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7/30/2016 Investment House Daily
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NOTE: Jon Johnson is traveling and had an 'incident' with a car door. As a
result there will be no Market Summary video this weekend. New Plays will be
sent later today. Thank you.
Targets hit: GOOG
Entry alerts: ISRG
Trailing stops: None issued
Stop alerts: None issued
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If any market circumstances arise where we see additional plays we want to
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of the day of the week.
- BOJ disappoints, GDP misses big, market does the same.
- The economy continues to underwhelm as this will mark the first
Administration to have no year with 3% or better GDP growth.
- Earnings overall positive, market moves but again, market does not move.
- Bonds and gold surge on view Fed is nowhere near tightening yet dollar
sells. The data was that weak?
Friday was shocking. A lot of news hit the wires pre-market from earnings,
to central banks to economic data. Things did not go as expected in almost
The BOJ, after Abe's announcement of 28T yen in stimulus to come, barely
budged on stimulus. It raised ETF purchases to 6T yen from 3.3T yen, but
that was it. Not even a rate cut.
More than that, it included a statement that it would undertake a
'comprehensive assessment' of its stimulus. Some say that means it will
announce large stimulus plans at the next meeting. I am not so sure of
that. I posit the BOJ may, after over two decades of depression fostered by
the very policies it will assess, be rethinking and reshaping what should be
done in terms of stimulus.
IMF: More shock. The IMF admitted that its restructuring requirements and
policies caused the Greece depression.
GDP shock: US Q2 GDP 1st iteration was a complete whiff at 1.2%. Remember,
some even thought a 3+% quarter was possible.
GDP: 1.2% vs 2.4% exp vs 0.8% prior (from 1.1% Q1 final)
Core PCE: 1.7% vs 2.1% Q1
Business Investment: -2.2%, third straight quarter lower.
Consumer: +4.1% vs 1.6% Q1. That SAVED the report as it added 3% to the
final GDP number.
GDP last 3 quarters: Less than 2%. Juxtapose that to the rosy scenario
painted Wednesday night at the DNC Convention. Who is 'peddling fiction'?
The facts, as we have reported month after month after month, do not support
the grand conclusions about the present and future being made. Nothing new
there, just given the election cycle it is more apparent given the grand
speeches and statements that are more based on what the candidates would
LIKE the facts to be versus what the facts really are.
The shocking facts: President Obama will be the first US President to NEVER
have a year of 3% GDP growth.
The middle class fell below 50% in this country supposedly as the country
enjoyed a strong economic recovery. That is not so much shocking as it is
damning in terms of the notion of a strong economic recovery having occurred
or is in progress.
And more GDP shock: during the run up to the election the numbers reported
were allowed to be so pathetic. How does that help those currently in power?
Will there be a September surprise, a 'surge' in GDP just before the
election, such that it gets the swing voter thinking, 'gee, things just got
For now, Europe is pointing the way for the US as the latter's GDP growth
rates continue their decline toward more European levels. Indeed, looking
at the EU GDP levels, the gap is narrowing, and that does not mean Europe is
rising to meet the us:
EU GDP: 0.3% as expected. Year/year: 1.6% vs 1.5% exp vs 1.7% prior
France GDP: 0.0% VS 0.2% exp vs 0.6% prior. Take off velocity?
Again, the stock indices didn't surge and they didn't tank. They continued
rather modest moves. Some tested an earlier break upside. Others continued
tight lateral moves.
AMZN and GOOG reported strong earnings and moved higher, helping push NASDAQ
and SP500 green, but there was no strong move. Good earnings for big name
stocks. The central banks perhaps a bit more conservative but hardly
pulling back. Economic data turned from getting better (suspiciously so) to
dramatically worse, e.g. Durable Goods Orders and Q2 GDP.
None of that was, however, an overall catalyst to send the stock indices
higher. SOX is on its own plan, surging higher Tuesday. SP400 broke to a
clearer high Friday. NASDAQ is slowly moving higher itself. SP500 and DJ30
are still in tests, looking to follow the other indices in at least their
Again, the stock indices are still attempting to find a catalyst to send
them seriously higher. Perhaps they are just going to bleed higher e.g.
NASDAQ, RUTX, SP400. With SOX in the lead and NASDAQ working higher as well
thanks to the big names, perhaps the other indices just follow along. Thus
far they have, more or less.
Now that just about all the data is out, except of course the new jobs
report out Friday of this coming week, you would expect more of a move.
Instead a very staggered move upside. If leadership continues to hold up,
to set up, and move higher, well, that is the ultimate factor. Thus far
leadership is indeed setting up and moving up. While this week brings a new
week and a new month and that could shake things up, the leaders are thus
far doing the job of keeping the market moving higher or at least holding
To view charts, click on link or paste URL into browser.
NASDAQ: Gapped higher Wednesday out of a short consolidation and continued
higher into Friday. Steady move higher. Not blowout but very steady up the
10 day EMA following the break over the April and June highs. NASDAQ is now
at the late 2015 highs, pushing to move through toward that July 2015 high.
SOX: Big upside break Tuesday to a new post-2000 high. Faded in a 1-2-3
test Wednesday to Friday. SOX is leading, showing strength, and a test sets
it up in good position to continue to lead the market.
SP400: Has fiddled with a new high for over a week. Finally broke to a
more definitive new high Friday. As with SP500 and DJ30, the more mileage
it puts on the break higher, the more chance it has of sticking.
RUTX: Still trying to make the break into the final range that holds the
all-time high from mid-2015. Perhaps the Russell will follow SP400 in its
SP500: Up Friday but not really a new move. The first to a new high, now
in an 8 session lateral move. Not giving up gains, consolidating what it has
won, and leaving itself in good position to continue upside again after this
DJ30: Very nice test continues in progress, showing another doji as the Dow
tests the 20 day EMA. Nice test after being the second to hit an all-time
Stats: +7.15 points (+0.14%) to close at 5162.13
Volume: 1.991B (+4.17%)
Up Volume: 922.5M (-117.5M)
Down Volume: 1.12B (+240.97M)
A/D and Hi/Lo: Advancers led 1.02 to 1
Previous Session: Decliners led 1.14 to 1
New Highs: 157 (+16)
New Lows: 38 (+9)
Stats: +3.54 points (+0.16%) to close at 2173.6
NYSE Volume: 1.2B (+37.06%)
A/D and Hi/Lo: Advancers led 1.68 to 1
Previous Session: Advancers led 1.08 to 1
New Highs: 262 (+90)
New Lows: 19 (+4)
Stats: -24.11 points (-0.13%) to close at 18432.24
VIX: 11.87; -0.85
VXN: 13.97; -0.87
VXO: 11.52; -2.11
Put/Call Ratio (CBOE): 1.2; +0.3. First move over 1.0 on the close in 15
sessions. One such reading does not mean much but now watching to see if a
few more pop up.
14 of 15 below 1.0, 15 of last 32 over 1.0.
27 of the last 45 below 1.0. 35 of 65 over 1.0.
Definitely getting complacent at these levels.
Bulls and Bears: Bulls hanging in the low 50's, still off the 60ish level
that has spelled correction. Bears, however, are falling significantly and
are near levels where stock corrections have occurred.
Bulls: 53.9 versus 54.4
Bears: 21.6 versus 23.3
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: 53.9 versus 54.4
54.4% versus 52.5% versus 47.1% versus 41.6% versus 47.5% versus 45.9%
versus 47.3% versus 45.4% versus 35.4% versus 40.2 versus 39.2 versus 40.2%
versus 44.3% versus 47.4% versus 41.2% versus 45.4% versus 43.3% versus
47.4% versus 44.4% versus 39.4% versus 36.4% versus 34.7% versus 26.5%
Bears: 21.6% versus 23.3%
23.3% versus 24.7% versus 24.5% versus 23.8% versus 23.2% versus 23.5%
versus 23.8% versus 23.7% versus 24.0% versus 21.7% versus 21.6% versus 21.7
versus 20.6% versus 21.7% versus 27.8% versus 27.8% versus 28.9% versus
27.8% versus 30.3% versus 35.4% versus 34.3% versus 35.7% versus 39.8%
versus 39.2% versus 38.1% versus 35.4% versus 36.1%
Bonds (10 year): 1.46% versus 1.50%. TLT and bonds surging upside off the
test the first part of July.
Historical: 1.50% versus 1.51% versus 1.56% versus 1.57% versus 1.56% versus
1.558% versus 1.58% versus 1.56% versus 1.59% versus 1.58% versus 1.53%
versus 1.47% versus 1.51% versus 1.434% versus 1.36% versus 1.39% versus
1.373% versus 1.367% versus 1.44% versus 1.475% versus 1.51% versus 1.468%
versus 1.46% versus 1.57% versus 1.74% versus 1.68% versus 1.70% versus
1.67% versus 1.61% versus 1.57% versus 1.58% versus 1.62% versus 1.61%
versus 1.64% versus 1.68% versus 1.70% versus 1.72% versus 1.73% versus
1.70% versus 1.80% versus 1.84%
EUR/USD: 1.1173 versus 1.10806. Euro surging off of that double bottom.
Historical: 1.10806 versus 1.10732 versus 109857 versus 1.0992 versus 1.0977
versus 1.1021 versus 1.1022 versus 1.1021 versus 1.10654 versus 1.1035
versus 1.1117 versus 1.1099 versus 11061 versus 1.10588 versus 1.10502
versus 1.10634 versus 1.10891 versus 1.1056 versus 1.11396 versus 1.1106
versus 1.11256 versus 1.10736 versus 1.10226 versus 1.1101 versus 1.14070
versus 1.13324 versus 1.1251 versus 1.13131 versus 1.13749 versus 1.12778
versus 1.12554 versus 1.12731 versus 1.2104 versus 1.1297 versus 1.12526
versus 1.13149 versus 1.1412 versus 1.13570
USD/JPY: 102.045 versus 104.679. The dollar plunges back into the
Historical: 104.679 versus 105.98 versus 104.731 versus 105.76 versus
106.05 versus 106.11 versus 107.16 versus 106.139 versus 105.95 versus
104.85 versus 105.31 versus 104.74 versus 102.686 versus 100.59 versus
100.768 versus 101.15 versus 100.89 versus 102.497 versus 103.128 versus
102.912 versus 102.60 versus 101.93 versus 102.32 versus 106.73 versus
104.87 versus 104.788 versus 103.98 versus 104.58 versus 104.12 versus
104.68 versus 105.62 versus 106.085 versus 106.019 versus 106.933 versus
106.966 versus 106.66 versus 107.347 versus 107.72 versus 106.55 versus
106.66 versus 108.86 versus 109.99 versus 111.285
Oil: 41.60, +0.46. Modest gain after more than a week of losses took oil
to the 200 day SMA. Seven week test in progress, trying to rebound and
recover some lost ground.
Gold: 1357.50, +25.20. Surging higher, looking for no rate hikes near
A lot of economic data, earnings, and central bank moves are all in the
market. More data and earnings hit this week, a lot more of each. Still,
it appears some important moves are in progress: bonds rallying, gold
surging, dollar fall, and stocks holding up with continued leadership.
With the market still showing leadership with even oil stocks holding
patterns despite oil's slide, we will continue working on finding good
leaders in position to enter and ride for gain. The world of central bank
driven markets is still in place and will remain in place if the data shows
the kind of weakness that reappeared last week. After all, as DB noted last
week, the US Fed says it is data dependent but doesn't act when data is
good, and then some bad data does actually hit and the entire process starts
over. I suppose that puts us in a start over situation and that means we
look for stocks to play higher as the Fed again puts off hiking rates.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 5162.13
5162 is the early November peak, 5176 is the December intraday peak
5100 from the April peak and early May peak
The 10 day EMA is 5100
5042 is the March 2015 high
5008.57 is the early March 2015 post-bear market high
5007 is the 12/31 upper gap point from that big gap lower
4999 is the October upper gap point
4980 is the June 2016 peak
4969 is the April 2016 recovery high
4960 is the September 2015 intraday high, an important reversal point for
The 50 day EMA at 4946
4920 is the lower gap point from mid-October 2015, the January 2016 lower
4916 is the mid-November 2015 low
4899 - 4902 from the September 2015 peak, July 2015 low
4894 is the September 2015 closing high
The 200 day SMA at 4845
4836 is the March 2016 peak
4815 is the December 2014 peak
4811 is the November 2014 peak (intraday)
4774 is the January 2-15 high
4751 is the January 2015 lower high
4684 is the May 2016 test low
4637 is the February intraday high
4620 is the February 1 closing high
4615 from September 2014 highs, October 2014 upper gap point, late August
4574 is the June 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
S&P 500: Closed at 2173.60
The 10 day EMA at 2165
2135 is the May 2015 all-time high
2130 is the June 2015 peak
2126 was the April 2015 prior all-time high
2120 is the June 2016 peak
2119 is the February 2015 intraday high
2116 is the November 2015 high
The 50 day EMA at 2116
2111 is the April 2016 recovery high
2104 is the December 2015 high
2094 is the December 2014 high
2079 is the intraday all-time high from November 2014
2062 is the January 2015 lower high
2046 is the July 2015 closing low
2040 is the March 2015 closing low
The 200 day SMA at 2041
2026 is the May 2016 low
2023 is the November 2015 low
2020 is the September 2015 intraday high
2011 is the September prior all-time high
1995 is the September 2015 recovery peak
1991 is the July 2014 high
1972 is the December 2014 low
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
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
Dow: Closed at 18,432.24
The 10 day EMA at 18,449
18,351 is the all-time high from May 2015
18,288 from March 2015
18,168 is the April 2016 recovery high
18,100 to 18,181: interim peaks in the December 2014 to July 2015 range
The 50 day EMA at 18,067
18,016 is the June 2016 peak
17,978 is the November 2015 peak
17,600 is the rough bottom of the April to June range.
The 200 day SMA at 17,435
17,351 is the September 2014 all-time high.
17,265 is a December 2015 closing low
17,245 is the November 2015 closing low
17,152 is the mid-July 2014 post bear market high
17,068 is the early July 2014 peak
17067 is the December 2014 low
17,063 is the June 2016 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
16,665 is the late August 2015 closing high
16,632 is the April 2014 peak
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
July 29 - Friday
July 29 - Friday
GDP-Adv., Q2 (8:30): 1.2% actual versus 2.6% expected, 0.8% prior (revised
Chain Deflator-Adv., Q2 (8:30): 2.2% actual versus 1.9% expected, 0.5% prior
(revised from 0.4%)
Employment Cost Index, Q2 (8:30): 0.6% actual versus 0.6% expected, 0.6%
prior (no revisions)
Chicago PMI, July (9:45): 55.8 actual versus 54.0 expected, 56.8 prior (no
Michigan Sentiment -, July (10:00): 90.0 actual versus 90.4 expected, 93.5
prior (no revisions)
August 1 - Monday
Construction Spendin, June (10:00): -0.8% prior
ISM Index, July (10:00): 53.1 expected, 53.2 prior
Construction Spendin, June (10:00): 0.7% expected, -0.8% prior
August 2 - Tuesday
Personal Income, June (8:30): 0.3% expected, 0.2% prior
Personal Spending, June (8:30): 0.3% expected, 0.4% prior
Core PCE Prices, June (8:30): 0.2% expected, 0.2% prior
PCE Prices, June (8:30): 0.2% prior
Auto Sales, July (14:00): 4.95M prior
Truck Sales, July (14:00): 8.24M prior
August 3 - Wednesday
MBA Mortgage Index, 07/30 (7:00): -11.2% prior
ADP Employment Chang, July (8:15): 165K expected, 172K prior
ISM Services, July (10:00): 55.8 expected, 56.5 prior
Crude Inventories, 07/30 (10:30): 1.671M prior
August 4 - Thursday
Challenger Job Cuts, July (7:30): -14.0% prior
Initial Claims, 07/30 (8:30): 264K expected, 266K prior
Continuing Claims, 07/23 (8:30): 2139K prior
Factory Orders, June (10:00): -1.9% expected, -1.0% prior
Natural Gas Inventor, 07/30 (10:30): 17 bcf prior
August 5 - Friday
Nonfarm Payrolls, July (8:30): 185K expected, 287K prior
Nonfarm Private Payr, July (8:30): 171K expected, 265K prior
Unemployment Rate, July (8:30): 4.8% expected, 4.9% prior
Average Hourly Earni, July (8:30): 0.2% expected, 0.1% prior
Average Workweek, July (8:30): 34.4 expected, 34.4 prior
Trade Balance, June (8:30): -$42.7B expected, -$41.1B prior
Consumer Credit, June (15:00): $16.2B expected, $18.6B prior
End part 1 of 2
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