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8/10/2015 Investment House Report
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Targets hit: None issued
Buy alerts: GPRO; NXPI; SHAK; ULTA
Trailing stops: None issued
Stop alerts: CAKE
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- On cue the stock indexes bounce.
- A little M&A, a little China stimulus hopes (thanks to terrible data), and an excuse to trigger the move.
- SP500, SP400 bounce nicely as expected. NASDAQ bounces, but not as strong as anticipated.
- Big names lag a bit while other groups try to move up. Yes, but a lot of oversold bouncing for the most part.
- Now, more than two days of a rebound this time?
"It's the end of the world!" 'The Birds' (1963)
The stock indices were set up to bounce, at least some of them, and that they did. The surprise, if there was one, was how NASDAQ lagged. It moved well, gapping off the Friday doji at the 61% Fibonacci Retracement, but it failed to move back through its lower trendline as stocks such as GOOG, NFLX, FB, BWLD failed to participate in the rally. Now that may end as afterhours GOOG announced that GOOGL and GOOG would be under a new company named Alphabet. Both are up substantially after hours. Not really sure how a name change 'unlocks value' as they say, but traders are eating it up.
Back to the market. NASDAQ was decent, did what it had to. SP500 posted a nice move up through its lower TL on rising, above average volume. SP400 gapped and rallied off the bottom of its trading range and right shoulder of its inverted head and shoulders pattern. Moved through the 50 day EMA on the close, looking strong.
DJ30 decent, making it back just base its lower support in its range. RUTX gapped off the Friday doji at the March low, rallying just through the 200 day SMA. SOX gapped and rallied to the 20 day EMA off of its short double bottom on rising MACD.
Again, nice test of key support by some indexes, and when the upside move triggered, they surged and took the other indices with them.
SP500 26.61, 1.28%
NASDAQ 58.26, 1.16%
DJ30 241.79, +1.39%
VOLUME: NYSE +4.5%, NASDAQ -12%. Kind of tells the story as NASDAQ lagged with lower volume.
A/D: NYSE 3:1, NASDAQ 2.2:1.
As noted, that was the expected action. The more interesting action is the lesser impact the big NASDAQ names and other recent market leaders exerted while other names, with good setups mind you, made the stronger moves, e.g. AMBA, NXPI, GPRO, ULTA. Energy stepped to the upside as did metals. The latter perhaps are not all in the best patterns, but they are continuing to work on them as they continue their recovery attempts.
Positive to see money moving their way, PARTICULARLY when many continue to talk about a market top. Typically the money would not rotate to new areas, just leave the market, if a top was setting in. That the beaten down sectors and others that have put in bases are seeing good moves shows money not leaving, but instead moving around the market.
Energy: May be a false move or just an oversold move, but there are some interesting stocks. XEC crossed the 200 day SMA. HAL is rising off the six week lateral move with rising MACD. SLB is the same. Some drillers are bouncing as well, e.g. DO, RIG.
Financials: BAC is in very good shape to move higher with the nice pennant. JPM is moving up off the 50 day EMA. V is in a nice test of the 20 day EMA and the gap. This group is still hanging in nicely. But . . not surging.
Big Names: EBAY gapped upside to a doji, still solid. MSFT continued the rebound. NFLX did not rally but it is setting up well. GOOG didn't participate but will tomorrow. SBUX broke below the 20 day EMA, heading to test the 50 day; that works.
Software: Nothing really new; some moving decently, others trying to recover from selling. BLKB still working higher, PANW in a weak bear flag. SPLK trying to break back up in the range.
Chips: Not a great group but NXPI looks good, and AVGO is not bad. Not great, but not bad. SWKS, ARMN bouncing but not great.
Commodity Stocks: Some rebounding, e.g. AKS, STLD -- and not bad patterns though, again, not great. FCX is just bouncing from selling.
Lots of stocks are bouncing after selloffs, but that does not mean they are buys and it does not mean the market continues upside with no issues. TEX, CAT
Stats: +58.25 points (+1.16%) to close at 5101.8
Volume: 1.73B (-11.72%)
Up Volume: 1.33B (+395.14M)
Down Volume: 449.66M (-610.34M)
A/D and Hi/Lo: Advancers led 2.21 to 1
Previous Session: Decliners led 1.55 to 1
New Highs: 60 (+37)
New Lows: 88 (-91)
Stats: +26.61 points (+1.28%) to close at 2104.18
NYSE Volume: 868.7M (+4.46%)
A/D and Hi/Lo: Advancers led 3.07 to 1
Previous Session: Decliners led 1.42 to 1
New Highs: 83 (+54)
New Lows: 81 (-106)
Stats: +241.79 points (+1.39%) to close at 17615.17
VIX: 12.23; -1.16
VXN: 15.87; -1.03
VXO: 12.52; -2.24
Put/Call Ratio (CBOE): 0.56; -0.67
Recent history: 1 below, 2 over, 3 below, 1 over, 3 below, 3 over, 8 below, 11 above.
Not really enough to warrant any major new bounce.
Bulls and Bears:
Bulls: 42.2% versus 43.3% versus 49.0% versus 43.7% versus 44.8% versus 49.5%
Bears: 17.5% versus 17.5% versus 15.6% versus 15.6% versus 15.6% versus 15.4% versus 15.4% versus 16.5%
Theory: When everyone is bullish and has put all their capital to work, where does the ammunition to drive the market come from? There is always new money to start a new year. After that is used will more money be coming? That is the question.
43.3% versus 49.0% versus 43.7% versus 44.8% versus 49.5% versus 51.6% versus 45.5% versus 47.4% versus 51.5% versus 47.5% versus 51.5% versus 48.5% versus 50.5% versus 50.6% versus 47.5% versus 52.5% versus 57.4% versus 52.5% versus 50.5% versus 50.4% versus 54.5% versus 55.6% versus 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% versus53.4% versus 56.5%
Background: Last undercut 35%, the threshold for bullishness, in early June 2012.
17.5% versus 15.6% versus 15.6% versus 15.6% versus 15.4% versus 15.4% versus 16.5% versus 16.5% versus 15.8% versus 14.9% versus 15.8% versus 13.9% versus 13.9% versus 15.2% versus 13.9% versus 14.2% versus 14.2% versus 14.1% versus 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%
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.
Bonds (10 year): 2.24% versus 2.17%. Back to the 10 day EMA in what is a seemingly daily ritual: bounce up nicely off the 10 day, test it the next, but trending higher all the while.
Historical: 2.17% versus 2.27% versus 2.15% versus 2.19% versus 2.29% versus 2.25% versus 2.23% versus 2.27% versus 2.27% versus 2.32% versus 2.34% versus 2.37% versus 2.34% versus 2.35% versus 2.35% versus 2.40% versus 2.44% versus 2.42% versus 2.31% versus 2.206% versus 2.26% versus 2.29% versus 2.38% versus 2.42% versus 2.34% versus 2.364% versus 2.48% versus 2.40% versus 2.37% versus 2.40% versus 2.36% versus 2.26% versus 2.35% versus 2.32% versus 2.32% versus 2.36% versus 2.39% versus 2.39% versus 2.48%
Euro/$: 1.1014 versus 1.0966. Falling on the session.
Historical: 1.0966 versus 1.0906 versus 1.0953 versus 1.0978 versus 1.0936 versus 1.0983 versus 1.1058 versus 1.1092 versus 1.0977 versus 1.0992 versus 1.0927 versus 1.0944 versus 1.0927 versus 1.0825 versus 1.0836 versus 1.0880 versus 1.0946 versus 1.1005 versus 1.0999 versus 1.1157 versus 1.1032 versus 1.11069 versus 1.1099 versus 1.1055 versus 1.1082 versus 1.1054 versus 1.1131 versus 1.1243 versus 1.1205
$/JPY: 124.36 versus 124.21
Historical: 124.36 versus 124.74 versus 124.78 versus 124.31 versus 123.99 versus 123.89 versus 124.15 versus 123.99 versus 123.56 versus 123.26 versus 123.79 versus 123.89 versus 123.96 versus 123.88 versus 124.31 versus 124.07 versus 124.13 versus 123.78 versus 123.38 versus 123.42 versus 122.76 versus 121.29 versus 120.66 versus 122.46 versus 122.51 versus 123.04 versus 123.115 versus 122.43 versus 122.497 versus 123.82 versus 123.63 versus 123.88 versus 123.69 versus 123.37 versus 122.66
Oil: 44.96, +1.09. Trying to bounce off of the support.
Gold: 1104.10 +10.00. Finally breaking upside from that three week lateral move.
The data starts back up and while important, the afterhours news regarding GOOG reorganizing into Alphabet has stocks higher. We will see how that holds into the morning, but if it does, we stand to make some good money on the GOOG options as both GOOG and GOOGL are up nicely.
We picked up some new positions as the market started its bounce off that 7 day DJ30 decline, putting SP500, SP400, and NASDAQ in good position to bounce. GOOG will hit near our target tomorrow if this surge on the name change/reorganization holds. If it does, it will help the market continue the bounce.
After that, we see how the move holds. The last attempt posted two great days and stalled. That set up a better pattern, and now we see, again, if it can hold more than a 2-day gain (hey, just a one day for now, taking it one day at a time) and rally SP500 back up to the three peaks near 2130-2135 from May to July. That again is the initial target on the move and we will see if stocks can be true to that move. After that, big decisions need to be made. We will, of course, have banked some nice gain by then.
Have a great evening!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 5101.80
The lower trendline is at 5102
5120 is the April 2015 post-bear market high
5132.52 is the 3/2000 all-time high
5150-5160 is the June peak range
5164 is the June prior all-time high
5232 is the July 2015 all-time high.
The 50 day EMA at 5076
5042 is the March 2015 high
5008.57 is the early March 2015 post-bear market high
The June low at 4974
4912 the mid-April China dip
The 200 day SMA at 4893
The March lows at 4843 and 4825
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.
4566 is the lower gap point from late October
4563 and 4567 are the January lows
4547 is the December low
S&P 500: Closed at 2104.18
The 50 day EMA at 2096
2115 is the late March lower high
2119.59 is the February intraday prior all-time high
2126 was the April prior all-time high
2130 is the June 2015 peak
2135 is the May 2015 all-time high
The lower channel line at 2097
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 200 day SMA at 2074
2062 is the January 2015 lower high
2046 is the July closing low
2011 is the September prior all-time high
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 17,605.65
June low at 17,715
The March low at 17,718
17,748 is the mid-April China margin selloff and the bottom of the 5 month trading range
The 50 day EMA at 17,788
The 200 day SMA at 17,810
17,923 is the January 2015 lower high
17,991 is the early December intraday high
18,104 is the December high
18,200 to 18,206 (late March lower high)
18,289 is the March 2015 high, the prior all-time high
18,351 is the May 2015 all-time high
17,585 to 17,579, the March intraday lows, helping mark the bottom of the Dow's The February to present trading range.
17,515 is the early July closing low
17,351 is the September 2014 all-time high.
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
August 11 - Tuesday
Productivity-Prel, Q2 (8:30): 1.4% expected, -3.1% prior
Unit Labor Costs, Q2 (8:30): -0.1% expected, 6.7% prior
Wholesale Inventories, June (10:00): 0.8% prior
August 12 - Wednesday
MBA Mortgage Index, 08/08 (7:00)
JOLTS - Job Openings, June (10:00): 5.363M prior
Crude Inventories, 08/08 (10:30)
Treasury Budget, July (14:00): -$149.0B expected, -$94.6B prior
August 13 - Thursday
Initial Claims, 08/08 (8:30): 273K expected,
Continuing Claims, 08/01 (8:30): 2247K expected,
Retail Sales, July (8:30): 0.5% expected, -0.3% prior
Retail Sales ex-auto, July (8:30): 0.5% expected, -0.1% prior
Export Prices ex-ag., July (8:30): -0.1% prior
Import Prices ex-oil, July (8:30): -0.2% prior
Business Inventories, June (10:00): 0.3% expected, 0.3% prior
Natural Gas Inventor, 08/08 (10:30)
August 14 - Friday
PPI, July (8:30): 0.1% expected, 0.4% prior
Core PPI, July (8:30): 0.1% expected, 0.3% prior
Industrial Production, July (9:15): 0.3% expected, 0.2% prior (revised from 0.3%)
Capacity Utilization, July (9:15): 78.0 expected, 77.8% prior (revised from 78.4%)
Michigan Sentiment, August (10:00): 93.9 expected, 93.1 prior
End part 1 of 3
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