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12/22/2017 Investment House Daily
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Market reopens Tuesday after Christmas holiday. Merry Christmas!
Investment House Daily Subscribers:
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
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The REPORT SCHEDULE is as follows:
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.
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
- Indices test nicely, waiting for Santa to bring his rally next week.
- SP500, DJ30 are extended, but this action does not indicate near term
topping.
- Still many leaders testing near support and looking good if the bids
return.
- Fund outflows jump post-tax passing and the market weathers it with a
modest test. The question is whether the outflows continue.
- Many plays are ready to move if they get the nod.
The stock market is apparently waiting on Santa to show up and bring a Santa
Clause rally. After gapping nicely upside Monday, the balance of the week
was testing. With outflows post-tax reform vote at $14.5B from equity funds
there is justification to the argument that the action showed 'smart money'
leaving the market. Hey, we took some profits as well based upon a specific
set of plans.
SP500 -1.23, -0.05%
NASDAQ -5.40, -0.08%
DJ30 -28.23, -0.11%
SP400 -0.03%
RUTX -0.27%
SOX -0.05%
NASDAQ 100 -0.12%
That said, the Tuesday to Friday action was not in itself damaging to the
market. Lower volume, quite modest fades by both the indices and leading
stocks. Sure DJ30 and SP500 are quite extended, but the action this week
did not suggest they are rolling over. That may still come as the market
moves past the yearend good tidings, and we are very cognizant of that, but
you can only take the market that presents itself.
Even so, as discussed earlier this week, while large caps may find the need
to fade and consolidate more than these past four sessions, other areas of
the market are still fresh and can easily make new moves. Indeed, even the
FAANG and some other NASDAQ large names can still move: they based all
summer and broke out in late October. We still own some of these (GOOG,
INTC, AMZN) and are looking at new positions on them as the case may be.
Money definitely flowed out as the flow indicators state, but if this is as
bad as it gets, that was nothing. The key is whether the money continues to
leave or if it was just some readjustment. If net outflows continue, stocks
of course will struggle more to find a floor. Again, thus far the outflows
resulted in only modest, low volume tests, indeed very normal tests back to
the 10 day EMA for the indices and for leading stocks.
TUESDAY
We have a lot of great plays on the report, plays that are ready to go if
they get the nod from investors and traders. AAPL, AMZN, BIDU, CAVM, CUTR,
FFIV, GOOG, PTN, PTLA -- lots that look really good, and still more not
mentioned. If they show the moves we want to play the moves. Also, love
the pullback on ROKU and we are putting on a new play on it for next week.
NEWS/ECONOMY
Friday added to the long list of the week's data. Again it was good in some
respects, not so good in others. On a week that saw regional PMI's beat
expectations and housing sales surge, other reports missed, even if
slightly.
Durable Goods, preliminary November: 1.2 vs 2.1% exp vs -0.4 prior
(from -1.2)
Ex-Transports: -0.1 vs +0.4 exp vs 1.3 prior (up from 0.4%)
Business investment: -0.1 vs +0.8 October (from 0.3%). That was the
largest drop since 2016. At least the revision from October helped offset
the miss.
Personal Income, Nov: 0.3 vs 0.4 exp vs 0.4 October
Personal Spending: 0.6 vs 0.4 exp vs 0.2 Oct (from 0.3)
New Home Sales, Nov: +17.5%, the largest in crease in 25 years. Well, I
suppose those people needed some money to finance the purchases so that
explains the outflows from the market? Good gains, lock in some profits to
pay for the new digs.
Tax reform effects: More companies announcing bonuses, etc.
BAC to pay $1K bonuses to 145K employees. BBT increases its minimum pay to
$15/hour.
Expect to see a LOT more of this next week.
Also, AMGN said it will face a 6% tax issue with the new code. Expect to
see these announcements as well.
Bitcoin: Crashed through 14K overnight, then through 13K. It held, however,
at the 38% Fibonacci retracement of the prior move and started to bounce
late in the session. Ah, some trading parameters are holding in its action.
We are watching and looking for opportunities to trade this, and once
comfortable, we will share the trades with you of course.
THE MARKET
CHARTS
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
SP500/DJ30: Both are about the same in terms of extension with the Dow a
bit more than SP500. Both gapped higher Monday to new highs, both tested
the gain the rest of the week, showing doij at the 10 day EMA. Modest,
lower volume selling, holding near support. Thus far not flashing any
warning signs based on their trading action. That is different from their
technical position that is, as noted, extended with 4 and 5 runs up the
short term moving averages after the last 50 day EMA test.
NASDAQ/NASDAQ 100: Both are quite similar. They too gapped upside to highs
Monday then faded the move to the 10 day EMA through Friday, showing tight
doji there to close the week. NASDAQ on its fourth run up the 10/20 day
EMA, testing this week after its upside gap. No danger signals based upon
the trading action with the stronger volume rise, lower volume fade.
SP400/RUTX: Both the midcaps and small caps gapped higher Monday to the
prior highs from late November/early December and stopped there. Lateral
slides to Friday, not the fade of the large cap indices. Tax sensitive,
whether they can make good, solid breaks to new highs is important for the
market overall as that would indicate these domestically economic sensitive
stocks are building in more gains in the future.
SOX: You can argue SOX has put in an ABCD downside pattern off the late
November/early December selling. That would suggest a leg lower off this
last move into Wednesday that was tested Thursday and Friday. If you step
back a bit more, you see the big run from September to late November, and
the recent action as working on an ABCD upside pattern. That would suggest
another downside leg to undercut the early December low to around 1180 to
form a D point. That gives you the drop from the shorter downside ABCD, and
it sets up the larger upside ABCD that would indicate a rally back up toward
the prior highs. Either way you slice it, the prognosis would be weakness
off this last move higher. That said, SOX' action in the week was solid for
the upside: gapped through the 50 day MA, rallied some more, tested the 50
day MA with a doji Friday. While the ABCD patterns make sense, you have to
watch whether SOX goes rogue and just rallies back up.
LEADERSHIP
Oil: After a great upside week Friday was a day of rest. For some. CVX,
MRO, CRZO, PTEN, DNR all more or less took a day off. Those are our current
positions, and remember, we are watching HAL for a test of its break through
the 200 day SMA that we can use. APC added another 1.9% Friday.
FAANG: Still some very nice tests ongoing. AAPL is working laterally over
the 10 day EMA. AMZN testing the 20 day EMA. GOOG showing a very nice
pullback near the 10 day EMA that we were wanting to see. FB showing a doji
at the 50 day EMA. NFLX is still a mess technically.
Financial: Friday was somewhat mushy, but on the week these stocks closed
better after some volatility on some such as GS. BAC, JPM were back and
forth as well, but were trending upside all week.
Chips: Still a very mixed group with the struggling side such as LRCX,
AMAT, XLNX. The other side is not bad, just not moving outside of INTC:
CAVM, MRVL, CCMP, SIMO. These are good setups, however, and could surge.
Drugs/Biotechs: Big names struggling, e.g. CELG, BIIB. Smaller groups look
very good. PTLA set up well. ENDP, IMGN still solid. EXEL blasted higher,
never tested; waiting to see if it tests this coming week.
Retail: Same story with good tests, e.g. ULTA, COST, and good moves
continuing, e.g. TLRD, TGT, ROST, AAP.
Machinery/Manufacturing: CAT still on an upside tear. DE as well. Man.
Manufacturing testing a bit, e.g. HON, though EMR just hit a higher high.
Transports: Truckers rebounded right back up to higher highs, e.g. KNX,
WERN, ODFL. Airlines holding their gains on the week though pausing on the
busy travel day.
China: A few still look good. YY climbing up the 10 day EMA though off a
bit Friday. BIDU looks really good -- still -- just looking for the move.
NTES testing its great move on the week.
MARKET STATS
DJ30
Stats: -28.23 points (-0.11%) to close at 24754.06
Nasdaq
Stats: -5.40 points (-0.08%) to close at 6959.96
Volume: 1.54B (-14.92%)
Up Volume: 680.07M (-369.93M)
Down Volume: 813.91M (+73.84M)
A/D and Hi/Lo: Decliners led 1.3 to 1
Previous Session: Advancers led 1.61 to 1
New Highs: 82 (-23)
New Lows: 36 (-1)
S&P
Stats: -1.23 points (-0.05%) to close at 2683.34
NYSE Volume: 598.6M (-23.24%)
A/D and Hi/Lo: Advancers led 1.02 to 1
Previous Session: Advancers led 1.55 to 1
New Highs: 137 (-55)
New Lows: 26 (-16)
SENTIMENT INDICATORS
VIX: 9.90; +0.28
VXN: 12.54; -0.11
VXO: 8.45; +0.12
Put/Call Ratio (CBOE): 0.95; +0.11
Bulls and Bears: Pretty large drop though still easily over 60 for the
bulls. That is still in the overly optimistic range and of course the surge
Friday will bring them around again to the upside. This is a warning
indication, but not a great timing device.
Bulls: 61.9 versus 64.2
Bears: 15.2 versus 15.1
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: 61.9 versus 64.2
64.2 versus 62.3 versus 61.5 versus 63.5 versus 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: 15.2 versus 15.1
15.1 versus 15.1 versus 15.4 versus 15.4 versus 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
OTHER MARKETS
Bonds: 2.485% versus 2.484%. Crashed on the week, holding near the 200 day
SMA just as it did in late October and it managed to recover from there.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.484%
versus 2.501% versus 2.459% versus 2.398% versus 2.351% versus 2.36% versus
2.403% versus 2.389% versus 2.378% versus 2.34% versus 2.353% versus 2.381%
versus 2.363% versus 2.363 versus 2.412% versus 2.385% versus 2.326% versus
2.329% versus 2.321% versus 2.34% versus 2.354% versus 2.367% versus 2.345%
versus 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%
EUR/USD: 1.18628 versus 1.18658. Setting up for another move higher
against the dollar.
Historical: 1.18658 versus 1.18792 versus 1.18408 versus 1.17703 versus
1.1752 versus 1.17798 versus 1.18392 versus 1.17430 versus 1.17652 versus
1.1764 versus 1.17754 versus 1.17990 versus 1.18276 versus 1.18727 versus
1.18983 versus 1.18976 versus 1.18529 versus 1.18489 versus 1.1899 versus
1.19329 versus 1.18148 versus 1.17402 versus 1.1791 versus 1.1787 versus
1.1786 versus 1.1799 versus 1.16443 versus 1.16646 versus 1.16439 versus
1.15871
USD/JPY: 113.304 versus 113.363. Building for another move up, testing the
early week rally.
Historical: 113.363 versus 113.334 versus 112.870 versus 112.625 versus
112.619 versus 112.298 versus 112.639 versus 113.555 versus 113.476 versus
113.48 versus 113.473 versus 112.473 versus 112.554 versus 112.442 versus
112.190 versus 112.55 versus 112.102 versus 111.583 versus 111.244
Oil: 58.47, +0.11. Approaching the late October recovery high.
Gold: 1278.80, +8.20. Cleared the 200 day SMA and the 50 day MA's on the
way back up from the sharp selloff into the second week of December.
End part 1 of 3
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