus 2.366% versus 2.383% versus 2.318% versus 2.341% versus 2.30%
versus 2.302% versus 2.275% versus 2.321% versus 2.345% versus 2.345% versus
2.361% versus 2.348% versus 2.327% versus 2.326% versus 2.341% versus 2.339%
versus 2.312% versus 2.307% versus 2.236% versus 2.222% versus 2.253% versus
2.276% versus 2.273% versus 2.246% versus 2.234% versus 2.201% versus 2.186%
versus 2.19% versus 2.167% versus 2.134% versus 2.042%

EUR/USD: 1.1791 versus 1.1787. Euro surged Tuesday through the 50 day MA,
held it with a lateral test through Friday.

Historical: 1.1787 versus 1.1786 versus 1.1799 versus 1.16443 versus 1.16646
versus 1.16439 versus 1.15871 versus 1.15954 versus 1.1609 versus 1.16092
versus 1.16575 versus 1.15480 versus 1.1644 versus 1.16091 versus 1.16330
versus 1.18163 versus 1.17570 versus 1.1759 versus 1.17798 versus 1.18476
versus 1.17995 versus 1.1771 versus 1.17932 versus 1.1823 versus 1.1834
versus 1.18662 versus 1.1813 versus 1.17460 versus 1.17352 versus 1.17100
versus 1.1754 versus 1.17676 versus 1.17315 versus 1.1812 versus 1.17817
versus 1.1746 versus 1.17852 versus 1.18540 versus 1.19476 versus 1.19420
versus 1.19420 versus 1.19954 versus 1.19436 versus 1.1918 versus 1.1874
versus 1.19706 versus 1.19551 versus 1.20379 versus 1.2025 versus 1.19258
versus 1.19143 versus 1.18621 versus 1.19131 versus 1.18938 versus 1.19731
versus 1.19678 versus 1.19212 versus 1.18 versus 1.17516 versus 1.1813
versus 1.17595 versus 1.17107 versus 1.17812 versus 1.17445 versus 1.17751
versus 1.18216 versus 1.17652

USD/JPY: 112.124 versus 112.91. After peaking in early November at a
higher high, the dollar has rolled over against the yen, falling through the
50 day MA Thursday and extending that move lower Friday. Heading back to
the October low roughly coincident with the 200 day SMA.

Historical: 112.91 versus 112.879 versus 113.430 versus 113.615 versus
113.526 versus 113.379 versus 113.99 versus 113.723 versus 113.758 versus
114.064 versus 114.010 versus 114.010 versus 113.845 versus 113.640 versus
113.175 versus 113.675 versus 114.071 versus 113.607 versus 113.913 versus
113.31 versus 113.530 versus 112.561 versus 113.031 versus 112.21 versus
112.20 versus 111.852 versus 112.25 versus 112.413 versus 112.41 versus
112.700 versus 112.653 versus 112.818 versus 112.79 versus 112.667 versus
112.716 versus 112.442 versus 112.86 versus 112.289 versus 111.649 versus
1.12125 versus 111.995 versus 112.454 versus 111.559 versus 111.435 versus
110.846 versus 110.01 versus 110.62 versus 110.216 versus 109.434 versus
107.847 versus 108.444

Oil: 56.71 +1.36. After a 2 week test of the breakout of the range and move
to a higher high, oil was up sharply Friday, bouncing off the 20 day EMA

Gold: 1296.50, +18.30. Lots of movement in markets Friday on expiration,
and gold surged out of its 5 week consolidation, moving up through the 50
day MA's. The double bottom looks to be yielding a move up finally.


Earnings are for the most part in the bank. The indices performed well
through the season, keeping the October/November move working. Expiration
saw some hiccups just as a consolidation in NASDAQ, SOX and some of the big
names in each broke higher but then suffered some selling on expiration.

As noted earlier, how those stocks handle that action this coming week tells
an important story: was money starting to move out, or was it just a quick
expiration move? Is there rotation starting to other areas at the expense
of some leaders, or will money continue to move to the market versus just
move around the market? Or, for that matter, leave the market?

The patterns looked good going into Thursday and they broke higher. After
Friday there are some worrisome charts from LRCX, AMAT. GOOG more or less.
Not a ton of stocks, but important ones to the market. Overall the patterns
remain fine, but whenever you have the market logging 5 weeks or more of
high confidence, bonds rallying when they should be fading, gold jumping,
you have to start paying very close attention to the leading stocks. A LOT
of these just came out of consolidations of prior moves, looking ready to
break higher.

Will they continue the moves upside this week? If FAANG and other big names
that broke out of bases that formed during the summer, give up the new moves
after a short consolidation, that is not good for the market UNLESS breadth
spreads out a LOT more than it has shown of late. The big names are capable
of driving the market higher on their own. If they lose their bids and
other parts of the market do not improve significantly, the rally has lost
its legs.

We still see some upside possibilities, and some we passed on Friday due to
strong moves that were a bit too strong for a Friday or that rallied then
faded off the highs could still look good Monday. If so, we go where the
money goes.

And that is key as well for the big name FAANG and other stocks that set up
those great bases, broke out, tested, then started back up. If they lose
money that is big news. Then you have to see if other areas receive the
money and rally or if the move is dead, that Dennis Gartman was right.

To us the big names still look good, can still make the moves, but as always
they have to show it. You don't like seeing GOOG put in a break higher then
toss it back. That is not good action coming off a breakout test and trying
for a higher high. If GOOG, the other FAANG stocks, and the big chips
continue to show poor action, then the upside move is at risk unless more
areas pick up the slack.

Have a great weekend!


NASDAQ: Closed at 6782.79

6796 is the November 2017 all-time high

The 20 day EMA at 6715
6641 is the October high
The 50 day EMA at 6609
6477 is the September intraday high
The 2016 trendline at 6463
6461 is the July 2017 prior all-time high
6450 is the early September high
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
The 200 day SMA at 6220
6205 is the late May all-time high
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

S&P 500: Closed at 2578.85

2597 is the November 2017 all-time high

The 20 day EMA at 2575
The 50 day EMA at 2548
2535 is the upper channel line from the March 2009 uptrend channel
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
The 200 day SMA at 2441
2409 is the July 2017 closing low
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
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 23,358.24

23,602 is the November 2017 all-time high

The 20 day EMA at 23,343
The 50 day EMA at 23,968
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
The 200 day SMA at 21,603
21,529 is the June 2017 high
21,169 is the March 2017 all-time high

End part 1 of 3
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