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2/18/2017 Investment House Daily
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Investment House Daily Subscribers:
Targets hit: BLUE
Entry alerts: IP; MET; SWKS
Trailing stops: None issued
Stop alerts: NUS
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The REPORT SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.
Monday a Market Summary video, new plays, play table annotations.
Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.
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.
- Expiration fights off a slow open to close positive.
- SOX perhaps coming back to life after a test.
- Few stocks breaking down but upside plays harder to find.
- Coming week very instructive as to how leaders finish their tests, whether
indices try a test.
The past week saw the stock indices push again to new highs, continuing the
round of new highs from the previous Friday. Thursday stocks hit the near
term upside saturation point and stalled. That stall bled over into Friday.
It was a down and up and down and up session, however, and the market ended
on the upswing. That closed the indices positive, if just barely so in most
SP500 3.94, -0.17%
NASDAQ 23.68, 0.41%
DJ30 4.28, 0.02%
VOLUME: NYSE +6%, NASDAQ -3%. NASDAQ trade was lower but remained above
average as it did all week but Monday. Indeed, NASDAQ trade has scored
above average trade 11 of the last 14 sessions. As those were most all
upside, that shows buying. NYSE trade moved above average for the first
time in 13 sessions, and of course it was on expiration where there is
elevated trade. For NYSE this move remains rather exceptionally weak in its
price/volume action, particularly when you consider volume is just about at
the levels from the long 9 week lateral consolidation range. Not tons of
A/D: NYSE -1.1:1, NASDAQ +1.2:1. Breadth remains quite tepid as each day
the move is led by a few stocks even if the action does rotate around the
Interestingly, SOX, after lagging all week, took the point Friday and moved
to a new closing high. It led the initial move so it started testing while
the others played catch up. Then it shot higher Friday as stocks such as
SWKS surged in big new breakouts.
NASDAQ continued its breakneck (almost) rally, gapping lower but reversing
to a new high as it put in its eighth new closing high in nine sessions.
SP500, DJ30, and SP400 basically tread water, managing to recover off a
lower open to hold the Wednesday and Thursday close.
No power of note, but indeed a continued upside bias as investors bought a
weaker morning session. Perhaps expiration had something to do with that as
many had to get out of positions or roll them over after a big run into that
expiration, but once again sellers had a chance to sell and did not. Heck,
even Thursday saw the stock indices recover off the session lows to close
The internal indicators remain weak. MACD is trying to follow the stock
indices, but is still lagging considerably behind the index prices except
for NASDAQ where MACD broke out with NASDAQ and continues to break higher
with the prices.
Sentiment is also at a more extreme level with Bullish advisor sentiment
logging another week of bulls over 60%, now 5 of 6 weeks over 60%.
Okay, it is no secret the internal market indicators as well as sentiment
suggest a top to the rally. Indeed, on Thursday and Friday we heard more of
the TV commentators talking about a near term top.
The issue is how the many, many stocks moving higher in solid trends hold
their moves, AND whether new stocks come to the fore and add to the
leadership. Thus far the leaders have indeed showed up, moved up, and held
the moves. A stock such as SWKS broke out of a big base in mid-January,
moved laterally for five weeks, then surged higher anew on Friday. NTES
gapped out of a classic cup with handle base on Thursday. YNDX moved in a
tight consolidation at prior highs for 5 weeks then blasted off as well.
RS, X and others broke sharply higher. Many other stocks continue holding
gains and moving higher or are currently testing moves but still look great.
The point: the internals and sentiment continue pointing toward a pullback
in the market, but leading stocks keep finding a way to rally or hold their
gains and support while waiting for money to rotate back their way so they
can rally once more. As long as the market has plenty of leaders setting up
to move higher and moving higher, the internals and sentiment take a back
seat. They tell you to be alert to leaders breaking down, but the move can
continue for quite some time after the internals start suggesting trouble
I will say it was harder to find plays in good position for upside moves
this weekend, and that speaks to the rally with many stocks either having
broken higher recently or are in continuing moves that are not good entry
points. Or they are testing and do not yet look ripe to make the new break
higher. That does suggest that the upside is getting extended AND raises
questions as to how much fuel is still out there to burn to drive the
upside. So, another reason to be aware that the market could put in a peak.
As for our positions, virtually all are either moving higher still or are in
very good tests of very good moves or are set up in very good patterns. It
could be the stocks in pullbacks just don't bounce this time due to the
market bids drying up for now. They will show that by breaking near support
and being unable to recover by the close. That would be a pretty solid
signal, combined with the internals and sentiment, that the rally had run
Thus, this week's action after the NYSE indices started to slow, will be
hugely instructive. Unless there is a violent break lower, you usually have
to see where the leaders testing support close. A reach lower has been
bought in this market, and many testing leaders are at the point where they
often show one more dip then a reversal back upside sets in. Again, that
makes this week very instructive as to the rally's continued energy.
We have some really interesting upside plays to start the shortened week,
but remember, it was harder to find them. Some of the current plays look
great, e.g. SLAB, and you definitely want to keep them in mind as they are
really solid leaders in solid shape to make new solid moves. Solid.
So, let's see how those plays pan out and whether the market looks ready for
a pullback or a continued move. We know a pullback will come, and the
internals suggest it is in the making and has been in the making. We have
some downside plays in oil and gas as well as insurance along with IP thrown
in. Most sectors and particularly the indices, however, are still in solid
uptrends and have not started building tops. Thus, playing them downside is
really just a guessing game of when they crack, and if they do, how far that
crack takes them. We will definitely make some downside plays when they
show up, just was we are doing now, but many have not set up downside
patterns yet. As the different groups do, we can put some of that money to
work downside as we have done.
Have a great weekend and market day off on Monday!
Stats: +4.28 points (+0.02%) to close at 20624.05
Stats: +23.68 points (+0.41%) to close at 5838.58
Volume: 1.85B (-2.63%)
Up Volume: 1.17B (+327.99M)
Down Volume: 637.19M (-422.81M)
A/D and Hi/Lo: Advancers led 1.26 to 1
Previous Session: Decliners led 1.29 to 1
New Highs: 173 (-75)
New Lows: 24 (-1)
Stats: +3.94 points (+0.17%) to close at 2351.16
NYSE Volume: 900M (+5.5%)
A/D and Hi/Lo: Decliners led 1.16 to 1
Previous Session: Decliners led 1.36 to 1
New Highs: 123 (-78)
New Lows: 11 (-1)
VIX: 11.49; -0.27. This past week saw the situation where volatility rose
with market gains. That is always worth noting in your bearish signals log,
though VIX overall remains very low. At this juncture, upside VIX sessions
are more an indication that yes there can be a nearer term
pullback/correction. This is contrasted with the situation where VIX is
trending higher as the market trends higher. A steady uptrend in VIX
accompanying a steady uptrend in the market indices is an indication of a
longer term, serious market top setting in.
VXN: 12.07; -0.67
VXO: 11.27; +0.73
Put/Call Ratio (CBOE): 0.93; +0.04
Bulls and Bears: Bulls backed off the cycle high but still held over 60%.
Bears remain unconvinced, jumping back up to levels three weeks back.
Bulls: 61.8 versus 62.7
Bears: 17.6 versus 16.7
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: 61.8 versus 62.7
62.7 versus 61.8 versus 58.2 versus 60.6 versus 58.6 versus 60.2 versus 59.8
versus 59.8 versus 59.6 versus 58.8 versus 56.3 versus 55.6 versus 51.0
versus 42.9 versus 41.7 versus 47.1 versus 42.9 versus 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: 17.6 versus 16.7
16.7 versus 17.6 versus 17.5 versus 17.3 versus 18.3 versus 18.4 versus 19.6
versus 19.6 versus 19.2 versus 19.6 versus 22.3 versus 21.6 versus 23.5
versus 25.7 versus 24.3 versus 23.1 versus 23.8 versus 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%
Bonds (10 year): 2.42% versus 2.45%. Bonds rallied Thursday and Friday
after selling earlier on the Yellen congressional testimony. Still in the
more recent 7 week range as they try to continue a move off the lows, but
stuck at the 50 day EMA.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.45%
versus 2.50% versus 2.473% versus 2.43% versus 2.41% versus 2.398% versus
2.340% versus 2.393% versus 2.41% versus 2.48% versus 2.474% versus 2.477%
versus 2.44% versus 2.49% versus 2.48% versus 2.512% versus 2.52% versus
2.467% versus 2.40% versus 2.47% versus 2.468% versus 2.422% versus 2.372%
versus 2.393% versus 2.358% versus 2.365% versus 2.38% versus 2.962% versus
2.42% versus 2.357% versus 2.45% versus 2.448% versus 2.42% versus 2.48%
versus 2.51% versus 2.56% versus 2.54% versus 2.55% versus 2.54% versus
2.564% versus 2.544% versus 2.59% versus 2.59% versus 2.52% versus 2.473%
EUR/USD: 1.06108 versus 1.0665. Euro sold on the week but then bounced
Wednesday and Thursday to recover the 50 day MA's. Friday another weak
session coughed up those levels.
Historical: 1.06665 versus 1.06148 versus 1.05762 versus 1.06023 versus
1.06411 versus 1.06557 versus 1.06825 versus 1.06814 versus 1.07219 versus
1.07880 versus 1.07605 versus 1.07892 versus 1.0791 versus 1.07294 versus
1.06957 versus 1.06843 versus 1.0683 versus 1.0756 versus 1.07274 versus
1.0761 versus 1.07027 versus 1.06394 versus 1.06381 versus 1.07114 versus
1.06450 versus 1.0624 versus 1.05982 versus 1.0555 versus 1.0585 versus
1.05346 versus 105837 versus 1.0525 versus 1.03914 versus 1.05289 versus
1.05155 versus 1.04357 versus 1.04636 versus 1.0451 versus 1.04368 versus
1.04412 versus 1.0392
USD/JPY: 112.906 versus 113.356. Dollar first rallied into Yellen
testimony, but Wednesday tapped the 50 day SMA then faded into Friday. Still
working in the 7 week lateral range, trying to form a cup off the November
to December rally.
Historical: 113.356 versus 113.880 versus 114.306 versus 113.65 versus
113.856 versus 113.265 versus 113.401 versus 112.207 versus 112.332 versus
111.815 versus 112.567 versus 112.903 versus 112.68 versus 112.50 versus
114.493 versus 115.094 versus 114.469 versus 113.362 versus 113.850 versus
112.736 versus 114.39 versus 114.686 versus 114.538 versus 112.774 versus
114.473 versus 114.57 versus 114.70 versus 115.811 versus 116.023 versus
116.923 versus 115.93 versus 116.46 versus 117.983 versus 116.739 versus
116.456 versus 116.793 versus 117.41 versus 117.413 versus 117.32 versus
117.537 versus 117.544 versus 117.835 versus 117.453 versus 117.941 versus
118.257 versus 117.397 versus 115.038 versus 115.058 versus 115.20 versus
114.23 versus 113.325
Oil: 53.78, +0.03. And oil is still in the narrow 11 week lateral range
just over the 2016 highs.
Gold: 1239.10, -2.50. Testing the prior week's recovery highs off the
December low. Still trending higher off that low but bumping some resistance
and there is also the 200 day MA at 1265.
SUPPORT AND RESISTANCE
NASDAQ: Closed at 5838.58
5661 is the late January upper gap point
5601 is the January lower gap point
The 50 day EMA at 5580
The 50 day SMA at 5564
The 2016 trendline at 5559
The November prior all-time high at 5404
5340 is the September and October 2016 twin peaks
5287.61 is the September 2016 high
5271.36 is the August 2016 intraday prior all-time high
5231.94 is the 2015 all-time high
The 200 day SMA at 5220
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
4899 - 4902 from the September 2015 peak, July 2015 low
4894 is the September 2015 closing high
S&P 500: Closed at 2351.16
2301 is the late January 2017 high
The 2016 trendline at 2299
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The 50 day SMA at 2279
The 50 day EMA at 2276
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
The 200 day SMA at 2173
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
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 20,624.05
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
The 50 day SMA at 19,971
The 50 day EMA at 19,885
19750 is the lows of the December/January range
The 200 day SMA at 18,673
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
18,288 from March 2015
18,262 is the upper gap point from the Monday gap lower.
18,247 is the August 2016 low
18,168 is the April 2016 recovery high
18,100 to 18,181: interim peaks in the December 2014 to July 2015 range
18,016 is the June 2016 peak
17,992 is the early September low
17,978 is the November 2015 peak
17,960 is the October intraday low
17,600 is the rough bottom of the April to June range.
17,351 is the September 2014 all-time high.
February 22 - Wednesday
MBA Mortgage Applica, 02/18 (7:00): -3.7% prior
Existing Home Sales, January (10:00): 5.57M expected, 5.49M prior
FOMC Minutes, 02/01 (14:00)
February 23 - Thursday
Initial Claims, 02/18 (8:30): 242K expected, 239K prior
Continuing Claims, 02/11 (8:30): 2076K prior
FHFA Housing Price I, December (9:00): 0.4% expected, 0.5% prior
Natural Gas Inventor, 02/18 (10:30): -114 bcf prior
Crude Inventories, 02/18 (11:00): +9.5M prior
February 24 - Friday
Michigan Sentiment -, February (10:00): 95.8 expected, 95.7 prior
New Home Sales, January (10:00): 566K expected, 536K prior
End part 1 of 3
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