Saturday, February 17, 2018

The Daily, Part 1 of 3, 2-17-18

* * * *
2/17/2018 Investment House Daily
* * * *

Investment House Daily Subscribers:

MARKET ALERTS:

Targets hit: AMZN; DCPH; NFLX; RACE; RHT; SQ
Entry alerts: ROKU
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

********************************************************************
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:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4

TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://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

- Market moves from low to high, but then back to low.
- Indices show tombstone doji at key levels, many leading stocks do the
same.
- Still some leadership groups look very good, but have to be aware of the
levels being tested and the history of these kind of moves.
- Gold is up on excess spending, and the ideas for raising more revenue are
stupid.
- Being ready for all scenarios gives you the confidence to make your plays.

Was it just expiration and the 3-day weekend (Washington's Birthday; I am
old school in the holiday names)? Or was it 6 days straight up off of and
including the prior Friday reversal? How about the indices bumping what we
considered resistance for this relief bounce? All of the above?

Friday produced another back and forth session. Futures were higher with
DJ30 100+ to the upside, but by the open the gains turned to losses. But at
the open, stocks turned and surged right back up into midday, posting really
nice gains: SP500 +23, NASDAQ +46, DJ +232. That was it. The bids ended,
sellers took over and the gains were given back lock, stock, and barrel by
the afternoon session. Stocks spent the balance of the day trading back and
forth, the indices ending mixed, reflecting that lack of drive.

SP500 1.02, 0.04%
NASDAQ -16.96, -0.23%
DJ30 19.01, 0.08%
SP400 0.22%
RUTX 0.41%
SOX -0.35%
NASDAQ 100 -0.36%

VOLUME: NYSE +9%, NASDAQ -4%. Modestly above average volume on NYSE showing
some churn given the doji. NASDAQ average trade shows no kick up in the
selling. If it had surged, then that would have been bad.

ADVANCE/DECLINE: NYSE 1.4:1, NASDAQ 1.4:1.

Relatively innocuous closes on the day, but the details are very telling,
suggesting the relief move could have topped out.

CHARTS

All of the indices rallied higher and touched or came very close to the
levels we see as very likely peaks for the relief move that then turns back
to test the recent low. A bit too fast getting there, and they may bump at
these levels a bit more before giving up, but it is what it is. They all
showed tombstone doji on the session, and after a furious reversal the prior
Friday and a 6 session surge, that strongly suggests the relief move is
capping out. At the very minimum is suggests a pause. Given the market
circumstances, I would not assume a pause.

SP500: We pegged 2740 to 2750 (61% Fibonacci retracement at 2743) as
resistance with 7262 (upper gap point from early February) as the outside
high. SP500 moved past the midpoint in that gap zone Friday, also moving
past the 61% retracement (2754.42 intraday high). It then reversed to a
tombstone doji. As noted, after such a surge and in this kind of market
with that huge selloff, this suggests a reflex move is at or near its end.

NASDAQ: The same action, just different levels. NASDAQ filled the second
gap lower from early February (the big gap) and moved to 7303, the point of
a small price consolidation in mid-January. Didn't make 7317 (78% Fibonacci
retracement), but it made a game shot at it. After that rise, however,
NASDAQ tossed it back, closing with a tight tombstone doji. After a furious
670 points in 6 sessions recovering from a huge selloff, NASDAQ retraced 70%
of the move and indicates the relief rally is on the edge of the knife.

DJ30: The Dow rallied up to and through the 61% Fibonacci retracement,
hitting 25,432 at the high. That moved DJ30 into the gap down zone from
early February, but it was unable to make it to the upper gap. BTW, the gap
was filled the day after the gap as DJ30 moved higher to test that selloff
only to roll over and sell massively that session. Thus, the gap is filled
and with DJ30 showing a tombstone along with every other index on Friday, it
looks as if the Dow has hit our targets for the relief move and that move
now risks falling back to test that prior low.

SP400: The midcaps moved up to tap at the 50 day MA and the 61% Fibonacci
retracement, the levels we pegged for it, and backed off half the move. Not
the tight doji of the large cap indices, but the midcaps have followed the
lead of the large caps all the way.

RUTX: Moved through the 50 day MA's the coincident 61% Fibonacci
retracement, and the November peak. It then turned back with the other
indices. As with SP400, not a tight doji, just hitting the resistance we
cited for it and then fading the move to a still solid session gain. Bigger
picture, however, it has rallied off a massive selloff, retracing over 60%
of the move, but running into key resistance with a pattern that suggests a
turn back down.

SOX: SOX continued its relief move, moving through the 61% Fibonacci
retracement with some authority, but before it got to the November peak at
1342, it pulled up short (1334) and reversed to a loss and a tight tombstone
doji. That is close enough to be concerned that the relief move is ending,
especially given the action in the other indices. With the patterns in many
chips, the relief move does appear in jeopardy.


LEADERSHIP

If you look at the big names that led the relief move as well as many of the
stocks that rallied from fractured patterns, you see action very similar to
the indices. Many big names are very close to pre-selloff highs; sure they
can always pause and continue, but you have to look at the probabilities
taking into consideration not only this recovery, but the bigger picture of
how the market moves. That suggests the nice rally is peaking and a test of
the prior lows is coming.

Still, you cannot discount good moves such as WMT and retail in general that
still shows good setups and strength. Or biotech with stocks such as IMGN,
BLUE still surging from good setups with more in the sector in great
position. Industrial metals are strong.

FAANG: FB jumped midweek with a strong move but could not follow through.
AAPL was a tiger upside into Thursday, but hit the prior trading range and
showed a doji. AMZN rallied to just below the prior highs and tossed a
doji. NFLX surged through Thursday, then showed a tight doji Friday just
below the late January peak. GOOG moved through the 50 day MA's, then faded
off the high. Not bad, but GOOG has lagged all of FAANG and look at the
putrid volume on the way up. At least AMZN and NFLX put in some above
average volume on the advance.

Semiconductors: A few well-positioned (ENPH, MU, QRVO), but most bounced
and look to be running out of bounce road. You have those bouncing for
ruptured patterns (LRCX, KLAC) or sporting head and shoulders or other
topping patterns, e.g. LSI, SLAB, MLNX (yes, we did not have the guts to
hold it). Even NDVA could put in a near term top and test back with the
double top it is showing.

Industrial/Machinery: MMM bounced on low volume the past 1.5 weeks. CAT
looked good on its bounce, but Friday it gapped higher and then sold on the
strongest trade in a week. DE still trying to break higher on good
earnings, but it reversed from a new high. If it fails at the January high,
it has a double top and can fall hard as good news did not hold a good
break.

Software: With an exception or two, definitely soft. RHT posted a super
week. BLKB was up. FFIV looks as if it is topping out with a double top.
VMW is struggling below the 50 day. TTWO ditto. Just lost a lot of pop.

China: Since fading 3 weeks back this group has done nothing. Only BZUN and
perhaps HTHT look decent. BABA struggling, BIDU bounced but has to show
more. Ditto SINA. NTES, SOHU in the toilet.

Drugs/Biotech: Still solid. Lots of good patterns. ARRY is great. IMGN
surging. BLUE moving higher. MNKD, IPXL, CERS quite solid.

Metals: Strong. SCHN, STLD, CENX, AKS. SID still looks interesting.

Retail: WMT had a great Friday. Most other retailers took Friday off after
a solid week. TGT, BBY, DDS, TLRD.


MARKET STATS

DJ30
Stats: +19.01 points (+0.08%) to close at 25219.38

Nasdaq
Stats: -16.96 points (-0.23%) to close at 7239.47
Volume: 2.03B (-4.25%)

Up Volume: 925.39M (-644.61M)
Down Volume: 1.06B (+536.34M)

A/D and Hi/Lo: Advancers led 1.34 to 1
Previous Session: Advancers led 2.25 to 1

New Highs: 86 (+6)
New Lows: 30 (-22)

S&P
Stats: +1.02 points (+0.04%) to close at 2732.22
NYSE Volume: 900M (+9.25%)

A/D and Hi/Lo: Advancers led 1.43 to 1
Previous Session: Advancers led 2.24 to 1

New Highs: 78 (+9)
New Lows: 28 (-20)


SENTIMENT INDICATORS

VIX: 19.46; +0.33
VXN: 20.46; -0.39
VXO: 17.38; +0.12

Put/Call Ratio (CBOE): 0.93; +0.01. Elevated all week as the market
rallied. What will be funny is how they all closed downside positions just
as the rebound move peaks.


Bulls and Bears: Not as dramatic a bull drop but significant. 12 points
the prior week, 2.5 the past week. Bears bumped higher off 30 year lows two
weeks back, faded just a bit the week after.

Bulls: 51.9 versus 54.4

Bears: 14.4 versus 15.5

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: 51.9 versus 54.4
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 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

Bears: 14.4 versus 15.5
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 2.904%. Bonds bounced modestly Thursday and Friday,
making it back to kiss the 10 day MA. If they fail here, the downtrend that
has set up is showing a lot of strength.

Historical: the last sub-2% rate was in November 2016 (1.867%). 2.904%
versus 2.913% versus 2.833% versus 2.857% versus 2.8577% versus 2.844%
versus 2.813% versus 2.805% versus 2.707% versus 2.841% versus 2.792% versus
2.713% versus 2.72% versus 2.72% versus 2.66% versus 2.66% versus 2.639%
versus 2.617% versus 2.656% versus 2.661% versus 2.618% versus 2.587% versus
2.535% versus 2.55% versus 2.559% versus 2.551% versus 2.482% versus 2.456%
versus 2.463% versus 2.464% versus 2.405% versus 2.434% versus 2.412% versus
2.474% versus 2.485% versus 2.484% versus 2.501% versus 2.459% versus 2.398%
versus 2.351%


EUR/USD: 1.2411 versus 1.25083. After breaking to a higher rally high
Thursday, the euro dropped hard to the 10 day EMA Friday. Will have to see
if that lasts as a reversal from the high.

Historical: 1.25083 versus 1.2450 versus 1.23528 versus 1.22887 versus
1.22524 versus 1.2273 versus 1.2377 versus 1.24573 versus 1.2502 versus
1.2404 versus 1.2402 versus 1.23832 versus 1.24308 versus 1.24159 versus
1.24340 versus 1.23083 versus 1.22567 versus 1.22169 versus 1.2241 versus
1.2198 versus 1.22698 versus 1.22060 versus 1.20608 versus 1.19507 versus
1.19322 versus 1.19662 versus 1.20313 versus 1.20756 versus 1.20177 versus
1.20573 versus 1.2001 versus 1.1936 versus 1.1936 versus 1.18998 versus
1.18593 versus 1.18628 versus 1.18658 versus 1.18792 versus 1.18408 versus
1.17703 versus 1.1752 versus 1.17798 versus 1.18392 versus 1.17430


USD/JPY: 106.294 versus 106.153. Rebounded off the rip lower Tuesday to
Thursday. Entering a range of prices from August to October 2016.

Historical: 106.153 versus 106.782 versus 107.77 versus 108.669 versus
108.669 versus 108.797 versus 108.88 versus 109.33 versus 109.58 versus
108.651 versus 110.001 versus 109.46 versus 109.50 versus 108.77 versus
108.84 versus 108.601 versus 109.411 versus 109.033 versus 110.159 versus
110.159 versus 110.70


Oil: 61.55, +0.38. Rebounded Wednesday to Friday, moving just past the 50
day MA's. Rebounded, but it was a sharp break lower. Key is whether it can
hold the move, rest, then continue higher.


Gold: 1356.20, +0.90. Big surge Wednesday, then flat and lateral into the
weekend. Strong break higher as inflation fears are up given the continued
and accelerated profligate US spending, spending they are thinking saddling
on the average US citizen with a $0.25/gallon gasoline tax.

It is telling that supposedly conservative Fox Business commentators are
calling the idea 'intriguing' instead of saying 'hell no!' We have taxes
that are supposed to pay for infrastructure improvement and maintenance.
Why do we then have 'decaying' infrastructure and need to dramatically hike
taxes to pay for what we were supposedly already taxed for?

I don't have a problem with user fees such as on toll roads (and thus avoid
those 'bridges to nowhere' that everyone pays for but hardly anyone uses),
but a gasoline tax, given the reality of our transportation system that is
individual vehicle based, it is a very cruel tax. Several groups have put
the pencil to paper regarding the impact of such a tax, and the average
impact seen would negate 60% of the tax reform cuts for individuals. But
that is okay for the likes of Senator Corker who didn't want to do anything
at all to individual tax rates, happy to see the Obama tax hikes remain a
yoke around the average citizen's necks. He doesn't have to pay the
Obamacare increased costs; he has his Senate care and will have it until he
dies. How can they say they represent us, understand our problems, when
they are above them and don't have to experience them? Colossal asses.

Here is an idea, we just passed a pro-growth tax reform plan that will,
despite what the democrats, economics ignorant republicans, no longer free
press, and other big government backers say, generate more revenue than
expended. Why not let that work?


TUESDAY

Market is closed Monday for Washington's Birthday, and that could be bad for
US investors and traders. The rest of the world will be open, and it could
be that they get the jump on the US in selling and that could have US stocks
opening lower Tuesday. That is speculation, but it is a possibility.

While the relief move, or whatever you want to call it, still remains intact
as of Friday, the indications are and the history suggests it is ending and
a test of the prior low is coming in the near future.

Therefore we took some gain Friday on several positions, let positions still
working well continue, and if the market hesitates Tuesday, we are going to
close the upside outside of those strong areas such as biotech, and have
downside plays ready to go. Indeed, it may be that even the biotechs,
metals, retail have issues if the rally has run its course and starts the
test of the prior low.

As a refresher, historically when a market peaks and then reverses as
violently as stocks did three weeks back, they rebound over the course of a
few weeks, then fall back down to test the prior low. Often that test
undercuts the prior low and really shakes out the weaker hands that got in
late, bought too high, and don't have the stomach for getting burned again
(as is usually the case because they always come in late). Once they are
gone, the people left are the stronger holders and they use the violent
shakeout to start buying. Then a new rally begins.

That seems so pat, so easy, but even so, the fear and greed combination
works time and time again in history. Many people are talking about it now
as well, jumping on the 'test' bandwagon. Of course late last week many
changed to the 'this new rally is here' chant just in time likely for this
leg to end.

That shows why this works: in the heat of the battle most players, even the
veterans, lose sight of the big picture, what they know to be the likely
scenario. When stocks are getting slaughtered in a sea of red, redemption
requests are surging, and margin calls are peppering the accounts, even the
seasoned traders and managers succumb to their emotions. Their algos read
the headlines and sell, then the managers take over after the initial
selling, but then someone panics again and the downside resumes. The run to
the sea is on.

So, as pat and hackneyed as it appears, these patterns play out again and
again, regardless of our great technology and the confidence we are smarter
this time. I know; you have to fight your emotions all the time and hold to
what the facts show. I am always amazed at some of the bipolar blowhards
that show up on the financial stations. You know who they are. On days
when the market is strong, they are gushing that you should buy everything,
talking about their dogs or anything that pops in between the ears, chiding
those who actually have a plan. On down days, and I have seen it the day
after one of those up days and the talk that the sky is the limit, they are
almost morose, saying the market is just fickle right now, that selling will
come so get your buy list ready. But what? Didn't they just say the day
before to buy everything, that you were a fool for not owning them? This is
what you are up against and you have to see through it. Don't ignore it;
use it to illustrate the kind of emotion that plays in the market and makes
people make emotional decisions.

You will still slip up and make a bonk move from time to time (e.g. closing
the MLNX downside), but that is okay. I allow myself one bonk move as
something of a test case on a potential direction change. I don't mean it
to be a bonk move, it just goes that way. A position starts to break the
wrong way, it is not the end of the session but it is showing some
persistence, so I make the move. Then I see if the move holds and how I
will handle the rest of the positions. If it shook me out, I shake it off.
Bonk move. Flush it. You played your plan without emotion and you can't
let that emotion slip back in if the market then shows you acted too soon.
That happens. Remember when I said patience more often than not rewards
you? It helps to remind yourself of that, particularly in this volatile
market, and that gives you control over your emotions as well.

In any event, the setup in the indices and many stocks warrants prepping for
the possibility the relief move is topping out. Part of containing your
emotions is being prepared mentally and have a plan and plays in hand
tailored to the possible scenarios the market throws at you. See it, act,
play the plan. You will have enough work sticking to the plan, and there is
something empowering about a plan that makes you money and does a solid job
avoiding losing money. It reinforces good behavior and it keeps you from
missing out or worrying about missing out as that is a surefire way to make
emotional blunders that kill your returns.

Have a great weekend!


SUPPORT AND RESISTANCE

NASDAQ: Closed at 7239.47

Resistance:
7240, the upper gap point from early February 2018
7506 is the January 2018 all-time high
7300 from a modest mid-January consolidation
7317 is the 78% Fibonacci retracement


Support:
The 50 day EMA at 7090
6918 - 6980 are price points from November/December 2017
6914 is the late November all-time high
6796 is the early November 2017
6641 is the October high
6630 is the February 2018 selloff intraday low
The 200 day SMA at 6583
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows


S&P 500: Closed at 2732.22

Resistance:
2744 is the 61% Fibonacci retracement of the selloff
2751 from early January 2018
2762 is the upper gap point from early February
2808 from the mid-January consolidation. Some support, not that strong.
2850 from a January 2018 gap point
2873 is the January all-time high

Support:
The 50 day EMA at 2710
2694 is the mid-December peak
2597 is the November 2017 high
2584 is the upper channel line from the March 2009 uptrend channel
The 200 day SMA at 2547
2532 is the February 2018 intraday selloff low
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the May 2017 low


Dow: Closed at 25,219.38

Resistance:
The 61% Fibonacci retracement at 25391
The lower gap point from February at 25,521
26,000 from mid-January consolidation
26,439 is a gap point from the January high
January 2018 all-time high 26,617

Support:
The 50 day EMA at 24,989
24,835 is the mid-December consolidation range
23,608 is the early November high
23,602 is the early November 2017 high
23,360 is the intraday low form the February selloff
The 200 day SMA at 22,893
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high

End part 1 of 3
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Sunday, February 11, 2018

The Daily, Part 1 of 3, 2-10-18

* * * *
2/10/2018 Investment House Daily
* * * *

Investment House Daily Subscribers:

MARKET ALERTS:

Targets hit: SDS
Entry alerts: ROST
Trailing stops: IMGN; SRPT
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

********************************************************************
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:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4

TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
Flash: http://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

- A dive lower after a positive open may have provided the shakeout to end
the first leg lower.
- Fed letting the market find some pricing closer to reality?
- Looking to play the relief move with some familiar names and some very
good patterns that held up during all the selling.

Another day, another 1022 point swing on DJ30. 286 on NASDAQ. 106 on
SP500. Huge swings. Thursday it was high to low. Friday it was high to
way low to way high. As the market finished upside, many were saying that
Friday was THE day the market showed a change. Oversold, reached lower then
surged. Big volume on the rebound.

Yeah, sure. Heard that Tuesday and look what happened. But there were
differences Tuesday was not the ideal reversal day: it never had that real
selloff. It was down pre-market but was recovering and did so from the
opening bell. There was not that purge. Friday was better: an upside start
after an ugly selloff gave hope. Then it was dashed when the gains were
replaced by big losses. On top of that, the indices were just lower,
undercutting the prior lows and reversed on massive volume. THE reversal?
Very well could be . . . for this leg of the selloff.

JPM came out with an afternoon note stating the selling was just about done.
That helped act as the trigger and stocks surged into the close. Gains that
were turned to losses turned to gains once more. Maybe the day marked the
end of the volatility, but it was certainly a volatile day. And again, if
it did mark the end, it is the end for THIS leg, likely not the ultimate
bottom in this selling event.

SP500 38.55, 1.49%
NASDAQ 97.33, 1.44%
DJ30 330.44, 1.38%
SP400 1.09%
RUTX 0.96%
SOX 3.05%
NASDAQ 100 1.69%


NEWS/ECONOMY

Not a lot of news. The government shut down at midnight but an early
morning deal opened it right back up. AMZN announced its own shipping
service to take on FDX and UPS.

Earnings continued with mostly beats, but even stocks beating expectations
did not have an easy go of it. It would appear the market volatility has
overtaken every other story other than perhaps the Fed agreeing to lay down
regarding rate hikes. Even that, however, would not be a market positive.


The Fed: Where does it stand?

Since Bernanke and through Yellen, the Federal Reserve has stood behind a
rallying stock market. Every serious dip was met with the Fed backtracking
on vows to remove stimulus or indeed actual new stimulus.

That has changed, at least on the surface. As Yellen walked out the door,
seat still warm, she threw out for discussion that yes, equities and real
estate values were 'high.' A week ago, at the start of the selling, Kaplan
said that 3 rate hikes were the base case and likely more could come if
economics were strong. Kaplan reiterated his position Thursday.

Also Thursday, Mr. Dudley referred to the stock market selloff as 'small
potatoes' and opined the economy would continue to grow above pace. With
that, Dudley believes the Fed "is going to have to continue to remove
monetary policy accommodation."

Thus it appears the Fed is bound to continue hiking rates, and if the
economic data is right, it should. It has been behind the curve as always.
The fear of markets, of course, is the Fed panics, overreacts, and again
affects a market breakdown the presages an economic fall from expansion and
prosperity to more stagnation. Heck, we just got out of 10 years of that.
Don't send us back, please.

Nonetheless, the Fed, for now, is sticking to its path of 3 or more rate
hikes in 2018. It must. Can you imagine if the Fed came out otherwise? At
first the market pops upside but then panic sets in as to why the Fed
panicked.

Given that, the market drop as Yellen walks out and as Powell takes over is
perfect for Powell. If the market continues falling he can cite changed
circumstances. For now he sticks to the plan already in place, and if the
market does bottom as it should, then everyone concludes he is wise and
restrained. Confidence follows, and then good things, good things. Nothing
can go wrong, right?

The point: The market actually has a chance to go to real price discovery
versus Fed put pricing. In other words, there is no guarantee of a Fed step
in. That means looking for typical market moves as outlined the past week
for this correction.


THE MARKET

CHARTS

On the lows some important levels were touched. SP500 sold to tap the 200
day SMA, passing the 78% Fibonacci retracement along the way. Then a sharp
rebound to the 61% retracement. DJ30 did not get that far, undercutting the
61% Fibonacci retracement then rebounding to close much higher. NASDAQ
touched close to its 200 day and it held right at the 78% retracement and
shot back upside. All show doij with long tail, a reversal indication.

RUTX and SP400 undercut their 200 day MA's and then snapped back to show
nice doji with tail over that level on the close. That kept RUTX over the
200 day and the November low. SP400 ditto.

SOX gapped higher sold to undercut the Thursday low, also undercutting the
December low. Then a surge back up to close well above both. Hmm. Looks
as if the neckline to a head and shoulders is set, and now you watch SOX'
rebound to see if it stalls at 1350ish and rolls back over. That, however,
is the move after the next, not the next move that is a rebound back up to
test that 1350 level.

It is a pretty decent bet to surmise the Friday low is the low of the first
leg. It is not a proven fact, but it is a good support level with good
extreme internals that suggest a high probability of a rebound that lasts
more than a day and a half. It is not THE bottom, but one that supports a
relief bounce that sets up THE bottom or at least a try at THE bottom after
the coming relief move stalls and falls to test the Friday low.

That said, we didn't buy the rebound. Really thought about it, but opted to
wait and see if stocks can hold Monday. A soft open met with buying is a
great entry point for the relief rally back up to test somewhere below the
highs from late January. That is the tradable move we are looking at this
weekend with plays. We get in, ride it, take the gains when the move starts
to sputter after a good week or so, then look to play the test downside to
or below the Friday low. Same play book as before, just starting from a
lower level after a deeper test.



LEADERSHIP

One of the only groups that used the selling it its benefit is the
drug/biotech areas, and even in that group the large cap stocks were
murdered while the mid and smaller versions are using the selling to set up
new patterns and entries.

FAANG is not bad either in some instances, plus the fact that people such as
Cramer and others are touting the group to buy on this dip. Whatever, if it
works for us.

Everything else is something of a wildcard. Heavy selling broke many
patterns and frankly if the market is going to bounce then sell off again,
you want to focus on a handful of stocks that can make you money. For us
that means good patterns and decent patterns in stocks people love to buy
when they are sold off.


MARKET STATS

DJ30
Stats: +330.44 points (+1.38%) to close at 24190.90

Nasdaq
Stats: +97.33 points (+1.44%) to close at 6874.49
Volume: 3.16B (+16.18%)

Up Volume: 2.04B (+1.677B)
Down Volume: 1.09B (-1.25B)

A/D and Hi/Lo: Advancers led 1.36 to 1
Previous Session: Decliners led 5.58 to 1

New Highs: 20 (-12)
New Lows: 264 (+114)

S&P
Stats: +38.55 points (+1.49%) to close at 2619.55
NYSE Volume: 1.3B (+8.33%)

A/D and Hi/Lo: Advancers led 1.45 to 1
Previous Session: Decliners led 7.84 to 1

New Highs: 9 (-7)
New Lows: 356 (+149)


SENTIMENT INDICATORS

VIX: 33.46; +5.73. Up, but not soaring and did not take out the prior
high from Tuesday, not even close. Indeed, it is lower than Monday.
Something strange there.
VXN: 33.89; +9.16
VXO: 32.36; +11.36

Put/Call Ratio (CBOE): 1.14; +0.23. First spike over 1.0 in a long time.
Finally shaking the tree of those upside buyers.


Bulls and Bears: From highs and lows greater than the prior 30+ years,
bulls tumbled over 10 points and bears jumped 3 points -- major moves.
Okay, so the damage has been done.

Bulls: 54.4 versus 66.00

Bears: 15.5 versus 12.6

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: 54.4 versus 66.00
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
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: 15.5 versus 12.6
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 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: 2.8577% versus 2.844%. Bond selloff below the 10 day EMA continues.
Looks like a downtrend that will test the late 2016, early 2017 double
bottom near 116.

Historical: the last sub-2% rate was in November 2016 (1.867%). 2.844%
versus 2.813% versus 2.805% versus 2.707% versus 2.841% versus 2.792% versus
2.713% versus 2.72% versus 2.72% versus 2.66% versus 2.66% versus 2.639%
versus 2.617% versus 2.656% versus 2.661% versus 2.618% versus 2.587% versus
2.535% versus 2.55% versus 2.559% versus 2.551% versus 2.482% versus 2.456%
versus 2.463% versus 2.464% versus 2.405% versus 2.434% versus 2.412% versus
2.474% versus 2.485% versus 2.484% versus 2.501% versus 2.459% versus 2.398%
versus 2.351%


EUR/USD: 1.22524 versus 1.2273. Dollar rallied and pushed EUR to the 50
day MA but showing a pair of doji and ready to rebound against the dollar.

Historical: 1.2273 versus 1.2377 versus 1.24573 versus 1.2502 versus 1.2404
versus 1.2402 versus 1.23832 versus 1.24308 versus 1.24159 versus 1.24340
versus 1.23083 versus 1.22567 versus 1.22169 versus 1.2241 versus 1.2198
versus 1.22698 versus 1.22060 versus 1.20608 versus 1.19507 versus 1.19322
versus 1.19662 versus 1.20313 versus 1.20756 versus 1.20177 versus 1.20573
versus 1.2001 versus 1.1936 versus 1.1936 versus 1.18998 versus 1.18593
versus 1.18628 versus 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: 108.797 versus 108.88. Dollar trying to set up a short double
bottom to bounce.

Historical: 108.88 versus 109.33 versus 109.58 versus 108.651 versus
110.001 versus 109.46 versus 109.50 versus 108.77 versus 108.84 versus
108.601 versus 109.411 versus 109.033 versus 110.159 versus 110.159 versus
110.70 versus 110.834 versus 111.036 versus 111.290 versus 110.357 versus
111.024 versus 111.204 versus 111.534 versus 112.706 versus 113.15 versus
113.58 versus 112.749 versus 112.677 versus 112.27 versus 112.690 versus
112.758 versus 113.216 versus 113.208 versus 113.304 versus 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: 59.20, -1.95. Oil gaps below the 50 day MA as the selloff continues
after hitting that recovery high to end January.


Gold: 1315.70, -3.30. Still holding the 50 day EMA after dropping to that
level Wednesday. Important test for this upside move in gold.



SUPPORT AND RESISTANCE

NASDAQ: Closed at 6874.49

Resistance:
6914 is the late November all-time high
6918 - 6980 are price points from November/December 2017
The 50 day EMA at 7081
7240, the upper gap point from early February 2018
7506 is the January 2018 all-time high
7300 from a modest mid-January consolidation


Support:
6796 is the early November 2017
6641 is the October high
The 200 day SMA at 6557
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows


S&P 500: Closed at 2619.55

Resistance:
2694 is the mid-December peak
The 50 day EMA at 2713
2751 from early January 2018
2808 from the mid-January consolidation. Some support, not that strong.
2850 from a January 2018 gap point
2873 is the January all-time high

Support:
2597 is the November 2017 high
2569 is the upper channel line from the March 2009 uptrend channel
The 200 day SMA at 2539
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the May 2017 low


Dow: Closed at 24,190.90

Resistance:
24,835 is the mid-December consolidation range
The 50 day EMA at 25,003
26,000 from mid-January consolidation
26,439 is a gap point from the January high
January 2018 all-time high 26,617

Support:
23,602 is the early November 2017 high
23,608 is the early November high
The 200 day SMA at 22,794
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high

End part 1 of 3
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Sunday, February 04, 2018

The Daily, Part 1 of 3, 2-3-18

* * * *
2/3/2018 Investment House Daily
* * * *

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MARKET ALERTS:

Targets hit: AMZN
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Trailing stops: AAP; BZUN; DDS; DNR; IPXL; LH; SECO; TLRD
Stop alerts: AGN; BABA; SND

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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:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4

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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

- Dow posts a devilish 666 point drop as sellers hit the market like demons.
- Dow's 600+ loss is only the sixth in history over 600.
- Jobs report takes a back seat to the current market mood.
- Wells Fargo gets an afterhours rebuke and a lid on new assets gratis the
Fed
- Market is dealing with Yellen gone: barely out the door and Kaplin is
talking tough. Market is not used to that.
- A further selloff would be best before a rebound attempt.
- The various scenarios from here.
- Don't get too eager to move back in for more than short term plays. If
they turn into long term plays, that is okay. Unlikely, but okay.

The upside typically comes slow and steady. The downside starts quietly and
can disguise itself as just part of the same trend higher. The trend
remains solid, albeit quite extended. Distribution sessions start popping
up, but the trend holds. Sentiment hits extremes; this time it was record
bullishness and bearishness at 30 year lows. Then stocks start giving up
breakouts. Airlines, big biotechs broke out then reversed hard. AAPL broke
out in mid-January but then fizzled. But the big names still soldiered on.

Indeed, Thursday I noted that NASDAQ and SOX still held very well in good
patterns and if the market wanted again to shake off the issues it could do
so. It didn't.

Stocks started lower as futures gapped downside, dropped at the open, failed
a 45 minute bounce attempt after a half hour of trade. Then it was a steady
downtrend all session, exacerbated by the Fed's Kaplan who devilishly kicked
the market while it was down, saying if the Fed waits for inflation it will
be too late, that the tax cuts could cause an over-leveraged condition, and
that 3 hikes in 2018 was the base case, that there could be more. That set
the market into an afternoon panic that ended with the Dow down 666. Could
get worse on Monday; afterhours as Yellen's last official move, the Fed
placed Wells Fargo on restriction, saying WFC cannot add assets until it
replaces four board members and puts in place the protocols necessary to
preclude further malfeasance. Slap on the wrist, really; some people should
go to jail. Anyway, I am not sure if that will help the market in the
current climate where any reason is a good one to sell.

SP500 -59.85, -2.12%
NASDAQ -144.91, -1.96%
DJ30 -665.75, -2.54%
SP400 -2.02%
RUTX -2.06
SOX -2.74%
NASDAQ 100 -2.05%

VOLUME: Volume bounced on NYSE (12%) to farther above average, but it was
lower than Wednesday trade. NASDAQ volume (+13%) spiked to the highest
since mid-December. Lots of downside volume.

ADVANCE/DECLINE: NYSE -8.5:1, NASDAQ -5.2:1. That is extreme breadth. On
the NYSE open it was -10:1. Yes, extreme, and extremes indicate levels that
can cause things to head the other way. It will take more than just this,
however.


Ominous? Closes such as Friday can lead to really hellish Mondays and
Tuesdays. If that is the case, that probably sets a near term relief move,
but likely not the end of the selling. A lot depends upon how much damage
is done to leadership patterns, i.e. if they are in position to recover or
were just broken up. Well, actually, a reflex or relief bounce doesn't
care. It can jump up stocks in patterns as well as stocks that were broken.
It is the sustainability of the relief move that the patterns impact. If
there are no real leadership patterns, the move will fail. You can play a
reflex move of broken patterns upside and make some money, but as soon as it
looks to be stalling it is best to take the profits and see what happens
next. Without good leadership patterns, the relief rally will typically
fail.

In the big picture this is kind of what you had to expect, though the
reality is always rather harsh. This is something like only the sixth time
in history the Dow has dropped more than 600 points on a close. Elite
company. But then again, the move upside was an elite move.

The overall question everyone is asking is when do you buy in. That depends
on when this selling round lets off enough pressure. It also depends upon
what type of buying you want. If you are looking to buy positions with the
intent of holding for steady gains as seen of late, you have to have the
good patterns to lead the market higher again and hold up on the test of the
rebound. If you don't have those patterns, likely you won't be happy unless
you morph your plan of action into playing the surges and selling out when
they start to slow. Indeed, until the market shows it can hold a rebound
after a test and continue higher, it is wise to treat all rallies as simple
relief moves that will surge, rather violently at times. Once the market
has the leadership and holds a test, that is a different story. That is
also potentially a long way off.


So, this weekend you sift through the selloff, find what stocks held the
line and look decent. Then you see if they hold up during further selling
Monday and Tuesday. If there is further selling and they hold up, you have
some great candidates to play upside -- along with the usual favorites that
people pile into when they think the buying light is on when it really is
not.

You then play a bounce, take what you can until the bounce starts to
stumble, then get out. Then you look to play downside with stocks that
rebounded but ran into resistance such as the 50 day MA, prior lows, etc.
Also some of the index plays and ETF's are not bad, e.g. SDS, QID. The next
drop is likely rather violent as well.

After that drop, you see the relief move again and then note where the
rebound stalls. If at the 10 day EMA, that is the making of a strong
downtrend. If that occurs you start shifting your mindset from buying for
long term holds to selling the rallies back up to near resistance, playing
the drops lower as that becomes the trend.

Just look at SDS as an example. It trended lower and lower below the 10 and
20 day EMA. The play would be to sell it (or buy puts against it) each time
it touched the 10/20 day EMA and threw a doji. It is the reverse of playing
a strong trend upside such as the DJ30.

If there is no more selling come Monday, the move is really suspect and
certainly any bounce would be treated as relief. There will be, however,
good patterns because as of Friday, even after the trip-sixes, there are
good normal pullbacks. You always fear the head fake if stocks start higher
versus sell more then reverse. That is a tough place to play for sure. You
can do some sample buys with some quality patterns and stocks, but this is
considered even more of reflex type bounce. May not be, but it is very
difficult to ascertain in its early stages.

Either way, i.e. more early week selling or none, the big test for the
indices comes at the 50 day MA's and certain retracement levels. They will
try to find support there. They can be the bounce points for the relief
moves. HOW the indices and stocks react upside off of these, and then how
that move holds tells a big part of the tale as outlined above.

So for now it is a matter of watching for potential bounce points, watching
stocks and indices as they approach those and see what looks as if it is in
position to make a good bounce. Then play the bounce and see how it plays
out so to speak. Strong volume, good breadth or weaker trade and narrow
breadth? The former is upside positive, the latter more bearish and
suggests the move fails once the pressure is released. Once you gauge the
rebound, then you set up for the next move whether upside or downside. That
is something no one knows for now, though my experience would suggest the
relief bounce off this selling fails and the market goes down more. When
the relief move fails, that is when you start loading up on the downside for
the first time as outlined above.


NEWS/ECONOMY

Most of the news was what you would expect in an improving economy.

Jobs Report, January

Jobs were better than expected at 200K. Wages improved 0.3% month/month and
2.9% year/year. Interestingly, the workweek dropped a lot, down to 34.3
from 34.5. Ah the 'bomb cyclone' or whatever it was in January did serious
damage to the number of hours worked across the entire nation. I can attest
to that; it was hard to get anyone to go anywhere.


Factory Orders, December: 1.7% versus 1.3% expected versus 1.7% prior (from
1.3%)
Good news with final December durable goods orders at 2.8%.

But . . . business investment missed big: -0.6% versus -0.3% in November.
This was the fastest drop since September 2016. Business investment should
start ramping up, and with the promised investment post-tax reform it will.
At some point. At some amount.


THE MARKET

CHARTS

What do you say about these? Breaks of support for certain, and now you
start looking at potential bounce points. It is a game of patience on this
first selloff to see where it bottoms, being ready at each point with plays
to participate in the move.

NASDAQ: Was in a decent test along the 20 day EMA but broke down through
the 20 day on the close. Of course volume ballooned to the highest since
the December expiration. Logical support at 7100 to 7068, then the December
peak at 6995. Bare minimums for the selloff I would think, but for now
those are just levels to watch for a hold and bounce. A rip below the 20
day EMA Friday and want to go ahead and get the trip to the 50 day MA or
December peak out of the way on this move. That will be a good scare-off
selloff.

SOX: Gapped below the 20 day EMA and fell close to the 50 day EMA BY THE
CLOSE. Below the November high, and the first January high. From a pretty
decent consolidation to back to the drawing board to try to set up a new
upside pattern.

DJ30: Definitive break lower, only the sixth ever 600+ point loss on the
Dow. Heading to the 50 day MA (25,000) to the December consolidation at
24,860 as a logical first stopping point.

SP500: Similar to DJ30, SP500 crashed the 20 day EMA in a big way. Higher
volume; oh, sellers were in the majority. Surprise. The 50 day MA looks
logical at 2725 on the high end, 2685 from the December lateral
consolidation.

RUTX: Small caps were down harder than the large cap indices before Friday,
and Friday they were actually better than DJ30, SP500 in terms of percentage
losses. As if that matters; over 2% and that is big regardless. Already
breaking below the 50 day MA's, now right at the late November high and
December consolidation. Below that, 1515. Closed at 1547.

SP400: Cracked below the 50 day MA and closing in on the November high and
December consolidation -- just as the other indices. Those look like
logical support points.


LEADERSHIP

Somewhat of an oxymoron in this market, but there are stocks that are
holding well. The question is if they can continue doing so if there is a
sharp early week plunge.

BA: Of course it is strong, just a modest test to the 10 day EMA.

FAANG: AMZN of course, NFLX holding the 10 day EMA in a nice test. FB also
solid.

Chips: NVDA testing the 20 day EMA on high volume. Nice breakout and
initial rally, good initial test. One to watch for certain. MSCC holding
up well in a test. A lot of other chips are problematic.

Machinery/Manufacturing: CAT testing the 50 day MA. DE looks like it goes
lower but a downside play may be kind of tight. TEX already doing so. UTX
looks ready to roll lower. HON almost at the 50 day MA already after its
breakout and reversal. MMM testing still.

Oil: Some major bombs. CVX, XOM. CRZO to the 200 day SMA. Others not bad,
e.g. APC. MRO testing the 50 day EMA. HAL cracking the 20 day toward the
50 day.

Financial: Tough session with C off 2.75% and heading to the 50 day. BAC
is not bad. GS is selling hard to the 50 day MA.

Biotech/Drugs: BIIB, AMGN, GILD down hard on the week, but they are also
already showing signs they want to possibly hold. This could be a fertile
area this week if the market hits bottom at the targets indicated earlier.

Retail: Starting to break lower in some cases (TLRD; AAP). BBY not in bad
shape. TGT breaking the 20 day EMA, but WMT holding it nicely in its
pullback.

Metals: Sold but some are in good tests. STLD at the 50 day. SCHN at the
50 day MA. FCX dropped to the 50 day EMA in one move.


MARKET STATS

DJ30
Stats: -665.75 points (-2.54%) to close at 25520.96

Nasdaq
Stats: -144.92 points (-1.96%) to close at 7240.95
Volume: 2.6B (+13.04%)

Up Volume: 550.38M (-459.62M)
Down Volume: 1.99B (+760M)

A/D and Hi/Lo: Decliners led 5.16 to 1
Previous Session: Advancers led 1.01 to 1

New Highs: 65 (-24)
New Lows: 161 (+73)

S&P
Stats: -59.85 points (-2.12%) to close at 2762.13
NYSE Volume: 1B (+12.55%)

A/D and Hi/Lo: Decliners led 8.47 to 1
Previous Session: Decliners led 1.26 to 1

New Highs: 46 (-42)
New Lows: 338 (+207)


SENTIMENT INDICATORS

VIX: 17.31; +3.84. Exploding higher 28.5%. As it should. It did not
surge during the upside so this is not indicating a major top.
VXN: 20.66; +1.51
VXO: 16.82; +3.38

Put/Call Ratio (CBOE): 0.90; -0.01


Bulls and Bears: Bulls bounced right back upside, just below the cycle high
67.0. Bears fell to cycle lows at 12.6, still hanging around 30 year lows.

Bulls: 66.00 versus 64.7

Bears: 12.6 versus 12.8

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: 66.00 versus 64.7
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 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: 12.6 versus 12.8
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
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: 2.841% versus 2.792%. Impressive dive lower by bonds and spike
higher in yields. Kaplan says 3 rate hikes are the starting point in 2018,
not a max. Higher yields are not a bad thing in a growing economy.

Historical: the last sub-2% rate was in November 2016 (1.867%). 2.792%
versus 2.713% versus 2.72% versus 2.72% versus 2.66% versus 2.66% versus
2.639% versus 2.617% versus 2.656% versus 2.661% versus 2.618% versus 2.587%
versus 2.535% versus 2.55% versus 2.559% versus 2.551% versus 2.482% versus
2.456% versus 2.463% versus 2.464% versus 2.405% versus 2.434% versus 2.412%
versus 2.474% versus 2.485% versus 2.484% versus 2.501% versus 2.459% versus
2.398% versus 2.351%


EUR/USD: 1.24573 versus 1.2502. Dollar a bit stronger Friday, but the euro
is still in a trend up the 10 day EMA.

Historical: 1.2502 versus 1.2404 versus 1.2402 versus 1.23832 versus 1.24308
versus 1.24159 versus 1.24340 versus 1.23083 versus 1.22567 versus 1.22169
versus 1.2241 versus 1.2198 versus 1.22698 versus 1.22060 versus 1.20608
versus 1.19507 versus 1.19322 versus 1.19662 versus 1.20313 versus 1.20756
versus 1.20177 versus 1.20573 versus 1.2001 versus 1.1936 versus 1.1936
versus 1.18998 versus 1.18593 versus 1.18628 versus 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: 110.174 versus 109.46. Continues the rally this week. Moved the
dollar off the bottom of the 10 month range.

Historical: 109.46 versus 109.50 versus 108.77 versus 108.84 versus 108.601
versus 109.411 versus 109.033 versus 110.159 versus 110.159 versus 110.70
versus 110.834 versus 111.036 versus 111.290 versus 110.357 versus 111.024
versus 111.204 versus 111.534 versus 112.706 versus 113.15 versus 113.58
versus 112.749 versus 112.677 versus 112.27 versus 112.690 versus 112.758
versus 113.216 versus 113.208 versus 113.304 versus 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: 65.45, -0.35. Oil holding the gains but not going anywhere the past
week as the dollar firmed -- just a bit.


Gold: 1337.30, -10.60. Gold dropped to the 20 day EMA after gapping
upside. Still trending higher since December, but found the going tougher
last week.



SUPPORT AND RESISTANCE

NASDAQ: Closed at 7420.95

Resistance:
The 10 day EMA in 7363
7506 is the January 2018 all-time high
7300 from a modest mid-January consolidation


Support:
The 20 day EMA at 7301
The 50 day EMA at 7108
7,000 from mid-December
6914 is the late November all-time high
6796 is the early November 2017
The 2016 trendline at 6737
6641 is the October high
The 200 day SMA at 6533
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows


S&P 500: Closed at 2762.13

Resistance:
2808 from the mid-January consolidation. Some support, not that strong.
The 20 day EMA at 2782
2850 from a January 2018 gap point
2873 is the January all-time high

Support:
2751 from early January 2018
The 50 day EMA at 2728
2694 is the mid-December peak
2597 is the November 2017 high
2569 is the upper channel line from the March 2009 uptrend channel
The 200 day SMA at 2532
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the May 2017 low


Dow: Closed at 25,520.96

Resistance:
The 20 day EMA at 25,858
26,439 is a gap point from the January high
January 2018 all-time high 26,617

Support:
26,000 from mid-January consolidation
The 20 day EMA at 25,740
The 50 day EMA at 25,130
24,835 is the mid-December consolidation range
24,312
23,602 is the early November 2017 high
23,608 is the early November high
The 200 day SMA at 22,703
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high

End part 1 of 3
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