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3/28/2015 Investment House Report
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MARKET ALERTS:
Targets hit: None issued
Buy alerts: QRVO
Trailing stops: ALK; NXPI
Stop alerts: AKAM
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 REPORTS SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Tables with play annotations will issue Monday, Wednesday and the Weekend.
Tuesday and Thursday reports will contain the market summary, chart links to view the index charts, and updated play tables.
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
- Stocks rebound, though rather weakly.
- Key leadership groups biotechs and chips still struggling.
- Some great upside patterns, but the indices have to see money returning to sustain a new move.
I must apologize at the outset as I have virtually no voice this weekend after being the last holdout in the office against the 'crud' illness sweeping the nation. I thought I was in the clear, ready to sail into spring in great shape, but that nagging little hack Tuesday because full-fledged crud by the weekend. Lovely.
Thus, the report has to be abbreviated in order to stay somewhat cogent in gauging the market. I saved my voice, what little there is, for the plays. The plays we saw developing during the week, and they kept up their work through Friday so they were easy to select. Some interesting upside even as the indices struggled to wipe away the Wednesday selling to close out the week.
Wednesday was the issue. That session saw biotechs and chips, two key leadership groups, take some torpedo hits. The large cap NYSE ironically performed better that session, but that is only because they failed to make a decent move higher prior. The key tell for them was Thursday and Friday; they failed to put together any decent move when the Wednesday pressure subsided, leaving them locked in their ranges, needing a serious catalyst to break them higher.
RUTX, SP400, NASDAQ and SOX fared better, but that is only because they were higher when Wednesday hit. RUTX and SP400 held the 50 day EMA and bounced. They held where they had to and can continue the upside, but they patterns are not outstanding in terms of the recovery thus far. NASDAQ did the bare minimum, hanging onto the 50 day MA, and without some renewed bids is a bit precarious. SOX bounced sharply at the last line of support at the 200 day SMA, but that just got it to the 50 day EMA as it tries to shake off that double top break lower last Wednesday.
THE CHARTS
To view charts, click on link or paste URL into browser.
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
SP500 4.87, 0.24%
NASDAQ 27.86, 0.57%
DJ30 34.43, 0.19%
SP400 0.45%
RUTX 0.68%
SOX 2.83%
VOLUME: NYSE -10.5%, NASDAQ -17%.
A/D: 1.5:1 NYSE, 1.4:1 NASDAQ
LEADERSHIP
As noted, biotechs and chips, two big rally leaders, really struggled Wednesday. They rebounded Thursday and Friday, but the rebounds were not that convincing.
Biotechs: A big group and some broke their patterns, e.g. CELG, others used the selling to test prior moves, e.g. BIIB, while others used the selling to finish up patterns, e.g. PGNX. On the balance, there was not much of a recovery after the Wednesday selling, leaving this group near term more on the defensive.
Chips: Very similar to the biotechs though perhaps a better recovery in the big names. That didn't mean they returned to good buy positions, just put in bigger reflex moves. NXPI plunged to the 50 day EMA and bounced intraday Thursday and again Friday. Still, however, not great. AVGO may have recovered its form but it will have to prove it. AFOP held the 20 day EMA, bouncing back each time it undercut it. BRCM swan-dived to the 200 day SMA and bounced, but it was no assurance things were okay. This group is quite varied right now, but as with biotechs, near term defensive unless they can show something more.
Internet: One of the leadership groups for the most part still performing. Social still looks quite good, e.g. FB, TWTR. WUBA, LLNW look really positive to move higher.
Many groups are at an inflection point, i.e. they can break higher or lower.
Financials: JPM shows a pair of doji at the 200 day SMA, in position to bounce. C is trying to hold the 200 day SMA but that is problematic.
Retail: Some still solid, others struggling. BWLD has put in a rounded top and last week cracked. CMG is trying to use the 200 day SMA as support but has a lot of work ahead of it. Others look good in the trend, e.g. TJX, COST.
MARKET STATISTICS
NASDAQ
Stats: +27.86 points (+0.57%) to close at 4891.22
Volume: 1.622B (-16.79%)
Up Volume: 1.07B (+218.92M)
Down Volume: 578.05M (-541.95M)
A/D and Hi/Lo: Advancers led 1.41 to 1
Previous Session: Decliners led 1.26 to 1
New Highs: 40 (+20)
New Lows: 45 (-7)
S&P
Stats: +4.87 points (+0.24%) to close at 2061.02
NYSE Volume: 742.1M (-10.44%)
A/D and Hi/Lo: Advancers led 1.51 to 1
Previous Session: Decliners led 1.55 to 1
New Highs: 45 (+32)
New Lows: 30 (+7)
DJ30
Stats: +34.43 points (+0.19%) to close at 17712.66
SENTIMENT INDICATORS
VIX: 15.07; -0.73
VXN: 16.89; -0.61
VXO: 16.07; -0.53
Put/Call Ratio (CBOE): 1.07; +0.1. Three of four above 1.0 on top of the prior long string of 1.0+ sessions. At least this shows the apprehension remains.
Bulls and Bears: So much for wringing out the bulls. Now the bullishness is running right back up.
Bulls: 56.6% versus 52.0% versus 53.46% versus 58.7% versus 59.5% versus
Not what you want to see, that is bulls spiking back up after a two week slide.
Bears: 1.41% versus 14.3% versus 14.1% versus 14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3%
Okay, after one week bears fall right back into the rut at 14.1%.
Theory: When everyone is bullish and has put all their capital to work, where does the ammunition to drive the market come from? There is always new money to start a new year. After that is used will more money be coming? That is the question.
Bulls: 56.6%
52.0% versus 53.6% versus 58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0% versus 53.1% versus 49.0% versus 48.0% versus 50.5% versus 56.4% versus 52.5% versus 49.5% versus 51.5% versus 53.4% versus 56.5% versus 56.4% versus 55.5% versus 54.6% versus 47.0% versus 35.3% versus 37.8% versus 45.5% versus 47.5% versus 48.0% versus 52.5% versus 57.6% versus 56.1% versus 52.5%
Background: Last undercut 35%, the threshold for bullishness, in early June 2012.
Bears: 14.1%
14.3% versus 14.1% versus 14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3% versus 16.3% versus 17.4% versus16.3% versus 15.2% versus 14.9% versus 15.8% versus 14.9% versus 14.8% versus 13.9% versus 13.8% versus 14.9% versus 14.8% versus 15.1% versus 16.3% versus 18.2% versus 17.3% versus 14.1% versus 15.1% versus 15.3% versus 15.2% versus 14.1% versus 13.3% versus 15.1% versus 16.2%
Background: Over 35% for bears is the threshold to be really be a good upside indicator. The best indication is when bears cross up through bulls as the two merge. Right now bulls are coming back down from the 60 level that has consistently marked market tops over the past two years. The rapid decline in progress is pushing the bulls/bears lines toward one another. Still far from a cross with bulls falling faster than bears are rising, but bears are warming up to the notion of market weakness.
OTHER MARKETS
Bonds (10 year): 1.95% versus 2.01%. Flopping around like a fish on hot pavement, back and forth each session but holding the 50 day MA overall.
2.01% versus 1.92% versus 1.87% versus 1.91% versus 1.927% versus 1.97% versus 1.95% versus 2.06% versus 2.09% versus 2.10% versus 2.12% versus 2.10% versus 2.12% versus 2.11% versus 2.13% versus 2.20% versus 2.245% versus 2.11% versus 2.12% versus 2.12% versus 2.08% versus 1.98% versus 2.04% versus 1.96% versus 1.98% versus 2.06% versus 2.09% versus 2.11%
Euro/$: 1.0898 versus 1.0890 versus 1.0973 versus 1.0925 versus 1.0946 versus 1.0811 versus 1.0648 versus 1.0874 versus 1.0590 versus 1.0568 versus 1.0494 versus 1.0635 versus 1.0546 versus 1.0700 versus 1.0829 versus 1.0849 versus 1.1030 versus 1.1079 versus 1.1175 versus 1.1182 versus 1.1197 versus 1.1195 versus 1.1362 versus 1.1337 versus 1.1385 versus 1.1379 versus 1.1366
No movement on the Friday close as the dollar firmed up over the 50 day MA following the prior week's fall.
Oil: 48.87, -2.56. Backed off from the 50 day EMA test, but still at the higher end of the recent range, trying to make a new break higher.
Gold: 1199.90, -5.00. Still holding the rally up to the 50 day EMA.
$/JPY: 119.086 versus 119.167 versus 119.405 versus 119.72 versus 119.705 versus 120.02 versus 120.855 versus 120.04 versus 121.34 versus 121.39 versus 121.43 versus 121.28 versus 121.50 versus 121.80 versus 121.60 VERSUS 120.72 versus 120.14 versus 119.71 versus 119.74 versus 120.179 versus 119.63
Holding just below the 50 day MA after a three week fade.
MONDAY
Lots of data for the week starting with Personal Income and Spending Monday, checking out ISM and Factory orders midweek, Challenger Job Cuts Wednesday (need to see if it backs off any), and the March Jobs Report Friday. And don't forget, it will be April and Easter month so there will be some confessions of sorts in the form of earnings warnings.
There is also some overseas baggage to carry into Monday. The EU gave Greece's bailout program proposals the thumbs down as too 'piecemeal and vague' to satisfy international creditors. I guess Greece ends up cozy with Russia and Ras-Putin.
Lots of data to factor into the equation along with how the indices left themselves on Friday. Again, no index is in serious jeopardy but the upside has to show more than it did on the Friday bounce in order to sweep away the Wednesday selling.
It is definitely no done deal that the upside once again takes control as it has on just about every other occasion the market tested.
There are still plentiful upside setups ready to go if the market can hold and continue. Of course we want to take advantage of them if they show the moves and the market shows an overall improved bid.
There are some downside as well that can fall even if the market continues higher. These are stocks that are simply tired and showing a loss of momentum after extended moves.
SUPPORT AND RESISTANCE
NASDAQ: Closed at 4891.22
Resistance:
5008.57 is the March 2015 post-bear market high
5132.52 is the 3/2000 all-time high
Support:
The 50 day EMA at 4867
The March low at 4843
4816 is the 38% Fibonacci retracement of the February run
4815 is the December 2014 prior market peak
4811 is the November 2014 peak (intraday)
4774 is the January high
4751 is the January 2015 lower high
4631 is the October 2014 upside gap point
The 200 day SMA at 4612
4610 is the September 2014 post-bear market high.
4566 is the lower gap point from late October
4563 and 4567 are the January lows
4547 is the December low
4486 is the July 2014 high
4372 is the March 2014 high
The August low at 4321
4316 is the lower gap point from October 2014
4289 is the July 2000 recovery high
4277 is the March lower gap point
4246.55 is the January 2014 peak
S&P 500: Closed at 2061.02
Resistance:
2062 is the January 2015 lower high
The 50 day EMA at 2071
2076 is the all-time high from November
2079 is the intraday all-time high from November
2094 is the December 2014 high, the prior all-time high
2126 is the lower trendline from 11/2012
2119.59 is the all-time high
2191 is the December 2012 up trendline
Support:
2011 is the September prior all-time high
The 200 day SMA at 2011
1991 is the July 2014 high
1972 is the December 2014 low
1905 is the August 2014 low
1902 from early May was the intraday all-time high.
1897 is the prior all-time high hit in April 2014
1883.57 is the early March high.
The December and January highs at 1848
The April 2014 low at 1814
1808 is the November and December 2013 twin peaks
1775.22 is the October prior all-time high
Dow: Closed at 17,712.66
Resistance:
The 50 day EMA at 17,857
17,923 is the January 2015 lower high
17,991 is the early December interim
18,104 is the December high
18,289 is the all-time high
Support:
The March low at 17,620
17,351 is the September 2014 all-time high.
The 200 day SMA at 17,323
17,152 is the mid-July post bear market high
17,068 is the early July 2014 peak
17067 is the December 2014 low
16,970 is the June 2014 former all-time high
16,946 is the June 2014 peak
16,736 is the penultimate all-time high from May 2014
16,632 is the April 2014 all-time high
16,589 is the December 2013 all-time high
16,506 is the March 2014 peak
16,341 is the May low
16,334 is the August 2014 low
16,257 is the January 2014 low
16,179 is the November 2013 peak.
15,855 is the October 2014 low
15,739 is the December 2013 low
ECONOMIC CALENDAR
March 27 - Friday
GDP - Third Estimate, Q4 (8:30): 2.2% actual versus 2.4% expected, 2.2% prior
GDP Deflator - Third, Q4 (8:30): 0.1% actual versus 0.1% expected, 0.1% prior
Michigan Sentiment - Final, March (10:00): 93.0 actual versus 92.0 expected, 91.2 prior
March 30 - Monday
Personal Income, February (8:30): 0.3% expected, 0.3% prior
Personal Spending, February (8:30): 0.2% expected, -0.2% prior
PCE Prices - Core, February (8:30): 0.1% expected, 0.1% prior
Pending Home Sales, February (10:00): 0.4% expected, 1.7% prior
March 31 - Tuesday
Case-Shiller 20-city, January (9:00): 4.5% expected, 4.5% prior
Chicago PMI, March (9:45): 52.0 expected, 45.8 prior
Consumer Confidence, March (10:00): 96.2 expected, 96.4 prior
April 1 - Wednesday
MBA Mortgage Index, 03/28 (7:00): 9.5% prior
ADP Employment Repor, February (7:15): 212K prior
ADP Employment Repor, February (8:15): 228K expected, 212K prior
ISM Index, March (10:00): 52.5 expected, 52.9 prior
Construction Spendin, February (10:00): -0.2% expected, -1.1% prior
Crude Inventories, 03/28 (10:30): 8.170M prior
Auto Sales, March (17:00): 5.2M prior
Truck Sales, March (17:00): 7.9M prior
April 2 - Thursday
Challenger Job Cuts, March (7:30): 20.9% prior
Initial Claims, 03/28 (8:30): 285K expected, 282K prior
Continuing Claims, 03/21 (8:30): 2423K expected, 2416K prior
Trade Balance, February (8:30): -$42.0B expected, -$41.8B prior
Factory Orders, February (10:00): -0.5% expected, -0.2% prior
Natural Gas Inventor, 03/28 (10:30): 12 bcf prior
April 3 - Friday
Nonfarm Payrolls, March (8:30): 248K expected, 295K prior
Nonfarm Private Payr, March (8:30): 240K expected, 288K prior
Unemployment Rate, March (8:30): 5.5% expected, 5.5% prior
Hourly Earnings, March (8:30): 0.2% expected, 0.1% prior
Average Workweek, March (8:30): 34.6 expected, 34.6 prior
End part 1 of 3
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Sunday, March 29, 2015
Saturday, March 21, 2015
The Daily, Part 1 of 3, 3-21-15
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3/21/2015 Investment House Report
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MARKET ALERTS:
Targets hit: None issued
Buy alerts: None issued
Trailing stops: None issued
Stop alerts: FEYE
The market alert service is a premium level service where we issue intraday alerts relating to the general market conditions, when stocks hit action points (buy, stop, target, etc.), and when we see other information impacting the market or our stocks. To subscribe to the alert service you can sign up at the following link:
http://www.investmenthouse.com/alertdaily.html
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TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
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TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
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The REPORTS SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Tables with play annotations will issue Monday, Wednesday and the Weekend.
Tuesday and Thursday reports will contain the market summary, chart links to view the index charts, and updated play tables.
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
- Dollar sells but even so the midcaps and small caps take the lead.
- Some news, but the key is what the Fed said Wednesday.
- Solid leaders leading, others setting up.
- Heading to earnings the Fed has green-lighted the market, but of course that means be careful.
I am not going to waste your time this weekend with a lot of analysis. The big news for the week was in Wednesday afternoon.
More of the same stories, but the key one is well-known to everyone: the FOMC dropped its patience stance, but only in public. Patient is just a word; the Fed made it clear it was still more than patient.
Thus the market responded with a 'whew' and blasted upside. The dollar broke lower, bonds broke higher. All the trades pre-FOMC rate hike worry were either taken off of limited.
After that the market was set to take what came, pretty confident the Fed still had its back. Maybe not with QE, maybe not with rate hikes, but with keeping rates low, unwilling to upset what it just a month ago called a 'solid' recovery, but now sees as moderating.
So, the rest was pretty much fluff.
Earnings: NKE beat, DRI (restaurants such as Olive Garden) beat and raised guidance. China's CTRP saw more traffic. That overshadowed TIF's miss that was of course blamed on a strong US dollar. Heaven forbid that US citizens can now perhaps afford a bit more from Tiffany versus those with other currencies.
Dollar: Weakened back to 1.0811 after rebounding Thursday from the post-FOMC slaughter.
Oil: Oil rose as the dollar fell though the black gold is still struggling. After all Dennis Gartman stated Friday oil could fall to $15/bbl. Rig counts hit the lowest level in almost four years (5/2011) and show the fastest decline since 1986. The oilfield has lost 100K jobs in the last quarter. Maybe this time around the BLS will actually COUNT those jobs in its monthly report.
Deflation: For some reason deflation has such a bad reputation right now. All central banks are pushing inflation as a sign of health. In the 1970's and 1980's we would have done anything to avoid it. We finally got it right with policies that increased incentives to invest in the United States and create new innovations and technology to ramp up supply as well as some rate hike increases.
Oh well. The problem today, why they so hate deflation and push inflation, is the massive amount of debt on every country's books. Inflation eats away at the value of wages, assets, and currency values. It makes massive amounts of debt easier to repay because you use currency worth less. Good for governments, bad for the citizens. Deflation does the opposite. No good for countries heavy in debt.
That is why the Fed has a difficult task: it wants to avoid deflation at all costs, but it also does not want to raise interest rates either because with rate hikes our dollar firms among other things, and it makes it darn hard to pay back debt because you drain more of your wealth to do it.
None of this really matters to the market, at least short term, i.e. in the next several months. The Fed said it is going to be patient though not using the word. With the economic data still trending lower and Q1 said to be less than 1% in terms of growth, it does not look as if the Fed will be getting in the rate hike game soon, or at least that won't be a concern . . . until the next FOMC meeting.
THE MARKET
Stocks closed mostly higher on quad-expiration. All indices were up nicely with the midcaps leading the charge. Good to see them take over once again.
SP500 18.83, 0.90%
NASDAQ 34.04, 0.68%
DJ30 168.62, 0.94%
SP400 1.13%
RUTX 0.92%
SOX 1.49%
The afternoon was disappointing, however, as stocks peeled back in the afternoon session with some leaders suffering some dings. A lot of that, however, was expiration related as the FOMC's actions really threw some wrenches into plans for the future and just how active the Fed would be.
CHARTS
SP400: Blasting to a new all-time high, the second for the week, leading the market upside. Great to see the midcaps leading.
RUTX: Three new highs on the week, Wednesday to Friday. Good to see the small caps leading as well.
NASDAQ: Try as it might, NASDAQ could not post a new all-time closing high (5032) not to mention an all-time high (5132). Maybe NASDAQ has met its match, maybe it is peaking out. Not likely, not just yet, based upon what the Fed said. No assumptions, but the Fed said what it said (or didn't say).
SOX: Gapped upside to cap a solid week, just missing out on a new high for this rally. This after testing the 50 day EMA not quite two weeks back. Nice, solid.
SP500: Lagging but not bad at all. A good move Wednesday, a Thursday test, then a new upside move Friday. Still off the late February all-time high, but making tracks toward it.
DJ30: Same as SP500, a Thursday test of the Wednesday move, then breaking back above the December high Friday. Now looking at the late February high.
LEADERSHIP
No doubt some good moves Friday. After all the market was hustling upside again. Some 'names,' however, had a hard time closing it out. Some already moved really well, others were just not quite ready.
Chips: Typically solid of late. AVGO, NXPI up 2.5%, SWKS surged again as well.
Software: Not so soft though some leaders struggled late in the week. CRM struggled after a great week. Ditto SPLK. INFA looks good as does GLUU.
Biotech: CELG, TXMD surged. XON is setting up well.
Internet related: GOOG gapped but could not put in a big session. WWWW rallied 3%. FB continued higher. LNKD is setting back up. VIPS surged Thursday and Friday.
MARKET STATISTICS
NASDAQ
Stats: +34.04 points (+0.68%) to close at 5026.42
Volume: 2.524B (+53.77%)
Up Volume: 1.93B (+1.081B)
Down Volume: 872.31M (+61.56M)
A/D and Hi/Lo: Advancers led 1.5 to 1
Previous Session: Advancers led 1.11 to 1
New Highs: 234 (+72)
New Lows: 37 (+4)
S&P
Stats: +18.83 points (+0.9%) to close at 2108.1
NYSE Volume: 2.3B (+211.4%)
A/D and Hi/Lo: Advancers led 3.83 to 1
Previous Session: Decliners led 1.82 to 1
New Highs: 271 (+143)
New Lows: 23 (-11)
DJ30
Stats: +168.62 points (+0.94%) to close at 18127.65
SENTIMENT INDICATORS
VIX: 13.02; -1.05
VXN: 13.82; -0.89
VXO: 12.94; -1.25
Put/Call Ratio (CBOE): 0.81; -0.08
Bulls and Bears: Broke lower as expected in the selling. Not low enough but heading in the right direction.
Bulls: 52.0% versus 53.46% versus 58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0%
Continuing the slide from the spike, making a round trip of sorts down to 52.
Bears: 14.3% versus 14.1% versus 14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3%
Wow, an actual move higher, though still basically flat-line.
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: 52.0%
53.6% versus 58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0% versus 53.1% versus 49.0% versus 48.0% versus 50.5% versus 56.4% versus 52.5% versus 49.5% versus 51.5% versus 53.4% versus 56.5% versus 56.4% versus 55.5% versus 54.6% versus 47.0% versus 35.3% versus 37.8% versus 45.5% versus 47.5% versus 48.0% versus 52.5% versus 57.6% versus 56.1% versus 52.5%
Background: Last undercut 35%, the threshold for bullishness, in early June 2012.
Bears: 14.3%
14.1% versus 14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3% versus 16.3% versus 17.4% versus16.3% versus 15.2% versus 14.9% versus 15.8% versus 14.9% versus 14.8% versus 13.9% versus 13.8% versus 14.9% versus 14.8% versus 15.1% versus 16.3% versus 18.2% versus 17.3% versus 14.1% versus 15.1% versus 15.3% versus 15.2% versus 14.1% versus 13.3% versus 15.1% versus 16.2%
Background: Over 35% for bears is the threshold to be really be a good upside indicator. The best indication is when bears cross up through bulls as the two merge. Right now bulls are coming back down from the 60 level that has consistently marked market tops over the past two years. The rapid decline in progress is pushing the bulls/bears lines toward one another. Still far from a cross with bulls falling faster than bears are rising, but bears are warming up to the notion of market weakness.
OTHER MARKETS
Bonds (10 year): 1.927%. Unreal week and close to the week as TLT bounced off a double bottom at the 61% Fibonacci Retracement.
1.97% versus 1.95% versus 2.06% versus 2.09% versus 2.10% versus 2.12% versus 2.10% versus 2.12% versus 2.11% versus 2.13% versus 2.20% versus 2.245% versus 2.11% versus 2.12% versus 2.12% versus 2.08% versus 1.98% versus 2.04% versus 1.96% versus 1.98% versus 2.06% versus 2.09% versus 2.11% versus 2.08% versus 2.14% versus 2.03% versus 1.99% versus 1.98% versus 1.99% versus 1.95% versus 1.94% versus 1.81% versus 1.77% versus 1.78% versus 1.68% versus 1.67% versus 1.76%
Oil: 46.58, +1.08. Solid bounce off of that potential double bottom, but still below near resistance. Has to show the breakout and show it can make it stick.
Gold: 1184.50, +15.20. Good bounce off of that double bottom, moving up through the 20 day EMA for the first time since breaking below it in early February.
$/JPY: 120.02 versus 120.855 versus 120.04 versus 121.34 versus 121.39 versus 121.43 versus 121.28 versus 121.50 versus 121.80 versus 121.60 VERSUS 120.72 versus 120.14 versus 119.71 versus 119.74 versus 120.179 versus 119.63 versus 119.48 versus 118.86
Back to the fade, breaking toward the 50 day EMA again.
Euro/$: 1.0811 versus 1.0648 versus 1.0874 versus 1.0590 versus 1.0568 versus 1.0494 versus 1.0635 versus 1.0546 versus 1.0700 versus 1.0829 versus 1.0849 versus 1.1030 versus 1.1079 versus 1.1175 versus 1.1182 versus 1.1197 versus 1.1195 versus 1.1362 versus 1.1337 versus 1.1385 versus 1.1379 versus 1.1366
All over the map last week gratis FOMC. Sold Wednesday, rebounded Thursday, then back down Friday. Still at near term support so not a certainty that the dollar breaks here. Not positive given the FOMC revitalized anti-high rates position.
MONDAY
Moving toward earnings with the FOMC still very patient though not admitting it. Stocks are pushing to new highs in terms of the indices with smaller caps leading. Not a bad scenario for a continued move higher into earnings. Of course you cannot assume that to be the case, but the ground work is there to do it.
This weekend we have several plays to take advantage of a continuing move. We have some great positions that have made us great money, others in the process, and others just getting going. We plan to augment those existing plays with some more upside if they can show the moves they are set to show.
Nothing really fancy, nothing really nuanced. Of course, that is ALWAYS the time to watch out, to be careful. Okay, it is ALWAYS time to be careful in the market lest you get your head handed to you. If the stocks make the moves we play them. If stocks struggle we protect what we made this last run. Earnings are coming; no reason to be cute or coy. Just play the moves that we get, and as always, take what the market gives us.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 5026.42
Resistance:
5132.52 is the 3/2000 all-time high
Support:
5008.57 is the March 2015 post-bear market high
The 50 day EMA at 4854
The March low at 4843
4816 is the 38% Fibonacci retracement of the February run
4815 is the December 2014 prior market peak
4811 is the November 2014 peak (intraday)
4774 is the January high
4751 is the January 2015 lower high
4631 is the October 2014 upside gap point
4610 is the September 2014 post-bear market high.
The 200 day SMA at 4597
4566 is the lower gap point from late October
4563 and 4567 are the January lows
4547 is the December low
4486 is the July 2014 high
4372 is the March 2014 high
The August low at 4321
4316 is the lower gap point from October 2014
4289 is the July 2000 recovery high
4277 is the March lower gap point
4246.55 is the January 2014 peak
S&P 500: Closed at 2108.10
Resistance:
2119 is the lower trendline from 11/2012
2119.59 is the all-time high
2182 is the December 2012 up trendline
Support:
2094 is the December 2014 high, the prior all-time high
2079 is the intraday all-time high from November
2076 is the all-time high from November
The 50 day EMA at 2070
2062 is the January 2015 lower high
2011 is the September prior all-time high
The 200 day SMA at 2008
1991 is the July 2014 high
1972 is the December 2014 low
1905 is the August 2014 low
1902 from early May was the intraday all-time high.
1897 is the prior all-time high hit in April 2014
1883.57 is the early March high.
The December and January highs at 1848
The April 2014 low at 1814
1808 is the November and December 2013 twin peaks
1775.22 is the October prior all-time high
Dow: Closed at 18,127.65
Resistance:
18,289 is the all-time high
Support:
18,104 is the December high
17,991 is the early December interim
17,923 is the January 2015 lower high
The 50 day EMA at 17,861
The March low at 17,620
17,351 is the September 2014 all-time high.
The 200 day SMA at 17,299
17,152 is the mid-July post bear market high
17,068 is the early July 2014 peak
17067 is the December 2014 low
16,970 is the June 2014 former all-time high
16,946 is the June 2014 peak
16,736 is the penultimate all-time high from May 2014
16,632 is the April 2014 all-time high
16,589 is the December 2013 all-time high
16,506 is the March 2014 peak
16,341 is the May low
16,334 is the August 2014 low
16,257 is the January 2014 low
16,179 is the November 2013 peak.
15,855 is the October 2014 low
15,739 is the December 2013 low
ECONOMIC CALENDAR
March 23 - Monday
Existing Home Sales, February (10:00): 4.90M expected, 4.82M prior
March 24 - Tuesday
CPI, February (8:30): 0.2% expected, -0.7% prior
Core CPI, February (8:30): 0.1% expected, 0.2% prior
FHFA Housing Price I, January (9:00): 0.8% prior
New Home Sales, February (10:00): 470K expected, 481K prior
March 25 - Wednesday
MBA Mortgage Index, 03/21 (7:00): -3.9% prior
Durable Orders, February (8:30): 0.5% expected, 2.8% prior
Durable Goods -ex tr, February (8:30): 0.3% expected, 0.0% prior (revised from 0.3%)
Crude Inventories, 03/21 (10:30): 9.622M prior
March 26 - Thursday
Initial Claims, 03/21 (8:30): 293K expected, 291K prior
Continuing Claims, 03/14 (8:30): 2425K expected, 2417K prior
Natural Gas Inventor, 03/21 (10:30): -45 bcf prior
March 27 - Friday
GDP - Third Estimate, Q4 (8:30): 2.4% expected, 2.2% prior
GDP Deflator - Third, Q4 (8:30): 0.1% expected, 0.1 prior
Michigan Sentiment - Final, March (10:00): 91.2 prior
End part 1 of 3
_______________________________________________________
Member: tweet@investbilling.com
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
3/21/2015 Investment House Report
* * * *
MARKET ALERTS:
Targets hit: None issued
Buy alerts: None issued
Trailing stops: None issued
Stop alerts: FEYE
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
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************
The REPORTS SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Tables with play annotations will issue Monday, Wednesday and the Weekend.
Tuesday and Thursday reports will contain the market summary, chart links to view the index charts, and updated play tables.
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
- Dollar sells but even so the midcaps and small caps take the lead.
- Some news, but the key is what the Fed said Wednesday.
- Solid leaders leading, others setting up.
- Heading to earnings the Fed has green-lighted the market, but of course that means be careful.
I am not going to waste your time this weekend with a lot of analysis. The big news for the week was in Wednesday afternoon.
More of the same stories, but the key one is well-known to everyone: the FOMC dropped its patience stance, but only in public. Patient is just a word; the Fed made it clear it was still more than patient.
Thus the market responded with a 'whew' and blasted upside. The dollar broke lower, bonds broke higher. All the trades pre-FOMC rate hike worry were either taken off of limited.
After that the market was set to take what came, pretty confident the Fed still had its back. Maybe not with QE, maybe not with rate hikes, but with keeping rates low, unwilling to upset what it just a month ago called a 'solid' recovery, but now sees as moderating.
So, the rest was pretty much fluff.
Earnings: NKE beat, DRI (restaurants such as Olive Garden) beat and raised guidance. China's CTRP saw more traffic. That overshadowed TIF's miss that was of course blamed on a strong US dollar. Heaven forbid that US citizens can now perhaps afford a bit more from Tiffany versus those with other currencies.
Dollar: Weakened back to 1.0811 after rebounding Thursday from the post-FOMC slaughter.
Oil: Oil rose as the dollar fell though the black gold is still struggling. After all Dennis Gartman stated Friday oil could fall to $15/bbl. Rig counts hit the lowest level in almost four years (5/2011) and show the fastest decline since 1986. The oilfield has lost 100K jobs in the last quarter. Maybe this time around the BLS will actually COUNT those jobs in its monthly report.
Deflation: For some reason deflation has such a bad reputation right now. All central banks are pushing inflation as a sign of health. In the 1970's and 1980's we would have done anything to avoid it. We finally got it right with policies that increased incentives to invest in the United States and create new innovations and technology to ramp up supply as well as some rate hike increases.
Oh well. The problem today, why they so hate deflation and push inflation, is the massive amount of debt on every country's books. Inflation eats away at the value of wages, assets, and currency values. It makes massive amounts of debt easier to repay because you use currency worth less. Good for governments, bad for the citizens. Deflation does the opposite. No good for countries heavy in debt.
That is why the Fed has a difficult task: it wants to avoid deflation at all costs, but it also does not want to raise interest rates either because with rate hikes our dollar firms among other things, and it makes it darn hard to pay back debt because you drain more of your wealth to do it.
None of this really matters to the market, at least short term, i.e. in the next several months. The Fed said it is going to be patient though not using the word. With the economic data still trending lower and Q1 said to be less than 1% in terms of growth, it does not look as if the Fed will be getting in the rate hike game soon, or at least that won't be a concern . . . until the next FOMC meeting.
THE MARKET
Stocks closed mostly higher on quad-expiration. All indices were up nicely with the midcaps leading the charge. Good to see them take over once again.
SP500 18.83, 0.90%
NASDAQ 34.04, 0.68%
DJ30 168.62, 0.94%
SP400 1.13%
RUTX 0.92%
SOX 1.49%
The afternoon was disappointing, however, as stocks peeled back in the afternoon session with some leaders suffering some dings. A lot of that, however, was expiration related as the FOMC's actions really threw some wrenches into plans for the future and just how active the Fed would be.
CHARTS
SP400: Blasting to a new all-time high, the second for the week, leading the market upside. Great to see the midcaps leading.
RUTX: Three new highs on the week, Wednesday to Friday. Good to see the small caps leading as well.
NASDAQ: Try as it might, NASDAQ could not post a new all-time closing high (5032) not to mention an all-time high (5132). Maybe NASDAQ has met its match, maybe it is peaking out. Not likely, not just yet, based upon what the Fed said. No assumptions, but the Fed said what it said (or didn't say).
SOX: Gapped upside to cap a solid week, just missing out on a new high for this rally. This after testing the 50 day EMA not quite two weeks back. Nice, solid.
SP500: Lagging but not bad at all. A good move Wednesday, a Thursday test, then a new upside move Friday. Still off the late February all-time high, but making tracks toward it.
DJ30: Same as SP500, a Thursday test of the Wednesday move, then breaking back above the December high Friday. Now looking at the late February high.
LEADERSHIP
No doubt some good moves Friday. After all the market was hustling upside again. Some 'names,' however, had a hard time closing it out. Some already moved really well, others were just not quite ready.
Chips: Typically solid of late. AVGO, NXPI up 2.5%, SWKS surged again as well.
Software: Not so soft though some leaders struggled late in the week. CRM struggled after a great week. Ditto SPLK. INFA looks good as does GLUU.
Biotech: CELG, TXMD surged. XON is setting up well.
Internet related: GOOG gapped but could not put in a big session. WWWW rallied 3%. FB continued higher. LNKD is setting back up. VIPS surged Thursday and Friday.
MARKET STATISTICS
NASDAQ
Stats: +34.04 points (+0.68%) to close at 5026.42
Volume: 2.524B (+53.77%)
Up Volume: 1.93B (+1.081B)
Down Volume: 872.31M (+61.56M)
A/D and Hi/Lo: Advancers led 1.5 to 1
Previous Session: Advancers led 1.11 to 1
New Highs: 234 (+72)
New Lows: 37 (+4)
S&P
Stats: +18.83 points (+0.9%) to close at 2108.1
NYSE Volume: 2.3B (+211.4%)
A/D and Hi/Lo: Advancers led 3.83 to 1
Previous Session: Decliners led 1.82 to 1
New Highs: 271 (+143)
New Lows: 23 (-11)
DJ30
Stats: +168.62 points (+0.94%) to close at 18127.65
SENTIMENT INDICATORS
VIX: 13.02; -1.05
VXN: 13.82; -0.89
VXO: 12.94; -1.25
Put/Call Ratio (CBOE): 0.81; -0.08
Bulls and Bears: Broke lower as expected in the selling. Not low enough but heading in the right direction.
Bulls: 52.0% versus 53.46% versus 58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0%
Continuing the slide from the spike, making a round trip of sorts down to 52.
Bears: 14.3% versus 14.1% versus 14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3%
Wow, an actual move higher, though still basically flat-line.
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: 52.0%
53.6% versus 58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0% versus 53.1% versus 49.0% versus 48.0% versus 50.5% versus 56.4% versus 52.5% versus 49.5% versus 51.5% versus 53.4% versus 56.5% versus 56.4% versus 55.5% versus 54.6% versus 47.0% versus 35.3% versus 37.8% versus 45.5% versus 47.5% versus 48.0% versus 52.5% versus 57.6% versus 56.1% versus 52.5%
Background: Last undercut 35%, the threshold for bullishness, in early June 2012.
Bears: 14.3%
14.1% versus 14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3% versus 16.3% versus 17.4% versus16.3% versus 15.2% versus 14.9% versus 15.8% versus 14.9% versus 14.8% versus 13.9% versus 13.8% versus 14.9% versus 14.8% versus 15.1% versus 16.3% versus 18.2% versus 17.3% versus 14.1% versus 15.1% versus 15.3% versus 15.2% versus 14.1% versus 13.3% versus 15.1% versus 16.2%
Background: Over 35% for bears is the threshold to be really be a good upside indicator. The best indication is when bears cross up through bulls as the two merge. Right now bulls are coming back down from the 60 level that has consistently marked market tops over the past two years. The rapid decline in progress is pushing the bulls/bears lines toward one another. Still far from a cross with bulls falling faster than bears are rising, but bears are warming up to the notion of market weakness.
OTHER MARKETS
Bonds (10 year): 1.927%. Unreal week and close to the week as TLT bounced off a double bottom at the 61% Fibonacci Retracement.
1.97% versus 1.95% versus 2.06% versus 2.09% versus 2.10% versus 2.12% versus 2.10% versus 2.12% versus 2.11% versus 2.13% versus 2.20% versus 2.245% versus 2.11% versus 2.12% versus 2.12% versus 2.08% versus 1.98% versus 2.04% versus 1.96% versus 1.98% versus 2.06% versus 2.09% versus 2.11% versus 2.08% versus 2.14% versus 2.03% versus 1.99% versus 1.98% versus 1.99% versus 1.95% versus 1.94% versus 1.81% versus 1.77% versus 1.78% versus 1.68% versus 1.67% versus 1.76%
Oil: 46.58, +1.08. Solid bounce off of that potential double bottom, but still below near resistance. Has to show the breakout and show it can make it stick.
Gold: 1184.50, +15.20. Good bounce off of that double bottom, moving up through the 20 day EMA for the first time since breaking below it in early February.
$/JPY: 120.02 versus 120.855 versus 120.04 versus 121.34 versus 121.39 versus 121.43 versus 121.28 versus 121.50 versus 121.80 versus 121.60 VERSUS 120.72 versus 120.14 versus 119.71 versus 119.74 versus 120.179 versus 119.63 versus 119.48 versus 118.86
Back to the fade, breaking toward the 50 day EMA again.
Euro/$: 1.0811 versus 1.0648 versus 1.0874 versus 1.0590 versus 1.0568 versus 1.0494 versus 1.0635 versus 1.0546 versus 1.0700 versus 1.0829 versus 1.0849 versus 1.1030 versus 1.1079 versus 1.1175 versus 1.1182 versus 1.1197 versus 1.1195 versus 1.1362 versus 1.1337 versus 1.1385 versus 1.1379 versus 1.1366
All over the map last week gratis FOMC. Sold Wednesday, rebounded Thursday, then back down Friday. Still at near term support so not a certainty that the dollar breaks here. Not positive given the FOMC revitalized anti-high rates position.
MONDAY
Moving toward earnings with the FOMC still very patient though not admitting it. Stocks are pushing to new highs in terms of the indices with smaller caps leading. Not a bad scenario for a continued move higher into earnings. Of course you cannot assume that to be the case, but the ground work is there to do it.
This weekend we have several plays to take advantage of a continuing move. We have some great positions that have made us great money, others in the process, and others just getting going. We plan to augment those existing plays with some more upside if they can show the moves they are set to show.
Nothing really fancy, nothing really nuanced. Of course, that is ALWAYS the time to watch out, to be careful. Okay, it is ALWAYS time to be careful in the market lest you get your head handed to you. If the stocks make the moves we play them. If stocks struggle we protect what we made this last run. Earnings are coming; no reason to be cute or coy. Just play the moves that we get, and as always, take what the market gives us.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 5026.42
Resistance:
5132.52 is the 3/2000 all-time high
Support:
5008.57 is the March 2015 post-bear market high
The 50 day EMA at 4854
The March low at 4843
4816 is the 38% Fibonacci retracement of the February run
4815 is the December 2014 prior market peak
4811 is the November 2014 peak (intraday)
4774 is the January high
4751 is the January 2015 lower high
4631 is the October 2014 upside gap point
4610 is the September 2014 post-bear market high.
The 200 day SMA at 4597
4566 is the lower gap point from late October
4563 and 4567 are the January lows
4547 is the December low
4486 is the July 2014 high
4372 is the March 2014 high
The August low at 4321
4316 is the lower gap point from October 2014
4289 is the July 2000 recovery high
4277 is the March lower gap point
4246.55 is the January 2014 peak
S&P 500: Closed at 2108.10
Resistance:
2119 is the lower trendline from 11/2012
2119.59 is the all-time high
2182 is the December 2012 up trendline
Support:
2094 is the December 2014 high, the prior all-time high
2079 is the intraday all-time high from November
2076 is the all-time high from November
The 50 day EMA at 2070
2062 is the January 2015 lower high
2011 is the September prior all-time high
The 200 day SMA at 2008
1991 is the July 2014 high
1972 is the December 2014 low
1905 is the August 2014 low
1902 from early May was the intraday all-time high.
1897 is the prior all-time high hit in April 2014
1883.57 is the early March high.
The December and January highs at 1848
The April 2014 low at 1814
1808 is the November and December 2013 twin peaks
1775.22 is the October prior all-time high
Dow: Closed at 18,127.65
Resistance:
18,289 is the all-time high
Support:
18,104 is the December high
17,991 is the early December interim
17,923 is the January 2015 lower high
The 50 day EMA at 17,861
The March low at 17,620
17,351 is the September 2014 all-time high.
The 200 day SMA at 17,299
17,152 is the mid-July post bear market high
17,068 is the early July 2014 peak
17067 is the December 2014 low
16,970 is the June 2014 former all-time high
16,946 is the June 2014 peak
16,736 is the penultimate all-time high from May 2014
16,632 is the April 2014 all-time high
16,589 is the December 2013 all-time high
16,506 is the March 2014 peak
16,341 is the May low
16,334 is the August 2014 low
16,257 is the January 2014 low
16,179 is the November 2013 peak.
15,855 is the October 2014 low
15,739 is the December 2013 low
ECONOMIC CALENDAR
March 23 - Monday
Existing Home Sales, February (10:00): 4.90M expected, 4.82M prior
March 24 - Tuesday
CPI, February (8:30): 0.2% expected, -0.7% prior
Core CPI, February (8:30): 0.1% expected, 0.2% prior
FHFA Housing Price I, January (9:00): 0.8% prior
New Home Sales, February (10:00): 470K expected, 481K prior
March 25 - Wednesday
MBA Mortgage Index, 03/21 (7:00): -3.9% prior
Durable Orders, February (8:30): 0.5% expected, 2.8% prior
Durable Goods -ex tr, February (8:30): 0.3% expected, 0.0% prior (revised from 0.3%)
Crude Inventories, 03/21 (10:30): 9.622M prior
March 26 - Thursday
Initial Claims, 03/21 (8:30): 293K expected, 291K prior
Continuing Claims, 03/14 (8:30): 2425K expected, 2417K prior
Natural Gas Inventor, 03/21 (10:30): -45 bcf prior
March 27 - Friday
GDP - Third Estimate, Q4 (8:30): 2.4% expected, 2.2% prior
GDP Deflator - Third, Q4 (8:30): 0.1% expected, 0.1 prior
Michigan Sentiment - Final, March (10:00): 91.2 prior
End part 1 of 3
_______________________________________________________
Member: tweet@investbilling.com
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
Wednesday, March 18, 2015
The Daily, Part 1 of 3, 3-18-15
* * * *
3/18/2015 Investment House Report
* * * *
MARKET ALERTS:
Targets hit: ALK; QRVO
Buy alerts: AAPL; CELG; FEYE; GOOG
Trailing stops: MTSN
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
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************
The REPORTS SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Tables with play annotations will issue Monday, Wednesday and the Weekend.
Tuesday and Thursday reports will contain the market summary, chart links to view the index charts, and updated play tables.
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
- Stocks fear the Fed then celebrate as Yellen pulls her patience but more than makes up for it.
- Fed downgrades economic outlooks, inflation projections.
- Small caps, midcaps are not the leaders on the session, but they are the first to hit new highs.
- With the Fed's soft stance, the dollar's weakening , and the market's reaction, we will see if the other indices can follow the small caps to new highs.
Stocks stumbled into the FOMC decision apprehensive the Fed was set to drop its 'patient' stance and further toughen its pre-rate hike stance. Just how far would the Fed go kept investors and traders guessing.
The Fed dropped references to patient, and it went further than the market anticipated -- in reverse. The Fed downgraded its economic outlook across the board, and in addition, softened its language regarding the economic outlook. Perhaps the Fed IS looking at the recent 90+% miss rate on economic data and isn't ready to start pulling triggers on rate hikes.
Specifics:
Economic growth: The Fed moved from noting 'solid growth' in the last statement to 'economic growth has moderated somewhat.'
Inflation: The Fed noted it needs to 'have confidence' inflation is moving toward the 2% level.
The Fed is concerned and it cut its PCE forecasts
PCE: 0.6% to 0.8% versus 1% to 1.6% just three months back.
Core PCE: 1.3% to 1.4% from 1.5% to 1.8%
GDP forecast: This is where the real impact of the Fed's statement hit home.
2015: 2.3% to 2.7% from 2.6% to 3%.
2016: 2.3% to 2.7% versus 2.5% to 3.0%
2017: 2.0% to 2.4% versus 2.3% to 2.5%
Summary: Two key points to take away.
1. The Fed removed 'patient' but slashed its forecast levels and reiterated its data dependency. In effect, the Fed softened its position from where it was last meeting.
2. The Fed launched an attack on the dollar, backtracking from its last statement in terms of hawkishness: the economy is not that strong to warrant foreign money seeking dollar-based assets AND decreasing dollar value by postponing the point of rate hikes.
The result was upside. Stocks, oil, bonds, but, of course, not the dollar. The euro and yen scored big gains, the best in months and months.
SP500 25.22, 1.22%
NASDAQ 45.40, 0.92%
DJ30 227.11, 1.27%
SP400 1.07%
RUTX 0.80%
SOX 0.74%
VOLUME: NYSE +23%, NASDAQ +1.6:1
A/D: NYSE 4.5:1, NASDAQ 15%
Large cap led the move higher but we note RUTX and SP400 hit new all-time highs while NASDAQ bumped at its recent high and stumbled. DJ30 and SP500 moved well but still have distance to cover for new highs past the February peaks.
There were big moves in many areas and we picked up AAPL and GOOG positions in the really big caps, some CELG, and some FEYE also.
So, the Fed under Yellen opted not to do anything to upset what is happening right now . . . OTHER than undermining the dollar, one of the BEST things for the US consumer in 6 years of 'recovery.' Yellen once told Greenspan not to hike rates to avoid killing off an economic move before it was strong enough. Seems she is sticking to her beliefs.
The market loved it. Now we see if it is sustainable. Should be. Yellen gave stock investors and traders something of a green light, a ringing bell, etc.
THE MARKET
CHARTS
SP400: Not the biggest percentage mover on the session, but at 1.07%, not chopped liver. SP400 was one two indices moving to new all-time highs. Good NYSE volume pushed the midcaps to that high. The large caps played catch up while the midcaps and small caps moved to new highs.
RUTX: New high for the small caps as well, even punching through the upper trendline formed through the March and July 2014 peaks. As with the midcaps, not the best performing index on the session but a new high as the small caps led the prior move and held on the best during the test.
NASDAQ: Aided by AAPL and GOOG, NASDAQ posted a solid advance though it too lagged SP500 and DJ30. Indeed, NASDAQ broke 5,000 on the high but simply could not hold it. Not a bad session with a solid price move and strong volume, but it was predominantly a large cap move as NASDAQ 100 outpaced NASDAQ overall.
DJ30: Dicey pre-Fed, trading well below the 50 day MA. After Yellen and her henchmen, however, issued their proclamation, the Dow reversed and rallied through 18K. Not much volume and still below the late December peak. It is tough when you dig deeper holes; harder to get out.
SOX: Down early, undercutting the 20 day EMA then reversing to a nice rally. Tapped the December peak on the low, reversed nicely. Excellent positioning.
SP500: Tapped the 50 day SMA on the low then reversed upside, closing over the late December peak and on rising, above average volume. Not bad for the large caps: higher low at the 61% Fibonacci Retracement on the pullback from the February high. Broke the December peak on stronger volume. No complaints.
LEADERSHIP
Big Names: With the Dow and SP500 posting the best percentage moves you know the big caps were in the lead. GOOG broke nicely higher. AAPL as well. HON. CAT.
Chips: Good and so-so. NXPI up 1.5% but low trade. SWKS flat but after a good move. AAOI surging 3.3%. AVGO up a decent 1% on good volume.
Software: CRM jumping 1.5%. FEYE up 1.8% and giving us the entry signal. FFIV looks very good with a double bottom.
Internet Social: FB surging 1.95%. GRUB flat, but it put in a super run into the FOMC. TWTR looks very interesting for a move higher.
Industrial equipment: TEX surged 4% off its higher low. CAT has a double bottom and jumped higher. CMI not so good but could bounce further from here.
MARKET STATISTICS
NASDAQ
Stats: +45.39 points (+0.92%) to close at 4982.83
Volume: 1.942B (+15.5%)
Up Volume: 1.35B (+472.46M)
Down Volume: 556.59M (-259.13M)
A/D and Hi/Lo: Advancers led 1.62 to 1
Previous Session: Advancers led 1.04 to 1
New Highs: 184 (+63)
New Lows: 62 (-10)
S&P
Stats: +25.22 points (+1.22%) to close at 2099.5
NYSE Volume: 883.3M (+23.35%)
A/D and Hi/Lo: Advancers led 4.51 to 1
Previous Session: Decliners led 1.11 to 1
New Highs: 201 (+100)
New Lows: 63 (-8)
DJ30
Stats: +227.11 points (+1.27%) to close at 18076.19
SENTIMENT INDICATORS
VIX: 13.97; -1.69
VXN: 14.99; -1.61
VXO: 14.01; -2.13
Put/Call Ratio (CBOE): 0.98; +0.03. Second day below 1.0 as the 7 straight 1+ readings did their work.
Bulls and Bears: Broke lower as expected in the selling. Not low enough but heading in the right direction.
Bulls: 53.46% versus 58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0%
After that rapid spike from 49% to 59.5%, backing down. A bit.
Bears: 14.1% versus 14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3%
Are you kidding me? This goes beyond stuck in the mud. Chronically low bearishness is bearish.
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: 53.6%
58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0% versus 53.1% versus 49.0% versus 48.0% versus 50.5% versus 56.4% versus 52.5% versus 49.5% versus 51.5% versus 53.4% versus 56.5% versus 56.4% versus 55.5% versus 54.6% versus 47.0% versus 35.3% versus 37.8% versus 45.5% versus 47.5% versus 48.0% versus 52.5% versus 57.6% versus 56.1% versus 52.5%
Background: Last undercut 35%, the threshold for bullishness, in early June 2012.
Bears: 14.1%
14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3% versus 16.3% versus 17.4% versus16.3% versus 15.2% versus 14.9% versus 15.8% versus 14.9% versus 14.8% versus 13.9% versus 13.8% versus 14.9% versus 14.8% versus 15.1% versus 16.3% versus 18.2% versus 17.3% versus 14.1% versus 15.1% versus 15.3% versus 15.2% versus 14.1% versus 13.3% versus 15.1% versus 16.2%
Background: Over 35% for bears is the threshold to be really be a good upside indicator. The best indication is when bears cross up through bulls as the two merge. Right now bulls are coming back down from the 60 level that has consistently marked market tops over the past two years. The rapid decline in progress is pushing the bulls/bears lines toward one another. Still far from a cross with bulls falling faster than bears are rising, but bears are warming up to the notion of market weakness.
OTHER MARKETS
Bonds (10 year): 1.95%. Bombs away for rates as bonds gapped higher through the late February recovery high. ABCD pattern formed and it is fulfilling.
2.06% versus 2.09% versus 2.10% versus 2.12% versus 2.10% versus 2.12% versus 2.11% versus 2.13% versus 2.20% versus 2.245% versus 2.11% versus 2.12% versus 2.12% versus 2.08% versus 1.98% versus 2.04% versus 1.96% versus 1.98% versus 2.06% versus 2.09% versus 2.11% versus 2.08% versus 2.14% versus 2.03% versus 1.99% versus 1.98% versus 1.99% versus 1.95% versus 1.94% versus 1.81% versus 1.77% versus 1.78% versus 1.68% versus 1.67% versus 1.76%
Oil: 45.16, +1.70. After undercutting the January low, oil rebounded and now will test that resistance again with a double bottom behind it.
Gold: 1166.40, +18.20. Big upside break off the bottom that matched the November 2014 low. The Fed is not as hawkish as thought and gold took heart.
$/JPY: 120.04 versus 121.34 versus 121.39 versus 121.43 versus 121.28 versus 121.50 versus 121.80 versus 121.60 VERSUS 120.72 versus 120.14 versus 119.71 versus 119.74 versus 120.179 versus 119.63 versus 119.48 versus 118.86
Looked ready to pop with that handle then flopped because of the Fed taking a more dovish stance. That is why we say it is just a pretty pattern until it can prove it can make the move.
Euro/$: 1.0874 versus 1.0590 versus 1.0568 versus 1.0494 versus 1.0635 versus 1.0546 versus 1.0700 versus 1.0829 versus 1.0849 versus 1.1030 versus 1.1079 versus 1.1175 versus 1.1182 versus 1.1197 versus 1.1195 versus 1.1362 versus 1.1337 versus 1.1385 versus 1.1379 versus 1.1366
The dollar, of course, sold hard as the Fed suddenly showed it was not so interested in hiking rates. Is it just the economy or is it the economy. Meaning? Does the Fed see the economy threatened by a stronger dollar and thus Ms. Yellen was DOUBLY worried about hiking rates?
THURSDAY
Certainly a nice surge as the stock market received a rate hike reprieve, or at least that is they way investors and traders (or is that traders and investors?) saw things. New highs on the leading indices though it was interesting to see NASDAQ trade over 5,000 then stumble, unable to hold it.
With that action, even with NASDAQ's fear of 5K, you have to continue looking upside. Even with the move there are some good looking patterns out there that you can pick up on a continued move. Of course we will be looking at those.
You always have to worry about the day after the party. Nothing is for certain in the aftermath of a big policy decision. Second thoughts, new insight, additional news, buyer's remorse.
Not anticipating that kind of response but you have to be aware of the possibility. Given the Fed's action, the response, and the patterns showing up, we will continue looking for upside opportunity. Stocks tested, held, moved up modestly toward the Fed, then were green-lighted. It again behooves us to look at upside plays to take advantage of the new run that received a big boost Wednesday.
Have a great evening!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 4982.83
Resistance:
5008.57 is the March 2015 post-bear market high
5132.52 is the 3/2000 all-time high
Support:
The March low at 4843
The 50 day EMA at 4841
4816 is the 38% Fibonacci retracement of the February run
4815 is the December 2014 prior market peak
4811 is the November 2014 peak (intraday)
4774 is the January high
4751 is the January 2015 lower high
4631 is the October 2014 upside gap point
4610 is the September 2014 post-bear market high.
The 200 day SMA at 4590
4566 is the lower gap point from late October
4563 and 4567 are the January lows
4547 is the December low
4486 is the July 2014 high
4372 is the March 2014 high
The August low at 4321
4316 is the lower gap point from October 2014
4289 is the July 2000 recovery high
4277 is the March lower gap point
4246.55 is the January 2014 peak
S&P 500: Closed at 2099.50
Resistance:
2117 is the lower trendline from 11/2012
2119.59 is the all-time high
2179 is the December 2012 up trendline
Support:
2094 is the December 2014 high, the prior all-time high
2079 is the intraday all-time high from November
2076 is the all-time high from November
The 50 day EMA at 2068
2062 is the January 2015 lower high
2011 is the September prior all-time high
The 200 day SMA at 2006
1991 is the July 2014 high
1972 is the December 2014 low
1905 is the August 2014 low
1902 from early May was the intraday all-time high.
1897 is the prior all-time high hit in April 2014
1883.57 is the early March high.
The December and January highs at 1848
The April 2014 low at 1814
1808 is the November and December 2013 twin peaks
1775.22 is the October prior all-time high
Dow: Closed at 18,071.57
Resistance:
18,104 is the December high
18,289 is the all-time high
Support:
17,991 is the early December interim
17,923 is the January 2015 lower high
The 50 day EMA at 17,845
The March low at 17,620
17,351 is the September 2014 all-time high.
The 200 day SMA at 17,287
17,152 is the mid-July post bear market high
17,068 is the early July 2014 peak
17067 is the December 2014 low
16,970 is the June 2014 former all-time high
16,946 is the June 2014 peak
16,736 is the penultimate all-time high from May 2014
16,632 is the April 2014 all-time high
16,589 is the December 2013 all-time high
16,506 is the March 2014 peak
16,341 is the May low
16,334 is the August 2014 low
16,257 is the January 2014 low
16,179 is the November 2013 peak.
15,855 is the October 2014 low
15,739 is the December 2013 low
ECONOMIC CALENDAR
March 16 - Monday
Empire Manufacturing, March (8:30): 6.9 actual versus 8.8 expected, 7.8 prior
Industrial Production, February (9:15): 0.1% actual versus 0.3% expected, -0.3% prior (revised from 0.2%)
Capacity Utilization, February (9:15): 78.9% actual versus 79.5% expected, 79.1% prior (revised from 79.4%)
NAHB Housing Market , March (10:00): 53 actual versus 56 expected, 55 prior
Net Long-Term TIC Fl, January (16:00): -$27.2B actual versus $39.2B prior (revised from $35.4B)
March 17 - Tuesday
Housing Starts, February (8:30): 897K actual versus 1041K expected, 1081K prior (revised from 1065K)
Building Permits, February (8:30): 1092K actual versus 1070K expected, 1060K prior (revised from 1053K)
March 18 - Wednesday
MBA Mortgage Index, 03/14 (7:00): -3.9% actual versus -1.3% prior
Crude Inventories, 03/14 (10:30): 9.622M actual versus 4.512M prior
FOMC Rate Decision, March (14:00): 0.25% expected, 0.25% prior
March 19 - Thursday
Continuing Claims, 03/07 (8:30)
Initial Claims, 03/14 (8:30): 294K expected, 289K prior
Continuing Claims, 03/07 (8:30): 2420K expected, 2418K prior
Current Account Bala, Q4 (8:30): -$105.0B expected, -$100.3B prior
Philadelphia Fed, March (10:00): 7.2 expected, 5.2 prior
Leading Indicators, February (10:00): 0.2% expected, 0.2% prior
Natural Gas Inventor, 03/14 (10:30): -198 bcf prior
End part 1 o f3
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3/18/2015 Investment House Report
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MARKET ALERTS:
Targets hit: ALK; QRVO
Buy alerts: AAPL; CELG; FEYE; GOOG
Trailing stops: MTSN
Stop alerts: None issued
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The REPORTS SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Tables with play annotations will issue Monday, Wednesday and the Weekend.
Tuesday and Thursday reports will contain the market summary, chart links to view the index charts, and updated play tables.
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
- Stocks fear the Fed then celebrate as Yellen pulls her patience but more than makes up for it.
- Fed downgrades economic outlooks, inflation projections.
- Small caps, midcaps are not the leaders on the session, but they are the first to hit new highs.
- With the Fed's soft stance, the dollar's weakening , and the market's reaction, we will see if the other indices can follow the small caps to new highs.
Stocks stumbled into the FOMC decision apprehensive the Fed was set to drop its 'patient' stance and further toughen its pre-rate hike stance. Just how far would the Fed go kept investors and traders guessing.
The Fed dropped references to patient, and it went further than the market anticipated -- in reverse. The Fed downgraded its economic outlook across the board, and in addition, softened its language regarding the economic outlook. Perhaps the Fed IS looking at the recent 90+% miss rate on economic data and isn't ready to start pulling triggers on rate hikes.
Specifics:
Economic growth: The Fed moved from noting 'solid growth' in the last statement to 'economic growth has moderated somewhat.'
Inflation: The Fed noted it needs to 'have confidence' inflation is moving toward the 2% level.
The Fed is concerned and it cut its PCE forecasts
PCE: 0.6% to 0.8% versus 1% to 1.6% just three months back.
Core PCE: 1.3% to 1.4% from 1.5% to 1.8%
GDP forecast: This is where the real impact of the Fed's statement hit home.
2015: 2.3% to 2.7% from 2.6% to 3%.
2016: 2.3% to 2.7% versus 2.5% to 3.0%
2017: 2.0% to 2.4% versus 2.3% to 2.5%
Summary: Two key points to take away.
1. The Fed removed 'patient' but slashed its forecast levels and reiterated its data dependency. In effect, the Fed softened its position from where it was last meeting.
2. The Fed launched an attack on the dollar, backtracking from its last statement in terms of hawkishness: the economy is not that strong to warrant foreign money seeking dollar-based assets AND decreasing dollar value by postponing the point of rate hikes.
The result was upside. Stocks, oil, bonds, but, of course, not the dollar. The euro and yen scored big gains, the best in months and months.
SP500 25.22, 1.22%
NASDAQ 45.40, 0.92%
DJ30 227.11, 1.27%
SP400 1.07%
RUTX 0.80%
SOX 0.74%
VOLUME: NYSE +23%, NASDAQ +1.6:1
A/D: NYSE 4.5:1, NASDAQ 15%
Large cap led the move higher but we note RUTX and SP400 hit new all-time highs while NASDAQ bumped at its recent high and stumbled. DJ30 and SP500 moved well but still have distance to cover for new highs past the February peaks.
There were big moves in many areas and we picked up AAPL and GOOG positions in the really big caps, some CELG, and some FEYE also.
So, the Fed under Yellen opted not to do anything to upset what is happening right now . . . OTHER than undermining the dollar, one of the BEST things for the US consumer in 6 years of 'recovery.' Yellen once told Greenspan not to hike rates to avoid killing off an economic move before it was strong enough. Seems she is sticking to her beliefs.
The market loved it. Now we see if it is sustainable. Should be. Yellen gave stock investors and traders something of a green light, a ringing bell, etc.
THE MARKET
CHARTS
SP400: Not the biggest percentage mover on the session, but at 1.07%, not chopped liver. SP400 was one two indices moving to new all-time highs. Good NYSE volume pushed the midcaps to that high. The large caps played catch up while the midcaps and small caps moved to new highs.
RUTX: New high for the small caps as well, even punching through the upper trendline formed through the March and July 2014 peaks. As with the midcaps, not the best performing index on the session but a new high as the small caps led the prior move and held on the best during the test.
NASDAQ: Aided by AAPL and GOOG, NASDAQ posted a solid advance though it too lagged SP500 and DJ30. Indeed, NASDAQ broke 5,000 on the high but simply could not hold it. Not a bad session with a solid price move and strong volume, but it was predominantly a large cap move as NASDAQ 100 outpaced NASDAQ overall.
DJ30: Dicey pre-Fed, trading well below the 50 day MA. After Yellen and her henchmen, however, issued their proclamation, the Dow reversed and rallied through 18K. Not much volume and still below the late December peak. It is tough when you dig deeper holes; harder to get out.
SOX: Down early, undercutting the 20 day EMA then reversing to a nice rally. Tapped the December peak on the low, reversed nicely. Excellent positioning.
SP500: Tapped the 50 day SMA on the low then reversed upside, closing over the late December peak and on rising, above average volume. Not bad for the large caps: higher low at the 61% Fibonacci Retracement on the pullback from the February high. Broke the December peak on stronger volume. No complaints.
LEADERSHIP
Big Names: With the Dow and SP500 posting the best percentage moves you know the big caps were in the lead. GOOG broke nicely higher. AAPL as well. HON. CAT.
Chips: Good and so-so. NXPI up 1.5% but low trade. SWKS flat but after a good move. AAOI surging 3.3%. AVGO up a decent 1% on good volume.
Software: CRM jumping 1.5%. FEYE up 1.8% and giving us the entry signal. FFIV looks very good with a double bottom.
Internet Social: FB surging 1.95%. GRUB flat, but it put in a super run into the FOMC. TWTR looks very interesting for a move higher.
Industrial equipment: TEX surged 4% off its higher low. CAT has a double bottom and jumped higher. CMI not so good but could bounce further from here.
MARKET STATISTICS
NASDAQ
Stats: +45.39 points (+0.92%) to close at 4982.83
Volume: 1.942B (+15.5%)
Up Volume: 1.35B (+472.46M)
Down Volume: 556.59M (-259.13M)
A/D and Hi/Lo: Advancers led 1.62 to 1
Previous Session: Advancers led 1.04 to 1
New Highs: 184 (+63)
New Lows: 62 (-10)
S&P
Stats: +25.22 points (+1.22%) to close at 2099.5
NYSE Volume: 883.3M (+23.35%)
A/D and Hi/Lo: Advancers led 4.51 to 1
Previous Session: Decliners led 1.11 to 1
New Highs: 201 (+100)
New Lows: 63 (-8)
DJ30
Stats: +227.11 points (+1.27%) to close at 18076.19
SENTIMENT INDICATORS
VIX: 13.97; -1.69
VXN: 14.99; -1.61
VXO: 14.01; -2.13
Put/Call Ratio (CBOE): 0.98; +0.03. Second day below 1.0 as the 7 straight 1+ readings did their work.
Bulls and Bears: Broke lower as expected in the selling. Not low enough but heading in the right direction.
Bulls: 53.46% versus 58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0%
After that rapid spike from 49% to 59.5%, backing down. A bit.
Bears: 14.1% versus 14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3%
Are you kidding me? This goes beyond stuck in the mud. Chronically low bearishness is bearish.
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: 53.6%
58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0% versus 53.1% versus 49.0% versus 48.0% versus 50.5% versus 56.4% versus 52.5% versus 49.5% versus 51.5% versus 53.4% versus 56.5% versus 56.4% versus 55.5% versus 54.6% versus 47.0% versus 35.3% versus 37.8% versus 45.5% versus 47.5% versus 48.0% versus 52.5% versus 57.6% versus 56.1% versus 52.5%
Background: Last undercut 35%, the threshold for bullishness, in early June 2012.
Bears: 14.1%
14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3% versus 16.3% versus 17.4% versus16.3% versus 15.2% versus 14.9% versus 15.8% versus 14.9% versus 14.8% versus 13.9% versus 13.8% versus 14.9% versus 14.8% versus 15.1% versus 16.3% versus 18.2% versus 17.3% versus 14.1% versus 15.1% versus 15.3% versus 15.2% versus 14.1% versus 13.3% versus 15.1% versus 16.2%
Background: Over 35% for bears is the threshold to be really be a good upside indicator. The best indication is when bears cross up through bulls as the two merge. Right now bulls are coming back down from the 60 level that has consistently marked market tops over the past two years. The rapid decline in progress is pushing the bulls/bears lines toward one another. Still far from a cross with bulls falling faster than bears are rising, but bears are warming up to the notion of market weakness.
OTHER MARKETS
Bonds (10 year): 1.95%. Bombs away for rates as bonds gapped higher through the late February recovery high. ABCD pattern formed and it is fulfilling.
2.06% versus 2.09% versus 2.10% versus 2.12% versus 2.10% versus 2.12% versus 2.11% versus 2.13% versus 2.20% versus 2.245% versus 2.11% versus 2.12% versus 2.12% versus 2.08% versus 1.98% versus 2.04% versus 1.96% versus 1.98% versus 2.06% versus 2.09% versus 2.11% versus 2.08% versus 2.14% versus 2.03% versus 1.99% versus 1.98% versus 1.99% versus 1.95% versus 1.94% versus 1.81% versus 1.77% versus 1.78% versus 1.68% versus 1.67% versus 1.76%
Oil: 45.16, +1.70. After undercutting the January low, oil rebounded and now will test that resistance again with a double bottom behind it.
Gold: 1166.40, +18.20. Big upside break off the bottom that matched the November 2014 low. The Fed is not as hawkish as thought and gold took heart.
$/JPY: 120.04 versus 121.34 versus 121.39 versus 121.43 versus 121.28 versus 121.50 versus 121.80 versus 121.60 VERSUS 120.72 versus 120.14 versus 119.71 versus 119.74 versus 120.179 versus 119.63 versus 119.48 versus 118.86
Looked ready to pop with that handle then flopped because of the Fed taking a more dovish stance. That is why we say it is just a pretty pattern until it can prove it can make the move.
Euro/$: 1.0874 versus 1.0590 versus 1.0568 versus 1.0494 versus 1.0635 versus 1.0546 versus 1.0700 versus 1.0829 versus 1.0849 versus 1.1030 versus 1.1079 versus 1.1175 versus 1.1182 versus 1.1197 versus 1.1195 versus 1.1362 versus 1.1337 versus 1.1385 versus 1.1379 versus 1.1366
The dollar, of course, sold hard as the Fed suddenly showed it was not so interested in hiking rates. Is it just the economy or is it the economy. Meaning? Does the Fed see the economy threatened by a stronger dollar and thus Ms. Yellen was DOUBLY worried about hiking rates?
THURSDAY
Certainly a nice surge as the stock market received a rate hike reprieve, or at least that is they way investors and traders (or is that traders and investors?) saw things. New highs on the leading indices though it was interesting to see NASDAQ trade over 5,000 then stumble, unable to hold it.
With that action, even with NASDAQ's fear of 5K, you have to continue looking upside. Even with the move there are some good looking patterns out there that you can pick up on a continued move. Of course we will be looking at those.
You always have to worry about the day after the party. Nothing is for certain in the aftermath of a big policy decision. Second thoughts, new insight, additional news, buyer's remorse.
Not anticipating that kind of response but you have to be aware of the possibility. Given the Fed's action, the response, and the patterns showing up, we will continue looking for upside opportunity. Stocks tested, held, moved up modestly toward the Fed, then were green-lighted. It again behooves us to look at upside plays to take advantage of the new run that received a big boost Wednesday.
Have a great evening!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 4982.83
Resistance:
5008.57 is the March 2015 post-bear market high
5132.52 is the 3/2000 all-time high
Support:
The March low at 4843
The 50 day EMA at 4841
4816 is the 38% Fibonacci retracement of the February run
4815 is the December 2014 prior market peak
4811 is the November 2014 peak (intraday)
4774 is the January high
4751 is the January 2015 lower high
4631 is the October 2014 upside gap point
4610 is the September 2014 post-bear market high.
The 200 day SMA at 4590
4566 is the lower gap point from late October
4563 and 4567 are the January lows
4547 is the December low
4486 is the July 2014 high
4372 is the March 2014 high
The August low at 4321
4316 is the lower gap point from October 2014
4289 is the July 2000 recovery high
4277 is the March lower gap point
4246.55 is the January 2014 peak
S&P 500: Closed at 2099.50
Resistance:
2117 is the lower trendline from 11/2012
2119.59 is the all-time high
2179 is the December 2012 up trendline
Support:
2094 is the December 2014 high, the prior all-time high
2079 is the intraday all-time high from November
2076 is the all-time high from November
The 50 day EMA at 2068
2062 is the January 2015 lower high
2011 is the September prior all-time high
The 200 day SMA at 2006
1991 is the July 2014 high
1972 is the December 2014 low
1905 is the August 2014 low
1902 from early May was the intraday all-time high.
1897 is the prior all-time high hit in April 2014
1883.57 is the early March high.
The December and January highs at 1848
The April 2014 low at 1814
1808 is the November and December 2013 twin peaks
1775.22 is the October prior all-time high
Dow: Closed at 18,071.57
Resistance:
18,104 is the December high
18,289 is the all-time high
Support:
17,991 is the early December interim
17,923 is the January 2015 lower high
The 50 day EMA at 17,845
The March low at 17,620
17,351 is the September 2014 all-time high.
The 200 day SMA at 17,287
17,152 is the mid-July post bear market high
17,068 is the early July 2014 peak
17067 is the December 2014 low
16,970 is the June 2014 former all-time high
16,946 is the June 2014 peak
16,736 is the penultimate all-time high from May 2014
16,632 is the April 2014 all-time high
16,589 is the December 2013 all-time high
16,506 is the March 2014 peak
16,341 is the May low
16,334 is the August 2014 low
16,257 is the January 2014 low
16,179 is the November 2013 peak.
15,855 is the October 2014 low
15,739 is the December 2013 low
ECONOMIC CALENDAR
March 16 - Monday
Empire Manufacturing, March (8:30): 6.9 actual versus 8.8 expected, 7.8 prior
Industrial Production, February (9:15): 0.1% actual versus 0.3% expected, -0.3% prior (revised from 0.2%)
Capacity Utilization, February (9:15): 78.9% actual versus 79.5% expected, 79.1% prior (revised from 79.4%)
NAHB Housing Market , March (10:00): 53 actual versus 56 expected, 55 prior
Net Long-Term TIC Fl, January (16:00): -$27.2B actual versus $39.2B prior (revised from $35.4B)
March 17 - Tuesday
Housing Starts, February (8:30): 897K actual versus 1041K expected, 1081K prior (revised from 1065K)
Building Permits, February (8:30): 1092K actual versus 1070K expected, 1060K prior (revised from 1053K)
March 18 - Wednesday
MBA Mortgage Index, 03/14 (7:00): -3.9% actual versus -1.3% prior
Crude Inventories, 03/14 (10:30): 9.622M actual versus 4.512M prior
FOMC Rate Decision, March (14:00): 0.25% expected, 0.25% prior
March 19 - Thursday
Continuing Claims, 03/07 (8:30)
Initial Claims, 03/14 (8:30): 294K expected, 289K prior
Continuing Claims, 03/07 (8:30): 2420K expected, 2418K prior
Current Account Bala, Q4 (8:30): -$105.0B expected, -$100.3B prior
Philadelphia Fed, March (10:00): 7.2 expected, 5.2 prior
Leading Indicators, February (10:00): 0.2% expected, 0.2% prior
Natural Gas Inventor, 03/14 (10:30): -198 bcf prior
End part 1 o f3
_______________________________________________________
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Monday, March 16, 2015
The Daily, Part 1 of 3, 3-16-15
* * * *
3/16/2015 Investment House Report
* * * *
MARKET ALERTS:
Targets hit: GRUB
Buy alerts: AKAM; AVGO; CRM
Trailing stops: VIPS
Stop alerts: DIA
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
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************
The REPORTS SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Tables with play annotations will issue Monday, Wednesday and the Weekend.
Tuesday and Thursday reports will contain the market summary, chart links to view the index charts, and updated play tables.
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
- Crisp Monday after Sloppy Friday with SP500, DJ30 helping lead.
- Weak breadth (large caps led) and low volume on the upside. Again.
- Leadership helps itself out but is still below its better levels.
- 2015 economic data off to the worst start since 2000.
- Some nice setups are out there. We will look at taking some more gain ahead of the FOMC meeting, either Tuesday if stocks can rally or Wednesday. May anticipate some weakness, but need to be ready if it does not show up.
New week, and after a sloppy Friday, particularly for the NYSE large caps, new upside. Hmmm. Been there before: last Monday stocks bounced, if for just a day. Two Mondays back the indexes broke to new highs only to roll over the next session. Monday showed some great individual moves and strong percentage gains -- just like two Mondays ago -- now can they hold a move and expand upon it?
Volume again provided little comfort as NYSE and NASDAQ trade faded 6.2% and 8% respectively. Good price moves, no punch.
SP500 27.79, 1.35%
NASDAQ 57.75, 1.19%
DJ30 1.29%
SP400 1.19%
RUTX 0.62%
SOX 1.52%
A/D: 1.3:1 NYSE, 1.8:1 NASDAQ. Pretty atrocious breadth for such strong percentage gains. The small caps lagged at up just 0.62%, and when they are not out in front, breadth drags.
Narrow breadth Monday is not necessarily a bad thing as last week the small and midcaps rallied or at least held up well as SP500 and DJ30 sold on dollar worries. Monday the dollar was off after last week's pounding (1.0568 versus 1.0494 Friday) so stocks were at least free of that worry. For the day.
There was other news to bump stocks higher pre-market and on the session.
China's premier was out pumping stimulus hopes once more, stating China has 'the tools to intervene' if employment started to lag. Reminds me of the 1980's 'Ghostbusters' line 'We have the tools, we have the talent.'
Well there you go. All the ingredients necessary for a rally, or at least an early upside start.
Not all news was great. Industrial production and the Empire (New York) PMI were to say, disappointing.
Industrial Production:
0.1% versus 0.3% expected versus -0.3% (from 0.2%). Nice half percent downward revision.
Note the trend lower the past 12 months.
Capacity Utilization
February: 78.9% versus 79.5% versus 79.1% (from 79.4%)
Again, note the trend lower the past 12 months.
Empire PMI, March: 6.9 versus 8.8 versus 7.8
New orders fell to -2.39, a 16 month low.
With a lower dollar and a 'data dependent', still patient FOMC, that gave hope that perhaps the Fed would not take more hawkish steps. I am pretty certain, and indeed most people are certain, that removing 'patient' is already a done deal, that the Fed is going to prep for the hike by dropping that language barring a massive collapse between now and Wednesday afternoon. Heck, some are even saying the Fed hikes Wednesday. Not sure if that is the case, but it is worth banking some gain on positions that are at or close to targets or have enjoyed solid runs higher?
THE MARKET
CHARTS
The charts were not bad with the large caps coming back and showing the best percentage gains outside, of course, SOX and its nice move. You have to wonder, however, what happens if the dollar weakens again versus the euro?
SP500: Broke upside through both 50 day MA's as well as the 20 day EMA. It took out the November peak as well and is 12 points off the December high. A good answer to the selling though not a lot of volume.
DJ30: Recaptured the 50 day MA's and the 20 day EMA as well, just below the two December highs. Not great volume, but it works as DJ30 is not giving up.
NASDAQ: Continued its 50 day MA rebound, clearing the 20 day EMA Monday after holding that three-layer support. Volume well below average as well; disappointing yet again, but it is moving up from a nice pattern.
SP400: Excellent break higher off the Friday doji, rallying past all other peaks but the February all-time high. Quite solid again.
RUTX: Lagging significantly, managing a rather paltry 0.62% when compared to the other indices. Stalling out just below the early March all-time high. Seems to have a bit of aversion there.
SOX: Continued off the 50 day EMA test and rebound, really improving its move with a gap and run higher. Very nice action and of course we jumped on AVGO early in the session and let it work for us as SWKS surged upside as well.
LEADERSHP:
Leadership improved from Friday and last week's erosion but I would not say that all issues were washed away.
Some very good moves of course, but also a bit narrow.
Chips: AVGO, SUNE, SWKS all moving well. NXPI took a day off, but that after a huge Friday move.
Biotechs: Up and not up, i.e. mixed. BIIB, CELG look decent. CLDX moving higher again. TXMD, BDSI and others, however, struggled.
Internet-related: GOOG started to bounce off the 50 day EMA. GRUB surged to the initial target. AKAM broke higher form its four week pennant.
Software: NOW rallying nicely. CRM broke sharply higher after its gap test. FLTX taking a second day of rest. FEYE still trying to hold at the 20 day EMA.
Retail: BWLD surged off the 50 day EMA. RH was flat but is in a good move upside.
Big Names: AAPL was up off the 50 day EMA test, but it does not look that strong. It needs to show more along with other large caps that rebounded but didn't change their patterns that much. Some great volume would help, but it is not there yet.
In any event, there were some good moves that we picked up on, e.g. AVGO, CRM, AKAM. Took some gain on GRUB. Got out of some VIPS as it gapped lower; held, but it was a struggle for it.
MARKET STATISTICS
NASDAQ
Stats: +57.75 points (+1.19%) to close at 4929.51
Volume: 1.674B (-7.76%)
Up Volume: 1.11B (+444.13M)
Down Volume: 575.62M (-574.38M)
A/D and Hi/Lo: Advancers led 1.29 to 1
Previous Session: Decliners led 1.53 to 1
New Highs: 185 (+84)
New Lows: 73 (+9)
S&P
Stats: +27.79 points (+1.35%) to close at 2081.19
NYSE Volume: 755.8M (-6.24%)
A/D and Hi/Lo: Advancers led 1.81 to 1
Previous Session: Decliners led 2.28 to 1
New Highs: 142 (+69)
New Lows: 96 (-23)
DJ30
Stats: +228.11 points (+1.29%) to close at 17977.42
SENTIMENT INDICATORS
VIX: 15.61; -0.39
VXN: 16.91; -0.64
VXO: 15.93; -0.95
Put/Call Ratio (CBOE): 1.02; -0.19. Seven consecutive sessions above 1.0, 8 of 11. Again, plenty of sessions here to support an upside move as tried to renew Monday.
Bulls and Bears: Broke lower as expected in the selling. Not low enough but heading in the right direction.
Bulls: 53.46% versus 58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0%
After that rapid spike from 49% to 59.5%, backing down. A bit.
Bears: 14.1% versus 14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3%
Are you kidding me? This goes beyond stuck in the mud. Chronically low bearishness is bearish.
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: 53.6%
58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0% versus 53.1% versus 49.0% versus 48.0% versus 50.5% versus 56.4% versus 52.5% versus 49.5% versus 51.5% versus 53.4% versus 56.5% versus 56.4% versus 55.5% versus 54.6% versus 47.0% versus 35.3% versus 37.8% versus 45.5% versus 47.5% versus 48.0% versus 52.5% versus 57.6% versus 56.1% versus 52.5%
Background: Last undercut 35%, the threshold for bullishness, in early June 2012.
Bears: 14.1%
14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3% versus 16.3% versus 17.4% versus16.3% versus 15.2% versus 14.9% versus 15.8% versus 14.9% versus 14.8% versus 13.9% versus 13.8% versus 14.9% versus 14.8% versus 15.1% versus 16.3% versus 18.2% versus 17.3% versus 14.1% versus 15.1% versus 15.3% versus 15.2% versus 14.1% versus 13.3% versus 15.1% versus 16.2%
Background: Over 35% for bears is the threshold to be really be a good upside indicator. The best indication is when bears cross up through bulls as the two merge. Right now bulls are coming back down from the 60 level that has consistently marked market tops over the past two years. The rapid decline in progress is pushing the bulls/bears lines toward one another. Still far from a cross with bulls falling faster than bears are rising, but bears are warming up to the notion of market weakness.
OTHER MARKETS
Bonds (10 year): 2.10% versus 2.10%.
2.12% versus 2.10% versus 2.12% versus 2.11% versus 2.13% versus 2.20% versus 2.245% versus 2.11% versus 2.12% versus 2.12% versus 2.08% versus 1.98% versus 2.04% versus 1.96% versus 1.98% versus 2.06% versus 2.09% versus 2.11% versus 2.08% versus 2.14% versus 2.03% versus 1.99% versus 1.98% versus 1.99% versus 1.95% versus 1.94% versus 1.81% versus 1.77% versus 1.78% versus 1.68% versus 1.67% versus 1.76%
Doji below the 50 day EMA as bonds still struggle to move back up.
Oil: 43.94, -0.95. Broke below the January lows though did recover some off of the session lows.
Gold: 1153.40, +2.80. Trying to hold at the November low.
$/JPY: 121.39 versus 121.43 versus 121.28 versus 121.50 versus 121.80 versus 121.60 VERSUS 120.72 versus 120.14 versus 119.71 versus 119.74 versus 120.179 versus 119.63 versus 119.48 versus 118.86
Still looks very good to break higher after this weeklong flag test of the 10 day EMA.
Euro/$: 1.0568 versus 1.0494 versus 1.0635 versus 1.0546 versus 1.0700 versus 1.0829 versus 1.0849 versus 1.1030 versus 1.1079 versus 1.1175 versus 1.1182 versus 1.1197 versus 1.1195 versus 1.1362 versus 1.1337 versus 1.1385 versus 1.1379 versus 1.1366
Dollar sold back after a big move. Second fade in three sessions, showing the move is weakening a bit.
TUESDAY
FOMC starts its 2-day meeting, easily the most important data point of the week, at least until the next data point that very well could be a Fed official 'explaining' what the FOMC did.
Patient or not? The US economic data in 2015 is showing, according to Bloomberg, the worst start for a year since 2000 as 90+% of the economic data is missing expectations. If the Fed is truly 'data dependent' it would have to remain patient.
It likely won't because it cannot. At least in its view. The Fed believes it needs to have ammunition in the event of another recession or crisis. Sad thing is, the next recession may be upon us. May be. The rest of the world outside of Germany is close or already there. The US has slowed but is still managing some expansion. If the oil sector continues its decline, however, maybe not.
The Fed feels it needs to hike and likely will do so by whatever means necessary. Not Wednesday of course, but perhaps April or the next meeting. What happens, however, when the Fed does hike? Perhaps not just 25BP but when they get really higher, e.g. 3%, 4%, 5% as they should in a real recovery? US debt costs shoot through the roof. This even as China continues dumping US treasuries, so much so that Japan has now tied China as the largest holder of US debt.
The day of FOMC meetings tend to be softer with a modest rise into the result. Then the market has issues. If patient stays perhaps the market itself is patient and continues the new move higher. If the Fed takes the 'we have to do it regardless' position and drops 'patient,' that may start some selling post-FOMC yet again.
Thus, we would love to see another push higher Tuesday ahead of the FOMC meeting result Wednesday. Some nice gain is built into several positions, e.g. QRVO, SUNE, NXPI, SWKS. Another good move and we will look to take some of that gain ahead of Wednesday and some possible pre- FOMC nervous and softer action.
Have a great evening!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 4929.51
Resistance:
5008.57 is the March 2015 post-bear market high
5132.52 is the 3/2000 all-time high
Support:
The 50 day EMA at 4832
4816 is the 38% Fibonacci retracement of the February run
4815 is the December 2014 prior market peak
4811 is the November 2014 peak (intraday)
4774 is the January high
4751 is the January 2015 lower high
4631 is the October 2014 upside gap point
4610 is the September 2014 post-bear market high.
The 200 day SMA at 4582
4566 is the lower gap point from late October
4563 and 4567 are the January lows
4547 is the December low
4486 is the July 2014 high
4372 is the March 2014 high
The August low at 4321
4316 is the lower gap point from October 2014
4289 is the July 2000 recovery high
4277 is the March lower gap point
4246.55 is the January 2014 peak
S&P 500: Closed at 2081.19
Resistance:
2094 is the December 2014 high, the prior all-time high
2114 is the lower trendline from 11/2012
2119.59 is the all-time high
2177 is the December 2012 up trendline
Support:
2079 is the intraday all-time high from November
2076 is the all-time high from November
The 50 day EMA at 2066
2062 is the January 2015 lower high
2011 is the September prior all-time high
The 200 day SMA at 2004
1991 is the July 2014 high
1972 is the December 2014 low
1905 is the August 2014 low
1902 from early May was the intraday all-time high.
1897 is the prior all-time high hit in April 2014
1883.57 is the early March high.
The December and January highs at 1848
The April 2014 low at 1814
1808 is the November and December 2013 twin peaks
1775.22 is the October prior all-time high
Dow: Closed at 17,977.42
Resistance:
17,991 is the early December interim
18,104 is the December high
18,289 is the all-time high
Support:
17,923 is the January 2015 lower high
The 50 day EMA at 17,835
17,351 is the September 2014 all-time high.
The 200 day SMA at 17,274
17,152 is the mid-July post bear market high
17,068 is the early July 2014 peak
17067 is the December 2014 low
16,970 is the June 2014 former all-time high
16,946 is the June 2014 peak
16,736 is the penultimate all-time high from May 2014
16,632 is the April 2014 all-time high
16,589 is the December 2013 all-time high
16,506 is the March 2014 peak
16,341 is the May low
16,334 is the August 2014 low
16,257 is the January 2014 low
16,179 is the November 2013 peak.
15,855 is the October 2014 low
15,739 is the December 2013 low
ECONOMIC CALENDAR
March 16 - Monday
Empire Manufacturing, March (8:30): 6.9 actual versus 8.8 expected, 7.8 prior
Industrial Productio, February (9:15): 0.1% actual versus 0.3% expected, -0.3% prior (revised from 0.2%)
Capacity Utilization, February (9:15): 78.9% actual versus 79.5% expected, 79.1% prior (revised from 79.4%)
NAHB Housing Market , March (10:00): 53 actual versus 56 expected, 55 prior
Net Long-Term TIC Fl, January (16:00): -$27.2B actual versus $39.2B prior (revised from $35.4B)
March 17 - Tuesday
Building Permits, February (8:30): 1070K expected, 1053K prior
Housing Starts, February (8:30): 1040K expected, 1065K prior
March 18 - Wednesday
MBA Mortgage Index, 03/14 (7:00): -1.3% prior
Crude Inventories, 03/14 (10:30): 4.512M prior
FOMC Rate Decision, March (14:00): 0.25% expected, 0.25% prior
March 19 - Thursday
Continuing Claims, 03/07 (8:30)
Initial Claims, 03/14 (8:30): 294K expected, 289K prior
Continuing Claims, 03/07 (8:30): 2420K expected, 2418K prior
Current Account Bala, Q4 (8:30): -$105.0B expected, -$100.3B prior
Philadelphia Fed, March (10:00): 7.2 expected, 5.2 prior
Leading Indicators, February (10:00): 0.2% expected, 0.2% prior
Natural Gas Inventor, 03/14 (10:30): -198 bcf prior
End part 1 of 3
_______________________________________________________
Member: tweet@investbilling.com
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
3/16/2015 Investment House Report
* * * *
MARKET ALERTS:
Targets hit: GRUB
Buy alerts: AKAM; AVGO; CRM
Trailing stops: VIPS
Stop alerts: DIA
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
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************
The REPORTS SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Tables with play annotations will issue Monday, Wednesday and the Weekend.
Tuesday and Thursday reports will contain the market summary, chart links to view the index charts, and updated play tables.
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
- Crisp Monday after Sloppy Friday with SP500, DJ30 helping lead.
- Weak breadth (large caps led) and low volume on the upside. Again.
- Leadership helps itself out but is still below its better levels.
- 2015 economic data off to the worst start since 2000.
- Some nice setups are out there. We will look at taking some more gain ahead of the FOMC meeting, either Tuesday if stocks can rally or Wednesday. May anticipate some weakness, but need to be ready if it does not show up.
New week, and after a sloppy Friday, particularly for the NYSE large caps, new upside. Hmmm. Been there before: last Monday stocks bounced, if for just a day. Two Mondays back the indexes broke to new highs only to roll over the next session. Monday showed some great individual moves and strong percentage gains -- just like two Mondays ago -- now can they hold a move and expand upon it?
Volume again provided little comfort as NYSE and NASDAQ trade faded 6.2% and 8% respectively. Good price moves, no punch.
SP500 27.79, 1.35%
NASDAQ 57.75, 1.19%
DJ30 1.29%
SP400 1.19%
RUTX 0.62%
SOX 1.52%
A/D: 1.3:1 NYSE, 1.8:1 NASDAQ. Pretty atrocious breadth for such strong percentage gains. The small caps lagged at up just 0.62%, and when they are not out in front, breadth drags.
Narrow breadth Monday is not necessarily a bad thing as last week the small and midcaps rallied or at least held up well as SP500 and DJ30 sold on dollar worries. Monday the dollar was off after last week's pounding (1.0568 versus 1.0494 Friday) so stocks were at least free of that worry. For the day.
There was other news to bump stocks higher pre-market and on the session.
China's premier was out pumping stimulus hopes once more, stating China has 'the tools to intervene' if employment started to lag. Reminds me of the 1980's 'Ghostbusters' line 'We have the tools, we have the talent.'
Well there you go. All the ingredients necessary for a rally, or at least an early upside start.
Not all news was great. Industrial production and the Empire (New York) PMI were to say, disappointing.
Industrial Production:
0.1% versus 0.3% expected versus -0.3% (from 0.2%). Nice half percent downward revision.
Note the trend lower the past 12 months.
Capacity Utilization
February: 78.9% versus 79.5% versus 79.1% (from 79.4%)
Again, note the trend lower the past 12 months.
Empire PMI, March: 6.9 versus 8.8 versus 7.8
New orders fell to -2.39, a 16 month low.
With a lower dollar and a 'data dependent', still patient FOMC, that gave hope that perhaps the Fed would not take more hawkish steps. I am pretty certain, and indeed most people are certain, that removing 'patient' is already a done deal, that the Fed is going to prep for the hike by dropping that language barring a massive collapse between now and Wednesday afternoon. Heck, some are even saying the Fed hikes Wednesday. Not sure if that is the case, but it is worth banking some gain on positions that are at or close to targets or have enjoyed solid runs higher?
THE MARKET
CHARTS
The charts were not bad with the large caps coming back and showing the best percentage gains outside, of course, SOX and its nice move. You have to wonder, however, what happens if the dollar weakens again versus the euro?
SP500: Broke upside through both 50 day MA's as well as the 20 day EMA. It took out the November peak as well and is 12 points off the December high. A good answer to the selling though not a lot of volume.
DJ30: Recaptured the 50 day MA's and the 20 day EMA as well, just below the two December highs. Not great volume, but it works as DJ30 is not giving up.
NASDAQ: Continued its 50 day MA rebound, clearing the 20 day EMA Monday after holding that three-layer support. Volume well below average as well; disappointing yet again, but it is moving up from a nice pattern.
SP400: Excellent break higher off the Friday doji, rallying past all other peaks but the February all-time high. Quite solid again.
RUTX: Lagging significantly, managing a rather paltry 0.62% when compared to the other indices. Stalling out just below the early March all-time high. Seems to have a bit of aversion there.
SOX: Continued off the 50 day EMA test and rebound, really improving its move with a gap and run higher. Very nice action and of course we jumped on AVGO early in the session and let it work for us as SWKS surged upside as well.
LEADERSHP:
Leadership improved from Friday and last week's erosion but I would not say that all issues were washed away.
Some very good moves of course, but also a bit narrow.
Chips: AVGO, SUNE, SWKS all moving well. NXPI took a day off, but that after a huge Friday move.
Biotechs: Up and not up, i.e. mixed. BIIB, CELG look decent. CLDX moving higher again. TXMD, BDSI and others, however, struggled.
Internet-related: GOOG started to bounce off the 50 day EMA. GRUB surged to the initial target. AKAM broke higher form its four week pennant.
Software: NOW rallying nicely. CRM broke sharply higher after its gap test. FLTX taking a second day of rest. FEYE still trying to hold at the 20 day EMA.
Retail: BWLD surged off the 50 day EMA. RH was flat but is in a good move upside.
Big Names: AAPL was up off the 50 day EMA test, but it does not look that strong. It needs to show more along with other large caps that rebounded but didn't change their patterns that much. Some great volume would help, but it is not there yet.
In any event, there were some good moves that we picked up on, e.g. AVGO, CRM, AKAM. Took some gain on GRUB. Got out of some VIPS as it gapped lower; held, but it was a struggle for it.
MARKET STATISTICS
NASDAQ
Stats: +57.75 points (+1.19%) to close at 4929.51
Volume: 1.674B (-7.76%)
Up Volume: 1.11B (+444.13M)
Down Volume: 575.62M (-574.38M)
A/D and Hi/Lo: Advancers led 1.29 to 1
Previous Session: Decliners led 1.53 to 1
New Highs: 185 (+84)
New Lows: 73 (+9)
S&P
Stats: +27.79 points (+1.35%) to close at 2081.19
NYSE Volume: 755.8M (-6.24%)
A/D and Hi/Lo: Advancers led 1.81 to 1
Previous Session: Decliners led 2.28 to 1
New Highs: 142 (+69)
New Lows: 96 (-23)
DJ30
Stats: +228.11 points (+1.29%) to close at 17977.42
SENTIMENT INDICATORS
VIX: 15.61; -0.39
VXN: 16.91; -0.64
VXO: 15.93; -0.95
Put/Call Ratio (CBOE): 1.02; -0.19. Seven consecutive sessions above 1.0, 8 of 11. Again, plenty of sessions here to support an upside move as tried to renew Monday.
Bulls and Bears: Broke lower as expected in the selling. Not low enough but heading in the right direction.
Bulls: 53.46% versus 58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0%
After that rapid spike from 49% to 59.5%, backing down. A bit.
Bears: 14.1% versus 14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3%
Are you kidding me? This goes beyond stuck in the mud. Chronically low bearishness is bearish.
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: 53.6%
58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0% versus 53.1% versus 49.0% versus 48.0% versus 50.5% versus 56.4% versus 52.5% versus 49.5% versus 51.5% versus 53.4% versus 56.5% versus 56.4% versus 55.5% versus 54.6% versus 47.0% versus 35.3% versus 37.8% versus 45.5% versus 47.5% versus 48.0% versus 52.5% versus 57.6% versus 56.1% versus 52.5%
Background: Last undercut 35%, the threshold for bullishness, in early June 2012.
Bears: 14.1%
14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3% versus 16.3% versus 17.4% versus16.3% versus 15.2% versus 14.9% versus 15.8% versus 14.9% versus 14.8% versus 13.9% versus 13.8% versus 14.9% versus 14.8% versus 15.1% versus 16.3% versus 18.2% versus 17.3% versus 14.1% versus 15.1% versus 15.3% versus 15.2% versus 14.1% versus 13.3% versus 15.1% versus 16.2%
Background: Over 35% for bears is the threshold to be really be a good upside indicator. The best indication is when bears cross up through bulls as the two merge. Right now bulls are coming back down from the 60 level that has consistently marked market tops over the past two years. The rapid decline in progress is pushing the bulls/bears lines toward one another. Still far from a cross with bulls falling faster than bears are rising, but bears are warming up to the notion of market weakness.
OTHER MARKETS
Bonds (10 year): 2.10% versus 2.10%.
2.12% versus 2.10% versus 2.12% versus 2.11% versus 2.13% versus 2.20% versus 2.245% versus 2.11% versus 2.12% versus 2.12% versus 2.08% versus 1.98% versus 2.04% versus 1.96% versus 1.98% versus 2.06% versus 2.09% versus 2.11% versus 2.08% versus 2.14% versus 2.03% versus 1.99% versus 1.98% versus 1.99% versus 1.95% versus 1.94% versus 1.81% versus 1.77% versus 1.78% versus 1.68% versus 1.67% versus 1.76%
Doji below the 50 day EMA as bonds still struggle to move back up.
Oil: 43.94, -0.95. Broke below the January lows though did recover some off of the session lows.
Gold: 1153.40, +2.80. Trying to hold at the November low.
$/JPY: 121.39 versus 121.43 versus 121.28 versus 121.50 versus 121.80 versus 121.60 VERSUS 120.72 versus 120.14 versus 119.71 versus 119.74 versus 120.179 versus 119.63 versus 119.48 versus 118.86
Still looks very good to break higher after this weeklong flag test of the 10 day EMA.
Euro/$: 1.0568 versus 1.0494 versus 1.0635 versus 1.0546 versus 1.0700 versus 1.0829 versus 1.0849 versus 1.1030 versus 1.1079 versus 1.1175 versus 1.1182 versus 1.1197 versus 1.1195 versus 1.1362 versus 1.1337 versus 1.1385 versus 1.1379 versus 1.1366
Dollar sold back after a big move. Second fade in three sessions, showing the move is weakening a bit.
TUESDAY
FOMC starts its 2-day meeting, easily the most important data point of the week, at least until the next data point that very well could be a Fed official 'explaining' what the FOMC did.
Patient or not? The US economic data in 2015 is showing, according to Bloomberg, the worst start for a year since 2000 as 90+% of the economic data is missing expectations. If the Fed is truly 'data dependent' it would have to remain patient.
It likely won't because it cannot. At least in its view. The Fed believes it needs to have ammunition in the event of another recession or crisis. Sad thing is, the next recession may be upon us. May be. The rest of the world outside of Germany is close or already there. The US has slowed but is still managing some expansion. If the oil sector continues its decline, however, maybe not.
The Fed feels it needs to hike and likely will do so by whatever means necessary. Not Wednesday of course, but perhaps April or the next meeting. What happens, however, when the Fed does hike? Perhaps not just 25BP but when they get really higher, e.g. 3%, 4%, 5% as they should in a real recovery? US debt costs shoot through the roof. This even as China continues dumping US treasuries, so much so that Japan has now tied China as the largest holder of US debt.
The day of FOMC meetings tend to be softer with a modest rise into the result. Then the market has issues. If patient stays perhaps the market itself is patient and continues the new move higher. If the Fed takes the 'we have to do it regardless' position and drops 'patient,' that may start some selling post-FOMC yet again.
Thus, we would love to see another push higher Tuesday ahead of the FOMC meeting result Wednesday. Some nice gain is built into several positions, e.g. QRVO, SUNE, NXPI, SWKS. Another good move and we will look to take some of that gain ahead of Wednesday and some possible pre- FOMC nervous and softer action.
Have a great evening!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 4929.51
Resistance:
5008.57 is the March 2015 post-bear market high
5132.52 is the 3/2000 all-time high
Support:
The 50 day EMA at 4832
4816 is the 38% Fibonacci retracement of the February run
4815 is the December 2014 prior market peak
4811 is the November 2014 peak (intraday)
4774 is the January high
4751 is the January 2015 lower high
4631 is the October 2014 upside gap point
4610 is the September 2014 post-bear market high.
The 200 day SMA at 4582
4566 is the lower gap point from late October
4563 and 4567 are the January lows
4547 is the December low
4486 is the July 2014 high
4372 is the March 2014 high
The August low at 4321
4316 is the lower gap point from October 2014
4289 is the July 2000 recovery high
4277 is the March lower gap point
4246.55 is the January 2014 peak
S&P 500: Closed at 2081.19
Resistance:
2094 is the December 2014 high, the prior all-time high
2114 is the lower trendline from 11/2012
2119.59 is the all-time high
2177 is the December 2012 up trendline
Support:
2079 is the intraday all-time high from November
2076 is the all-time high from November
The 50 day EMA at 2066
2062 is the January 2015 lower high
2011 is the September prior all-time high
The 200 day SMA at 2004
1991 is the July 2014 high
1972 is the December 2014 low
1905 is the August 2014 low
1902 from early May was the intraday all-time high.
1897 is the prior all-time high hit in April 2014
1883.57 is the early March high.
The December and January highs at 1848
The April 2014 low at 1814
1808 is the November and December 2013 twin peaks
1775.22 is the October prior all-time high
Dow: Closed at 17,977.42
Resistance:
17,991 is the early December interim
18,104 is the December high
18,289 is the all-time high
Support:
17,923 is the January 2015 lower high
The 50 day EMA at 17,835
17,351 is the September 2014 all-time high.
The 200 day SMA at 17,274
17,152 is the mid-July post bear market high
17,068 is the early July 2014 peak
17067 is the December 2014 low
16,970 is the June 2014 former all-time high
16,946 is the June 2014 peak
16,736 is the penultimate all-time high from May 2014
16,632 is the April 2014 all-time high
16,589 is the December 2013 all-time high
16,506 is the March 2014 peak
16,341 is the May low
16,334 is the August 2014 low
16,257 is the January 2014 low
16,179 is the November 2013 peak.
15,855 is the October 2014 low
15,739 is the December 2013 low
ECONOMIC CALENDAR
March 16 - Monday
Empire Manufacturing, March (8:30): 6.9 actual versus 8.8 expected, 7.8 prior
Industrial Productio, February (9:15): 0.1% actual versus 0.3% expected, -0.3% prior (revised from 0.2%)
Capacity Utilization, February (9:15): 78.9% actual versus 79.5% expected, 79.1% prior (revised from 79.4%)
NAHB Housing Market , March (10:00): 53 actual versus 56 expected, 55 prior
Net Long-Term TIC Fl, January (16:00): -$27.2B actual versus $39.2B prior (revised from $35.4B)
March 17 - Tuesday
Building Permits, February (8:30): 1070K expected, 1053K prior
Housing Starts, February (8:30): 1040K expected, 1065K prior
March 18 - Wednesday
MBA Mortgage Index, 03/14 (7:00): -1.3% prior
Crude Inventories, 03/14 (10:30): 4.512M prior
FOMC Rate Decision, March (14:00): 0.25% expected, 0.25% prior
March 19 - Thursday
Continuing Claims, 03/07 (8:30)
Initial Claims, 03/14 (8:30): 294K expected, 289K prior
Continuing Claims, 03/07 (8:30): 2420K expected, 2418K prior
Current Account Bala, Q4 (8:30): -$105.0B expected, -$100.3B prior
Philadelphia Fed, March (10:00): 7.2 expected, 5.2 prior
Leading Indicators, February (10:00): 0.2% expected, 0.2% prior
Natural Gas Inventor, 03/14 (10:30): -198 bcf prior
End part 1 of 3
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Saturday, March 14, 2015
The Daily, Part 1 of 3, 3-14-15
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3/14/2015 Investment House Report
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Targets hit: None issued
Buy alerts: DIA; RH
Trailing stops: None issued
Stop alerts: LNKD
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The REPORTS SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Tables with play annotations will issue Monday, Wednesday and the Weekend.
Tuesday and Thursday reports will contain the market summary, chart links to view the index charts, and updated play tables.
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
- Sloppy Friday sees DJ30, SP500 revert to old ways, relative strength in RUTX and SP400, and SOX post a gain.
- Dollar continues its surge, pushing more rotation.
- Near trend continues with money rotating from large caps to smaller caps.
- Michigan Sentiment shows a rare decline.
- Gallup Poll: Government dissatisfaction tops the list of US citizen gripes.
- Growth index patterns are not bad, but leadership took on some water the past week.
- FOMC 'no patience' meeting set for this week. Will the market now have patience?
Back to Tuesday as large cap NYSE indices give up gains, small and mid-caps lead.
Tuesday saw all indices fall, but SP400 and RUTX held their 50 day MA while SP500 and DJ30 plowed them under. Thursday all stocks advanced and DJ30 even recaptured the 50 day MA it just crashed. Looked as if they were back on the same page though RUTX and SP400 were really nice, gapping back through the gap lower Tuesday.
Friday it was back to Tuesday. DJ30 and SP500 gave up the goods, i.e. the bounce from Thursday that took DJ30 back up through the 50 day EMA. At the same time, RUTX and SP400, both of which sold early, filled that Thursday upside gap intraday and rebounded rather nicely. Large cap struggling on the stronger dollar (up again) while the smaller caps continued working on good patterns.
NASDAQ was lower but bounced off a 50 day EMA intraday test. SOX actually scored a gain, using that Thursday gap and reversal that tested the 50 day EMA in something of a slingshot effect, moving through the 20 day EMA on the close.
So, RUTX and SP400 leading (though lower), SP500 and DJ30 struggling (with a stronger dollar), NASDAQ hanging in there, and SOX trying to move up and lead with SP400 and RUTX.
SP500 -11.47, -0.55%
NASDAQ -17.71, -036%
DJ30 -130.75, -0.72%
SP400 -0.54%
RUTX -0.37%
SOX 0.85%
VOLUME: NYSE +7.8%, NASDAQ scratching higher at +0.23%. Another day of distribution on the NYSE large caps. Not bad action on NASDAQ as it bounced off the 50 day EMA and recovered some lost ground.
A/D: NYSE -2.4:1, NASDAQ -3:2.
Yes, the large caps struggled again as the small and midcaps performed better. Another bout of strong dollar-itis.
What about that dollar? Broke the 1.05 barrier, closing at 1.0494 euro/dollars. Some say parity is coming soon (certainly looks easy to get there), others say an all-time low for the euro at $0.80 is a given before this is finished.
Of course that puts the hurt on the large caps that have fed so heavily on the weak dollar and the policies that allowed them to rake in big profits . . . most of which are left overseas thanks to our tax code . . and avoid any investment in the US outside of dividends, stock buy backs, and the occasional acquisition, funded of course, by the use of stock at inflated values.
The strong dollar is a grave danger . . . to my bonus structure.
And what are those corporations saying if they don't get a lower dollar? It will hurt . . . who? Certainly not the US consumer who gets virtually no benefit from those overseas profits. No investment, no new innovations, no new full-time, breadwinner jobs.
I have beaten that horse quite a bit of late, but with EVERY guest on every financial stations berating a strong dollar there has to be a counter voice.
Michigan Sentiment: A bit less exuberant
91.2 versus 95.8 expected, 95.4 February. Wow not heading up for once. What could be holding the consumer back? Realization that the decent jobs are not pouring fourth? Or maybe it is the anti-dollar talk convincing them things are not going to be good. Gasoline prices back up? Or maybe the oil patch workers in Michigan are voicing displeasure over good jobs lost.
They said gas prices were going lower!
Gallup Poll: What is important to Americans right now.
ISIS? National security? Budget deficit? No. Not even in the top 8.
Surely the economy? No, even that falls second to the number 1 concern.
Perhaps it is something that aggregates ALL of the concerns, frustration, and indeed, anger in the US:
Dissatisfaction with the government.
Spaces 2 through 7: Economy, Unemployment/Jobs, Immigration/illegal aliens, healthcare, terrorism, and education.
Hmmm. All areas over which the government now asserts primary control. No wonder government dissatisfaction, what many are now viewing as the cause of so many of our troubles, sits atop the list.
Rig Count: -67 on the week to 1125.
Fourteen weeks of decline and picking up speed. But - - production continues unabated. Of course we know why: producers trying to make what they can on their most recent wells drilled to get their money back before things really hit the skids, i.e. when the Cushing, OK storage facility is topped off and the oil has to go into the refineries to be processed. When that happens, oil goes to $30 or less from what our friends in the patch are telling us. So, produce as if there is no tomorrow (or at the legal limits set by the state) and get what you can while you can. They know what is coming and they want the cash in hand now versus prices $20/bbl less.
THE MARKET
CHARTS
RUTX: Not the leader on the day but perhaps the best situated. Gapped lower Tuesday to the 50 day EMA, gapped right back through the gap Thursday. Friday the small caps sold back, but held the gap point and rebounded to cut the losses. Very nice action as the small caps benefit from the stronger dollar as investors and traders push money their way versus the large caps.
SP400: After gapping higher Thursday through the Tuesday gap point, the midcaps tested and filled the gap intraday, recovering a good chunk of the downside. Perhaps not as solid as RUTX, but similar action and better than the large caps.
SOX: Leader on Friday, The chips managed to recover the 20 day EMA after the Thursday gap lower that tested the 50 day EMA and the reversed to flat. Nice test and reversal followed by some more upside Friday. Not huge, now all-powerful, but the move works well.
NASDAQ: Fell to the 50 day EMA, still over the November peaks, holding that level Tuesday and Wednesday, bouncing Thursday, giving it up Friday but then rebounding to cut the losses. Not exactly a powerhouse, but holding where it needs to, actually consolidating.
DJ30: Maybe not horrid, but it has to prove it can make the upside move. Ugly crash Tuesday, held the line and rebounded through the 50 day EMA Thursday. Friday, it was in another sharp drop, but the late market bounce pulled at least one of its chestnuts out of the fire. Still closed below the 50 day MA, but at least it held the same lows for the week and bounced. Not in love with it as it looks a bit toppy considering that late December high. Picked up a few DIA put positions ahead of the close in the event the downside cranks up again Monday.
SP500: Same action as DJ30. Identical but for the large cap index never recaptured the 50 day EMA Thursday and never crossed it Friday. Otherwise basically the same.
SUMMARY: It looks as if money is not necessarily leaving the market, at least not wholesale. Volume is up on SP500 and DJ30 selling, but at the same time you see small and midcaps getting money pushed their way. When there is rotation, one area's high volume selling is another area's higher volume buying. Thus while we don't feel all that great about the SP500 and DJ30's prospects, there are very good upside plays in the small and midcaps. Chips remain leaders, and tech is not chopped liver. Bifurcated action, and while we like what we see in the small and midcaps, it is not blow me away kind of strength. Thus we play good plays but we also keep an eye on the overall market action.
LEADERSHIP
Not as solid as Thursday by any means. Some great moves, but it was not the day for those ahead of the weekend.
Chips: The lone upside group so you would expect some decent action. NXPI was huge with a new 6+% upside surge. SWKS is still trending higher. AVGO is holding its gap, prepping for a new move.
Internet: Hanging in there. GRUB posted a new closing high on this move. VIPS tested lower but held the 10 day EMA on the close. WWWW is putting in a nice 10 day EMA test of the break higher off the 50 day.
Biotech: TXMD is still rallying. BIIB is a larger biotech and is making a 10 day EMA test.
Software: FLTX took a day off after a great run. SPLK is holding the start of a bounce from support. More work to do.
MARKET STATISTICS
NASDAQ
Stats: -21.53 points (-0.44%) to close at 4871.76
Volume: 1.815B (+0.23%)
Up Volume: 665.87M (-524.13M)
Down Volume: 1.15B (+512.13M)
A/D and Hi/Lo: Decliners led 1.53 to 1
Previous Session: Advancers led 2.53 to 1
New Highs: 101 (-22)
New Lows: 64 (+7)
S&P
Stats: -12.55 points (-0.61%) to close at 2053.4
NYSE Volume: 806.1M (+7.8%)
A/D and Hi/Lo: Decliners led 2.28 to 1
Previous Session: Advancers led 2.68 to 1
New Highs: 73 (-30)
New Lows: 119 (+70)
DJ30
Stats: -145.91 points (-0.82%) to close at 17749.31
SENTIMENT INDICATORS
VIX: 16; +0.58
VXN: 17.55; +0.4
VXO: 16.88; +0.92
Put/Call Ratio (CBOE): 1.21; +0.16. Six consecutive sessions over 1.0, and seven of ten. Plenty of downside speculation to be a positive for the upside.
Bulls and Bears: Broke lower as expected in the selling. Not low enough but heading in the right direction.
Bulls: 53.46% versus 58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0%
After that rapid spike from 49% to 59.5%, backing down. A bit.
Bears: 14.1% versus 14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3%
Are you kidding me? This goes beyond stuck in the mud. Chronically low bearishness is bearish.
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: 53.6%
58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0% versus 53.1% versus 49.0% versus 48.0% versus 50.5% versus 56.4% versus 52.5% versus 49.5% versus 51.5% versus 53.4% versus 56.5% versus 56.4% versus 55.5% versus 54.6% versus 47.0% versus 35.3% versus 37.8% versus 45.5% versus 47.5% versus 48.0% versus 52.5% versus 57.6% versus 56.1% versus 52.5%
Background: Last undercut 35%, the threshold for bullishness, in early June 2012.
Bears: 14.1%
14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3% versus 16.3% versus 17.4% versus16.3% versus 15.2% versus 14.9% versus 15.8% versus 14.9% versus 14.8% versus 13.9% versus 13.8% versus 14.9% versus 14.8% versus 15.1% versus 16.3% versus 18.2% versus 17.3% versus 14.1% versus 15.1% versus 15.3% versus 15.2% versus 14.1% versus 13.3% versus 15.1% versus 16.2%
Background: Over 35% for bears is the threshold to be really be a good upside indicator. The best indication is when bears cross up through bulls as the two merge. Right now bulls are coming back down from the 60 level that has consistently marked market tops over the past two years. The rapid decline in progress is pushing the bulls/bears lines toward one another. Still far from a cross with bulls falling faster than bears are rising, but bears are warming up to the notion of market weakness.
OTHER MARKETS
Bonds (10 year): 2.12% versus 2.10%.
2.12% versus 2.11% versus 2.13% versus 2.20% versus 2.245% versus 2.11% versus 2.12% versus 2.12% versus 2.08% versus 1.98% versus 2.04% versus 1.96% versus 1.98% versus 2.06% versus 2.09% versus 2.11% versus 2.08% versus 2.14% versus 2.03% versus 1.99% versus 1.98% versus 1.99% versus 1.95% versus 1.94% versus 1.81% versus 1.77% versus 1.78% versus 1.68% versus 1.67% versus 1.76%
Big rebound on the week to the 50 day EMA. Likely doesn't get further.
Oil: 44.89, -2.22. Breaking bad, heading back to the late January low 43.58.
Gold: 1150.60, +1.60. Second doji just over the early November low. Looks like a place to bounce.
$/JPY: 121.43 versus 121.28 versus 121.50 versus 121.80 versus 121.60 VERSUS 120.72 versus 120.14 versus 119.71 versus 119.74 versus 120.179 versus 119.63 versus 119.48 versus 118.86
Nice flag test of the 10 day EMA. Setting up the next move.
Euro/$: 1.04.94 versus 1.0635 versus 1.0546 versus 1.0700 versus 1.0829 versus 1.0849 versus 1.1030 versus 1.1079 versus 1.1175 versus 1.1182 versus 1.1197 versus 1.1195 versus 1.1362 versus 1.1337 versus 1.1385 versus 1.1379 versus 1.1366
Exploding higher yet again, breaking the important 1.05 level. Just a one-day oversold pause? Seems that way.
NEXT WEEK
The FOMC meets next week with a decision Wednesday. To be or not to be . . patient. The consensus is the Fed removes patient. Makes sense to us. Yellen said a couple of meetings to do away with it, and if she wants to keep her slip of tongue 6 months after QE ends, take out patient now, hike in April.
That the Fed may lose its patience was a purported issue for the market the past week. The stronger dollar was supposedly another issue for stocks. The two are, of course, related. While the rest of the world devaluates on top of prior devaluations, the US is actually talking raising rates, thereby instantly making the dollar more desirous. Add to that the US economy is not nearly as crappy as all the others, you get a stronger currency.
So, how does the market react? A good and bad move, sweet and sour, whatever you want to call it, last week saw some good days, some weak days, and some bifurcation. Thanks to the dollar, money rotated from the large caps to the smaller cap areas. Rotation is healthy for the market, but we are not 100% convinced this leads to significant higher highs.
RUTX looks to be a lock at a new high. That means beware. NASDAQ is holding the 50 day EMA, looks good to bounce. SOX bounced again. Take out SP500 and DJ30 and the market prospects are pretty solid. Put them in and they are still decent. Rotation is good as noted, but not sure this one is 100% of the money raised from selling large caps is getting put back into the market in other areas.
Friday saw some pattern degradation, e.g. ATHM, GNRC, QIWI, Z. Some. Still many are setting up: they had the week to test and set back up given the market chop. With money rotating, we definitely have plays setting up and will play them if they show the breaks, but at the same time you have to keep an eye on all the market. If too much bifurcation between large caps and smaller caps takes place, that impacts the market's ability to rise.
What would be best is to see the smaller caps lead, NASDAQ and SOX (both growth) perform well, and SP500 and DJ30 follow along. Maybe grudgingly, but following.
The market reacts adversely to Fed rate hikes. It anticipates them, struggles with the thought, then sells some on the news. Typically, however, they come back. The question is when. No one knows that. All we can do is watch where the money goes, what stocks it pushes into leadership, and go with that flow.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 4871.76
Resistance:
The 10 day EMA at 4907
5008.57 is the March 2015 post-bear market high
5132.52 is the 3/2000 all-time high
Support:
The 50 day EMA at 4828
4816 is the 38% Fibonacci retracement of the February run
4815 is the December 2014 prior market peak
4811 is the November 2014 peak (intraday)
4774 is the January high
4751 is the January 2015 lower high
4631 is the October 2014 upside gap point
4610 is the September 2014 post-bear market high.
The 200 day SMA at 4579
4566 is the lower gap point from late October
4563 and 4567 are the January lows
4547 is the December low
4486 is the July 2014 high
4372 is the March 2014 high
The August low at 4321
4316 is the lower gap point from October 2014
4289 is the July 2000 recovery high
4277 is the March lower gap point
4246.55 is the January 2014 peak
S&P 500: Closed at 2053.40
Resistance:
2062 is the January 2015 lower high
The 50 day EMA at 2066
2076 is the all-time high from November
2079 is the intraday all-time high from November
2094 is the December 2014 high, the prior all-time high
2111 is the lower trendline from 11/2012
2119.59 is the all-time high
2175 is the December 2012 up trendline
Support:
2011 is the September prior all-time high
The 200 day SMA at 2003
1991 is the July 2014 high
1972 is the December 2014 low
1905 is the August 2014 low
1902 from early May was the intraday all-time high.
1897 is the prior all-time high hit in April 2014
1883.57 is the early March high.
The December and January highs at 1848
The April 2014 low at 1814
1808 is the November and December 2013 twin peaks
1775.22 is the October prior all-time high
Dow: Closed at 17,749.31
Resistance:
The 50 day EMA at 17,830
17,923 is the January 2015 lower high
17,991 is the early December interim
18,104 is the December high
18,289 is the all-time high
Support:
17,351 is the September 2014 all-time high.
The 200 day SMA at 17,268
17,152 is the mid-July post bear market high
17,068 is the early July 2014 peak
17067 is the December 2014 low
16,970 is the June 2014 former all-time high
16,946 is the June 2014 peak
16,736 is the penultimate all-time high from May 2014
16,632 is the April 2014 all-time high
16,589 is the December 2013 all-time high
16,506 is the March 2014 peak
16,341 is the May low
16,334 is the August 2014 low
16,257 is the January 2014 low
16,179 is the November 2013 peak.
15,855 is the October 2014 low
15,739 is the December 2013 low
ECONOMIC CALENDAR
March 13 - Friday
PPI, February (8:30): -0.5% actual versus 0.3% expected, -0.8% prior
Core PPI, February (8:30): -0.5% actual versus 0.1% expected, -0.1% prior
Michigan Sentiment, March (10:00): 91.2 actual versus 95.8 expected, 95.4 prior
March 16 - Monday
Empire Manufacturing, March (8:30): 8.8 expected, 7.8 prior
Industrial Production, February (9:15): 0.3% expected, 0.2% prior
Capacity Utilization, February (9:15): 79.5% expected, 79.4% prior
NAHB Housing Market , March (10:00): 56 expected, 55 prior
Net Long-Term TIC Fl, January (16:00): $35.4B prior
March 17 - Tuesday
Building Permits, February (8:30): 1070K expected, 1053K prior
Housing Starts, February (8:30): 1040K expected, 1065K prior
March 18 - Wednesday
MBA Mortgage Index, 03/14 (7:00): -1.3% prior
Crude Inventories, 03/14 (10:30): 4.512M prior
FOMC Rate Decision, March (14:00): 0.25% expected, 0.25% prior
March 19 - Thursday
Continuing Claims, 03/07 (8:30)
Initial Claims, 03/14 (8:30): 294K expected, 289K prior
Continuing Claims, 03/07 (8:30): 2420K expected, 2418K prior
Current Account Bala, Q4 (8:30): -$105.0B expected, -$100.3B prior
Philadelphia Fed, March (10:00): 7.2 expected, 5.2 prior
Leading Indicators, February (10:00): 0.2% expected, 0.2% prior
Natural Gas Inventor, 03/14 (10:30): -198 bcf prior
End part 1 of 3
_______________________________________________________
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3/14/2015 Investment House Report
* * * *
MARKET ALERTS:
Targets hit: None issued
Buy alerts: DIA; RH
Trailing stops: None issued
Stop alerts: LNKD
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 ECONOMY OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/eco/eco.mp4
TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/ts/ts.mp4
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************
The REPORTS SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Tables with play annotations will issue Monday, Wednesday and the Weekend.
Tuesday and Thursday reports will contain the market summary, chart links to view the index charts, and updated play tables.
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
- Sloppy Friday sees DJ30, SP500 revert to old ways, relative strength in RUTX and SP400, and SOX post a gain.
- Dollar continues its surge, pushing more rotation.
- Near trend continues with money rotating from large caps to smaller caps.
- Michigan Sentiment shows a rare decline.
- Gallup Poll: Government dissatisfaction tops the list of US citizen gripes.
- Growth index patterns are not bad, but leadership took on some water the past week.
- FOMC 'no patience' meeting set for this week. Will the market now have patience?
Back to Tuesday as large cap NYSE indices give up gains, small and mid-caps lead.
Tuesday saw all indices fall, but SP400 and RUTX held their 50 day MA while SP500 and DJ30 plowed them under. Thursday all stocks advanced and DJ30 even recaptured the 50 day MA it just crashed. Looked as if they were back on the same page though RUTX and SP400 were really nice, gapping back through the gap lower Tuesday.
Friday it was back to Tuesday. DJ30 and SP500 gave up the goods, i.e. the bounce from Thursday that took DJ30 back up through the 50 day EMA. At the same time, RUTX and SP400, both of which sold early, filled that Thursday upside gap intraday and rebounded rather nicely. Large cap struggling on the stronger dollar (up again) while the smaller caps continued working on good patterns.
NASDAQ was lower but bounced off a 50 day EMA intraday test. SOX actually scored a gain, using that Thursday gap and reversal that tested the 50 day EMA in something of a slingshot effect, moving through the 20 day EMA on the close.
So, RUTX and SP400 leading (though lower), SP500 and DJ30 struggling (with a stronger dollar), NASDAQ hanging in there, and SOX trying to move up and lead with SP400 and RUTX.
SP500 -11.47, -0.55%
NASDAQ -17.71, -036%
DJ30 -130.75, -0.72%
SP400 -0.54%
RUTX -0.37%
SOX 0.85%
VOLUME: NYSE +7.8%, NASDAQ scratching higher at +0.23%. Another day of distribution on the NYSE large caps. Not bad action on NASDAQ as it bounced off the 50 day EMA and recovered some lost ground.
A/D: NYSE -2.4:1, NASDAQ -3:2.
Yes, the large caps struggled again as the small and midcaps performed better. Another bout of strong dollar-itis.
What about that dollar? Broke the 1.05 barrier, closing at 1.0494 euro/dollars. Some say parity is coming soon (certainly looks easy to get there), others say an all-time low for the euro at $0.80 is a given before this is finished.
Of course that puts the hurt on the large caps that have fed so heavily on the weak dollar and the policies that allowed them to rake in big profits . . . most of which are left overseas thanks to our tax code . . and avoid any investment in the US outside of dividends, stock buy backs, and the occasional acquisition, funded of course, by the use of stock at inflated values.
The strong dollar is a grave danger . . . to my bonus structure.
And what are those corporations saying if they don't get a lower dollar? It will hurt . . . who? Certainly not the US consumer who gets virtually no benefit from those overseas profits. No investment, no new innovations, no new full-time, breadwinner jobs.
I have beaten that horse quite a bit of late, but with EVERY guest on every financial stations berating a strong dollar there has to be a counter voice.
Michigan Sentiment: A bit less exuberant
91.2 versus 95.8 expected, 95.4 February. Wow not heading up for once. What could be holding the consumer back? Realization that the decent jobs are not pouring fourth? Or maybe it is the anti-dollar talk convincing them things are not going to be good. Gasoline prices back up? Or maybe the oil patch workers in Michigan are voicing displeasure over good jobs lost.
They said gas prices were going lower!
Gallup Poll: What is important to Americans right now.
ISIS? National security? Budget deficit? No. Not even in the top 8.
Surely the economy? No, even that falls second to the number 1 concern.
Perhaps it is something that aggregates ALL of the concerns, frustration, and indeed, anger in the US:
Dissatisfaction with the government.
Spaces 2 through 7: Economy, Unemployment/Jobs, Immigration/illegal aliens, healthcare, terrorism, and education.
Hmmm. All areas over which the government now asserts primary control. No wonder government dissatisfaction, what many are now viewing as the cause of so many of our troubles, sits atop the list.
Rig Count: -67 on the week to 1125.
Fourteen weeks of decline and picking up speed. But - - production continues unabated. Of course we know why: producers trying to make what they can on their most recent wells drilled to get their money back before things really hit the skids, i.e. when the Cushing, OK storage facility is topped off and the oil has to go into the refineries to be processed. When that happens, oil goes to $30 or less from what our friends in the patch are telling us. So, produce as if there is no tomorrow (or at the legal limits set by the state) and get what you can while you can. They know what is coming and they want the cash in hand now versus prices $20/bbl less.
THE MARKET
CHARTS
RUTX: Not the leader on the day but perhaps the best situated. Gapped lower Tuesday to the 50 day EMA, gapped right back through the gap Thursday. Friday the small caps sold back, but held the gap point and rebounded to cut the losses. Very nice action as the small caps benefit from the stronger dollar as investors and traders push money their way versus the large caps.
SP400: After gapping higher Thursday through the Tuesday gap point, the midcaps tested and filled the gap intraday, recovering a good chunk of the downside. Perhaps not as solid as RUTX, but similar action and better than the large caps.
SOX: Leader on Friday, The chips managed to recover the 20 day EMA after the Thursday gap lower that tested the 50 day EMA and the reversed to flat. Nice test and reversal followed by some more upside Friday. Not huge, now all-powerful, but the move works well.
NASDAQ: Fell to the 50 day EMA, still over the November peaks, holding that level Tuesday and Wednesday, bouncing Thursday, giving it up Friday but then rebounding to cut the losses. Not exactly a powerhouse, but holding where it needs to, actually consolidating.
DJ30: Maybe not horrid, but it has to prove it can make the upside move. Ugly crash Tuesday, held the line and rebounded through the 50 day EMA Thursday. Friday, it was in another sharp drop, but the late market bounce pulled at least one of its chestnuts out of the fire. Still closed below the 50 day MA, but at least it held the same lows for the week and bounced. Not in love with it as it looks a bit toppy considering that late December high. Picked up a few DIA put positions ahead of the close in the event the downside cranks up again Monday.
SP500: Same action as DJ30. Identical but for the large cap index never recaptured the 50 day EMA Thursday and never crossed it Friday. Otherwise basically the same.
SUMMARY: It looks as if money is not necessarily leaving the market, at least not wholesale. Volume is up on SP500 and DJ30 selling, but at the same time you see small and midcaps getting money pushed their way. When there is rotation, one area's high volume selling is another area's higher volume buying. Thus while we don't feel all that great about the SP500 and DJ30's prospects, there are very good upside plays in the small and midcaps. Chips remain leaders, and tech is not chopped liver. Bifurcated action, and while we like what we see in the small and midcaps, it is not blow me away kind of strength. Thus we play good plays but we also keep an eye on the overall market action.
LEADERSHIP
Not as solid as Thursday by any means. Some great moves, but it was not the day for those ahead of the weekend.
Chips: The lone upside group so you would expect some decent action. NXPI was huge with a new 6+% upside surge. SWKS is still trending higher. AVGO is holding its gap, prepping for a new move.
Internet: Hanging in there. GRUB posted a new closing high on this move. VIPS tested lower but held the 10 day EMA on the close. WWWW is putting in a nice 10 day EMA test of the break higher off the 50 day.
Biotech: TXMD is still rallying. BIIB is a larger biotech and is making a 10 day EMA test.
Software: FLTX took a day off after a great run. SPLK is holding the start of a bounce from support. More work to do.
MARKET STATISTICS
NASDAQ
Stats: -21.53 points (-0.44%) to close at 4871.76
Volume: 1.815B (+0.23%)
Up Volume: 665.87M (-524.13M)
Down Volume: 1.15B (+512.13M)
A/D and Hi/Lo: Decliners led 1.53 to 1
Previous Session: Advancers led 2.53 to 1
New Highs: 101 (-22)
New Lows: 64 (+7)
S&P
Stats: -12.55 points (-0.61%) to close at 2053.4
NYSE Volume: 806.1M (+7.8%)
A/D and Hi/Lo: Decliners led 2.28 to 1
Previous Session: Advancers led 2.68 to 1
New Highs: 73 (-30)
New Lows: 119 (+70)
DJ30
Stats: -145.91 points (-0.82%) to close at 17749.31
SENTIMENT INDICATORS
VIX: 16; +0.58
VXN: 17.55; +0.4
VXO: 16.88; +0.92
Put/Call Ratio (CBOE): 1.21; +0.16. Six consecutive sessions over 1.0, and seven of ten. Plenty of downside speculation to be a positive for the upside.
Bulls and Bears: Broke lower as expected in the selling. Not low enough but heading in the right direction.
Bulls: 53.46% versus 58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0%
After that rapid spike from 49% to 59.5%, backing down. A bit.
Bears: 14.1% versus 14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3%
Are you kidding me? This goes beyond stuck in the mud. Chronically low bearishness is bearish.
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: 53.6%
58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0% versus 53.1% versus 49.0% versus 48.0% versus 50.5% versus 56.4% versus 52.5% versus 49.5% versus 51.5% versus 53.4% versus 56.5% versus 56.4% versus 55.5% versus 54.6% versus 47.0% versus 35.3% versus 37.8% versus 45.5% versus 47.5% versus 48.0% versus 52.5% versus 57.6% versus 56.1% versus 52.5%
Background: Last undercut 35%, the threshold for bullishness, in early June 2012.
Bears: 14.1%
14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3% versus 16.3% versus 17.4% versus16.3% versus 15.2% versus 14.9% versus 15.8% versus 14.9% versus 14.8% versus 13.9% versus 13.8% versus 14.9% versus 14.8% versus 15.1% versus 16.3% versus 18.2% versus 17.3% versus 14.1% versus 15.1% versus 15.3% versus 15.2% versus 14.1% versus 13.3% versus 15.1% versus 16.2%
Background: Over 35% for bears is the threshold to be really be a good upside indicator. The best indication is when bears cross up through bulls as the two merge. Right now bulls are coming back down from the 60 level that has consistently marked market tops over the past two years. The rapid decline in progress is pushing the bulls/bears lines toward one another. Still far from a cross with bulls falling faster than bears are rising, but bears are warming up to the notion of market weakness.
OTHER MARKETS
Bonds (10 year): 2.12% versus 2.10%.
2.12% versus 2.11% versus 2.13% versus 2.20% versus 2.245% versus 2.11% versus 2.12% versus 2.12% versus 2.08% versus 1.98% versus 2.04% versus 1.96% versus 1.98% versus 2.06% versus 2.09% versus 2.11% versus 2.08% versus 2.14% versus 2.03% versus 1.99% versus 1.98% versus 1.99% versus 1.95% versus 1.94% versus 1.81% versus 1.77% versus 1.78% versus 1.68% versus 1.67% versus 1.76%
Big rebound on the week to the 50 day EMA. Likely doesn't get further.
Oil: 44.89, -2.22. Breaking bad, heading back to the late January low 43.58.
Gold: 1150.60, +1.60. Second doji just over the early November low. Looks like a place to bounce.
$/JPY: 121.43 versus 121.28 versus 121.50 versus 121.80 versus 121.60 VERSUS 120.72 versus 120.14 versus 119.71 versus 119.74 versus 120.179 versus 119.63 versus 119.48 versus 118.86
Nice flag test of the 10 day EMA. Setting up the next move.
Euro/$: 1.04.94 versus 1.0635 versus 1.0546 versus 1.0700 versus 1.0829 versus 1.0849 versus 1.1030 versus 1.1079 versus 1.1175 versus 1.1182 versus 1.1197 versus 1.1195 versus 1.1362 versus 1.1337 versus 1.1385 versus 1.1379 versus 1.1366
Exploding higher yet again, breaking the important 1.05 level. Just a one-day oversold pause? Seems that way.
NEXT WEEK
The FOMC meets next week with a decision Wednesday. To be or not to be . . patient. The consensus is the Fed removes patient. Makes sense to us. Yellen said a couple of meetings to do away with it, and if she wants to keep her slip of tongue 6 months after QE ends, take out patient now, hike in April.
That the Fed may lose its patience was a purported issue for the market the past week. The stronger dollar was supposedly another issue for stocks. The two are, of course, related. While the rest of the world devaluates on top of prior devaluations, the US is actually talking raising rates, thereby instantly making the dollar more desirous. Add to that the US economy is not nearly as crappy as all the others, you get a stronger currency.
So, how does the market react? A good and bad move, sweet and sour, whatever you want to call it, last week saw some good days, some weak days, and some bifurcation. Thanks to the dollar, money rotated from the large caps to the smaller cap areas. Rotation is healthy for the market, but we are not 100% convinced this leads to significant higher highs.
RUTX looks to be a lock at a new high. That means beware. NASDAQ is holding the 50 day EMA, looks good to bounce. SOX bounced again. Take out SP500 and DJ30 and the market prospects are pretty solid. Put them in and they are still decent. Rotation is good as noted, but not sure this one is 100% of the money raised from selling large caps is getting put back into the market in other areas.
Friday saw some pattern degradation, e.g. ATHM, GNRC, QIWI, Z. Some. Still many are setting up: they had the week to test and set back up given the market chop. With money rotating, we definitely have plays setting up and will play them if they show the breaks, but at the same time you have to keep an eye on all the market. If too much bifurcation between large caps and smaller caps takes place, that impacts the market's ability to rise.
What would be best is to see the smaller caps lead, NASDAQ and SOX (both growth) perform well, and SP500 and DJ30 follow along. Maybe grudgingly, but following.
The market reacts adversely to Fed rate hikes. It anticipates them, struggles with the thought, then sells some on the news. Typically, however, they come back. The question is when. No one knows that. All we can do is watch where the money goes, what stocks it pushes into leadership, and go with that flow.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 4871.76
Resistance:
The 10 day EMA at 4907
5008.57 is the March 2015 post-bear market high
5132.52 is the 3/2000 all-time high
Support:
The 50 day EMA at 4828
4816 is the 38% Fibonacci retracement of the February run
4815 is the December 2014 prior market peak
4811 is the November 2014 peak (intraday)
4774 is the January high
4751 is the January 2015 lower high
4631 is the October 2014 upside gap point
4610 is the September 2014 post-bear market high.
The 200 day SMA at 4579
4566 is the lower gap point from late October
4563 and 4567 are the January lows
4547 is the December low
4486 is the July 2014 high
4372 is the March 2014 high
The August low at 4321
4316 is the lower gap point from October 2014
4289 is the July 2000 recovery high
4277 is the March lower gap point
4246.55 is the January 2014 peak
S&P 500: Closed at 2053.40
Resistance:
2062 is the January 2015 lower high
The 50 day EMA at 2066
2076 is the all-time high from November
2079 is the intraday all-time high from November
2094 is the December 2014 high, the prior all-time high
2111 is the lower trendline from 11/2012
2119.59 is the all-time high
2175 is the December 2012 up trendline
Support:
2011 is the September prior all-time high
The 200 day SMA at 2003
1991 is the July 2014 high
1972 is the December 2014 low
1905 is the August 2014 low
1902 from early May was the intraday all-time high.
1897 is the prior all-time high hit in April 2014
1883.57 is the early March high.
The December and January highs at 1848
The April 2014 low at 1814
1808 is the November and December 2013 twin peaks
1775.22 is the October prior all-time high
Dow: Closed at 17,749.31
Resistance:
The 50 day EMA at 17,830
17,923 is the January 2015 lower high
17,991 is the early December interim
18,104 is the December high
18,289 is the all-time high
Support:
17,351 is the September 2014 all-time high.
The 200 day SMA at 17,268
17,152 is the mid-July post bear market high
17,068 is the early July 2014 peak
17067 is the December 2014 low
16,970 is the June 2014 former all-time high
16,946 is the June 2014 peak
16,736 is the penultimate all-time high from May 2014
16,632 is the April 2014 all-time high
16,589 is the December 2013 all-time high
16,506 is the March 2014 peak
16,341 is the May low
16,334 is the August 2014 low
16,257 is the January 2014 low
16,179 is the November 2013 peak.
15,855 is the October 2014 low
15,739 is the December 2013 low
ECONOMIC CALENDAR
March 13 - Friday
PPI, February (8:30): -0.5% actual versus 0.3% expected, -0.8% prior
Core PPI, February (8:30): -0.5% actual versus 0.1% expected, -0.1% prior
Michigan Sentiment, March (10:00): 91.2 actual versus 95.8 expected, 95.4 prior
March 16 - Monday
Empire Manufacturing, March (8:30): 8.8 expected, 7.8 prior
Industrial Production, February (9:15): 0.3% expected, 0.2% prior
Capacity Utilization, February (9:15): 79.5% expected, 79.4% prior
NAHB Housing Market , March (10:00): 56 expected, 55 prior
Net Long-Term TIC Fl, January (16:00): $35.4B prior
March 17 - Tuesday
Building Permits, February (8:30): 1070K expected, 1053K prior
Housing Starts, February (8:30): 1040K expected, 1065K prior
March 18 - Wednesday
MBA Mortgage Index, 03/14 (7:00): -1.3% prior
Crude Inventories, 03/14 (10:30): 4.512M prior
FOMC Rate Decision, March (14:00): 0.25% expected, 0.25% prior
March 19 - Thursday
Continuing Claims, 03/07 (8:30)
Initial Claims, 03/14 (8:30): 294K expected, 289K prior
Continuing Claims, 03/07 (8:30): 2420K expected, 2418K prior
Current Account Bala, Q4 (8:30): -$105.0B expected, -$100.3B prior
Philadelphia Fed, March (10:00): 7.2 expected, 5.2 prior
Leading Indicators, February (10:00): 0.2% expected, 0.2% prior
Natural Gas Inventor, 03/14 (10:30): -198 bcf prior
End part 1 of 3
_______________________________________________________
Member: tweet@investbilling.com
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
Wednesday, March 11, 2015
The Daily, Part 1 of 3, 3-11-15
* * * *
3/11/2015 Investment House Report
* * * *
MARKET ALERTS:
Targets hit: None issued
Buy alerts: SPR
Trailing stops: BWLD; JD
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
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************
The REPORTS SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Tables with play annotations will issue Monday, Wednesday and the Weekend.
Tuesday and Thursday reports will contain the market summary, chart links to view the index charts, and updated play tables.
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
- And the small caps, midcaps lead.
- Dollar effect: large cap indices sell, money rotates to smaller cap indices.
- China economic data fades again, raising hope for stimulus in a bailout world.
- Did the Fed wait for a worldwide recession to hike?
- DJ30, SP500 still in limbo, NASDAQ still has room to test, RUTX and SP400 trying to hold the 50 day EMA. As of course, did DJ30 and SP500.
- Leaders move higher, others set up. Watching to see if leaders can lead higher.
Wednesday saw a lot of nothing in terms of the large cap index moves, but there was some life for the small and midcaps as well as some real substance in several leaders.
SP500 -3.92, -0.19%
NASDAQ -9.85, -0.20%
DJ30 -27.55, -0.16%
SP400 0.73%
RUTX 0.60%
SOX 0.27%
VOLUME: NYSE -8.5%, NASDAQ -2.2%
A/D: NYSE 1.3:1, NASDAQ 1.3:1
The dollar was up once more, really up versus the euro pre-market, but futures were up. How can that be when Tuesday we were informed that stocks were lower because the dollar was too strong? Perhaps because that is not the reason.
China? Data was weak with Industrial Production at 6.8% versus 7.9% prior. 6.8% sounds pretty good, but it was the worst reading for China since the great financial crisis. Weaker China surely means more stimulus is on the way and even with the dollar surging, a weak China is worth some S&P futures gains.
The world has become a place where mistakes is rewarded with money. If a bank makes poor loan decisions or focuses on segments that do not produce, it gets handouts to avoid closing. Homeowners buy way too much house and cannot afford the payments as soon as the economy hiccups the slightest bit, then scold the banks for lending and force them to forgive principal and lower mortgage repayment. The government pumps billions into student loans, prices surge in textbook inflation, costs to students balloon accordingly for a 4-year degree, students cannot find a job thanks to the horrid recovery the government has fostered . . bail them out by forgiving the loans. A government over-taxes businesses and individuals, overspends that money, the economy slows, so massive bailout.
That is why the market gets excited over poor economic news: more likelihood of stimulus and we all know that stimulus inflates stock prices. Now a contrast to that is the current situation in the US. The Fed has kept rates at 0% once again for a long, long time. It started feeling the uneasiness of being at 0% rates if another economic slowdown rolled in. So it started talking rate hikes and the basis for it hiking. Now it has talked itself into a corner and will have to raise rates. That is okay because the Fed WANTS to raise rates in order to get some arrows back in the quiver for the next crisis.
Fed moving too late?
Problem is, some say the next crisis is upon us. Peter Schiff stated Wednesday that the Fed had plenty of opportunity to move rates back up over the past year, but it refused to act. It took the slow course and now that it is ready to act it is facing, in Schiff's view, a new world recession. Waited too long so now what? Go back to QE?
What about that large cap/small cap split Wednesday?
In the afternoon we heard commentary from some about the strange action that saw the small caps and midcaps moving nicely higher while the large caps traded negative. Was it really strange action?
Of late I have written a bit about the stronger dollar and how it really benefits the US and most citizens even if those working at the big multinational companies moan about how a strong dollar is an economic negative.
What indices hold the most multinationals? Large cap. What companies are mostly hurt by a still soaring dollar? Large cap. Given that, Wednesday money moved to the small cap and midcap areas.
How poetic. The large multinationals squeal their earnings will be lower thus hurting the economy and of course the stock market. It has been a rather obvious pander to get the government to act, to bail them out perhaps? Tuesday it was working as we noted the White House weighed in, worried the dollar would hinder economic growth.
Then the market responds by . . . rotating money to those areas that benefit from a stronger dollar.
So just how bad is a rising dollar to the US? It allows domestic companies with clientele mostly in the US to buy raw materials cheaper, to have cheaper energy sources (denominated in dollars after all), and goodness gracious, maybe even some foreign investment seeking a country with an appreciating currency versus a world attempting to race to the bottom of the currency pond.
I really cannot cry for the large cap companies that have had it so incredibly good for the entirety of the 'recovery.' Free money at the start, 0% interest rates for any further needs, a Fed actively inflating their stock values so the officers can give themselves bonuses and salary increases as stated in their employment contracts, using that free and easy money to buy back stock to further enhance their take home pay. I know their stock prices will suffer, but look what is happening: money is rotating to the smaller cap areas that might FINALLY prosper. Oh, and rotation IS a healthy sign for a market.
THE MARKET
CHARTS
NASDAQ: After an early move higher, NASDAQ reversed and moved lower, Still heading towards the 50 day EMA, 38% Fibonacci, December high. It had a chance to make a move higher and it did not.
SOX: Rallied early as well but could not hold a move over the 20 day EMA. Reversed, managed to hold a gain, but as with NASDAQ, did not change its sag toward its 50 day MA and 38% Fibonacci retracement (the former is 10 points away, the latter 5 points.
SP400: A very decent bounce off the 50 day MA. Of course SP500 and DJ30 posted 50 day EMA bounces Monday after the Friday selling and see where that got them. Would have been nice if NASDAQ finished its pullback with the SP400 and RUTX at their 50 day EMA, but not the case Wednesday. Nice bounce from where you would expect it to bounce, and that was good, but it was not all that impressive. Well maybe it was impressive given the large caps, but it didn't change the situation that much.
RUTX: This is a good looking bounce as with SP400, and the same questions arise. Can it hold or is it an SP500/DJ30 like false move, a bounce that sets up the 50 day EMA crash? If SOX and NASDAQ test and hold, RUTX has better odds of holding this level even if it undercuts it during the session.
SP500: After torpedoing the 50 day MA Tuesday, SP500 didn't even make it up to the 50 day EMA, didn't even try. A modest wave at moving higher then rolled over. Now, this was not a massive decline; had those on Friday and Tuesday. There is not much, however, to suggest that just because SP500 didn't continue to sell as hard as it did Tuesday that the pullback is over. It is caught in no-man's land of its own.
DJ30: Bounced from a lower open but stalled just below 17,750 and slipped back to a modest loss. As with SP500, the Dow is in no-man's land, below the prior peaks, below the 50% Fibonacci retracement, and looking for a place to land.
LEADERSHIP
With the big caps down, look at some of our positions and plays ready to enter that are up: AAOI, AKAM, ALK, GRUB, KE, QRVO, SWKS, SUNE, TXMD, VIPS, WWWW.
Holding up well: BDSI, FLTX, FSLR, LNKD, MTSN.
Industrial Machinery: Hanging in. CAT still holding the double bottom. DE faded but in a good pattern. TEX holding the 50 day EMA.
Chemicals: Some nice patterns, some nice tests. ASH is great at the 50 day EMA. AGU is near the 20 day EMA with a couple of doji. Not all are great: CF, MON.
Chips: NXPI is still working on an excellent gap test. Getting ready for a new play. SWKS went on the SP500, still solid. MTSN nicely testing the 20 day EMA. MLNX bouncing off the 50 day EMA . SUNE surging. AAOI looks locked and loaded.
Retail: Some interesting action. KIRK surged up through its 50 day MA. JWN is in a decent 50 day EMA test. COST didn't stick its move. ROST has held its upside gap. TJX is cracking its 50 day EMA.
Internet: Some life. WWWW is working well. VIPS surged too. GRUB holding up well. WUBA.
MARKET STATISTICS
NASDAQ
Stats: -9.85 points (-0.2%) to close at 4849.94
Volume: 1.771B (-3.29%)
Up Volume: 974.14M (+629.85M)
Down Volume: 848.71M (-671.29M)
A/D and Hi/Lo: Advancers led 1.32 to 1
Previous Session: Decliners led 3.09 to 1
New Highs: 61 (+11)
New Lows: 89 (-12)
S&P
Stats: -3.92 points (-0.19%) to close at 2040.24
NYSE Volume: 780.5M (-8.42%)
A/D and Hi/Lo: Advancers led 1.34 to 1
Previous Session: Decliners led 2.68 to 1
New Highs: 40 (+19)
New Lows: 113 (-13)
DJ30
Stats: -27.55 points (-0.16%) to close at 17635.39
SENTIMENT INDICATORS
VIX: 16.87; +0.18
VXN: 18.42; +0.4
VXO: 17.64; +0.39
Put/Call Ratio (CBOE): 1.11; +0.02. Fourth consecutive 1.00 session, 5 out of 8. Getting to the level that can support a bounce. Not an indicator that means just by itself, but a piece of the puzzle.
Bulls and Bears: Will be interesting to see how the selling has impacted bulls after they tickled the key 60% level.
Bulls: 58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0%
Okay, a bit of a fade even as the remnants of the upside were still around. Still too many bulls and too few bears, and this is still a negative for the market.
Bears: 14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3% versus 16.3% versus 17.4%.
Stuck in the mud.
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: 58.7%
59.5% versus 56.6% versus 52.5% versus 49.0% versus 53.1% versus 49.0% versus 48.0% versus 50.5% versus 56.4% versus 52.5% versus 49.5% versus 51.5% versus 53.4% versus 56.5% versus 56.4% versus 55.5% versus 54.6% versus 47.0% versus 35.3% versus 37.8% versus 45.5% versus 47.5% versus 48.0% versus 52.5% versus 57.6% versus 56.1% versus 52.5%
Background: Last undercut 35%, the threshold for bullishness, in early June 2012.
Bears: 14.1%
14.1% versus 14.1% versus 15.2% versus 16.3% versus 16.3% versus 17.4% versus16.3% versus 15.2% versus 14.9% versus 15.8% versus 14.9% versus 14.8% versus 13.9% versus 13.8% versus 14.9% versus 14.8% versus 15.1% versus 16.3% versus 18.2% versus 17.3% versus 14.1% versus 15.1% versus 15.3% versus 15.2% versus 14.1% versus 13.3% versus 15.1% versus 16.2%
Background: Over 35% for bears is the threshold to be really be a good upside indicator. The best indication is when bears cross up through bulls as the two merge. Right now bulls are coming back down from the 60 level that has consistently marked market tops over the past two years. The rapid decline in progress is pushing the bulls/bears lines toward one another. Still far from a cross with bulls falling faster than bears are rising, but bears are warming up to the notion of market weakness.
OTHER MARKETS
Bonds (10 year): 2.11%
2.13% versus 2.20% versus 2.245% versus 2.11% versus 2.12% versus 2.12% versus 2.08% versus 1.98% versus 2.04% versus 1.96% versus 1.98% versus 2.06% versus 2.09% versus 2.11% versus 2.08% versus 2.14% versus 2.03% versus 1.99% versus 1.98% versus 1.99% versus 1.95% versus 1.94% versus 1.81% versus 1.77% versus 1.78% versus 1.68% versus 1.67% versus 1.76%
Another upside session to the 20 day EMA. Still looks like a relief bounce but there is that island reversal.
Oil: 48.21, -0.19. Holding at the low from two weeks back. If it does then the Tuesday dive lower is not that horrid a move.
Gold: 1150.62, -9.50. Still diving, now almost at the early November low.
$/JPY: 121.50 versus 121.80 versus 121.60 VERSUS 120.72 versus 120.14 versus 119.71 versus 119.74 versus 120.179 versus 119.63 versus 119.48 versus 118.86 versus 118.95 versus 118.78 versus 119.08 versus 119.04 versus 118.70 versus 119.34 versus 118.83 versus 118.915 versus 120.26 versus119.48 versus 118.62 versus 118.987 versus 117.56 versus 117.21 versus 117.58 versus 117.52 versus 117.40 versus 118.30
Testing the big move from last week into Monday. No signs of selling off.
Euro/$: 1.0546 versus 1.0700 versus 1.0829 versus 1.0849 versus 1.1030 versus 1.1079 versus 1.1175 versus 1.1182 versus 1.1197 versus 1.1195 versus 1.1362 versus 1.1337 versus 1.1385 versus 1.1379 versus 1.1366 versus 1.1398 versus 1.14 versus 1.1390 versus 1.1409 versus 1.1294 versus 1.1315 versus 1.1324 versus 1.1318 versus 1.1474 versus 1.1387 versus 1.1481 versus 1.1336 versus 1.1290 versus 1.1318 versus
This is wild. Another surge upside, straight up the past two weeks after the breakout. About to get overdone near term for a test.
THURSDAY
Jobless claims and February retail sales are on tap as well as reaction to the most recent US bank stress tests. All but two passed. Much rejoicing. I feel so safe.
SP500 looks weak. DJ30 looks weak. No-man's land. RUTX at the 50 day MA. SP400 at the 50 day MA. Not bad but need help. NASDAQ closing in on the 50 day EMA and the 38% Fibonacci retracement. SOX is already at a key level the November/December peaks. If NASDAQ helps it likely holds. Not in bad shape but not at that bounce point right now.
So, might not be ready to try a bounce. Some great leadership out there moving higher, others testing and in position to move higher. Question is, are the indices. RUTX, SP400 are and NASDAQ will be shortly. Basically where they were Tuesday and the session didn't do all that was needed to finish setting up. Of course they have to fend off SP500 and DJ30 that look as if they are in the middle of continued selling. Still looking for which side wins, but NASDAQ has to get to the point where it can put in a legit attempt at a move.
Actually making some money on upside positions, and that is a positive as it shows the market selling is not that severe, but they are the minority. Need to see those stocks in good patterns start making moves as well. Some leaders are stirring, moving upside. Others are set up well to move higher. That is always a good sign: leaders should move out early and start to lead. Will the rest follow, however? Just be ready to act, and we are.
SUPPORT AND RESISTANCE
NASDAQ: Closed at 4849.94
Resistance:
The 10 day EMA at 4919
5008.57 is the March 2015 post-bear market high
5132.52 is the 3/2000 all-time high
Support:
The 50 day EMA at 4823
4816 is the 38% Fibonacci retracement of the February run
4815 is the December 2014 prior market peak
4811 is the November 2014 peak (intraday)
4774 is the January high
4751 is the January 2015 lower high
4631 is the October 2014 upside gap point
4610 is the September 2014 post-bear market high.
The 200 day SMA at 4572
4566 is the lower gap point from late October
4563 and 4567 are the January lows
4547 is the December low
4486 is the July 2014 high
4372 is the March 2014 high
The August low at 4321
4316 is the lower gap point from October 2014
4289 is the July 2000 recovery high
4277 is the March lower gap point
4246.55 is the January 2014 peak
S&P 500: Closed at 2040.24
Resistance:
2062 is the January 2015 lower high
The 50 day EMA at 2066
2076 is the all-time high from November
2079 is the intraday all-time high from November
2094 is the December 2014 high, the prior all-time high
2108 is the lower trendline from 11/2012
2119.59 is the all-time high
2173 is the December 2012 up trendline
Support:
2011 is the September prior all-time high
The 200 day SMA at 2002
1991 is the July 2014 high
1972 is the December 2014 low
1905 is the August 2014 low
1902 from early May was the intraday all-time high.
1897 is the prior all-time high hit in April 2014
1883.57 is the early March high.
The December and January highs at 1848
The April 2014 low at 1814
1808 is the November and December 2013 twin peaks
1775.22 is the October prior all-time high
Dow: Closed at 17,655.58
Resistance:
The 50 day EMA at 17,831
17,923 is the January 2015 lower high
17,991 is the early December interim
18,104 is the December high
18,289 is the all-time high
Support:
17,351 is the September 2014 all-time high.
The 200 day SMA at 17,256
17,152 is the mid-July post bear market high
17,068 is the early July 2014 peak
17067 is the December 2014 low
16,970 is the June 2014 former all-time high
16,946 is the June 2014 peak
16,736 is the penultimate all-time high from May 2014
16,632 is the April 2014 all-time high
16,589 is the December 2013 all-time high
16,506 is the March 2014 peak
16,341 is the May low
16,334 is the August 2014 low
16,257 is the January 2014 low
16,179 is the November 2013 peak.
15,855 is the October 2014 low
15,739 is the December 2013 low
ECONOMIC CALENDAR
March 10 - Tuesday
JOLTS - Job Openings, January (10:00): 4.998M actual versus 4.877M prior (revised from 5.028M)
Wholesale Inventories, January (10:00): 0.3% actual versus -0.1% expected, 0.0% prior (revised from 0.1%)
March 11 - Wednesday
MBA Mortgage Index, 03/07 (7:00): -1.3% actual versus 0.1% prior
Crude Inventories, 03/07 (10:30): 4.512M actual versus 10.303M prior
Treasury Budget, February (14:00): -$192B expected, -$193.5B prior
March 12 - Thursday
Initial Claims, 03/07 (8:30): 306K expected, 320K prior
Continuing Claims, 02/28 (8:30): 2421K expected, 2421K prior
Retail Sales, February (8:30): 0.4% expected, -0.8% prior
Retail Sales ex-auto, February (8:30): 0.6% expected, -0.9% prior
Export Prices ex-ag., February (8:30): -1.0% prior
Import Prices ex-oil, February (8:30): -0.7% prior
Business Inventories, January (10:00): 0.1% expected, 0.1% prior
Natural Gas Inventor, 03/07 (10:30): -228 bcf prior
March 13 - Friday
PPI, February (8:30): 0.3% expected, -0.8% prior
Core PPI, February (8:30): 0.1% expected, -0.1% prior
Mich Sentiment, March (10:00): 95.8 expected, 95.4 prior
End part 1 of 3
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3/11/2015 Investment House Report
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MARKET SUMMARY
- And the small caps, midcaps lead.
- Dollar effect: large cap indices sell, money rotates to smaller cap indices.
- China economic data fades again, raising hope for stimulus in a bailout world.
- Did the Fed wait for a worldwide recession to hike?
- DJ30, SP500 still in limbo, NASDAQ still has room to test, RUTX and SP400 trying to hold the 50 day EMA. As of course, did DJ30 and SP500.
- Leaders move higher, others set up. Watching to see if leaders can lead higher.
Wednesday saw a lot of nothing in terms of the large cap index moves, but there was some life for the small and midcaps as well as some real substance in several leaders.
SP500 -3.92, -0.19%
NASDAQ -9.85, -0.20%
DJ30 -27.55, -0.16%
SP400 0.73%
RUTX 0.60%
SOX 0.27%
VOLUME: NYSE -8.5%, NASDAQ -2.2%
A/D: NYSE 1.3:1, NASDAQ 1.3:1
The dollar was up once more, really up versus the euro pre-market, but futures were up. How can that be when Tuesday we were informed that stocks were lower because the dollar was too strong? Perhaps because that is not the reason.
China? Data was weak with Industrial Production at 6.8% versus 7.9% prior. 6.8% sounds pretty good, but it was the worst reading for China since the great financial crisis. Weaker China surely means more stimulus is on the way and even with the dollar surging, a weak China is worth some S&P futures gains.
The world has become a place where mistakes is rewarded with money. If a bank makes poor loan decisions or focuses on segments that do not produce, it gets handouts to avoid closing. Homeowners buy way too much house and cannot afford the payments as soon as the economy hiccups the slightest bit, then scold the banks for lending and force them to forgive principal and lower mortgage repayment. The government pumps billions into student loans, prices surge in textbook inflation, costs to students balloon accordingly for a 4-year degree, students cannot find a job thanks to the horrid recovery the government has fostered . . bail them out by forgiving the loans. A government over-taxes businesses and individuals, overspends that money, the economy slows, so massive bailout.
That is why the market gets excited over poor economic news: more likelihood of stimulus and we all know that stimulus inflates stock prices. Now a contrast to that is the current situation in the US. The Fed has kept rates at 0% once again for a long, long time. It started feeling the uneasiness of being at 0% rates if another economic slowdown rolled in. So it started talking rate hikes and the basis for it hiking. Now it has talked itself into a corner and will have to raise rates. That is okay because the Fed WANTS to raise rates in order to get some arrows back in the quiver for the next crisis.
Fed moving too late?
Problem is, some say the next crisis is upon us. Peter Schiff stated Wednesday that the Fed had plenty of opportunity to move rates back up over the past year, but it refused to act. It took the slow course and now that it is ready to act it is facing, in Schiff's view, a new world recession. Waited too long so now what? Go back to QE?
What about that large cap/small cap split Wednesday?
In the afternoon we heard commentary from some about the strange action that saw the small caps and midcaps moving nicely higher while the large caps traded negative. Was it really strange action?
Of late I have written a bit about the stronger dollar and how it really benefits the US and most citizens even if those working at the big multinational companies moan about how a strong dollar is an economic negative.
What indices hold the most multinationals? Large cap. What companies are mostly hurt by a still soaring dollar? Large cap. Given that, Wednesday money moved to the small cap and midcap areas.
How poetic. The large multinationals squeal their earnings will be lower thus hurting the economy and of course the stock market. It has been a rather obvious pander to get the government to act, to bail them out perhaps? Tuesday it was working as we noted the White House weighed in, worried the dollar would hinder economic growth.
Then the market responds by . . . rotating money to those areas that benefit from a stronger dollar.
So just how bad is a rising dollar to the US? It allows domestic companies with clientele mostly in the US to buy raw materials cheaper, to have cheaper energy sources (denominated in dollars after all), and goodness gracious, maybe even some foreign investment seeking a country with an appreciating currency versus a world attempting to race to the bottom of the currency pond.
I really cannot cry for the large cap companies that have had it so incredibly good for the entirety of the 'recovery.' Free money at the start, 0% interest rates for any further needs, a Fed actively inflating their stock values so the officers can give themselves bonuses and salary increases as stated in their employment contracts, using that free and easy money to buy back stock to further enhance their take home pay. I know their stock prices will suffer, but look what is happening: money is rotating to the smaller cap areas that might FINALLY prosper. Oh, and rotation IS a healthy sign for a market.
THE MARKET
CHARTS
NASDAQ: After an early move higher, NASDAQ reversed and moved lower, Still heading towards the 50 day EMA, 38% Fibonacci, December high. It had a chance to make a move higher and it did not.
SOX: Rallied early as well but could not hold a move over the 20 day EMA. Reversed, managed to hold a gain, but as with NASDAQ, did not change its sag toward its 50 day MA and 38% Fibonacci retracement (the former is 10 points away, the latter 5 points.
SP400: A very decent bounce off the 50 day MA. Of course SP500 and DJ30 posted 50 day EMA bounces Monday after the Friday selling and see where that got them. Would have been nice if NASDAQ finished its pullback with the SP400 and RUTX at their 50 day EMA, but not the case Wednesday. Nice bounce from where you would expect it to bounce, and that was good, but it was not all that impressive. Well maybe it was impressive given the large caps, but it didn't change the situation that much.
RUTX: This is a good looking bounce as with SP400, and the same questions arise. Can it hold or is it an SP500/DJ30 like false move, a bounce that sets up the 50 day EMA crash? If SOX and NASDAQ test and hold, RUTX has better odds of holding this level even if it undercuts it during the session.
SP500: After torpedoing the 50 day MA Tuesday, SP500 didn't even make it up to the 50 day EMA, didn't even try. A modest wave at moving higher then rolled over. Now, this was not a massive decline; had those on Friday and Tuesday. There is not much, however, to suggest that just because SP500 didn't continue to sell as hard as it did Tuesday that the pullback is over. It is caught in no-man's land of its own.
DJ30: Bounced from a lower open but stalled just below 17,750 and slipped back to a modest loss. As with SP500, the Dow is in no-man's land, below the prior peaks, below the 50% Fibonacci retracement, and looking for a place to land.
LEADERSHIP
With the big caps down, look at some of our positions and plays ready to enter that are up: AAOI, AKAM, ALK, GRUB, KE, QRVO, SWKS, SUNE, TXMD, VIPS, WWWW.
Holding up well: BDSI, FLTX, FSLR, LNKD, MTSN.
Industrial Machinery: Hanging in. CAT still holding the double bottom. DE faded but in a good pattern. TEX holding the 50 day EMA.
Chemicals: Some nice patterns, some nice tests. ASH is great at the 50 day EMA. AGU is near the 20 day EMA with a couple of doji. Not all are great: CF, MON.
Chips: NXPI is still working on an excellent gap test. Getting ready for a new play. SWKS went on the SP500, still solid. MTSN nicely testing the 20 day EMA. MLNX bouncing off the 50 day EMA . SUNE surging. AAOI looks locked and loaded.
Retail: Some interesting action. KIRK surged up through its 50 day MA. JWN is in a decent 50 day EMA test. COST didn't stick its move. ROST has held its upside gap. TJX is cracking its 50 day EMA.
Internet: Some life. WWWW is working well. VIPS surged too. GRUB holding up well. WUBA.
MARKET STATISTICS
NASDAQ
Stats: -9.85 points (-0.2%) to close at 4849.94
Volume: 1.771B (-3.29%)
Up Volume: 974.14M (+629.85M)
Down Volume: 848.71M (-671.29M)
A/D and Hi/Lo: Advancers led 1.32 to 1
Previous Session: Decliners led 3.09 to 1
New Highs: 61 (+11)
New Lows: 89 (-12)
S&P
Stats: -3.92 points (-0.19%) to close at 2040.24
NYSE Volume: 780.5M (-8.42%)
A/D and Hi/Lo: Advancers led 1.34 to 1
Previous Session: Decliners led 2.68 to 1
New Highs: 40 (+19)
New Lows: 113 (-13)
DJ30
Stats: -27.55 points (-0.16%) to close at 17635.39
SENTIMENT INDICATORS
VIX: 16.87; +0.18
VXN: 18.42; +0.4
VXO: 17.64; +0.39
Put/Call Ratio (CBOE): 1.11; +0.02. Fourth consecutive 1.00 session, 5 out of 8. Getting to the level that can support a bounce. Not an indicator that means just by itself, but a piece of the puzzle.
Bulls and Bears: Will be interesting to see how the selling has impacted bulls after they tickled the key 60% level.
Bulls: 58.7% versus 59.5% versus 56.6% versus 52.5% versus 49.0%
Okay, a bit of a fade even as the remnants of the upside were still around. Still too many bulls and too few bears, and this is still a negative for the market.
Bears: 14.1% versus 14.1% versus 14.1% versus 15.2% versus 16.3% versus 16.3% versus 17.4%.
Stuck in the mud.
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: 58.7%
59.5% versus 56.6% versus 52.5% versus 49.0% versus 53.1% versus 49.0% versus 48.0% versus 50.5% versus 56.4% versus 52.5% versus 49.5% versus 51.5% versus 53.4% versus 56.5% versus 56.4% versus 55.5% versus 54.6% versus 47.0% versus 35.3% versus 37.8% versus 45.5% versus 47.5% versus 48.0% versus 52.5% versus 57.6% versus 56.1% versus 52.5%
Background: Last undercut 35%, the threshold for bullishness, in early June 2012.
Bears: 14.1%
14.1% versus 14.1% versus 15.2% versus 16.3% versus 16.3% versus 17.4% versus16.3% versus 15.2% versus 14.9% versus 15.8% versus 14.9% versus 14.8% versus 13.9% versus 13.8% versus 14.9% versus 14.8% versus 15.1% versus 16.3% versus 18.2% versus 17.3% versus 14.1% versus 15.1% versus 15.3% versus 15.2% versus 14.1% versus 13.3% versus 15.1% versus 16.2%
Background: Over 35% for bears is the threshold to be really be a good upside indicator. The best indication is when bears cross up through bulls as the two merge. Right now bulls are coming back down from the 60 level that has consistently marked market tops over the past two years. The rapid decline in progress is pushing the bulls/bears lines toward one another. Still far from a cross with bulls falling faster than bears are rising, but bears are warming up to the notion of market weakness.
OTHER MARKETS
Bonds (10 year): 2.11%
2.13% versus 2.20% versus 2.245% versus 2.11% versus 2.12% versus 2.12% versus 2.08% versus 1.98% versus 2.04% versus 1.96% versus 1.98% versus 2.06% versus 2.09% versus 2.11% versus 2.08% versus 2.14% versus 2.03% versus 1.99% versus 1.98% versus 1.99% versus 1.95% versus 1.94% versus 1.81% versus 1.77% versus 1.78% versus 1.68% versus 1.67% versus 1.76%
Another upside session to the 20 day EMA. Still looks like a relief bounce but there is that island reversal.
Oil: 48.21, -0.19. Holding at the low from two weeks back. If it does then the Tuesday dive lower is not that horrid a move.
Gold: 1150.62, -9.50. Still diving, now almost at the early November low.
$/JPY: 121.50 versus 121.80 versus 121.60 VERSUS 120.72 versus 120.14 versus 119.71 versus 119.74 versus 120.179 versus 119.63 versus 119.48 versus 118.86 versus 118.95 versus 118.78 versus 119.08 versus 119.04 versus 118.70 versus 119.34 versus 118.83 versus 118.915 versus 120.26 versus119.48 versus 118.62 versus 118.987 versus 117.56 versus 117.21 versus 117.58 versus 117.52 versus 117.40 versus 118.30
Testing the big move from last week into Monday. No signs of selling off.
Euro/$: 1.0546 versus 1.0700 versus 1.0829 versus 1.0849 versus 1.1030 versus 1.1079 versus 1.1175 versus 1.1182 versus 1.1197 versus 1.1195 versus 1.1362 versus 1.1337 versus 1.1385 versus 1.1379 versus 1.1366 versus 1.1398 versus 1.14 versus 1.1390 versus 1.1409 versus 1.1294 versus 1.1315 versus 1.1324 versus 1.1318 versus 1.1474 versus 1.1387 versus 1.1481 versus 1.1336 versus 1.1290 versus 1.1318 versus
This is wild. Another surge upside, straight up the past two weeks after the breakout. About to get overdone near term for a test.
THURSDAY
Jobless claims and February retail sales are on tap as well as reaction to the most recent US bank stress tests. All but two passed. Much rejoicing. I feel so safe.
SP500 looks weak. DJ30 looks weak. No-man's land. RUTX at the 50 day MA. SP400 at the 50 day MA. Not bad but need help. NASDAQ closing in on the 50 day EMA and the 38% Fibonacci retracement. SOX is already at a key level the November/December peaks. If NASDAQ helps it likely holds. Not in bad shape but not at that bounce point right now.
So, might not be ready to try a bounce. Some great leadership out there moving higher, others testing and in position to move higher. Question is, are the indices. RUTX, SP400 are and NASDAQ will be shortly. Basically where they were Tuesday and the session didn't do all that was needed to finish setting up. Of course they have to fend off SP500 and DJ30 that look as if they are in the middle of continued selling. Still looking for which side wins, but NASDAQ has to get to the point where it can put in a legit attempt at a move.
Actually making some money on upside positions, and that is a positive as it shows the market selling is not that severe, but they are the minority. Need to see those stocks in good patterns start making moves as well. Some leaders are stirring, moving upside. Others are set up well to move higher. That is always a good sign: leaders should move out early and start to lead. Will the rest follow, however? Just be ready to act, and we are.
SUPPORT AND RESISTANCE
NASDAQ: Closed at 4849.94
Resistance:
The 10 day EMA at 4919
5008.57 is the March 2015 post-bear market high
5132.52 is the 3/2000 all-time high
Support:
The 50 day EMA at 4823
4816 is the 38% Fibonacci retracement of the February run
4815 is the December 2014 prior market peak
4811 is the November 2014 peak (intraday)
4774 is the January high
4751 is the January 2015 lower high
4631 is the October 2014 upside gap point
4610 is the September 2014 post-bear market high.
The 200 day SMA at 4572
4566 is the lower gap point from late October
4563 and 4567 are the January lows
4547 is the December low
4486 is the July 2014 high
4372 is the March 2014 high
The August low at 4321
4316 is the lower gap point from October 2014
4289 is the July 2000 recovery high
4277 is the March lower gap point
4246.55 is the January 2014 peak
S&P 500: Closed at 2040.24
Resistance:
2062 is the January 2015 lower high
The 50 day EMA at 2066
2076 is the all-time high from November
2079 is the intraday all-time high from November
2094 is the December 2014 high, the prior all-time high
2108 is the lower trendline from 11/2012
2119.59 is the all-time high
2173 is the December 2012 up trendline
Support:
2011 is the September prior all-time high
The 200 day SMA at 2002
1991 is the July 2014 high
1972 is the December 2014 low
1905 is the August 2014 low
1902 from early May was the intraday all-time high.
1897 is the prior all-time high hit in April 2014
1883.57 is the early March high.
The December and January highs at 1848
The April 2014 low at 1814
1808 is the November and December 2013 twin peaks
1775.22 is the October prior all-time high
Dow: Closed at 17,655.58
Resistance:
The 50 day EMA at 17,831
17,923 is the January 2015 lower high
17,991 is the early December interim
18,104 is the December high
18,289 is the all-time high
Support:
17,351 is the September 2014 all-time high.
The 200 day SMA at 17,256
17,152 is the mid-July post bear market high
17,068 is the early July 2014 peak
17067 is the December 2014 low
16,970 is the June 2014 former all-time high
16,946 is the June 2014 peak
16,736 is the penultimate all-time high from May 2014
16,632 is the April 2014 all-time high
16,589 is the December 2013 all-time high
16,506 is the March 2014 peak
16,341 is the May low
16,334 is the August 2014 low
16,257 is the January 2014 low
16,179 is the November 2013 peak.
15,855 is the October 2014 low
15,739 is the December 2013 low
ECONOMIC CALENDAR
March 10 - Tuesday
JOLTS - Job Openings, January (10:00): 4.998M actual versus 4.877M prior (revised from 5.028M)
Wholesale Inventories, January (10:00): 0.3% actual versus -0.1% expected, 0.0% prior (revised from 0.1%)
March 11 - Wednesday
MBA Mortgage Index, 03/07 (7:00): -1.3% actual versus 0.1% prior
Crude Inventories, 03/07 (10:30): 4.512M actual versus 10.303M prior
Treasury Budget, February (14:00): -$192B expected, -$193.5B prior
March 12 - Thursday
Initial Claims, 03/07 (8:30): 306K expected, 320K prior
Continuing Claims, 02/28 (8:30): 2421K expected, 2421K prior
Retail Sales, February (8:30): 0.4% expected, -0.8% prior
Retail Sales ex-auto, February (8:30): 0.6% expected, -0.9% prior
Export Prices ex-ag., February (8:30): -1.0% prior
Import Prices ex-oil, February (8:30): -0.7% prior
Business Inventories, January (10:00): 0.1% expected, 0.1% prior
Natural Gas Inventor, 03/07 (10:30): -228 bcf prior
March 13 - Friday
PPI, February (8:30): 0.3% expected, -0.8% prior
Core PPI, February (8:30): 0.1% expected, -0.1% prior
Mich Sentiment, March (10:00): 95.8 expected, 95.4 prior
End part 1 of 3
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