Sunday, August 19, 2018

The Daily, Part 1 of 3, 8-18-18

* * * *
8/18/2018 Investment House Daily
* * * *

Investment House Daily Subscribers:

MARKET ALERTS:

Targets hit: V
Entry alerts: ADBE; DATA; EMR; TREX
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:
https://www.investmenthouse.com/alertdaily.html

********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.

TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/mo/mo.mp4

TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/ts/ts.mp4

********************************************************************

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

- Market avoids Friday drop, puts together a 2-session move higher.
- DJ30 leads upside as money rotates to its stocks, but SP400 does not look
bad. Promising even.
- Tech leaders topping but rotation allows the move to continue even if some
leaders drop out of the picture.
- Still many upside plays in the 'other' sectors.

Friday delivered upside as word is out the US and China have agreed to
restart trade negotiations with Trump and Xi meeting sometime in late
summer/early fall. For the market, holding talks is much better than
trading insults, and thus Friday was an up session.

SP500 9.44, 0.33%
NASDAQ 9.82, 0.13%
DJ30 110.59, 0.43%
SP400 0.49%
RUTX 0.43%
SOX -0.73%
NASDAQ 100 0.04%

VOLUME: NYSE +8%, NASDAQ -7%. Volume on the week showed overall
distribution on NASDAQ, a mix of distribution and accumulation on NYSE.

ADVANCE/DECLINE: NYSE 2.3:1, NASDAQ 1.4:1. Solid enough on NYSE, but
NASDAQ is showing the bleed as upside breadth is weak on a market upside
session.

Up, but nothing new, nothing game changing. The indices are still in the
same patterns with all trending higher, all holding support other than SOX.
DJ30 has done more than hold support, rallying nicely higher off the 50 day
MA. The others? They have held support but are not really making any kind
of serious move higher -- the same kind of slow one day up, one day back
action.

That leaves the indices still in good enough position, but not showing the
kind of chops that indicate they are ready to make that solid break higher.
Perhaps they can win by attrition, holding out with steady slow moves a la
the turtle versus the hare.

While the indices outside of DJ30 are slowly edging higher, many stocks are
in very good patterns and are in position to move higher. Money is moving
their way and thus the good setups and initial moves. We picked up several
positions and are looking for more.


Tires and markets

I bought some new tires for my truck this morning. Kept the pressure right,
rotated them when I should. They still wore out. In due time.

What the hell, right? Okay, here is the tie: the market is rotating out of
most of the big leaders that carried the indices to new highs through
January and then again in July. Drugs, industrials, personal products,
retail, credit services, specialty services (e.g. Match) and other areas are
receiving money while FAANG, semiconductors, large tech and to a lesser
extent tech in general are losing money.

Again, how does that tie into my tire story? It suggests that while the
loss of the big tech and FAANG stocks has some saying the market has topped
and can only fall, that kind of 'if not rallying then it must be falling'
theory is not only wrong but loses you money. It ignores the rotation
clearly taking place. I talked about the possibility of rotation as the
July volatility hit; it took some time but is clearly taking place.

The point: rotation does not equal a market top, and rotation can last for
quite some time as money moves to certain sectors and pushes them higher.
It can push them higher for a long time, and then move to another area and
push those stocks higher. This can go on for a long time dependent upon the
economy. At some point even rotation won't work -- the tires are worn out.
For now, the stocks moving higher look quite good, i.e. they have good
patterns, have room to run, are making good moves and . . . holding onto the
moves. That is the upside promise in this market.

What about a resurrection of the leaders that fell and damaged their
patterns? It can happen; we even have an upside play on GOOG again in case.
The odds typically do not favor those kind of moves, at least not without
some significant bases. Perhaps I am wrong, perhaps they can rejuvenate
themselves as they have done several times in this long rally. Thing is,
the Fed stimulus they received each time they faded is no longer being
injected and indeed removed. Thus if they fall and no one is there as a
backstop to bounce them back, they need a base to reset.

Of course, some are predicting the Fed will be forced into QE in 2019, that
the economy is currently slowing and will force the Fed's hand. That
remains to be seen, but it is also is next year -- the rotation into the new
sectors is occurring now and has plenty of time to work.

So, we are still looking to play upside in those stocks turning upside. We
already have a number of positions in them and look to add more. We also
have downside positions on some big names that are bleeding money. This
week there are a lot of solid upside plays on the report because there are a
lot of solid upside plays in those areas receiving the money. There will
come a time when we will play 90% downside, but with the rotation setting up
good patterns that can make us money, upside will still be the dominant play
with some downside included as we have now.


THE MARKET

For the most part the stock indices managed to avoid a downside Friday, but
as noted, they did not do much to help their rise outside of DJ30.

CHARTS

DJ30: Not the powerful move as on Thursday when WMT BA and company blasted
it higher, but DJ30 did continue a solid move off the 50 day MA test that
saw a hammer doji Wednesday that bounced it higher. DJ30 is back near the
top of the channel formed off the March and April lows that acted as the
bottom of the current 8 month base. Working higher, looking better than
most.

SP500: Similar to the Dow, moving up near the top of its uptrend channel
that has built the right side of its 8 month base. The late week gains have
SP500 filling the downside gap from a week back. Okay, rebounded from the
island reversal, at the late July high, at the all-time high (more or less).
Critical time once again here at the prior high.

NASDAQ: Trying to get off the 50 day MA, less than impressive in the
attempts. The major volume on the week was in the Wednesday selling to the
50 day MA. Low trade on the rather weak bounce attempt. Still trending
higher, but not a lot of life as upside volume wanes along with MACD.

SOX: Dropped to the trendline formed from the February and May lows.
Tapped it, rebounded to cut the losses after a pretty nasty gap lower
Wednesday and again Friday. Nice hammer doji Friday so SOX could bounce,
but a number of key big cap chips continue to struggle, e.g. INTC, AMAT,
MU -- big names weighing the index down.

SP400: Back near the highs again after a test of the 50 day MA starting
Monday. Back and forth each session, then a back to back rise to end the
week. That puts SP400 right in the range of the highs, and frankly, it was
a good solid move from a higher low at solid support. Promising . . . as it
was in early July, mid-July, early August.

RUTX: Similar to SP400, RUTX tested the 50 day MA on the week and moved
back up. Thursday saw a gap higher, a selloff, then a rebound. Friday
added a bit more. Not as great as the SP400 action, but, dare I say it . .
. promising?


LEADERSHIP

Rotation is taking money out of fAang and tech. Happens. Other areas are
the beneficiary.

fAang: Only one cap letter, and that is AAPL. AAPL moved up to new highs
on the week post earnings. FB, NFLX are selling off, GOOG sold off, gapping
to the 50 day EMA and a doji Friday. AMZN looks pretty darn good with its
own doji at the 10 day EMA; looking at playing it downside, but this is a
nice test setup for a rebound. No new upside play on it this weekend, but
it would not take much to convince us to move in upside if AMZN holds and
rises from here.

Software: Key names dropping out, e.g. ADBE, VRSN, DATA, NOW. Others are
hanging in, indeed looking good; COUP, FFIV, MSFT, TTWO.

Drugs/Healthcare: More sweet action. PFE surged Friday on the third day
off the 10 day EMA test. LLY, BMY, MRK enjoyed good weeks. Many smaller
biotechs are setting up well along with medical instrumentation and other
healthcare related areas.

Industrials: Some nice moves indeed. EMR up Friday on solid volume. HON,
CMI coming off 50 day MA tests with solid action. Even CAT came to life.

Financial: Banks are hanging in around support but not making moves upside
yet. C at the 50 day MA, BAC, JPM testing at the 20 day MA. GS recovered
on the week after the dump lower the prior week; only about half the gain
recouped. V showing good volume Friday on a modest move.

Retail: A solid week with some earnings shooting stocks higher, e.g. WMT,
JWN. DLTR and DG still climbing. COST broke higher again Friday, ROST in a
nice test, TJX in a test over the 10 day EMA after a new high. RH is forming
a nice handle to a 10 week base.

Chips: Some key names really struggling but in their travails may be ready
to bounce, e.g. INTC. MU down hard but bounced a bit Friday. AMAT did not
rebound after its gap lower on earnings. NVDA gapped below the 50 day MA
and sold off hard. AMD broke higher again Friday; nice. XLNX tested the
200 day SMA on the week, looks ready to bounce.

Transports: Rails continues upside. CSX trending higher up the 10 day EMA
all week. KSU, after a flop on Monday, rebounded all the loss with a good
move Friday.

Misc: SQ testing still. GRUB handing on at the 20 day EMA. DIS still
looks good at the 20 day EMA. DOCU looks solid, forming a handle.


MARKET STATS

DJ30
Stats: +110.59 points (+0.43%) to close at 25669.32

Nasdaq
Stats: +9.81 points (+0.13%) to close at 7816.33
Volume: 1.85B (-6.57%)

Up Volume: 994.39M (-115.61M)
Down Volume: 828.69M (-18.21M)

A/D and Hi/Lo: Advancers led 1.41 to 1
Previous Session: Advancers led 2.39 to 1

New Highs: 101 (+9)
New Lows: 74 (+2)

S&P
Stats: +9.44 points (+0.33%) to close at 2850.13
NYSE Volume: 761.53M (+8.11%)

A/D and Hi/Lo: Advancers led 2.3 to 1
Previous Session: Advancers led 2.92 to 1

New Highs: 105 (+11)
New Lows: 50 (-1)


SENTIMENT

VIX: 12.64; -0.81
VXN: 15.86; -0.57
VXO: 11.19; -0.75

Put/Call Ratio (CBOE): 1.04; +0.10

Bulls and Bears:

Recovery in bulls continues with a solid advance pushing bulls back up in
the top of the range. Bears remain elevated from the lows, but flat-lining
a bit the past several weeks.

Bulls: 57.3 versus 54.9

Bears: 18.4 versus 18.6

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: 57.3 versus 54.9
54.9 versus 54.5 versus 54.9 versus 55.3 versus 52.4 versus 47.1 versus 47.6
versus 52.0 versus 55.5 versus 52.9 versus 50.0 versus 49.1 versus 46.6
versus 43.1 versus 43.6 versus 48.0 versus 43.6 versus 42.2 versus 49.5
versus 55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9
versus 54.4 versus 66.00 versus 64.7 versus 66.7 versus 64.4 versus 61.9
versus 64.1 versus 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

Bears: 18.4 versus 18.6
18.6 versus 18.8 versus 18.6 versus 18.5 versus 18.5 versus 18.6 versus 18.4
versus 17.6 versus 17.8 versus 17.7 versus 19.2 versus 19.2 versus 19.4
versus 19.4 versus 20.6 versus 20.8 versus 19.6 versus 19.8 versus 18.6
versus 17.5 versus 16.8 versus 15.7 versus 15.5 versus 14.4 versus 14.6
versus 14.4 versus 15.5 versus 12.6 versus 12.8 versus 12.7 versus 13.5
versus 15.2 versus 15.1 versus 15.2 versus 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


OTHER MARKETS

Bonds: 2.864% versus 2.871%. Bonds have returned to just below the 200 day
SMA as of Friday, rallying for 2+ weeks off the selloff from late July.

Historical: the last sub-2% rate was in November 2016 (1.867%). 2.871%
versus 2.879% versus 2.882% versus 2.873% versus 2.928% versus 2.963% versus
2.977% versus 2.977% versus 2.945% versus 2.95% versus 2.986% versus 3.005%
versus 2.962% versus 2.975% versus 2.958% versus 2.982% versus 2.965%


EUR/USD: 1.1437 versus 1.13765. Sold off through Tuesday then started a
recovery to the 10 day EMA as of the Friday close. Oversold, needed to
bounce.

Historical: 1.13765 versus 1.13731 versus 1.13479 versus 1.14052 versus
1.1413 versus 1.1526 versus 1.16186 versus 1.16001 versus 1.15572 versus
1.15683 versus 1.15864 versus 1.1662 versus 1.1689 versus 1.17074 versus
1.16558 versus 1.17324 versus 1.17385 versus 1.16846 versus 1.16989 versus
1.17214 versus 1.1651 versus 1.16514 versus 1.16603 versus 1.1709 versus
1.1685 versus 1.16608 versus 1.1672 versus 1.17288 versus 1.17578 versus
1.17439 versus 1.1689 versus 1.1665 versus 1.16388 versus 1.1638 versus
1.15634 versus 1.15602 versus 1.16517 versus 1.17031 versus 1.16572 versus
1.16072 versus 1.15762 versus 1.1586 versus 1.15746 versus 1.2624 versus
1.16245 versus 1.15678 versus 1.17973 versus 1.17454 versus 1.17761 versus
1.17737 versus 1.17987 versus 1.1774 versus 1.1762 versus 1.1697 versus
1.166 versus 1.16993


USD/JPY: 110.49 versus 110.935. Volatile. Sold off the prior Friday below
the 50 day MA's. Recovered into Tuesday, but then turned right back over.

Historical: 110.935 versus 110.818 versus 111.229 versus 110.737 versus
110.840 versus 111.07 versus 111.361 versus 111.344 versus 111.254 versus
111.621 versus 111.628 versus 111.744 versus 110.990 versus 110.995 versus
110.791 versus 110.871 versus 111.235 versus 111.084 versus 111.451 versus
112.732 versus 112.783 versus 112.896 versus 112.337 versus 112.631 versus
112.093 versus 110.911 versus 110.973 versus 110.474 versus 110.666 versus
110.40 versus 110.854 versus 110.687 versus 110.523 versus 110.223 versus
110.097 versus 109.678 versus 109.980 versus 109.895 versus 110.376 versus
110.03 versus 109.783 versus 110.668 versus 110.578 versus 110.247 versus
110.381 versus 110.314 versus 109.466 versus 109.705 versus 110.164 versus
109.878 versus 109.90 versus 109.53 versus 108.767


Oil: 65.21, -0.25. Dropped to the 200 day SMA as of the Wednesday close,
held that level through Friday but that is about all.


Gold: 1184.20, -0.20. Sold off on the week, dropping away from the 10 day
EMA. Sharp drop, threw a doji, perhaps an oversold rebound.

End part 1
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Saturday, August 11, 2018

The Daily, Part 1 of 3, 8-11-18

* * * *
8/11/2018 Investment House Daily
* * * *

Investment House Daily Subscribers:

MARKET ALERTS:

Targets hit: TTWO; WOW
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 SSR alert service
you can sign up at the following link:
https://www.investmenthouse.com/alertssr.html

********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.

TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/mo/mo.mp4

TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/ts/ts.mp4

TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************

The REPORTS SCHEDULE is as follows:

WEDNESDAY and the WEEKEND reports contain NEW PLAYS, Market Summary Video,
Play Videos, and Play Table with play annotations.

MONDAY report will contain a Market Summary Video, new plays, annotated play
table.

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

- Painfully slow session Thursday is triggered Friday by lira, falls from
the highs.
- Trump takes advantage of Turkey's bad policies and diving lira, doubles
steel and aluminum tariffs.
- World markets, currencies struggling, but US markets and dollar are solid.
For now.
- US in a good position but the Fed can louse it up as . . . always.
- Once again new and higher highs are tossed. Indices remain in nice
uptrends, but the New High Anxiety and damaged leader patterns are vexing.

The lira? More tariffs? Or, was it High Anxiety?

Friday the lira was a turkey, crashing as Turkey's problems go from bad to
worse. Even so, Erdogan told the Turks to convert any dollars to lira,
blustering 'they have got their dollars, we have got our people, our right,
our Allah.'

World markets were sharply lower and US futures followed. Then, still
before the US bell, Trump added to Turkey's woes, apparently seeing an
opportunity to affect the release of the American pastor held captive by our
'ally.' Trump moved to double the recently enacted tariffs to 50% on steel,
20% on aluminum. You have to hand it to Trump: he plays for keeps, and
while he keeps those across the negotiating table off balance, when he sees
an opening, he takes it.

So stocks were going to open lower. They did. I predicted the indices
would close higher than they opened. That would have been easily correct if
the market only traded for the first two hours of the session. They gapped
lower and immediately rose, recovering to 11:35ET. Then they gave it all
back and more, selling lower and lower to mid-afternoon. A late bounce
managed to close SP500, NASDAQ, SP400 over the open -- barely. It was not
much and certainly not the kind of recovery we had in mind.

SP500 -20.30, -0.71%
NASDAQ -52.67, -0.67%
DJ30 -196.09, -0.77%
SP400 -059%
RUTX -0.24%
SOX -2.47%
NASDAQ 100 -0.79%

VOLUME: NYSE +27%, moving back to average. NASDAQ +3%, back above average
on a gap down to the 10 day EMA.

ADVANCE/DECLINE: NYSE -2:1, NASDAQ -3:2.

So what really happened Friday? The lira provided perhaps an unexpected
catalyst and reason, but what happened in the bigger picture? Once again
the stock indices fell victim to selling when near highs, aka New High
Anxiety.

Last week I talked, and indeed others as well, about tops and bottoms being
a process versus a singular event. While NASDAQ and company are still
trending higher, every time they approach the highs they get knocked down.
Thus far, they get knocked down, they get up again, just can't seem to keep
them down. That is always the case . . . until they can't get up again.

For now this is just one of those 'get knocked down' sessions in a still
continuing uptrend. But again, a top is a process where there is
distribution on several occasions, particularly at the higher highs. After
a week and more of upside depending upon the index, they were at or close to
new highs. As noted, the lira could have acted as the trigger but the
result was another move back hear highs that was pushed down. With many
stocks across many sectors hit, you have to keep in mind that a top could be
in process.


CHARTS

Not a collapse, not a reversal. The indices are still in uptrends, some in
better shape than others, still trying to hit and hold new highs, still
struggling each time they get there. One step forward, a half step
backward, right? This is the most frustrating uptrending market in recent
memory.

NASDAQ: The focus of most attention, NASDAQ came close to a new high this
time around, didn't hit it, then gapped downside to the 10 day EMA Friday.
Rising, above average volume so once again some distribution as NASDAQ backs
down from the highs. No trend break, not even close, but if the sellers
take it down each time it hits this level, that eventually forms serious
resistance and a top.

SP500: Very similar action to NASDAQ, gapping downside to the 20 day EMA
after moving to a higher high over the late July peak. Gapped down, tight
range on the session, volume moving up to average for the first time in two
weeks. Still in the upper range of its channel formed as it moved off the
bottom of the base. As with NASDAQ, still trending upside, no issue with
breaking the uptrend but some high volume selling at the higher high.

SOX: Gapped below the 50 day MA's, back to the middle of its pattern. It
did not hold the 50 day MA and use that as a higher low to make the breakout
run. SOX is key, the move was not great, the pattern still holds. Watch to
see if it reloads and can make a move upside.

DJ30: Gapped lower through the 10 day EMA, landing on the 20 day EMA.
Higher volume but still below average. No real issues, in the upper half of
the channel, still working on a pattern, a pretty good one.

SP400: From a higher high gapping to the 20 day EMA and a doji. Nice
uptrend, holding near support. Great trend. But, three times in the past
two months SP400 has been right here, eked out a higher high, but was
immediately shoved back.

RUTX: Fourth straight doji over the 10 day EMA, quite frankly ignoring the
overall market selling. This is actually encouraging action for the small
caps, also a very important index economically.


LEADERSHIP

FAANG: FB fell below the 200 day MA, possibly failing its rebound attempt
after the earnings gap lower. AAPL on the other hand is in a tight lateral
range as the 10 day EMA rises to meet it; good looking for the upside. AMZN
faded just modestly, showing a doji, still solid. GOOG gapped lower to the
10 day EMA. Hardly a bad pattern. NFLX still dancing around laterally just
below the 10 day EMA. Problematic.

Software: The group could make a comeback to leadership status. TTWO is
looking great in the recovery, breaking to a new high. Could lead the group.
FFIV is another recovering software stock, breaking higher into the week
then trying to form a handle. VMW working in a tight lateral pattern after
breaking higher out of its flag. UIS testing a very nice post-earnings run;
could be a new play. DATA is at the 10 day EMA, could be putting in a
possible entry. NOW is not that bad either. ADBE, VRSN still trying to
hang on after recovering but still unable to move upside.

Financial: Some very ugly action as bonds surged and yields dropped.
Reason: if the lira and Turkey is contagion, bonds will continue as a safe
haven. C gapped to the 50 day EMA, losing 2.39%. JPM is not bad, gapping
lower to the 20 day EMA and a doji. BAC shows the same action. GS gapped
lower to the 50 day SMA. V is not bad, holding a lateral move over the 10
day EMA.

Industrial: More trouble. CAT gapped lower to support at 135. CMI faded in
a handle on the week after a good initial move, holding the 20 day EMA. EMR
in a great 1-2-3 test of its earnings surge. UTX held up decently, holding
the 20 day EMA. HON gapped to a dojij, holding over the late May/early June
peaks. Not bad. The group struggled, but not a rout.

Drugs: PFE finally testing the strong move, fading as the 10 day EMA rises
to meet it. MRK testing the 10 day EMA as well. BMY still stuck at the 200
day MA. BCRX in biotech took off late week. ARWR in the same group is
solid. Still a solid group of course and will see if we get entries off
these tests.

Chips: INTC downgraded and several chips struggled though not AMD, INTC's
main rival. TXN gapped below the 50 day MA's. XLNX fell to test near the
200 day SMA on the low. QRVO fell to the 20 day EMA, nothing major. MXIM
sold lower as well. Very familiar action though not a lot of breakdowns.

Retail: Some up, some down, still some good patterns. KSS moved higher on
volume. M held fine over near support. DDS faded a bit, but fine. RH off
just a bit. JWN tried to surge, faded. HD faded to again test the 50 day
EMA. Most, as noted, remain fine.

Transports: Rails held up well, e.g. CGX, CNI, RAIL, KSU.

Misc: GRUB still solid. SQ ditto at the 20 day EMA. DIS testing the 20
day EMA. WOW posted a nice gap and run higher.


MARKET STATS

DJ30
Stats: -196.09 points (-0.77%) to close at 25313.14

Nasdaq
Stats: -52.67 points (-0.67%) to close at 7839.11
Volume: 2.1B (+2.94%)

Up Volume: 656.98M (-330.79M)
Down Volume: 1.4B (+370M)

A/D and Hi/Lo: Decliners led 1.51 to 1
Previous Session: Advancers led 1.1 to 1

New Highs: 92 (-22)
New Lows: 105 (+39)

S&P
Stats: -20.30 points (-0.71%) to close at 2833.28
NYSE Volume: 826.278M (+27.38%)

A/D and Hi/Lo: Decliners led 1.97 to 1
Previous Session: Advancers led 1.01 to 1

New Highs: 70 (-45)
New Lows: 88 (+53)


SENTIMENT

VIX: 13.16; +1.89
VXN: 16.22; +1.31
VXO: 11.85; +1.72

Put/Call Ratio (CBOE): 1.20; +0.35

Bulls and Bears:

Market in a recovery mode so the bulls recovered a bit, bears fell a bit,
but no significant change on the week. That likely changes some after
Friday.

Bulls: 54.9 versus 54.5

Bears: 18.6 versus 18.8

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.




Bulls: 54.9 versus 54.5
54.5 versus 54.9 versus 55.3 versus 52.4 versus 47.1 versus 47.6 versus 52.0
versus 55.5 versus 52.9 versus 50.0 versus 49.1 versus 46.6 versus 43.1
versus 43.6 versus 48.0 versus 43.6 versus 42.2 versus 49.5 versus 55.5
versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4
versus 66.00 versus 64.7 versus 66.7 versus 64.4 versus 61.9 versus 64.1
versus 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

Bears: 18.6 versus 18.8
18.8 versus 18.6 versus 18.5 versus 18.5 versus 18.6 versus 18.4 versus 17.6
versus 17.8 versus 17.7 versus 19.2 versus 19.2 versus 19.4 versus 19.4
versus 20.6 versus 20.8 versus 19.6 versus 19.8 versus 18.6 versus 17.5
versus 16.8 versus 15.7 versus 15.5 versus 14.4 versus 14.6 versus 14.4
versus 15.5 versus 12.6 versus 12.8 versus 12.7 versus 13.5 versus 15.2
versus 15.1 versus 15.2 versus 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


OTHER MARKETS

Bonds: 2.873% versus 2.928%. Bonds gapped upside in a flight to safety,
closing just over the 50 day SMA. Could be working on the right shoulder of
a head and shoulders top spanning late May to present. Those often set up,
don't often lead to major selling.

Historical: the last sub-2% rate was in November 2016 (1.867%). 2.928%
versus 2.963% versus 2.977% versus 2.977% versus 2.945% versus 2.95% versus
2.986% versus 3.005% versus 2.962% versus 2.975% versus 2.958% versus 2.982%
versus 2.965%


EUR/USD: 1.1413 versus 1.1526. Sharp break lower, moving through the late
May low as well as the late 2017 lows. The euro just broke lower from a 13
month head and shoulders. Wow. Serious break lower.

Historical: 1.1526 versus 1.16186 versus 1.16001 versus 1.15572 versus
1.15683 versus 1.15864 versus 1.1662 versus 1.1689 versus 1.17074 versus
1.16558 versus 1.17324 versus 1.17385 versus 1.16846 versus 1.16989 versus
1.17214 versus 1.1651 versus 1.16514 versus 1.16603 versus 1.1709 versus
1.1685 versus 1.16608 versus 1.1672 versus 1.17288 versus 1.17578 versus
1.17439 versus 1.1689 versus 1.1665 versus 1.16388 versus 1.1638 versus
1.15634 versus 1.15602 versus 1.16517 versus 1.17031 versus 1.16572 versus
1.16072 versus 1.15762 versus 1.1586 versus 1.15746 versus 1.2624 versus
1.16245 versus 1.15678 versus 1.17973 versus 1.17454 versus 1.17761 versus
1.17737 versus 1.17987 versus 1.1774 versus 1.1762 versus 1.1697 versus
1.166 versus 1.16993


USD/JPY: 110.840 versus 111.07. Doji at support. Against all other
currencies, the dollar is soaring.

Historical: 111.07 versus 111.361 versus 111.344 versus 111.254 versus
111.621 versus 111.628 versus 111.744 versus 110.990 versus 110.995 versus
110.791 versus 110.871 versus 111.235 versus 111.084 versus 111.451 versus
112.732 versus 112.783 versus 112.896 versus 112.337 versus 112.631 versus
112.093 versus 110.911 versus 110.973 versus 110.474 versus 110.666 versus
110.40 versus 110.854 versus 110.687 versus 110.523 versus 110.223 versus
110.097 versus 109.678 versus 109.980 versus 109.895 versus 110.376 versus
110.03 versus 109.783 versus 110.668 versus 110.578 versus 110.247 versus
110.381 versus 110.314 versus 109.466 versus 109.705 versus 110.164 versus
109.878 versus 109.90 versus 109.53 versus 108.767


Oil: 67.63, +0.82. Bouncing off some support at 66.


Gold: 1219.00, -0.90.


MONDAY

Earnings winding down, data ratcheting up. Back end loaded on the week:
retail sales, Empire manufacturing and Philly Fed, industrial production and
capacity, housing starts, leading indicators, Michigan sentiment.

Data is important as it is important the US economy remain strong as it
tackles the trade and other issues from the rogues such as China (don't
agree? Just look at the South China Sea aggression), Iran, Russia, North
Korea, Turkey. Peace through strength -- economic strength as it pays for
everything else.

The July CPI core inflation clocked in at 2.4% year/year with real wages up
just 0.1% a -0.2% move year/year. That is a problem because of the Fed.
The Fed will fear inflation more than it does the yield curve. Ironic is it
not? The Fed desperately wanted to create inflation, and now it has it but
is acting to prevent what it wanted to the point it will stall out the
expansion. Insanity. The Fed likes to say IT prevents the swings.
Baloney. It CAUSES swings that it feels it must then fight. And we need
the Fed for what? Creating cycles it must then fight, kind of like a
firefighter starting fires so they can be extinguished, justifying the need
for more firefighters.

In any event, the economy must be strong for the market as well. Shocks
such as the lira drop should be temporary as it only underscores the US
strength vis- -vis other countries. The dollar is showing that as well.

Thus, in theory, the market should hold and continue higher if the economy
is going to do the same. Ah, but the Fed. The market is a forecaster, not
follower. New highs being sold on higher volume. Leaders sacked as well, a
few recovering to higher highs, most not. New movers trying to be leaders
now struggling again. The trend remains but it could very well be the
bucking at new highs suggesting economic issues ahead thanks to the Fed
tightening into a flat yield curve -- as it always does.

The market action last week was hard on stocks that started moving up,
trying to turn to leaders. They are not wrecked, but many are at support
they have to hold and rebound off if the upside is to continue. MMM, SWK
are examples as they formed ABCD consolidations.

The New High Anxiety makes it more treacherous moving into upside, but then
again you have good moves from TTWO and many software stocks look better
along with AAPL for example. So, we look at some of those upside. Still.

Also, looking at NFLX downside already and likely add FB to that with some
others if the numbers work.

Many are dismissing the trouble at new highs, letting moves by AAPL and a
few others trowel over the cracks others are showing. They may turn out
100% correct in ignoring those other stocks, but we have seen tops start
this way before. Heck, they all start this way with some of the big horses
missing revenues and even bottom line earnings. They are symptomatic of a
larger problem, and when such huge market cap stocks roll over, the market
does as well. That does not mean other stocks cannot take their place;
sometimes it is simply time for new leadership and the money rotates
elsewhere.

Sometimes. Often when the powerful leaders break, everything typically
breaks as well and resets. The confluence of the Fed, the balky market, and
the almost blind confidence that things can only remain good can be
treacherous.

Accordingly, we have to be cautious but we also cannot for certain say a top
is definitely forming; no one can. Thus, we still look at possible upside
from leaders still leaders and in great patterns, such as AAPL, UIS, TTWO,
perhaps FFIV, perhaps others. Also, watching for falling starts, e.g. FB,
NFLX. Looking both ways, the effect of this kind of market.

End part 1
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Sunday, August 05, 2018

The Daily, Part 1 of 3, 8-4-18

* * * *
8/3/2018 Investment House Daily
* * * *

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MARKET ALERTS:

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

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Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.

TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
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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

- The past week had all the key players present: Fed, Trade, Economy, and of
course, the market indices.
- FOMC remains hawkish, even more so, and that is THE market driver now
regardless of the trade issues.
- Techs enjoyed a recovery thanks to some salvaging earnings, but once that
driver is through, the money rotation likely continues.

The past week showed some of all the market sides. The week started
continuing the prior week selling, some sharp selling at that. Wednesday
saw the FOMC rate decision where the Fed was more hawkish (and with at best
two rate hikes before inversion, it is cutting it close) but not so much the
market dropped, instead just holding steady. Thursday the hammer fell with
Trump wanting to increase tariffs from 10% to 25% on the first $200B in
tariffs on Chinese goods. Stocks flopped -- then surged back up intraday.
142 points low to close on the Dow? No! On NASDAQ. The trade issues were
no match for AAPL's earnings as the company's line of cash cow products
produces tons of income even if the company can no longer come up with
innovations.

Friday was jobs Friday and it was a clinker of sorts, though revisions to
the two prior months more than made up the difference. 157K jobs versus the
190K expected (248K June, from 213K). Disappointing, but then again,
Toys-R-Us finally closed its operations in its slow, Ivan Ilyich-like death.
That bled 32,000 jobs from the report. Added back in and, voila, 189K, just
1K off expectations. Tomato, tomato. Everything else status quo as well.
Wages +2.7% year/year. Participation 62.9%. 57K more of those
manufacturing jobs that would never come back came back. 3 month average is
224K per month.

What did stocks do? Not much. After AAPL's big day, NASDAQ was quiet
though TTWO came back to life -- for most of the session. SP500 and DJ30
added some decent 0.5%ish gains. The midcaps were up modestly, RUTX lost a
half percent. Kind of status quo in terms of the action of late outside of
that trade dispute ramp up.

SP500 13.13, 0.46%
NASDAQ 9.32, 0.12%
DJ30 135.42, 0.54%
SP400 0.26%
RUTX -0.52%
SOX 0.20%
NASDAQ 100 0.32%

VOLUME: NYSE -8%, NASDAQ -4%.

ADVANCE/DECLINE: NYSE 1.4:1, NASDAQ -1.4:1. That somewhat tells the tale of
the tape.


Friday basically started a slow reversion back to the recent action that has
seen money move from growth toward the more stoic, and though I hate the
phrase, 'old economy,' stocks. Now those stocks were rattled by the midweek
renewed trade dustup, but they started their recovery Thursday and Friday.
Indeed, many are nicely poised to break higher, e.g. CMI, UTX, et al.
Financials are also rebounding. The rotation continues though it was not
violent last week.

Bigger picture, the stock indices are showing decent patterns, particularly
SP500 and DJ30 as they trek higher to find the prior all-time highs as have
the other indices. SOX remains interesting, quietly building a good pattern
with no one really watching. Very important development for the upside if
SOX can breakout higher.

That said, there is still that rotation that has taken some money from the
growth areas. Those indices are still holding near their highs, but clearly
volatility hit them as they tried to make clean breaks to new highs.
Indeed, NASDAQ broke to a new high with a nice move but was almost
immediately rebuffed, redirected, rejected. Thanks to AAPL's earnings it is
trying to bounce, but again, even that bounce shows the back and forth large
swing volatility.

Moreover, there is the Fed. Wednesday it made clear it is still hiking, and
indeed was even more hawkish, repeatedly using the word 'strong' or a
variation thereof throughout its statement. Who can forget the eloquent and
elegant wording that household spending and business investment 'grew
strongly.' Ah, sheer poetry. The Fed is hiking, and while it clearly knows
what the yield curve is because it discussed it in prior minutes, the math
is getting to the end game. Meaning: At most, the Fed has two 25BP rate
hikes before the bond yield curve totally flattens or inverts. Thus, if the
Fed has designs to keep hiking, something has got to give or else the oldest
and most reliable of economic indicators will indicate a recession coming.

That is why a few very smart people are closely watching over the next six
or so months. That is why we (and I am not saying I am in that group of
very smart people) are so concerned with the RUTX, SP400 and indeed NASDAQ
action. RUTX is very economically sensitive, and as I have noted, has the
worst pattern of the group. Maybe it is just time for small caps to no
longer lead the move. Maybe they just hit a new high, it is summer, and
they need to come back in as do most stocks this time of year. This story
won't be told in a few weeks but in several months, and so, as with others,
we watch closely and try to see where the money is going and gravitate that
direction.

That is why we have picked up positions in the SP500 and DJ30 areas and are
looking at more. Doesn't mean there are no plays in growth areas; of course
there are. The economy is still growing and so are these stocks. Unlike 4
months ago, however, now it is clear there is money moving to other areas
and some of that money is leaving other areas. So, as always, we watch for
sectors and groups showing good accumulation patterns, patterns that tell
you money is moving in. Oh, and of course, watching for those showing
distribution patterns, i.e. money moving out.

Of course, as we watch where money is migrating to and from, we look for
plays to take advantage of those. Right now the macro picture is as stated
above: FOMC is in the background but dominating. That is seen in the
weakness in small caps and to a lesser extent the midcaps. Trade plays a
role as you see in the industrial side hiccups when trade hits the
headlines, BUT the migration of money continues afterward. After NASDAQ
earnings from the big names have emptied their ammo, that migration likely
continues. Then it is up to the Fed whether it goes too far and throws
everything into recession with too many hikes, inverting the curve and
making the same mistakes as Greenspan and indeed all Feds before it.


THE MARKET

CHARTS

NASDAQ: NASDAQ started the week testing the 50 day MA in the middle of its
7+ month uptrend channel. It fell from the new high in very volatile action
as big NASDAQ FAANG names missed earnings. GOOG tried to salvage things
with its good results, and NASDAQ gapped higher only to reverse and then
sell off into Monday. AAPL is now trying to do the repair work, and
Thursday it was working. Friday was a pause session. A test of good
support in a good uptrend channel. A good initial bounce from that support.
Now, will other stocks step in to fill the NFLX, cloud void, e.g. MSFT and
company? That is the question.

SP500: SP500 got the shakes as well late the prior week and into Monday,
but it held the 20 day EMA near the top of its channel, then Thursday pulled
that intraday low to high reversal. Friday it added some more but on low
volume. SP500 is still fighting to find a new high over the January peak,
another 33ish points away. When it gets there, when it catches the car (as
a dog, right?), what will it do? Volatility like NASDAQ and the growth
sectors, or just power on through? Don't forget, even if it is getting new
money or money from the small caps, it too is about to hit the same new
highs.

DJ30: The Dow struggled more on the trade issues than SP500, but it handled
them well enough. Gapped lower Thursday, sold to the 20 day EMA for the
first visit there in four weeks, but recovered intraday to hold the 10 day
EMA. Friday DJ30 bounced from there. No volume, but it too is in its
uptrend channel that is just part of the larger cup base formed off the
January all-time high. DJ30 has over 1100 points to gain to meet that high,
and that, given all the trouble the other indices have had when they hit new
highs, is quite comforting for more upside.

SP400: Continued the Thursday move off the 50 day MA after a week at that
level. Modest Friday gain as SP400 encroaches on the highs from the past
two months. Held the 50 day MA and bounced again, but can it breakout to a
real new high this time around after showing so much indecision at the new
highs for three weeks? Hmm.

RUTX: After a major selloff the prior Friday, RUTX was the black sheep this
Friday as it posted a sizable loss. Bounced Tuesday to Thursday, managing
to recapture the 50 day MA's, stalling Friday when trying to move past the
10 and 20 day EMA. Perhaps it will stretch the pattern laterally into a
pennant/triangle; you can see that trying to develop, and that would be a
positive. For now, still cautious to skeptical about RUTX' prospects.

SOX: The quiet index that is working on a 6 month triangle, holding at the
50 day MA's the past week and a bit more. I hear no one talking about the
group; that is how quiet they are. That is a good indication, i.e. when no
one is bad mouthing, when no one is singing their praises. Just forgotten
until they make a break. Triangles are basically neutral. They can produce
big upside, they can produce big downside. They are a pattern to watch,
however, because when they do break, the tend to break big. In addition,
this is SOX. SOX is often a harbinger for the rest of the market. Is it a
surprise the indices have been stuck for the past 6 weeks as SOX has slid
laterally in its base?


LEADERSHIP

FAANG: AAPL up modestly Friday after its big 1-2 WED/THURS surge. FB was
up the last two days of the week, but it is still below the late July
post-gap highs and the 200 day SMA. Looks miserable and not really a
pattern to play yet. AMZN is solid enough, bouncing nicely Thursday on some
decent trade. The Friday test toward the 10 day EMA may morph into a good
entry for us this week. NFLX recovered Tuesday to Friday, but showing a
doji below the 10 day EMA. If it fails here, NFLX is entering a downtrend.
GOOG is not bad, similar to AMZN, working laterally over the 20 day MA after
filling the earnings gap. We have a play on it if it starts back up.

Software: Showed improvement on the week only to mostly louse it up after
Friday. TTWO helped out, gapping upside on earnings. It managed to fade 6
points off the high, however, gapping past the prior high but unable to hold
that gap intraday and make it a breakaway gap. UIS continued to perform on
through Friday with a solid week after earnings. VMW is back, looking good
in its pattern, just needs to deliver. DATA looked good until Friday when
it flopped back to the 50 day MA. NOW struggled to recover the 50 day MA's.
MSFT looks quite good, one of the bright spots in what was a really solid
leadership group.

Financial: Rebounding after the Tuesday/Wednesday issues. JPM, BAC
bouncing, C looking like a good entry. GS trying to hold the test together
at the 50 day MA. V recovering off the 50 day MA with some good volume then
so-so volume.

Industrial: Still some great setups, e.g. CMI, UTX, IR. MMM starting to
recover, SWK and HON trying to bounce off the 10 day EMA Rocked by the
renewed trade issues, now they need to show they can resume back upside.

Drugs: Big names still moving. PFE is has a rocket strapped to it, and LLY
is similar. Still waiting for BMY to make its move. JNJ moved through the
200 day MA but flipped intraday. Still solid. AGN gapped upside Friday but
light trade. Providing SP500 plenty of support.

Chips: Some very interesting patterns setting up. AMD, XLNX we have plays
on, ready to enter. AMAT may be turning the corner. QCOM strong. LSCC in
a nice pennant. MU may try something as it too is forming a triangle off
that solid May rally.

Retail: Suddenly some key names turn choppy, e.g. M, KORS. TJX, COST, ROST
still holding up well enough, however.


MARKET STATS

DJ30
Stats: +136.42 points (+0.54%) to close at 25462.58

Nasdaq
Stats: +9.33 points (+0.12%) to close at 7812.01
Volume: 2.03B (-3.79%)

Up Volume: 913.67M (-446.33M)
Down Volume: 1.1B (+389.39M)

A/D and Hi/Lo: Decliners led 1.41 to 1
Previous Session: Advancers led 1.57 to 1

New Highs: 95 (-1)
New Lows: 73 (-27)

S&P
Stats: +13.13 points (+0.46%) to close at 2840.35
NYSE Volume: 702.683M (-8.30%)

A/D and Hi/Lo: Advancers led 1.43 to 1
Previous Session: Advancers led 1.46 to 1

New Highs: 113 (+23)
New Lows: 31 (-32)


SENTIMENT

VIX: 11.64; -0.55
VXN: 15.81; -0.50
VXO: 10.14; -0.72

Put/Call Ratio (CBOE): 0.90; -0.07

Bulls and Bears:

A bit of market volatility boosted bears to their highest in 8 weeks. Bulls
held on to their recent levels, unwilling to leave the 50 range the past 8
weeks. That leaves bulls well off the highs, but still near the top of the
historic range that leads to pullbacks.

Bulls: 54.5 versus 54.9

Bears: 18.8 versus 18.6

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: 54.5 versus 54.9
54.9 versus 55.3 versus 52.4 versus 47.1 versus 47.6 versus 52.0 versus 55.5
versus 52.9 versus 50.0 versus 49.1 versus 46.6 versus 43.1 versus 43.6
versus 48.0 versus 43.6 versus 42.2 versus 49.5 versus 55.5 versus 54.9
versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4 versus 66.00
versus 64.7 versus 66.7 versus 64.4 versus 61.9 versus 64.1 versus 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

Bears: 18.8 versus 18.6
18.6 versus 18.5 versus 18.5 versus 18.6 versus 18.4 versus 17.6 versus 17.8
versus 17.7 versus 19.2 versus 19.2 versus 19.4 versus 19.4 versus 20.6
versus 20.8 versus 19.6 versus 19.8 versus 18.6 versus 17.5 versus 16.8
versus 15.7 versus 15.5 versus 14.4 versus 14.6 versus 14.4 versus 15.5
versus 12.6 versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1
versus 15.2 versus 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


OTHER MARKETS

Bonds: 2.95% versus 2.986%. Bonds sold Wednesday after testing the 10 day
EMA Tuesday. Looked as it should be with the Fed hiking rates as the 10
year moved over 3% on the Wednesday close. Then they recovered into Friday,
closing near the 10 day EMA. A failure here means a downtrend is
establishing and consummates a head and shoulders formed from late May.
Again, that is as it should be. Yields should rise, need to rise, to prevent
a Fed induced inversion.

Historical: the last sub-2% rate was in November 2016 (1.867%). 2.986%
versus 3.005% versus 2.962% versus 2.975% versus 2.958% versus 2.982% versus
2.965% versus 2.952% versus 2.962% versus 2.895% versus 2.838% versus 2.88%
versus 2.86% versus 2.856% versus 2.829% versus 2.849% versus 2.853% versus
2.867% versus 2.867% versus 2.824% versus 2.835% versus 2.833% versus 2.871%
versus 2.86% versus 2.84% versus 2.833% versus 2.877% versus 2.882% versus
2.895% versus 2.899% versus 2.937% versus 2.889% versus 2.915% versus 2.922%
versus 2.933% versus 2.977% versus 2.963% versus 2.952% versus 2.948% versus
2.928% versus 2.974% versus 2.935% versus 2.944% versus 2.902% versus 2.86%
versus 2.857% versus 2.79% versus 2.931% versus 2.992% versus 2.982% versus
3.063% versus 3.056% versus 3.06% versus 3.123% versus 3.096% versus 3.069%


EUR/USD: 1.15683 versus 1.15864. Faded all week to the bottom of the 5
week range. Still an overall basing process that looks as if it will break
higher, but wants more information about the trade issues with the EU,
China.

Historical: 1.15864 versus 1.1662 versus 1.1689 versus 1.17074 versus
1.16558 versus 1.17324 versus 1.17385 versus 1.16846 versus 1.16989 versus
1.17214 versus 1.1651 versus 1.16514 versus 1.16603 versus 1.1709 versus
1.1685 versus 1.16608 versus 1.1672 versus 1.17288 versus 1.17578 versus
1.17439 versus 1.1689 versus 1.1665 versus 1.16388 versus 1.1638 versus
1.15634 versus 1.15602 versus 1.16517 versus 1.17031 versus 1.16572 versus
1.16072 versus 1.15762 versus 1.1586 versus 1.15746 versus 1.2624 versus
1.16245 versus 1.15678 versus 1.17973 versus 1.17454 versus 1.17761 versus
1.17737 versus 1.17987 versus 1.1774 versus 1.1762 versus 1.1697 versus
1.166 versus 1.16993


USD/JPY: 111.254 versus 111.621. Bounced off the 50 day MA Tuesday, then
faded back almost to the 50 day MA as of Friday. Trying to breakaway, just
not able to do it yet.

Historical: 111.621 versus 111.628 versus 111.744 versus 110.990 versus
110.995 versus 110.791 versus 110.871 versus 111.235 versus 111.084 versus
111.451 versus 112.732 versus 112.783 versus 112.896 versus 112.337 versus
112.631 versus 112.093 versus 110.911 versus 110.973 versus 110.474 versus
110.666 versus 110.40 versus 110.854 versus 110.687 versus 110.523 versus
110.223 versus 110.097 versus 109.678 versus 109.980 versus 109.895 versus
110.376 versus 110.03 versus 109.783 versus 110.668 versus 110.578 versus
110.247 versus 110.381 versus 110.314 versus 109.466 versus 109.705 versus
110.164 versus 109.878 versus 109.90 versus 109.53 versus 108.767


Oil: 68.49, -0.47. Broke over the 50 day MA to start the week, immediately
gave it up and floundered around to close the week. Massive weakness after
hitting $75.00/bbl, and the pattern the past three months is now bearish
with a potential head and shoulders forming.


Gold: 1223.20, +3.10. Now working laterally the past three weeks, but
still below the 10 day EMA as that nearest of resistance is keeping it in
check. A break lower from here confirms the downtrend.

End Part 1
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Sunday, July 29, 2018

The Daily, Part 1 of 3, 7-27-18

* * * *
7/27/2018 Investment House Daily
* * * *

Investment House Daily Subscribers:

MARKET ALERTS:

Targets hit: AMZN; CRM; JNJ
Entry alerts: None issued
Trailing stops: DATA
Stop alerts: BCRX; FB; FOSL; ROST

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:
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The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.

TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/mo/mo.mp4

TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/ts/ts.mp4

********************************************************************

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

- AMZN beats big on EPS, gaps higher with NASDAQ, but flip the gains.
- Not breakdowns, but a volatile week for growth puts those indices at risk.
- SP500, DJ30 pause, still look solid.
- FAANG stocks may have started to saturate their markets.
- GDP solid, but not as solid as expectations. Combined with the action in
growth indices there could be some trouble.
- GDP at 4.1% dragged a whole 1% lower thanks to a surprise drop in
inventories.

I cannot say Friday was a reversal session in terms of the market, certainly
not for SP500 and DJ30, but I can say it was not good action, particularly
for NASDAQ and growth.

Think about it. AMZN exploded EPS expectations and GDP grew at 4.1%. It
would appear the market had what it needed, i.e. arguably the major stock
more than doubling EPS expectations and GDP surging the most since 2014.
Yet, after a higher open, all indices closed lower, with NASDAQ -1.46% as
AMZN gave up 63 points open to close, giving up a breakout to a new high.

Again, it was not a definitive reversal, but a gift to the market was
refused.

SP500 -18.62, -0.66%
NASDAQ -114.77, -1.46%
DJ30 76.01, -0.30%
SP400 -22.22, -1.11%
RUTX -1.89%
SOX -6.18, -0.45%

VOLUME: NYSE -7.4%, NASDAQ -4%. NYSE trade well below average as there was
no selling just a lack of bids. NASDAQ trade was lower but still well above
average as it sold, a sign that NASDAQ stocks are being unloaded.

ADVANCE/DECLINE: NYSE -2.1:1, NASDAQ -3.4:1. Definitely escalating negative
breadth on the downside.


Not a definitive reversal, but there are issues. Macro and more micro.

First, the micro (the macro will just be a repeat of this past week's
discussion anyway). AMZN earnings. Yes, EPS was amazing at $5.07 versus
2.50 expected. With 49% of all online sales, AMZN has now clearly become
profitable after all those years of plowing everything back into the
company. Fantastic. Just as revenues slow. Yes, AMZN missed on its top
line ($52.89B vs $53.4B). Sure, it is only a tiny 0.51B less, but then AMZN
had to go and warn that Q3 revenue would be light of expectations.

Time to back up. What is going on there? NFLX top line lower and warned
with subscriber growth lower than expected. FB missed the top line and
guided revenues lower with daily and monthly usage lower. GOOG posted just
a slight top line beat; GOOG was the best of the bunch and at least it was
rewarded. AAPL is still to come, but last quarter AAPL already reported
that iPhone sales were lower than expected. With the issues with China I am
not expecting that to change this past quarter.

AAPL has now become the old MSFT: no new tech of its own, just living off
past glory. Tim Cook has had what seems to be many, many years at the helm
and while AAPL is super profitable, it is living off the prior successes.
No new products since Steve Jobs' death. Just iPhone sales growth until
AAPL's i8 and i10 fiasco and the absurd $1000+ phone. Like the 1990's that
owed their success to the tax cuts and regulation reduction in the 1980's.
Clinton was smart: he didn't get in the way of the expansion -- until the
end. I call it the Pittsburg Steelers syndrome from the 1970's. People
said anyone could have quarterbacked that team and won. Not saying I agree
with the premise, but it illuminates the idea: riding on what other's built.

I touched on this earlier in the week: market penetration by FAANG companies
is reaching plateau level. It happens in all retailers and let's face it,
these companies are retailers. FB sells its data. Three times it denied
its existence, but in the end it turns out it sold data to dozens and dozens
and dozens of companies and countries -- even the Russians heaven forbid.
AAPL sells iPhones. NFLX sells movies and shows. GOOG is the outlier.

What happens with retailers is they are growth stocks as long as they are
entering new markets and opening new stores. Once they move toward market
saturation, growth over and the stock price reflects it. SBUX, CHS, CMG,
ZUMZ -- the list is miles long because it happens to every retailer. Now
FAANG stocks are hitting this wall. AAPL through a lack of creativity, NFLX
and FB through numbers. At 49% you have to wonder just how much more AMZN
can do. That is why it is branching out into other areas a la GOOG.

For the NASDAQ you have to consider that its horsemen are peaking out in
terms of growth. Dell, CSCO, HPQ, INTC -- the hardware makers had their own
similar issues when their markets became saturated. Others over the next
several years will emerge to take their place as new areas of tech appear.
And these stocks won't disappear from the leaderboard for quite some time.
It is never linear at first, but when it starts it is inevitable unless they
reinvent the company. AAPL could actually come out with something useful
other than the next iteration of the iPhone. AMZN moves into new areas such
as space travel.

In any event, near term some of these leaders are no longer the same buy on
the dips that they were. NFLX, AAPL, FB in our book have lost that tag.
While we said get used to buying these in the second half of 2017 due to the
market conditions, now we are going to have to be very selective with these
stocks. That also means NASDAQ will likely struggle as it finds
replacements. Near term it is very likely NASDAQ has peaked for now.

Second is the macro discussed all last week: the market action on NASDAQ and
the small and midcap indices suggests distribution given the volatile day to
day swings at or near new highs. Sellers are at least as aggressive as the
buyers at these levels. Our concern is the growth indices are starting to
undergo distribution (selling out by big money) as an indication the Q2 4.1%
GDP is the high water mark for the near term. That remains to be seen, but
RUTX and SP400 have faltered at the prior highs, and if they sell
aggressively that suggests the domestic economics are deteriorating.

Also in the macro is the Fed, for now still in the background. It is hiking
and its last statement and minutes indicate it plans to keep hiking even if
the yield curve remains flat and threatens inversion. Despite its hiking,
the long end overall remains weak when it should rise. That also suggests
weakening economic activity. If the Fed does what it usually does, i.e.
hike into a slowdown, it is a real threat to tank the nice economic
expansion.

I don't mean to sound like a downer, but just recognizing what the various
markets are showing. The industrial side, the NYSE large caps and the like,
can still get money from a peaking growth side and continue their relatively
new moves off the lows. Again we are looking at plays in those areas this
weekend in addition to a spread of downside plays on areas appearing to be
losing money. It could be we see the more vicious rotation where money is
taken from some sectors and placed in others, causing the drop of the sector
losing the money. That looks to be the situation the past couple of weeks.

NEWS/ECONOMY

GPD, Q2: Not bad, not as good as expected, but the headline understates the
strong activity.

The 4.1% was a miss of the 4.4% expected (and 5+% whisper). That was in
itself a disappointment, but look at why not 5%: inventories showed a
surprise large drop as sales outstripped production. Thus inventories fell,
and a big part of GDP fell. Indeed, the drop in inventories pulled a full
1% off of the overall GDP. Thus, if inventories were as expected, GDP would
boast +5.1%.

As noted, inventories did not drop because manufacturers are sitting on
their hands. Sales ramped up more than expected and pulled inventories
lower. Further, imports rose as they tend to do when the US consumer is in
good spirits and consuming -- Personal Consumption jumped 4.0% versus 0.5%
in Q1. Looking good, Billy Ray. Feeling good Louis. That combined action
pulled a 5+% GDP down to a 'mere' 4.1%.

GDP Q2: 4.1 vs 4.4 exp vs 2.2 Q1 (from 2.0). Nice revision.

Personal Consumption: 4.0% vs 0.5% Q1

Price Index: 3.0 vs 2.2 exp vs 2.0 prior

PCE: 2.0 vs 2.2 vs 2.2 prior

Business Investment: 7.3% vs 11.5% Q1

Government Spending 2.1%.


MARKET

CHARTS

NASDAQ: Back and forth all week over the 10 day EMA as it hit new highs
then immediately sold back. After a doji at the 10 day EMA Thursday, NASDAQ
gapped upside gratis AMZN, but then reversed to take out the 20 day EMA and
touch the bottom of the two week lateral range on the low. Not a breakdown
as noted earlier, but definitely rejected at the new high, not just Friday,
but Tuesday and Thursday as well.

SP400: Not a breakdown either, but definitely sellers in the mix as it sold
hard Tuesday and Friday, both days closing near the 50 day MA. Still near
the all time highs in its three week lateral range, still fending off a
breakdown, but clearly it was sold as it tried for new highs.

RUTX: RUTX tapped the prior highs on the Tuesday intraday high then
reversed. A modest bounce into Thursday was pounded lower Friday, dropping
RUTX all the way back to the 50 day MA. Not a breakdown here either, and
just as with the other indices RUTX could use this test of support to rally
back upside. Did this in early July after the last June beat down. Would
maintain that trend if it did. It never, however, reached a definitive new
high on the move, turning lower instead. That shows a weaker move and RUTX
has to prove it can continue back upside.

SP500: Broke to a higher recovery high Wednesday then faded into Friday and
a test of the 10 day EMA on the close. Down but lower volume and SP500
remains in good position to take on the all-time high from late January.

DJ30: Surpassed the June high on the week, leaving the late February peak
and the January all-time high still out there. That is good; plenty of room
to run with the new money coming DJ30's way. Near term DJ30 is almost at
the upper channel line from the uptrend that started in March. It may want
to test a bit more before resuming the move and that run at those prior
highs. Overall DJ30 continues to look good in its recovery.

SOX: A slow process but SOX continues its attempt to rise off the 5 week
crawl up the 200 day SMA. It is just hanging on, but it is hanging on.


LEADERSHIP

Leaders in FAANG, software struggle as financial, drugs, some industrial
sectors, certain transports, certain large cap food are performing.

FAANG: continue to struggled despite AMZN beating the bottom line and
gapping upside. It gave up most of that gain. GOOG faded to the 10 day
EMA, still solid on its earnings gap. FB not recovering from the Thursday
bomb gap below the 200 day SMA. NFLX still struggling below the 50 day MA.
AAPL touched a higher high Thursday, reversed that day, then flopped to the
20 day EMA Friday. Not a good looking group.

Financial: Good week, still moving higher as of Friday, e.g. JPM, C, BAC,
GS. V announced results, held up reasonably well, then dropped some Friday.
Still very solid overall.

Drugs: Strong week for the old big names, e.g. PFE, LLY. BMY, MRK moved
well early week but then struggled Friday with moves lower. Others that
have moved well, e.g. ARWR sold harder Friday. JNJ jumped nicely into
Friday, testing the 200 day SMA.

Industrials: Great week for some though Friday was lower. UTX surged into
Friday but turned lower on the close. BA was decent off the 50 day MA. HON
surged all week, paused Friday. TEX poses an interesting pattern, and CMI
looks as if it is setting up to move higher through the 50 day MA.

Metals: Very improved. NUE may try the breakout from a big triangle. AKS,
SID working well. STLD looks decent in a test at the 50 day MA. We will
see if this group can lead.

Software: A good group but under fire. ADBE sold hard Friday to the 20 day
EMA. DATA sold to the same level on a volume jump. TTWO gapped lower below
the 20 day MA but held decently. VRSN surged on earnings then gave it all
back, managing to hold the 10 day EMA. ATVI broke down hard last week. NOW
very volatile to end the week.

Energy: As volatile as ever. CVX came off the 200 day SMA and was solid
Friday. Others struggled, e.g. APC, APA, MRO. GPOR broke lower. Still
very mixed.


MARKET STATS

DJ30
Stats: -76.01 points (-0.30%) to close at 25451.06

Nasdaq
Stats: -114.77 points (-1.46%) to close at 7737.42
Volume: 2.19B (-3.95%)

Up Volume: 652.38M (-467.62M)
Down Volume: 1.52B (+390M)

A/D and Hi/Lo: Decliners led 3.4 to 1
Previous Session: Advancers led 1.21 to 1

New Highs: 76 (-46)
New Lows: 106 (+39)

S&P
Stats: -18.62 points (-0.66%) to close at 2818.82
NYSE Volume: 753.915M (-7.36%)

A/D and Hi/Lo: Decliners led 2.1 to 1
Previous Session: Advancers led 1.43 to 1

New Highs: 71 (-66)
New Lows: 40 (+9)


SENTIMENT

VIX: 13.03; +0.89
VXN: 18.72; +1.85
VXO: 11.54; +0.31

Put/Call Ratio (CBOE): 1.05; +0.31

Bulls and Bears:

Modest moves with bulls holding near 55, bears near 18.6. Not telling a lot
right now, but bigger picture, bulls remain off the highs over 6 hit early
2018.

Bulls: 54.9 versus 55.3

Bears: 18.6 versus 18.5

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 55.3
55.3 versus 52.4 versus 47.1 versus 47.6 versus 52.0 versus 55.5 versus 52.9
versus 50.0 versus 49.1 versus 46.6 versus 43.1 versus 43.6 versus 48.0
versus 43.6 versus 42.2 versus 49.5 versus 55.5 versus 54.9 versus 48.6
versus 48.1 versus 48.5 versus 41.9 versus 54.4 versus 66.00 versus 64.7
versus 66.7 versus 64.4 versus 61.9 versus 64.1 versus 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

Bears: 18.6 versus 18.5
18.5 versus 18.5 versus 18.6 versus 18.4 versus 17.6 versus 17.8 versus 17.7
versus 19.2 versus 19.2 versus 19.4 versus 19.4 versus 20.6 versus 20.8
versus 19.6 versus 19.8 versus 18.6 versus 17.5 versus 16.8 versus 15.7
versus 15.5 versus 14.4 versus 14.6 versus 14.4 versus 15.5 versus 12.6
versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1 versus 15.2
versus 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


OTHER MARKETS

Bonds: 2.958 versus 2.982%. Bonds rallied despite good economic data.

Historical: the last sub-2% rate was in November 2016 (1.867%). 2.982%
versus 2.965% versus 2.952% versus 2.962% versus 2.895% versus 2.838% versus
2.88% versus 2.86% versus 2.856% versus 2.829% versus 2.849% versus 2.853%
versus 2.867% versus 2.867% versus 2.824% versus 2.835% versus 2.833% versus
2.871% versus 2.86% versus 2.84% versus 2.833% versus 2.877% versus 2.882%
versus 2.895% versus 2.899% versus 2.937% versus 2.889% versus 2.915% versus
2.922% versus 2.933% versus 2.977% versus 2.963% versus 2.952% versus 2.948%
versus 2.928% versus 2.974% versus 2.935% versus 2.944% versus 2.902% versus
2.86% versus 2.857% versus 2.79% versus 2.931% versus 2.992% versus 2.982%
versus 3.063% versus 3.056% versus 3.06% versus 3.123% versus 3.096% versus
3.069%


EUR/USD: 1.16558 versus 1.17324

Historical: 1.17324 versus 1.17385 versus 1.16846 versus 1.16989 versus
1.17214 versus 1.1651 versus 1.16514 versus 1.16603 versus 1.1709 versus
1.1685 versus 1.16608 versus 1.1672 versus 1.17288 versus 1.17578 versus
1.17439 versus 1.1689 versus 1.1665 versus 1.16388 versus 1.1638 versus
1.15634 versus 1.15602 versus 1.16517 versus 1.17031 versus 1.16572 versus
1.16072 versus 1.15762 versus 1.1586 versus 1.15746 versus 1.2624 versus
1.16245 versus 1.15678 versus 1.17973 versus 1.17454 versus 1.17761 versus
1.17737 versus 1.17987 versus 1.1774 versus 1.1762 versus 1.1697 versus
1.166 versus 1.16993


USD/JPY: 110.995 versus 110.791.

Historical: 110.791 versus 110.871 versus 111.235 versus 111.084 versus
111.451 versus 112.732 versus 112.783 versus 112.896 versus 112.337 versus
112.631 versus 112.093 versus 110.911 versus 110.973 versus 110.474 versus
110.666 versus 110.40 versus 110.854 versus 110.687 versus 110.523 versus
110.223 versus 110.097 versus 109.678 versus 109.980 versus 109.895 versus
110.376 versus 110.03 versus 109.783 versus 110.668 versus 110.578 versus
110.247 versus 110.381 versus 110.314 versus 109.466 versus 109.705 versus
110.164 versus 109.878 versus 109.90 versus 109.53 versus 108.767


Oil: 68.69, -0.92. Struggling after recovering to the 50 day MA.


Gold: 1223.00, -2.70. Moved up to the 10 day EMA on the week, then
stalled, gapping lower Friday.

End part 1
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Saturday, July 21, 2018

The Daily, Part 1 of 3, 7-21-2018

* * * *
7/21/2018 Investment House Daily
* * * *

Investment House Daily Subscribers:

MARKET ALERTS:

Targets hit: ISRG
Entry alerts: FOSL; ROST
Trailing stops: NVDA
Stop alerts: JD

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:
https://www.investmenthouse.com/alertdaily.html

********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.

TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/mo/mo.mp4

TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/ts/ts.mp4

TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************

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

- Expiration 'fireworks' not about the market, but about the President.
- Market initially overcomes Trump on China trade, Trump on the Fed, but
slides on his lawyer's tape discussing a Playboy model payoff.
- High to low action, but a very quiet expiration.
- Large cap indices set up to move higher and with copious amounts of
earnings results coming, the will have the ammo if they want to move.
- Finding plays not just ahead of earnings is a bit challenging right now,
but some non-tech areas do look promising for the first time in a long time.

Stocks started mixed, but with the uptrend they found bids and rallied
positive, cruising into midmorning.

This despite Trump telling Joe Kernen China was a currency manipulator,
undermining the gains in the US. As a result, Trump stated he was 'ready to
go' on $500B of tariffs that would cover all Chinese goods.

Trump also had a beef with the Fed, stating Powell was a good man, but
raising rates at this juncture when the US was making good progress was only
driving up the dollar and making debt service costlier.

Oh my did the media go berserk. I had to change the channel away from CNBC
even sooner than usual, moving over to a fairly liberal Bloomberg that was,
by comparison, much tamer, much more attached to reality than the CNBC
non-Kernen anchors. The female CNBC 'news anchor' was beside herself
calling the President's positions 'crazy,' also noting that the President
wanted to CONTROL other agencies, giving the attorney general as an example.
Well, of all the nerve, the President wanting to control an agency that is
under the Executive Branch, i.e. an agency CONTROLLED by the President. The
result of our schools forgoing teaching our children what the Constitution
actually says even with respect to the very basic, three-branch governmental
system, is showing. It was so bad that even some of the liberal guests
(e.g. Jared Bernstein, former VP Biden's economic advisor) had to chime in
and say the President's comments were just not that bad.

I know, I know, this sounds like a personal problem, but it is really a
problem for everyone. News reporting that is passing itself off as unbiased
but always taking the same side on every story, pursuing only one line of
questioning. Failure of our education system to instill in our children the
most basic understanding of why we are the country we are and how we formed
and what truths we hold dear. Thus, we end up electing a socialist in New
York who wants the federal government to oust private ownership of companies
in favor of government control. A person who does not understand that the
unemployment rate does not move lower because someone has two jobs instead
of one. We are creating incredibly ignorant young adults, and equally
ignorant young adults are electing them to office. My son fumes when I say
such things, but he is well-versed in US history and economic history and is
in the incredibly small minority of his peers who understand economic cause
and effect.

The point: the market didn't care about Trump's tweets. China is
manipulating its currency lower, despite the condition and its pledge upon
joining the WTO that it would not, and it appears investors are taking this
as a sign China is losing the trade war, a war that really has not yet
started, that Trump has not yet begun to fight.

But, I digress.

Then at midmorning, another story hit. Was it the Fed Chair resigning after
Trump's tweets? No. A conflict erupting in the South China Sea? No. A
political assassination by the Russians and no doubt personally ordered by
Putin? No. Bill Clinton grope and sexually harass another woman? No! The
NYT reported TRUMP, having paid a Playboy model claiming to have had an
affair with Trump, was the one abusing women. Apparently there is a tape
that Trump's lawyer made in a discussion between Cohen and Trump where this
was discussed, a tape that was part of the items picked up in the FBI's raid
of Cohen's office. How this is not attorney-client privilege and EVER got
out from the wholly unbiased, apolitical, justice-seeking, of highest
probity FBI is a complete mystery. As you can see, once again, the laws of
the US are no longer applied equally.

Stocks peaked for the day on this news and started a gradual downtrend into
the Friday close.

SP500 -2.66, -0.09%
NASDAQ -5.10, -0.07%
DJ30 -6.38, -0.03%
SP400 -0.53%
RUTX -0.26%
SOX -0.49%
NASDAQ 100 -0.03%

VOLUME: NYSE +12%, NASDAQ -4%. NYSE trade moved above average, NASDAQ
remained below average and actually fell. Expiration Friday so higher
volume on NYSE was nothing special. Lower volume on NASDAQ was rather
surprising.

ADVANCE/DECLINE: NYSE -1.1:1, NASDAQ -1.1:1. Rather boring expiration.

All of the July expiration 'fireworks' had nothing to do with stocks.
Charlie 'the blabbermouth' Gasparino on FoxBusiness, panting and drooling
with excitement, openly mused this was perhaps just a teaser.

Perhaps, but this is nothing new for Trump, is it? Same kind of allegations
(or more) during the campaign. And it mattered . . . not. Everyone knew
Trump was no Boy Scout. Those that voted for him were tired of the same
old, same old, and knew Trump was not a best buddy. I heard one woman say
he was a pig, but she was not voting for pastor but for someone who would
change the business as usual DC crapola. Thus, I would be surprised if this
has ANY impact on Trump over a week from now. His policies are popular with
his voters and with many independents, and they seem to realize the flaws,
the 'pig-like' actions are part of the package. They don't care, they voted
to put a new sheriff into DC town, someone like Wyatt Earp to be hard-nosed
and clean things up.

I don't mean to make this sound like some kind of gushing over Trump. It is
not. I am distilling what I have heard from several republican friends
about their support for Trump even if these kind of things are revealed.
Hey, the democrats still loved Bill Clinton for doing the same or worse, so
I can at least understand the sentiment.

The question for us is whether this means much other than a fade from the
highs on one expiration Friday. Doubt it. If tape after tape after tape
emerges painting Trump as a beast, then yes it has impact. Other than that,
the Friday fade back to flat by the indices is likely about all those Trump
haters will get out of this, at least in terms of the market action.

So, after that somewhat digression I have to say that the market action
Friday, while disappointing, was not a reversal. It was a damn boring
session, but not a reversal. Sometimes boring can be good as when stocks or
indices are working on bases. The quiet lets them go about their business,
and then things get noisy when the post a breakout move.

Of course the action Friday left the indices unchanged. After good moves
Thursday, promising moves toward the prior highs, SP400 and RUTX faded, RUTX
part of the move, SP400 all of its move. Not reversals, but leaving SP400
and RUTX still below the key prior peaks.

NASDAQ, SP500 and DJ30 lost some ground but that is fine. They all rallied
higher the past two weeks or more and needed a break. They are taking that
break with very modest fades. SP500 and DJ30 look exceptionally good on
this test, and given the patterns we anticipate a turn back upside in the
not too distant future.

Earnings season is here with dozens reporting next week. We are still
looking at playing some pre-earnings moves, but the primary interest for new
positions is the counterpunching after the earnings release and the stock
shows its break. These results could help break DJ30 and SP500 back to
their upside moves. BA, UTX are setting up well and announces results, an
important industrial stock. CELG announces and it has also put in a good
pattern as have many large biotechs. AMZN, AMGN, INTC announce Thursday.
Plenty of important earnings are ahead this week, earnings that could power
the large cap indices higher.



THE MARKET


CHARTS

DJ30: The Dow is in a 2-day fade after almost 3 weeks upside that
approached but didn't really threaten the early June peak. The banks and
some industrials perked up the past week, fading back to end the week,
setting up the same as the Dow. DJ30 looks set up very well to continue
higher, and some earnings this week could be the driver.

SP500: SP500 broke through the June and March highs and is now testing as
well, fading Thursday and Friday, waiting for the 10 day EMA to catch up.
Set up well, waiting on earnings.

NASDAQ: Rallied to a new high early week then slid laterally into Friday.
NASDAQ big names continue to push upside. The big change was the demise of
NFLX and its near-term trend. Gapped lower on earnings, recovered off the
lows but then stalled out. Other big names are in modest pullbacks similar
to DJ30 stocks, i.e. fading Thursday and Friday to test near support. MSFT
reported strong results, INTC is set to release results in the coming week.
NASDAQ continues in its uptrend.

SP400: Showed promise Thursday with a break higher to match the early July
peak. Faded Friday. Made a shallow test after the prior July high, is
rebounding as it needed to do, but it has not made the new breakout yet.
Critical for SP400 to make that move.

RUTX: As noted Thursday, RUTX' pattern is not as solid as SP400 with the
twin peaks. It tested the 20 day EMA off that second peak and has rebounded
Tuesday to Thursday, putting in a strong move Thursday. Friday it stalled,
fading just modestly. RUTX may bounce around here for a few sessions, but
it needs to make the breakout.

SOX: Trying to make a move off the 200 day SMA stick, SOX moved higher but
struggled after reaching the 50 day SMA. Looks as if it will put in a
higher low over the 50 day EMA and continue the break higher. INTC's
earnings will have something to do with that.


LEADERSHIP

FAANG: NFLX changed character on the week with its earnings miss. FB
continued its slow climb up the 10 day EMA. It announces results this week.
AMZN rallied to a new high, faded late week but is in very good position as
are many of the big name market leaders. GOOG is the same, surging early in
the week then fading to test the 10 day EMA. Very good positioning. AAPL
remains the forgotten stock of the group, in a 2 week tight lateral range.

Software: Some members of the group struggled, e.g. VMW, FFIV. Others
added to moves though slowed late week: DATA, ADBE; VRSN, TTWO. MSFT
announced solid results, gapped higher, faded much of the move. Good
earnings setting the stage.

Financial: Banks picked it back up Friday after a Thursday loss. JPM, BAC
up on strong volume. C looks good. V and MA put up modest Friday numbers
but look very good with V heading into earnings the coming week.

Industrials: BA tested more, setting up well ahead of earnings. UTX is
putting in an excellent test ahead of its results. HON exploded higher
Friday on huge trade with excellent earnings. TEX in a weeklong test back
to the 200 day SMA.

Energy: Down week for the group with oil falling as well. Many are testing
key support after 1 to 2 weeks of testing. APC ended at the 50 day MA, a
support it has used often. EOG showing a doji over the 50 day MA's, ESV at
that level as well. GPOR testing the 200 day. DO didn't make it; Friday it
broke sharply lower below the 50 day MA.

Drugs/Biotechs: MYGN broke higher again on the week. CELG, AMGN look very
good in pullbacks testing moves, earnings ahead this week. AGN solid in a
200 day SMA test. JNJ gapped upside Tuesday, could not hold and filled the
gap back at the 50 day MA. It could make its move upside as well.

Retail: Good week, sloppy finish Friday. ROST, TJX, FOSL all look good,
struggled Friday. RH, solid looking, needs to bounce. M broke higher
nicely, paused Friday.

Chips: As with many other areas, some very good setups heading into
earnings, e.g. TXN, SLAB. TSM powered higher to the 200 day SMA on its
earnings. Others were hit -- the story of the group, i.e. very bifurcated.
QRVO sold hard, SWKS dumped on its results.


MARKET STATS

DJ30
Stats: -6.38 points (-0.03%) to close at 25058.12

Nasdaq
Stats: -5.10 points (-0.07%) to close at 7820.20
Volume: 1.78B (-4.3%)

Up Volume: 721.95M (-111.22M)
Down Volume: 1.03B (+30M)

A/D and Hi/Lo: Decliners led 1.11 to 1
Previous Session: Advancers led 1.17 to 1

New Highs: 130 (+12)
New Lows: 39 (-7)

S&P
Stats: -2.66 points (-0.09%) to close at 2801.83
NYSE Volume: 816.81M (+11.48%)

A/D and Hi/Lo: Decliners led 1.13 to 1
Previous Session: Advancers led 1.49 to 1

New Highs: 90 (+9)
New Lows: 32 (-8)


SENTIMENT

VIX: 12.86; -0.01
VXN: 17.11; -0.24
VXO: 11.41; +0.05

Put/Call Ratio (CBOE): 0.98; +0.08

Bulls and Bears:

Bulls popped back up like a cork from 47.1 after the rise and drop. Got
overdone to the downside as everyone turned negative just as the market
bounced. Now is it too high? Not really. It was over 60 recently; a bit of
room but not much.

Bulls: 55.3 versus 52.4

Bears: 18.5 versus 18.5

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: 55.3 versus 52.4
52.4 versus 47.1 versus 47.6 versus 52.0 versus 55.5 versus 52.9 versus 50.0
versus 49.1 versus 46.6 versus 43.1 versus 43.6 versus 48.0 versus 43.6
versus 42.2 versus 49.5 versus 55.5 versus 54.9 versus 48.6 versus 48.1
versus 48.5 versus 41.9 versus 54.4 versus 66.00 versus 64.7 versus 66.7
versus 64.4 versus 61.9 versus 64.1 versus 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

Bears: 18.5 versus 18.5
18.5 versus 18.6 versus 18.4 versus 17.6 versus 17.8 versus 17.7 versus 19.2
versus 19.2 versus 19.4 versus 19.4 versus 20.6 versus 20.8 versus 19.6
versus 19.8 versus 18.6 versus 17.5 versus 16.8 versus 15.7 versus 15.5
versus 14.4 versus 14.6 versus 14.4 versus 15.5 versus 12.6 versus 12.8
versus 12.7 versus 13.5 versus 15.2 versus 15.1 versus 15.2 versus 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


OTHER MARKETS

Bonds: 2.895% versus 2.838%. Yields surged as bonds crashed. Trump
lamented the Fed's rate hikes and to many that only cemented another hike in
September as the Fed would have to show its 'independence.' Certainly
looked as if the market was heading that way.

Historical: the last sub-2% rate was in November 2016 (1.867%). 22.838%
versus 2.88% versus 2.86% versus 2.856% versus 2.829% versus 2.849% versus
2.853% versus 2.867% versus 2.867% versus 2.824% versus 2.835% versus 2.833%
versus 2.871% versus 2.86% versus 2.84% versus 2.833% versus 2.877% versus
2.882% versus 2.895% versus 2.899% versus 2.937% versus 2.889% versus 2.915%
versus 2.922% versus 2.933% versus 2.977% versus 2.963% versus 2.952% versus
2.948% versus 2.928% versus 2.974% versus 2.935% versus 2.944% versus 2.902%
versus 2.86% versus 2.857% versus 2.79% versus 2.931% versus 2.992% versus
2.982% versus 3.063% versus 3.056% versus 3.06% versus 3.123% versus 3.096%
versus 3.069%


EUR/USD: 1.17214 versus 1.1651. Euro jumped back up on the Trump comments.

Historical: 1.1651 versus 1.16514 versus 1.16603 versus 1.1709 versus 1.1685
versus 1.16608 versus 1.1672 versus 1.17288 versus 1.17578 versus 1.17439
versus 1.1689 versus 1.1665 versus 1.16388 versus 1.1638 versus 1.15634
versus 1.15602 versus 1.16517 versus 1.17031 versus 1.16572 versus 1.16072
versus 1.15762 versus 1.1586 versus 1.15746 versus 1.2624 versus 1.16245
versus 1.15678 versus 1.17973 versus 1.17454 versus 1.17761 versus 1.17737
versus 1.17987 versus 1.1774 versus 1.1762 versus 1.1697 versus 1.166 versus
1.16993 versus 1.16643 versus 1.15446 versus 1.17148 versus 1.17096 versus
1.17022 versus 1.17826 versus 1.1786 versus 1.17714 versus 1.1802 versus
1.1811 versus 1.18272 versus 1.19358 versus 1.19411 versus 1.1913 versus
1.18533 versus 1.18672 versus 1.19150 versus 1.19619 versus 1.1983 versus
1.1978 versus 1.19896 versus 1.20741 versus 1.21291 versus 1.21788 versus
1.2163 versus 1.22232


USD/JPY: 111.451 versus 112.732. Dollar dropped hard against the yen as
well.

Historical: 112.732 versus 112.783 versus 112.896 versus 112.337 versus
112.631 versus 112.093 versus 110.911 versus 110.973 versus 110.474 versus
110.666 versus 110.40 versus 110.854 versus 110.687 versus 110.523 versus
110.223 versus 110.097 versus 109.678 versus 109.980 versus 109.895 versus
110.376 versus 110.03 versus 109.783 versus 110.668 versus 110.578 versus
110.247 versus 110.381 versus 110.314 versus 109.466 versus 109.705 versus
110.164 versus 109.878 versus 109.90 versus 109.53 versus 108.767


Oil: 68.26, +0.51. A tough prior week, then oil bounced back to the 50 day
MA into Friday. Still not a great pattern.


Gold: 1231.10, +7.10. With all the turmoil, gold shot higher. That still
leaves it in the downtrend, rebounding but just toward the 10 day EMA.


MONDAY

Large cap indices set up well. Small and midcaps near the old highs in a
very important test of those. Earnings are queued up, ready to drive the
action.

Will the earnings provide a catalyst? Most are good with good guidance.
There are some guidance misses and warnings, however, and some analysts are
talking around this being the near term peak in results. No doubt weak
guidance from big names dampens enthusiasm.

As discussed Thursday, this earnings season we are a bit reluctant to ride
too many through earnings or take on new positions with the intention of
holding then through the results. Typically that is not our favorite play
and with some guidance issues it becomes even less so. Picking good entries
after earnings is the preferred method as the skeletons are out of the
closet. Banks are an example. JNJ has filled the earnings gap higher.
Looking for those as vehicles to use when SP500, DJ30 and NASDAQ bounce from
these nice little tests.

Have a great weekend!

End part 1
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