Tuesday, March 08, 2016

The Daily, Part 1 of 3, 3-7-16

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3/7/2016 Investment House Daily
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Targets hit: AKS; CX; FCX; FEYE; VRSN
Entry alerts: FB; INFI; VIP
Trailing stops: None issued
Stop alerts: None issued

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- No news, stocks start slow, mostly recover.
- Big names struggle, sell on high volume, acting as a drag even as other areas continue to rally.
- Most stocks head higher. Still.
- Money leaving some areas, rotates to others, rally stays alive.

A somewhat different day in the stock market and then again, a somewhat same day. First, there was no news, particularly juxtaposed to last week's data dump. A couple of merger maybes (BTI desires RAI, BASF wants to steal DD from DOW), some attempts at Fed-Speak. That was it. No news.

The similar: The indices traded around the flat line after a lower open. Futures were down since the early morning but did not erode any farther. With no increasing pressure, stocks started lower but then worked back to the upside as the low to high market bias remained in place. The moves was almost scuttled when Fed Vice Chair Fischer said he saw the 'first stirrings' of inflation, but even that did not stymie the recover as stocks rallied back in the last hour. Further, small caps continued to lead the upside move while the large cap indices remained somewhat stymied.

The different: The NASDAQ big names struggled as NASDAQ was the lone downside index outside of NASDAQ 100 that was significantly lower than overall NASDAQ. Some 2+% losses on the likes of FB, GOOG, AMZN, NFLX weighed those indices down though even those stocks managed a comeback off the lows. Indeed, that rebound in the afternoon kept SBUX from losing 2% with the other big names.

The result: Low to higher action, fighting off an afternoon dip along the way. That kept SP500 at 2000 and NASDAQ at the January lower gap point, both some resistance levels, but they also once more fought off the downside and recovered.

SP500 1.77, 0.09%
NASDAQ -8.77, -0.19%
DJ30 67.18, 0.40%
SP400 0.45%
RUTX 1.13%
SOX 0.32%

VOLUME: Down from the Friday large volume but not a shrinking violet. NYSE -18% though still above average, NASDAQ -7.5%, also still just above average. Perhaps a bit of churn after the moves upside as volume moves higher as the indices have bumped some resistance (at least SP500 and NASDAQ) and are at least momentarily stalled.

A/D: NYSE 2:1, NASDAQ 2.2:1. Definitely smaller cap led as NASDAQ was down thanks to the weight of the large cap names.

Chart-wise it was mostly more of the same. DJ30, RUTX, SP400 continued higher. SOX was up, but had to bounce off a 200 day SMA test first. It did. SP500 tested lower but recovered to hang on at 2000; at least it did not just roll over and burn. NASDAQ gapped lower, reached above the Friday close, but then stalled out.

Nothing major, no rollovers, but NASDAQ and SP500 do look as if there is a bit of churn here at the next resistance level. Maybe NASDAQ is just working on a lateral consolidation, but the elevated volumes are a bit of concern. The other indices? Not showing any real wear and tear.

So, another Monday with some selling. This one, however, was not exactly like the prior Monday's sharp selloff. Perhaps that means the rebound is even stronger. Of course all that was down was NASDAQ thanks to the big names. Hey, no problem with the big names selling off and the rest of the market posting gains.



SP500: Closed over 2000! Up just 1.77 points but over 2000. That leaves SP500 at the December lows, the last ones before SP500 melted down into January. Okay, slowing a bit, but that after a breakout Tuesday and drift higher into Monday. Now it is testing next resistance that dials in the next move in the breakout. This range runs up to 2025 (200 day SMA at 2022).

NASDAQ: Down on the session, but barely. Gapped lower, recovered to near flat. Basically holding the move at the downside gap point from early January, the last gap lower from the late December peak. Big names are struggling, acting as the drag, but NASDAQ overall is still in decent shape, working laterally, consolidating the break higher from the inverted head and shoulders. A bit of churn as the volume jumped Friday and Monday as NASDAQ struggled, but nothing major.

SOX: Held Friday's break through the 200 day SMA, bounced off that test to a higher closing high. Still working upside, MACD still leading as SOX not tests the first large gap lower from the late December peak that rolled over into the NASDAQ January selloff.

DJ30: More low volume but a continued move higher, now at the early December lows and just 100 points off the 200 day SMA. Nothing slowing it as CAT and company continue posting gains.

RUTX: Small caps impressed again with the only gain approaching 1%. Crazy move. 3+ weeks upside without barely a pause. 1116 is the next resistance (closed at 1094).

SP400: Started lower, reversed to a gain and the mid-November low. Starting to run into resistance but still going strong.


Biotechs enjoyed a pretty solid session as they try to join the other groups that formed nice rounded bottoms and broke higher (e.g. retail, metals). INFI moved well, BMRN, KITE and others look ready. CLDX hurt us as it revealed a failure to hit its targets in a test of one of its main drugs. Overall, the group looks pretty solid.

Metals rallied again but also closed off the highs just as on Friday. Materials rallied again. Industrial equipment jumped again, e.g. CMI, CAT. Financial struggled a bit but more like a test of the recent moves. V did knife lower, however.

Big names struggled, and while GOOG looks bad, NFLX as well, the others mostly salvaged their skins, e.g. AMZN, SBUX. For now.

Financial: For the most part took a day off but also still quite solid. JPM is putting in a nice lateral move over the 50 day EMA after breaking that resistance. GS paused after its move. V broke sharply lower on volume. Banks are okay, credit services, not so much given revolving credit came in far less than expected.

Telecom: Stronger session. VIP jumped. MBT rallied nicely. MOBI is breaking upside.

Energy: Continued the reversal off the lows. XEC, WLL. HAL.


Stats: -8.77 points (-0.19%) to close at 4708.25
Volume: 2.142B (-7.55%)

Up Volume: 1.31B (+10M)
Down Volume: 740.96M (-120.1M)

A/D and Hi/Lo: Advancers led 2.18 to 1
Previous Session: Advancers led 1.46 to 1

New Highs: 36 (-3)
New Lows: 29 (-3)

Stats: +1.77 points (+0.09%) to close at 2001.76
NYSE Volume: 1.11B (-17.78%)

A/D and Hi/Lo: Advancers led 1.97 to 1
Previous Session: Advancers led 1.84 to 1

New Highs: 51 (-29)
New Lows: 6 (-8)

Stats: +67.18 points (+0.4%) to close at 17073.95


VIX: 17.35; +0.49
VXN: 21.61; +0.8
VXO: 18.37; -0.05

Put/Call Ratio (CBOE): 0.85; +0.01. Did its job, now there is a markedly lower put market as the indices stretch the upside move past three straight weeks. Always buying at the top, selling at the bottom. Getting closer to a top of this run.

Recent history: 7 of 14 sessions over 1.0.
13 of 22 sessions below 1.0, 27 of the last 46 sessions above 1.0.

Bulls and Bears: Bulls recovered a bit of ground after falling the prior week from over 30. Bears remain very skeptical with their numbers rising despite a market bounce. Still in a crossover position. This indicator is strongly suggesting a bounce, but this is not a timing indicator.

Bulls: 36.4 versus 34.7. As anticipated, after that surge the prior week from 26.5, Bulls moved back over 35%. Did the work, market has rallied, now moving back to a more normal level.

Bears: 34.3 versus 35.7. Also as expected after that huge drop from 40ish, Bears moved back below 35%, also to a more normal level.

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: 36.4%
34.7% versus 26.5% versus 24.7% 34.0% versus 29.2% versus 26.8% versus 28.6% versus 34.7% versus 36.7% versus 37.8% versus 44.9% versus 41.2% versus 45.4%

Background: Bulls hit their lowest level in late 2015 and 2016 since the 2008 and 2009 market plummet.

Bears: 34.3%
35.7% versus 39.8% versus 39.2% versus 38.1% versus 35.4% versus 36.1% versus 35.7% versus 31.6% versus 29.6% versus 29.6% versus 27.6% versus 26.8% versus 26.8% versus 28.9% versus 28.1% versus 29.2% versus 31.3% versus 31.2% versus 34.4% versus 35.1% versus 30.2% versus 26.8% versus 27.9 versus 26.8% versus 22.5% versus 18.4% versus 18.6% versus 17.5%

Background: Finally back below 35% after spiking to 39.8 three weeks back.


Bonds (10 year): 1.91% versus 1.88%. Holding over the 50 day EMA, still holding an ABCD pattern.

Historical: 1.88% versus 1.83% versus 1.84% versus 1.82% versus 1.74% versus 1.757% versus 1.70% versus 1.74% versus 1.74% versus 1.76% versus 1.75% versus 1.74% versus 1.81% versus 1.78% versus 1.75% versus 1.64% versus 1.69% versus 1.73% versus 1.76% versus 1.85% versus 1.85% versus 1.88% versus 1.86% versus 1.96% versus 1.93% versus 1.99% versus 2.019% versus 2.01% versus 2.01% versus 2.05%

EUR/USD: 1.1017 versus 1.0999. Euro still recovering after the selloff from early February. At the 200 day SMA after the Monday close.

Historical: 1.0999 versus 1.0961 versus 1.0865 versus 1.0866 versus 1.0880 versus 1.0940 versus 1.102 versus 1.1016 versus 1.1039 versus 1.1130 versus 1.1103 versus 1.1124 versus 1.1275 versus 1.1154 versus 1.1249 versus 1.1322 versus 1.1293 versus 1.1294 versus 1.1197 versus 1.1159 versus 1.1206 versus 1.1110 versus 1.0916 versus 1.0905 versus 1.0836 versus 1.0939 versus 1.0899

USD/JPY: 112.965 versus 113.795. Dollar turned down hard at the 20 day EMA.

Historical: 113.795 versus 113.70 versus 113.45 versus 113.896 versus 112.76 versus 113.965 versus 112.90 versus 112.11 versus 112.435 versus 112.65 versus 113.25 versus 114.04 versus 114.33 versus 114.747 versus 113.29 versus 112.39 versus 113.36 versus 115.085 versus 115.74 versus 116.83 versus 116.76 versus 117.88 versus 120.04

Oil: 37.98, +1.65. Dollar is on a strong run, now about to clear the late December recovery high.

Gold: 1268.00, +7.90. Gold running higher with oil and stocks. Some strange bedfellows. These are going to diverge at some point.


Monday was not a great day and the big names did struggle a bit. To put things in perspective, however, the prior Monday was ugly. Stocks sold hard, on volume, closing at session lows. By comparison, this Monday was a pleasant stroll with a few potholes to walk around. The indices didn't do anything to hurt themselves, just some slight issues on NASDAQ and SP500. Thus the upside still appears the direction of least resistance, but it will require SP500 and NASDAQ to break this next resistance that is quietly exerting enough pressure to push the big names lower and on some strong downside volume.

There are some very interesting downside moves in some of the names, but some upside also looks good in drugs, biotechs, telecom -- there remain groups that are acting just as if they have bottomed and intend to rise for awhile even as some of the big names that broke but rebounded with the market are starting to struggle once more. That is rotation and as noted last week, it tends to keep market upside moves working.

We will continue looking at some more upside plays as those continue to set up and run, but also some downside as we did with FB. That makes logical sense. If money wants to move into new areas, it typically leaves other areas. Thus the big names can break while new areas continue higher, as the new areas get the money leaving the old leaders.

Have a great evening!


NASDAQ: Closed at 4708.25

4736 is the early January lower gap point downside, the last downside gap in the selloff.
4751 is the January 2015 lower high
4774 is the January 2-15 high
4811 is the November 2014 peak (intraday)
4815 is the December 2014 peak
The March 2015 lows at 4843 and 4825
The 200 day SMA at 4888
4902 is the July 2015 low
4916 is the mid-November 2015 low
4920 is the lower gap point from mid-October
4894 is the September 2015 closing high
4999 is the October upper gap point
5008.57 is the early March 2015 post-bear market high
5042 is the March 2015 high
5100 from the April peak and early May peak
5162 is the early November peak, 5176 is the December intraday peak

4637 is the February intraday high
The 50 day EMA at 4632
4620 is the February 1 closing high
4615 from September 2014 highs, October 2014 upper gap point, late August 2015 low.
4517-4506 from the September 2015 and August 2015 closing lows
4485 are the twin July 2014 peaks
4471 is the January 2016 closing low
4425 is the late February intraday low
4363 is the February upper gap point
4352 is the March 2014 peak
4313 is the January 2016 intraday low
4292 is the August 2015 low
4212 is the February intraday low
4116 is the October 2014 low

S&P 500: Closed at 2001.76

2011 is the September prior all-time high
2020 is the September 2015 intraday high
The 200 day SMA at 2022
2040 is the March 2015 closing low
2046 is the July 2015 closing low
2062 is the January 2015 lower high
2079 is the intraday all-time high from November 2014
2094 is the December 2014 high, the prior all-time high
2104 is the December 2015 high
2116 is the November 2015 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

1995 is the September 2015 recovery peak
1991 is the July 2014 high
1972 is the December 2014 low
The 50 day EMA at 1949
1947 is the February 2016 intraday high, the late February peak
1940 is the January 2016 recovery bounce peak closing high
1913 is the early September 2015 closing low testing the bounce from the August selling
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
1891 is last week's intraday low prior to the miraculous reversal.
1872 is the September 2015 test low of the August low
1867 is the August 2015 low
1862 is the October 2014 closing low
1859 is the January 2016 closing low
1820 is the October 2014 intraday low
1815 is the April 2014 low
1812 is the January 2016 intraday low
1772 are the Q4 2013 highs and lows

Dow: Closed at 17,073.95

17,152 is the mid-July post bear market high
The 200 day SMA at 17,176
17,351 is the September 2014 all-time high.
June 2015 low at 17,715
17,748 is the mid-April China margin selloff and the bottom of the 5 month trading range
The March low at 17,786
17,978 is the November 2015 peak

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
16,933 is the September 2015 recovery intraday peak
16,740 is the mid-September peak and potential apex for a right shoulder to a head and shoulders pattern
16,736 is a prior all-time high from May 2014
16,670 is the December 2014 peak and the recent August 2015 relief bounce peak.
16,665 is the late August 2015 closing high
16,632 is the April 2014 peak
The 50 day EMA at 16,629
16,621 is the late February 2016 peak
16,589 is the December 2013 former all-time high
16,526 is the early January resistance
16,511 is the January 2016 intraday high
16,506 is the March 2014 peak
16,466 is the January 2016 recovery closing peak.
16,368 is the August 2014 low
16,117 is the October 2014 closing low
16,058 is the early September 2015 low
16,026 is the April 2014 low
15,855 is the October 2014 intraday low
15,766 is the January closing low
15,666 is the August 2015 closing low
15,450 is the January 2016 intraday low
15,372 is the February 2014 low
15,370 is the August 2015 low


March 7 - Monday
Consumer Credit, January (15:00): $10.5B actual versus $16.5B expected, $6.4B prior (revised from $21.3B)

March 9 - Wednesday
MBA Mortgage Index, 03/05 (7:00)
Wholesale Inventories, January (10:00): -0.2% expected, -0.1% prior
Crude Inventories, 03/05 (10:30): 10.374M prior

March 10 - Thursday
Continuing Claims, 02/27 (8:30): 2251K expected, 2257K prior
Initial Claims, 03/05 (8:30): 275K expected, 278K prior
Continuing Claims, 02/27 (8:30): 2251K expected, 2257K prior
Natural Gas Inventor, 03/05 (10:30): -48 bcf prior
Treasury Budget, February (14:00): -$192.4B prior

March 11 - Friday
Export Prices ex-ag., February (8:30): -0.8% prior
Import Prices ex-oil, February (8:30): -0.2% prior

End part 1 of 3
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