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10/22/2016 Investment House Daily
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Targets hit: CRK; MMM; TCBI
Entry alerts: AMZN; SYRG
Trailing stops: FL
Stop alerts: None issued
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- Expiration, Earnings, Election. Stock indices hold their range, hold
- No relative change in the indices, and that is not a bad outcome.
- SOX, NASDAQ still trying to drag the NYSE along with them.
- Nothing is determined yet in a final trend.
Another week of more of the same, threatening to continue a selloff early in
the week then late week, but scrambling to recover. It the market rally
dying as the small Texas town in the classic 'The Last Picture Show' or is
it setting up for still new highs?
The NYSE indices managed to rally to next resistance midweek but then faded.
Friday they were selling again and looked dicey, but after that test lower
on the open, the indices turned and moved steadily higher to midday,
pausing, then resuming the move higher into the close. On the other hand,
SOX and NASDAQ cruised on the session, moving up off support as some big
names in both groups helped them maintain their uptrends.
SP500 -0.18, -0.01%
NASDAQ 15.57, 0.30%
DJ30 -16.64, -0.09%
VOLUME: NYSE +11%, NASDAQ -6%. NYSE trade moved back to average for the
first time in two weeks, but it was expiration and some earnings from big
NYSE stocks pushed the volume up. Even so, this was a very tame expiration
volume session and a very tame volume week overall.
A/D: NYSE flat; NASDAQ -1.2:1
The index action changed nothing on the week. NYSE indices are still in the
post-trend break range, testing toward the range lows but refusing to break
down. SOX and NASDAQ held their trends, starting edging higher Friday, but
are still sitting right on the trendlines.
Surprise! That means no change. The NYSE indices are still in 3 month
bearish patterns having broken their near term trends, trading in volatile
ranges, but holding the same lows again and again as they move laterally.
They are again trying to shake off the break lower and consolidate for a try
higher to follow SOX and NASDAQ. They are just about back to where they
were two weeks ago in terms of volatility, i.e. volatility dying down, when
suddenly the volatility returned with a sharp break lower. Could have
happened Friday, but as noted, the early selling found bids and they fought
off another selling attempt.
That keeps the NSYE indices range bounce and that keeps both upside and
downside plays working. Friday we banked some downside gain on MMM as it
accommodated us quite nicely with a gap to the 200 day SMA, finishing out
this leg of the selling and letting us bank a 130+% gain on the last of the
October puts. We could have banked some more gain on AMGN as it too fell to
the 200 day SMA; AMGN did not bounce, however, so we left it to work into
We also took some upside profit off the table. CRK moved higher then
started to fade; we banked some more of that strong 37% stock and 100+%
option gain. Banked some TCBI as well as it hits its initial target, almost
10% on the stock and 85% on the options. Upside and downside gains. Ah,
We bought some AMZN as it broke higher and some SYRG in energy. Energy
continues to look quite strong overall along with financials,
semiconductors, airlines, and NASDAQ big names. The market definitely has
the leadership to merge the trends upside, but thus far has not had the
ability to do so.
The on air discussion of why the market is moving is rather interesting and
curious First it was a Clinton victory that was moving stocks higher for a
breakout. When that didn't happen a Clinton victory was blamed as being too
strong with a potential sweep of Congress in addition to the White House;
gridlock would be avoided and the markets are said to favor gridlock and the
'stability' it brings. But the indices have not broke down either.
Perhaps it is more than just one item. Could it possibly be earnings have
just now ramped up? That the economic data is weakening with even some from
the democratic side acknowledging the economy is not that great? That there
still has to be an election?
Whatever the reason, the week saw no change. SOX and NASDAQ held their
trends after a test of trend support. NYSE indices overcame early week
weakness and the Friday reach lower, holding the range to close out the
week. Again, that leaves the NYSE indices in their trading range after the
initial break lower in early September, while SOX and NASDAQ work to hold
their trends and continue higher. That should help support the NYSE
indices. Should, but they still have to work back up in the range and make
SP500: Monday SP500 put in a lower closing low on the last round of selling
that started 9 sessions back after SP500 failed to take out the 50 day SMA.
After that selling, SP500 recovered to the 20 day EMA Wednesday and Thursday
on the highs, then faded Friday but held the 2015 high. Trying to put in a
higher low after bouncing off the September/October range, MACD put in a
slightly higher low on the recent fade. Overall pattern still bearish but
trying to set up a move to follow NASDAQ.
NASDAQ: As with SP500, NASDAQ started lower on the week then reversed.
Moved through the 50 day EMA then held it on a Thursday test. Bounced
Friday. Unlike SP500, MACD is a bit lower on a higher low, suggesting some
momentum slowing. That said the trend remains in place as NASDAQ sorts out
the past 1.5 weeks where prices bounced all over the place day to day.
Trying to emerge from that and resume higher in its trend.
SOX: Similar action to NASDAQ, holding the trend the past 10 sessions but
quite volatile. Though it was lower Friday, Thursday was a solid session,
and now SOX will try to continue higher in its trend along with NASDAQ.
DJ30: Spending a lot of time bumping at the 50 day EMA and fading back, but
not breaking after the fade. Almost did that Monday after reversing off
that resistance the prior Friday, but recovered. Still could not get
through the 50 day this week, but a good reversal Friday. With the other
indices trying to set up a bounce to again test resistance, DJ30 likely
SP400: Really the same action as the other NYSE indices, lower early week,
recovered to the 50 day EMA, faded into Friday. Managed to reverse off a
low that reached below the Monday closing low. Still not a great pattern.
RUTX: Lower Monday, reversed to test the 10 day EMA Wednesday, faded back
to the Monday low intraday Friday. Reversed off of that low to a modest
loss. Held the September low and is finding support there. MACD has put in
a lower low, however, and has still not crossed back to the upside.
Momentum lagging but not a bad setup to bounce in the range.
Financial: A good week for financial stocks. BAC up all week, new rally
high Friday. TCBI surged off a 20 day EMA test to a new rally high and
hitting our initial target. JPM, C. MS up all week and solid move Friday.
Big Names: Some nice moves all week. FB provided an entry and it moved
well for us Friday. AMZN started back up off a test. AAPL was not moving
much on the week, but the 10 day EMA test was not bad given the worry about
a couple of iPhone 7's starting fires. Maybe on the next 'Naked and Afraid'
they should take a Samsung or iPhone 7 as a fire starter. NFLX had a huge
week upside and it got huger Friday. GOOG enjoyed a good week, gapping and
rallying, then fading some late week.
Retail: A good finish to the week. JWN bounced Friday. KSS came back.
KIRK is setting up for an entry off its lows. They all struggled but the
ones that have held decently managed a decent week.
Chips: Back and forth on the week but mostly holding the trend. AVGO won't
break lower. MRVL looks good to move higher. SWKS and SLAB held the 20 day
EMA on the week, still trending higher. MXL might try a bounce off its 50
Tech: MSFT gapped higher in a new all-time high. It can go higher. STX
struggling below the 50 day MA. WDC may hold its support. BLKB (software)
could be set to move off its 200 day SMA test.
Transports: Airlines posted a good week, SAVE, DAL, UAL. Other transports
were pounded, e.g. rails (UNP).
Oil: Still looking strong for the most part. CWEI struggled, but many are
working. SYRG is moving. AXAS us surging. HOS, WLL setting up. BHI looks
solid along with ESV.
Stats: +15.57 points (+0.3%) to close at 5257.4
Volume: 1.645B (-6.1%)
Up Volume: 806.19M (+12.45M)
Down Volume: 815.06M (-100.01M)
A/D and Hi/Lo: Decliners led 1.2 to 1
Previous Session: Decliners led 1.16 to 1
New Highs: 58 (-10)
New Lows: 50 (-6)
Stats: -0.18 points (-0.01%) to close at 2141.16
NYSE Volume: 882.7M (+11.24%)
A/D and Hi/Lo: Advancers led 1.05 to 1
Previous Session: Decliners led 1.37 to 1
New Highs: 78 (+8)
New Lows: 28 (+3)
Stats: -16.64 points (-0.09%) to close at 18145.71
VIX: 13.34; -0.41
VXN: 15.37; -0.26
VXO: 13.57; -0.44
Put/Call Ratio (CBOE): 0.97; -0.02
Nineteen 1.0+ Readings in 6 weeks, 15 of the last 31 sessions over 1.0. A
string of sub-1.0 readings the past week-plus.
Bulls and Bears: Wow an impressive drop in bulls as they continue to tail
off from the peak in the high 59's. Bears moved higher though their rise is
nowhere commensurate with the drop in bulls.
Both bulls and bears slipped a bit. Both are off their highs and lows
respectively, though bulls have lost more ground than bears have gained.
Bulls: 42.9 versus 46.1
Bears: 23.8 versus 23.1
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: 42.9 versus 46.1
46.1 versus 46.7 versus 45.2 versus 44.6 versus 49.0 versus 52.5 versus 55.9
versus 56.7 versus 56.2 versus 54.3 versus 52.9% versus 53.9% versus 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
Bears: 23.8 versus 23.1
23.1 versus 22.8 versus 23.1 versus 24.3 versus 22.6 versus 22.8 versus 20.6
Versus 20.2 versus 20.0 versus 20.9% versus 21.2% versus 21.6% versus 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%
Bonds (10 year): 1.73% versus 1.75%. Rallied back on the week, moving
through the 200 day SMA and closing the week right at that level. Still a
long way from where it started as bonds sold aggressively for 2 weeks.
Historical: 1.75% versus 1.74% versus 1.74% versus 1.766% versus 1.80%
versus 1.746% versus 1.78% versus 1.723% versus 1.72% versus 1.74% versus
1.72% versus 1.69% versus 1.622% versus 1.60% versus 1.56% versus 1.569%
versus 1.56% versus 1.584% versus 1.62% versus 1.625% versus 1.656% versus
1.693% versus 1.705% versus 1.698% versus 1.70% versus 1.698% versus 1.718%
versus 1.671% versus 1.67% versus 1.61% versus 1.53% versus 1.54% versus
1.601% versus 1.57% versus 1.58% versus 1.57% versus 1.57% versus 1.62%
versus 1.58% versus 1.56% versus 1.54% versus 1.58% versus 1.53% versus
1.55% versus 1.57% versus 1.558% versus 1.51%
EUR/USD: 1.08851 versus 1.0928. Euro undercut the June low Thursday and
Historical: 1.0928 versus 1.0971 versus 1.0977 versus 1.10217 versus 1.0966
versus 1.10536 versus 1.1032 versus 1.10598 versus 1.1233 versus 1.1183
versus 1.1147 versus 1.12052 versus 1.12091 versus 1.12066 versus 1.1239
versus 1.1218 versus 1.1228 versus 1.2148 versus 1.1254 versus 1.1248 versus
USD/JPY: 103.83 versus 103.990. Forming a handle with a lateral move along
the 10 day EMA. Nice setup to make a new break higher.
Historical: 103.99 versus 103.99 versus 103.602 versus 103.892 versus
103.815 versus 104.201 versus 103.634 versus 103.690 versus 103.698 versus
103.95 versus 103.159 versus 103.984 versus 103.381 versus 102.807 versus
102.035 versus 101.326 versus 101.143 versus 101.322 versus 100.55 versus
100.75 versus 101.034 versus 101.045 versus 100.386
Oil: 50.85, +0.22. New high Wednesday then immediately dropping to test
the 10 day EMA. Held it nicely with a doji Friday. Holding near support
after a sharp selling session such as Thursday is not bad action.
Gold: 1267.70, +0.20. Bounced off the sharp selloff. Moved through the
200 day SMA, tested Thursday and Friday, showing a good doji with tail
Friday. In position for a bit more of a bounce.
More data with New Home Sales, Durables orders, Q3 GDP. More earnings as
well. Lots more earnings.
Also a market with still separate trends. SOX and NASDAQ trending, NYSE
indices not so much though they are holding a lateral range since early
September. Kind of a range to nowhere.
Maybe a range to nowhere for now, but still plenty of upside plays in the
range, particularly as the indices come off the bottom of the range. And of
course there is NASDAQ and SOX in position to move higher. They will be
good for some moves, e.g. FB, AMZN.
Thus, we will look for more upside to play as well as some prime downside.
Definitely both out there and we took downside and upside gain the past
week. They will continue showing up while the NYSE indices continue to
thrash around. Also, as more earnings come out we will get opportunities to
play off of gaps higher and lower as stocks test the initial moves. Still
lots of opportunity inside the NYSE ranges.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 5257.40
5271.36 is the August 2016 intraday prior all-time high
5287.61 is the September 2016 high
5340 is the recent all-time closing high.
5231.94 is the 2015 all-time high
The 50 day EMA at 5224
5170 is the October intraday low.
5162 is the early November peak, 5176 is the December intraday peak
5100 from the April peak and early May peak
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
4920 is the lower gap point from mid-October 2015, the January 2016 lower
4916 is the mid-November 2015 low
The 200 day SMA at 4910
4899 - 4902 from the September 2015 peak, July 2015 low
4894 is the September 2015 closing high
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
S&P 500: Closed at 2141.16
The 50 day SMA at 2161
2175 is the June 2016 high
2194 is the August 2016 all-time high
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 September 2016 low; February 2015 intraday high
2116 is the November 2015 high
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
The 200 day SMA at 2072
2062 is the January 2015 lower high
2046 is the July 2015 closing low
2040 is the March 2015 closing low
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
Dow: Closed at 18,153.55
18,168 is the April 2016 recovery high
18,247 is the August 2016 low
18,262 is the upper gap point from the Monday gap lower.
18,288 from March 2015
The 50 day SMA at 18,314
18,351 is the prior all-time high from May 2015
18,400 IS THE October recovery attempt high
18,595 is the July 2016 peak
18,669 is the August 2016 all-time high
18,100 to 18,181: interim peaks in the December 2014 to July 2015 range
18,016 is the June 2016 peak
17,960 is the October low
17,992 is the early September low
17,978 is the November 2015 peak
The 200 day SMA at 17,671
17,600 is the rough bottom of the April to June range.
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
October 25 - Tuesday
Case-Shiller 20-city, August (9:00): 5.1% expected, 5.0% prior
FHFA Housing Price I, August (9:00): 0.5% prior
Consumer Confidence, October (10:00): 100.8 expected, 104.1 prior
October 26 - Wednesday
MBA Mortgage Index, 10/22 (7:00): -0.6% prior
International Trade , September (8:30): -$58.4B prior
New Home Sales, September (10:00): 610K expected, 609K prior
Crude Inventories, 10/22 (10:30): -5.247M prior
October 27 - Thursday
Initial Claims, 10/22 (8:30): 259K expected, 260K prior
Continuing Claims, 10/15 (8:30): 2057K prior
Durable Orders, September (8:30): 0.0% expected, 0.0% prior
Durable Orders, Ex-T, September (8:30): 0.3% expected, -0.4% prior
Pending Home Sales, September (10:00): 0.6% expected, -2.4% prior
Natural Gas Inventor, 10/22 (10:30): 77 bcf prior
October 28 - Friday
Chain Deflator-Adv., Q3 (8:30): 2.3% prior
GDP-Adv., Q3 (8:30): 2.5% expected, 1.4% prior
Chain Deflator-Adv., Q3 (8:30): 1.4% expected, 2.3% prior
Employment Cost Index, Q3 (8:30): 0.6% expected, 0.6% prior
Michigan Sentiment - Final, October (10:00): 88.2 expected, 87.9 prior
End part 1 of 3
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