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3/11/2017 Investment House Daily
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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.
MARKET SUMMARY
- Jobs Report comes, goes, stocks rise, fade, but SOX breaks to a higher
high.
- Jobs headlines are okay while the underlying numbers are finally better.
- Analysts calling for a pullback from the highs. Is that not just what
happened or do they mean a correction?
- Leaders have a pretty good Friday as they and the uptrends still don't
have any real sellers.
- This week sees the Fed rate decision, Dutch election, and debt ceiling all
hit on Wednesday.
February jobs topped Friday's news. It was an okay report on the headlines,
beating expectations along with an upward revision to January. The
internals were significantly better with participation rising to 63.0% as
those not in the workforce fell another 176K on top of January's 736K,
combining for the biggest ever 2 month drop.
Non-farm payrolls: 235K versus 188K expected versus 239K January (from 227K)
Unemployment: 4.7% versus 4.7% expected versus 4.8% January
Hourly wages: 0.2% versus 0.1% prior (revised from 0.2%). +2.8% year/year
Average hourly workweek: Steady at 34.4. Again.
Participation: 63.0%
The mix of jobs improved as well:
Construction 58K, roughly a 10 year high water mark
Manufacturing 28K
Mining 6K, a modest improvement
Private Education 39K
Professional and Business: 37K
Healthcare 27K
Leisure and Hospitality 26K
Retail -26K
Futures were already higher ahead of the report, and when the news hit, they
rallied a bit farther. The news, however, did not have a lot of staying
power. Even before the market opened stocks slid off the pre-market highs,
and when the opening bell sounded prices slid. Three down legs into early
afternoon led to back half recovery, but it was a very anticlimactic session
to a much anticipated report that could have been, but was not, the next
upside catalyst.
SP500 7.73, 0.33%
NASDAQ 22.92, 0.39%
DJ30 44.79, 0.21%
SP400 0.42%
RUTX 0.38%
SOX 1.17%
VOLUME: NYSE -4.5%, NASDAQ +6%. Lower on NYSE as the indices traded more or
less flat, up on NASDAQ as it broke higher, albeit modestly. Not bad
price/volume action.
A/D: NYSE 2:1, NASDAQ 1.4:1. A bit of a recovery in the small and midcaps
helped breadth recover to decent levels.
Thus the market was still in the test mode, more or less; SOX did break to a
higher high, and it is hard to argue with a semiconductor index that wants
to lead higher. Often the rest of the market follows.
Perhaps the market is still contemplating what is to come this week: FOMC
rate decision, Dutch election with a populist anti-EU candidate leading, and
the US debt hitting the ceiling, and all on Wednesday. Will they or won't
they raise it? Republican President, republican Congress. Sure they will.
After the super positive, olive branch extending SOTU address and subsequent
one-day gap and rally, the stock market has tested that move. That entire
move. Lots of infighting subsequent to the address, lots of obstructionism,
yet the Trump administration keeps coming out in decent shape. More
companies announce jobs in the US, even foreign companies. CEO's that talk
with the President come out pumped and excited. Polls show continued
approval of the job being done.
At the same time there is a lot of negativity surrounding a market testing
back from higher highs. I have made it clear; I am not a fan of the move
because of the weak internals and the high bullish sentiment. Yet,
leadership remains despite the dropout of some leader groups (e.g. oil
stocks). Moreover, as soon as the market started to test, bullish advisor
sentiment dropped precipitously -- it would appear advisors are as jumpy as
a 10 year old in a Halloween fright house.
Thus, while we still view this rally as being on its last legs, that is just
opinion. The market punched out some new highs, is putting in a very
orderly test of those highs, and it still has leadership in great position
and indeed making good moves. We bought into some of those moves on Friday
after moving into other positions during the week. Some great moves are in
progress from this new rebound of leaders -- even as the market tests.
SIMO, CTRP, PLX, IMMU, VRSN, BLUE, SWKS, AVGO, SOHU, ATHM -- excellent moves
even as the market tests, not suggesting that buyers are backing away from
the market. Bids are still there, and you have to, as corny as it sounds,
follow the leaders.
MARKET
CHARTS
SOX: The star of the session, SOX put in a rather unheralded break to a new
high, gapping and rallying past the late February high. SOX put in a 3 week
lateral move after a new high in February, and is now at a new high once
more. SOX tends to lead the rest of the market.
NASDAQ: After a four day lateral move over the 20 day EMA, NASDAQ gapped
upside, filled the gap, then rebounded to hold the move. All in all, not bad
with a nice showing of above average volume and some life moving back into
some chips while FANG still showed some upside.
SP500: After a 6 session test of the post-SOTU rally, SP500 completely
filled the gap higher, holding the 20 day EMA. Friday a gap higher to a
doji. Decent but nothing breakthrough, nothing showing a clear return to
the upside. It delivered a bounce where it needed to but did not add any
bling to it.
DJ30: Gapped modestly higher to a doji as well, also coming off a gap fill
and 20 day EMA test. Started higher, but that is about all it did.
SP400: After a 6 session fade to the 50 day MA's, SP400 midcaps gapped
higher Friday but could only manage a doji. As with SP500, it delivered a
bounce where it needed to but not anything more.
RUTX: The small caps fell into the lower third of the December to February
range as of Thursday, posted a modest bounce with a doji. Nothing
definitive, just held after a week of downside.
LEADERSHIP
As noted, there is a swath of leadership from many sectors even as some have
broken lower such as oil stocks. Even some of those, however, after long
selloffs, are going to try and bounce.
Biotech: Continues to produce some impressive moves. CORT is surging for
us. IMMU is in a powerful move. PLX exploded higher. CELG was up on the
week then tried to give it up Friday. BLUE put in solid moves up off the 20
day EMA test. SRPT looks ready to move. Some got away with upside gaps,
e.g. TTPH.
China: Some great moves again Friday, e.g. CTRP, ATHM, SOHU. YY looks
good. Still waiting for BIDU, BABA, YNDX to start upside again.
Chips: Definitely coming back to life as evidenced Friday. SIMO put in a
great week for us as we caught it on the breakout. SWKS put in a new high.
SLAB regained its feet after that early March gap lower, starting up off the
50 day MA on strong volume. AVGO surged Friday.
Financial: Not a spectacular week, but they held the line. BAC working in
a flat lateral move over the 10 day EMA. C gapped higher Wednesday and
edged higher to the early January highs. JPM put in a nice test of the 20
day EMA, looks ready to move. GS looks a bit wobbly as of Friday, trying to
hold the 20 day EMA.
Oil: Bouncing some after big drops but have not reversed the move yet. CVX
bounced but has a lot of resistance. HAL bounced modestly. SPN bombed
lower. SWN will be ready to bounce after putting in a small double bottom.
Industrial machinery: Struggling. TEX broke lower. CAT remains in
trouble. CMI is holding over the 20 day EMA.
Metals: After some selling, some possibilities. AKS is trying to hold the
late January low, showing higher MACD on this second low. It is somewhat by
itself, however, as STLD, SCHN, RS have work to do. AA is trying to break
below the 50 day EMA and the late February low.
Miscellaneous: GRMN breaking higher after testing its earnings gap. VRSN
broke out on the week.
MARKET STATS
DJ30
Stats: +44.79 points (+0.21%) to close at 20902.98
Nasdaq
Stats: +22.92 points (+0.39%) to close at 5861.73
Volume: 1.977B (+5.81%)
Up Volume: 1.23B (+261.52M)
Down Volume: 728.62M (-148.01M)
A/D and Hi/Lo: Advancers led 1.39 to 1
Previous Session: Decliners led 1.4 to 1
New Highs: 99 (+22)
New Lows: 40 (-26)
S&P
Stats: +7.73 points (+0.33%) to close at 2372.6
NYSE Volume: 838.7M (-4.51%)
A/D and Hi/Lo: Advancers led 2.03 to 1
Previous Session: Decliners led 2.32 to 1
New Highs: 71 (+30)
New Lows: 70 (-39)
SENTIMENT INDICATORS
VIX: 11.66; -0.64
VXN: 11.9; -0.57
VXO: 10.5; -0.67
Put/Call Ratio (CBOE): 0.88; -0.24
Bulls and Bears: Bulls fell back below 60 in a big drop. Bears back over
17. A bit of a bluster? Certainly in line with other sentiment we are
hearing.
Bulls: 57.7 versus 63.1
Bears: 17.3 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.
Bulls: 57.7 versus 63.1
63.1 versus 61.2 versus 61.8 versus 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: 17.3 versus 16.5
16.5 versus 17.5 versus 17.6 versus 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% versus 35.4%
OTHER MARKETS
Bonds (10 year): 2.58% versus 2.60%. Trying to put in a second bottom at
the December low. Look oversold from this pattern. Now what does that
suggest? The Fed NOT hiking rates? Would it really do that? Perhaps a
bounce into the FOMC announcement Wednesday.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.60%
versus 2.55% versus 2.51% versus 2.49% versus 2.48% versus 2.46% versus
2.260% versus 2.367% versus 2.31% versus 2.38% versus 2.42% versus 2.43%
versus 2.42% versus 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%
EUR/USD: 1.06746 versus 1.05948, Euro surging back upside Thursday and
Friday. Bouncing up off the higher low.
Historical: 1.06746 versus 1.05384 versus 1.0566 versus 1.05764 versus
1.06266 versus 1.05214 versus 1.05327 versus 1.05710 versus 1.05877 versus
1.05616 versus 1.05830 versus 1.0557 versus 1.05474 versus 1.06108 versus
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: 114.807 versus 115.259. After a break higher Wednesday and
Thursday out of the handle, the dollar backed off.
Historical: 115.259 versus 114.563 versus 113.498 versus 113.966 versus
114.042 versus 114.169 versus 113.951 versus 112.966 versus 223.982 versus
112.169 versus 112.745 versus 113.324 versus 113.399 versus 112.906 versus
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
Oil: 48.49, -0.79. Bombed lower Wednesday to Friday, closing just below
the 200 day SMA. This is where oil held in November, i.e. at the 200 day
SMA.
Gold: 1201.40, -1.80. Nine sessions to the downside, showing a doji just
below the 50 day SMA. Oversold near term.
MONDAY
Some important milestones this coming week converging Wednesday with the
FOMC rate hike (100% according to the Fed Funds Futures), the Dutch
election, and the US reaching the debt ceiling limit. Of course the Jobs
Report supposedly sealed the hike and that could have been a catalyst, but
it was not, at least not for the entire market; there were some good moves.
Friday I heard more than one market analyst talking about a pullback from
the highs being likely before the market rallied again. I looked at the
charts again just to make sure what I saw over the past 7 sessions. Yep,
still a nice orderly pullback off of the highs. Still no signs of sellers.
Now once again the indices have pulled right back off a higher high. Did it
in late January with a gap higher out of a 6 week lateral consolidation, but
they also immediately held the line and rallied sharply in February. New
high 8 sessions back on the post-SOTU rally, now a steady fade to fill the
gap and hold near support. Perhaps a pullback is coming, but with the index
action and the leadership action, once again there appears to be no sellers
of any number willing to take on the uptrend.
That can all change with the right news (wrong news for the bulls), but what
will that news be? The Dutch nationalists winning and wanting out of the EU
as did the UK? The market seemed to get used to the UK leaving and frankly
I don't think it would be surprised if the Dutch want out as well.
A Fed rate hike? That is supposed to be good news, right? Strong economy
if the Fed hikes, right? After 2 hikes in 15 months can the economy stand
another quarter point? If it cannot, and if the market cannot, then perhaps
the Fed grossly 'misoverestimated' the economy's strength. If that is the
case, well then stocks will ultimately react negatively to a hike.
The debt ceiling might be the silent rally killer. Treasury's Mnuchin is
asking to raise the debt limit to keep spending. The ironic news item is
the Deficit is down $90B since January.
So, reason to keep an eye out for what the politics are (and the Fed is
political by the way) as we watch how the indices bounce and behave AND how
leadership works. As of the end of the week it was working pretty well. Of
course we still took advantage of APC selling off to make some downside
money.
As for plays this week, we picked up some nice upside when things were not
so great the past week. Heck they are not all that great now according to
many pundits with this 'market top'. I guess we will just have to look at
those great upside setups and pass them up because the market might top off
of this pullback. Uh, hell no. As noted last week, the trend, despite all
misgivings, is still holding, and our worries or the worries of others don't
really change that trend and certainly have not changed the leaders setting
up and breaking upside. Until the leaders are breaking down and the trends
break, you look for stocks setting up for the upside and play them as them
make their moves.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 5861.73
Resistance:
5912 is the March all-time high.
Support:
5800 from the February consolidation lows
5661 is the late January upper gap point
The 50 day EMA at 5697
The 50 day SMA at 5677
The 2016 trendline at 5630
5601 is the January lower gap point
The November prior all-time high at 5404
5340 is the September and October 2016 twin peaks
The 200 day SMA at 5297
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
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
S&P 500: Closed at 2372.60
Resistance:
Support:
The 2016 trendline at 2329
2301 is the late January 2017 high
The 50 day EMA at 2313
The 50 day SMA at 2310
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
The 200 day SMA at 2195
2194 is the August 2016 prior all-time high
2175 is the June 2016 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
2062 is the January 2015 lower high
2046 is the July 2015 closing low
2040 is the March 2015 closing low
Dow: Closed at 20,902.98
Resistance:
Support:
The 50 day EMA at 20,317
The 50 day SMA at 20,265
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 200 day SMA at 18,900
19750 is the lows of the December/January range
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.
ECONOMIC CALENDAR
March 10 - Friday
Nonfarm Payrolls, February (8:30): 235K actual versus 188K expected, 238K
prior (revised from 227K)
Nonfarm Private Payrolls, February (8:30): 227K actual versus 185K expected,
221K prior (revised from 237K)
Unemployment Rate, February (8:30): 4.7% actual versus 4.7% expected, 4.8%
prior
Avg. Hourly Earnings, February (8:30): 0.2% actual versus 0.2% expected,
0.2% prior (revised from 0.1%)
Average Workweek, February (8:30): 34.4 actual versus 34.4 expected, 34.4
prior (no revisions)
Treasury Budget, February (14:00): -$192.0B actual versus -$192.6B prior
March 14 - Tuesday
PPI, February (8:30): 0.1% expected, 0.6% prior
Core PPI, February (8:30): 0.2% expected, 0.4% prior
March 15 - Wednesday
MBA Mortgage Applica, 03/11 (7:00)
MBA Mortgage Index, 03/11 (7:00): 3.3% prior
CPI, February (8:30): 0.1% expected, 0.6% prior
Core CPI, February (8:30): 0.2% expected, 0.3% prior
Retail Sales, February (8:30): 0.1% expected, 0.4% prior
Retail Sales ex-auto, February (8:30): 0.1% expected, 0.8% prior
Empire Manufacturing, March (8:30): 14.5 expected, 18.7 prior
Business Inventories, January (10:00): 0.3% expected, 0.4% prior
NAHB Housing Market , March (10:00): 65 expected, 65 prior
Crude Inventories, 03/11 (10:30): +8.2M prior
FOMC Rate Decision, March (14:00): 0.875% expected, 0.625% prior
Net Long-Term TIC Flows, March (16:00): -$12.9B prior
March 16 - Thursday
Housing Starts, February (8:30): 1260K expected, 1246K prior
Building Permits, February (8:30): 1251K expected, 1285K prior
Initial Claims, 03/11 (8:30): 242K expected, 243K prior
Continuing Claims, 03/04 (8:30): 2058K prior
Philadelphia Fed, March (8:30): 25.0 expected, 43.3 prior
JOLTS - Job Openings, January (10:00): 5.501M prior
Natural Gas Inventor, 03/11 (10:30): -68 bcf prior
March 17 - Friday
Industrial Production, February (9:15): 0.2% expected, -0.3% prior
Capacity Utilization, February (9:15): 75.4% expected, 75.3% prior
Leading Indicators, February (10:00): 0.5% expected, 0.6% prior
Michigan Sentiment, March (10:00): 96.8 expected, 96.3 prior
End part 1 of 3
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