* * * *
4/28/2017 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: None issued
Entry alerts: None issued
Trailing stops: None issued
Stop alerts: AMKR
The market alert service is a premium level service where we issue intraday
alerts relating to the general market conditions, when stocks hit action
points (buy, stop, target, etc.), and when we see other information
impacting the market or our stocks. To subscribe to the alert service you
can sign up at the following link:
http://www.investmenthouse.com/alertdaily.html
********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4
TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/ts/ts.mp4
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************
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
- Weaker US GDP, hotter EU inflation, healthcare reform vote scrubbed again.
Yet market goes about its own business. Upside business.
- A set up to the upside produced a mostly unexpected move. After a late
week test, will the move continue?
- Signs of some bubbling: 1948 square foot LA home sells for $440K/square
foot
- New month, new money, a new break higher in progress.
Friday was the third day of flat to lower trade after the Monday and Tuesday
breaks higher off of support, moves that caused some surprise.
SP500 -4.57, -0.19%
NASDAQ -1.33, -0.02%
DJ30 -40.82, -0.19%
SP400 -0.95%
RUTX -1.18%
SOX -1.74%
VOLUME: NYSE flat; NASDAQ +9%. Volume solid all week and increasing into
the end of the month. NASDAQ trade jumped to the highest of the week on a
week of stronger, above average volume as NASDAQ moved higher. Always good
for the upside to see expanding volume on moves higher.
There were many stories Friday from the EU showing hotter CPI inflation
(1.9% year/year and the highest core rate in 4 years), to an alarmingly weak
US Q1 GDP 0.7% vs 1.1% expected vs 2.1% Q4), to more earnings, to yet
another delayed vote on any US healthcare reform. All important, but all
really background noise for the market.
Why? Because the stock indices made a serious break higher early week,
moving off of patterns at support that we saw but, as is often the case when
fighting your emotions versus facts, had little faith in. After that
initial break the move stalled through Friday, but that was exactly the
action we felt it should show: a solid upside break off of support, moving
back up to an important level, then pausing in a 1-2-3 test to make a new
upside move this week.
In other words, this was a technical move that set up over the past 2
months. There was some anticipation ahead of a Trump tax plan that in our
view turned out much better than hoped that may have aided the break higher.
Perhaps, but the move was already set up and then there was the break
higher. After all, sadly, the howls of anger about Trump's tax proposal are
everywhere. Why? Because it is for the people and not the special
interests that typically get the goodies from tax 'reform.' This plan would
empower the individual to actually take risks, start new businesses, create
new jobs, create wealth. Well no WONDER there are howls of anger: this is
the US; we cannot have a lot of people becoming independent and creating
their own wealth. How will big government control them? You know the
story, but sadly the media will play into the hands of the big government as
your parent emotions and many will be convinced that taking charge of your
life is not in your best interest. Shocking that could work, but it does.
In any event, the move was set up, it triggered, and then it rested to end
the week. Now the next step: can it show the next break higher after the
initial move followed by a 1-2-3 test, at least as measured by SP500 and
DJ30? We will know more about that this week, but the action is quite
normal at this juncture.
This may appear to be a superficial or simplistic look at the market and the
events from last week. Maybe, but the market and market action in this
information age is massively overanalyzed. All day long Bloomberg,
FoxBusiness, CNBC and others run a dj-constant flow of 'experts' on the air,
each one giving us the explanation for why the market is doing what it is
doing. All of them are different of course, leaving you to wonder how they
can be so different.
Does the cause really matter? Only from a historical standpoint. The key
to any move is the move and recognizing the probabilities that are setting
up. Thus, even though we were somewhat sour on the market's upside
prospects after the run into March, we nonetheless recognized SP500 and DJ30
setting up into bullish patterns at important support levels. We saw RUTX
and SP500 trying to set up more bullish patterns. Sure those two failed the
first attempt, but the overall basing process did not break down and they
continued working on new patterns only to break higher after being the worst
performers through March and early April.
We also saw some continued good patterns in some of the same leadership
groups (e.g. chips, biotech/drugs, retail, internet) and when they flashed
upside entry signals we played the patterns, not our gut feelings.
When the market moved higher last week with that upside break we were able
to bank some gain on those positions. Some really big gain, some more
modest gain, but many opportunities to cash in on positions that set up
despite all the gloom and then made good moves higher.
If you look at it that way, all of the constant flow of expert opinion
doesn't, as the old lady in charge of the general store in 'The Outlaw Josey
Wales' said, amount to doodly. Do your best to recognize what the market is
setting up to do, try not to take preconceived notions into your analysis,
and look for vehicles to take advantage of that move if that is the move the
market decides to pursue. We did, even when the market was still testing
back, and those plays still moved higher and then really moved when the
overall market broke upside. Now we are watching, as noted, to see if the
market can make the next break higher off of this initial test.
Sure North Korea can launch missiles at us or vice versa, and then all bets
are off. Such 'black swan' events can always happen. You can either sit
out of the action and wait for those to come to pass or play what the market
is setting up to deliver.
THE MARKET
CHARTS
SP500: After double gaps higher Monday and Tuesday, SP500 moved into the
weekend with a lateral move, holding the gains. SP500 has advanced to the
early March 2017 highs with a nice breakout from its 8 week pennant. It is
resting with a lateral 1-2-3 move, and if the bullish sentiment remains, it
should make a new break higher to a new high.
DJ30: Very similar action to SP500, double gapping off the 78% Fibonacci
retracement of the February move then testing into Friday with a 1-2-3
lateral move. Excellent action setting DJ30 for a new break higher and a
new high as well.
NASDAQ: Not really a test here. NASDAQ gapped out of its 9 week lateral
range on Monday and continued upside into Thursday. Friday NASDAQ gapped
higher again, but faded to a modest loss. New highs, good volume on the
move.
SOX: Gapped higher to start the week as well, rallied to a higher post-2000
high Tuesday and again Thursday. Friday a fade back to the 10 day EMA and
back below the March prior highs. INTC, SWKS did not help things much. SOX
starts the week in position where it can move back up to those higher highs.
SP400: Gapped higher as well, made it near the March high, held into
Thursday, looked good. Then Friday a flop to the 10 day EMA. Okay, a very
important growth group here and the bulls want to see SP400 hold and then
break higher once more.
RUTX: From way down in the range to a new high breakout Wednesday. Flat
Thursday then down Friday but holding over the 10 day EMA. A test to
measure is fine, then want to see RUTX bounce back up off a 10 day EMA test.
LEADERSHIP
FAANG: Some good moves, some just hanging on. FB gapped to a new high.
AAPL continued a lateral test on the 10 day EMA. AMZN gapped higher on its
earning then gave up a large portion of that move. NFLX tested a bit after
a breakout Tuesday. Over the weekend a ransom hacker released the next
season of a popular NFLX show. GOOG posted a big gap higher on its earnings
report, holding most of it.
Machinery: After some excellent gaps higher early week, the machinery
stocks tested late week but still look good: CAT, TEX, DE, HON. UTX
continues higher.
Semiconductors: Mixed yet again. SWKS, after breaking to a higher high,
sold off Friday. INTC gapped sharply lower Friday after earnings. SLAB
flopped. MLNX gapped lower Thursday. AMKR dove lower but rebounded. Lots
of sharp selling in a leadership group.
Internet: Overall a solid week. LLNW surged. EXPE rallied to earnings,
sold modestly after results. MEET faded some Friday but enjoyed a good week
nonetheless.
Tech: WDC surged to a new high. MSFT likewise. CSCO continued its two
week rally.
Financial: Trying to set up a point to reverse. JPM, C, BAC sport a nifty
pullback/handle, setting up an opportunity upside.
China: Some solid moves. QIWI is surging for us. CTRP broke to a slightly
higher high. JD hit a new high. EDU is in a 1-2-3 test of a break to a new
high.
Retail: Continues to improve. COST is testing a gap to the prior high.
WSM is setting up a good handle to the March surge. Restaurants continue
looking good. WEN is testing the breakout from a 5 month range.
Drugs/Biotech: Some great moves, some not so great, and as usual, the moves
were large. CNAT enjoyed a great week. ZIOP took off upside but Friday
flopped to the 20 day EMA. IMGN still pushing higher. IMMU still in a bear
flag below the 50 day MA. KITE still set up well. JAZZ hit a new high on
the week. UNH broke higher again then finished the week with a lateral move,
holding the gain.
MARKET STATS
DJ30
Stats: -40.82 points (-0.19%) to close at 20940.51
Nasdaq
Stats: -1.33 points (-0.02%) to close at 6047.61
Volume: 2.01B (+8.65%)
Up Volume: 753.29M (-336.71M)
Down Volume: 1.22B (+456.09M)
A/D and Hi/Lo: Decliners led 1.76 to 1
Previous Session: Decliners led 1.15 to 1
New Highs: 148 (-93)
New Lows: 47 (+3)
S&P
Stats: -4.57 points (-0.19%) to close at 2384.2
NYSE Volume: 1B (0%)
A/D and Hi/Lo: Decliners led 1.59 to 1
Previous Session: Advancers led 1 to 1
New Highs: 163 (-101)
New Lows: 29 (+4)
SENTIMENT INDICATORS
VIX: 10.82; +0.46
VXN: 11.53; +0.42
VXO: 9.25; -0.68
Put/Call Ratio (CBOE): 0.96; +0.04
Bulls and Bears: With a bit of market success, bulls start back up, bears
fade some. The market was selling, threatened the prior lows, but then
rebounded.
Bulls: 54.7 versus 51.9
Bears: 17.9 versus 18.3
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: 54.7 versus 51.9
51.9 versus 56.3 versus 55.8 versus 49.5 versus 56.7 versus 53.4 versus 57.7
versus 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%
Bears: 17.9 versus 18.3
18.3 versus 17.5 versus 18.3 versus 18.1 versus 17.3 versus 13.75 versus
17.3 versus 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): 2.28% versus 2.30%. Bounced some Friday after selling off
to the 50 day EMA Tuesday.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.30%
versus 2.31% versus 2.33% versus 2.275% versus 2.236% versus 2.234% versus
2.21% versus 2.15% versus 2.248% versus 2.232% versus 2.264% versus 2.30%
versus 2.36% versus 2.37% versus 2.34% versus 2.33% versus 2.34% versus
2.33% versus 2.35% versus 2.40% versus 2.41% versus 2.382% versus 2.418%
versus 2.376% versus 2.40% versus 2.41% versus 2.40% versus 2.43% versus
2.463% versus 2.50% versus 2.529% versus 2.502% versus 2.602
EUR/USD: 1.08987 versus 1.08691. Big euro break higher, then a lateral
test into Friday. Euro still looks strong, particularly with the 1.9%
year/year EU CPI.
Historical: 1.08691 versus 1.09093 versus 1.09358 versus 1.08449 versus
1.07255 versus 1.07255 versus 1.07188 versus 1.0717 versus 1.07304 versus
1.06431 versus 1.06138 versus 1.0671 versus 1.06068 versus 1.05984 versus
1.05906 versus 1.0645 versus 1.06760 versus 1.06804 versus 1.06702 versus
1.06584 versus 1.06855 versus 1.07546 versus 1.0815 versus 1.08640 versus
1.07894 versus 1.07670 versus 1.07920 versus 1.08117 versus 1.0748 versus
1.07395 versus 1.07710 versus 1.0732 versus 1.06070 versus 1.0636 versus
1.06746 versus 1.06746 versus 1.05384 versus 1.0566 versus 1.05764 versus
1.06266 versus 1.05214
USD/JPY: 111.524 versus 111.197. Working laterally after a strong Tuesday
break higher through the 200 day SMA. Dollar looks as if it wants to
continue its recovery upside.
Historical: 111.197 versus 111. 177 versus 111.234 versus 109.704 versus
110.022 versus 109.00 versus 109.357 versus 108.974 versus 108.525 versus
109.150 versus 109.170 versus 108.926 versus 109.691 versus 110.704 versus
111.096 versus 110.85 versus 110.794 versus 110.705 versus 111.386 versus
111.255 versus 111.114 versus 110.581 versus 111.335 versus 111.242 versus
111.295 versus 111.502 versus 112.289 versus 112.707 versus 113.349 versus
113.447 versus 114.726 versus 114.833 versus 114.807 versus 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
Oil: 49.35, +0.38. After dropping to the 200 day SMA the prior week, oil
worked laterally along the 200 day all week, trying to set up a higher low
to at least put in a relief bounce to the 2 weeks of selling.
Gold: 1268.30, +2.40. Faded to test the 200 day SMA after the breakout two
weeks back.
MONDAY
A renewed upside last week followed by a test has the stock indices in
position to rally to higher highs with the start of a new month. New months
often bring some new money to the market, and with the new break higher and
test, there may be some that are eager to put that money to work.
Thus far this weekend no new wars have started. North Korea launched
another missile that again blew up before leaving its airspace, kind of the
status quo of late. China's economic data was less than exciting, however,
as manufacturing and services new orders hit six month lows. But all is
well here: a 2-bedroom, 1.5 bathroom, 1948 square foot house in Los Angeles
sold for 40% over the asking price: $980,888 after listing at $699K. A
'sustainable' $500/square foot. Or as I like to view it, $654K per
bathroom. With a market like that, no wonder those two on 'Flip or Flop'
always seem to land on the positive 'flip' side. It is like having a
Bernanke put under the housing market. It is great -- until it is not
there.
Earnings season marches on. Some big names are already out and numbers are
not that bad on the marquis companies; a few are making all the money. AAPL
and FB are still to come (5/2 and 5/3, respectively) along with a lot of
others in May; earnings is now a 2-month event, seemingly unending, much
like the baseball and basketball seasons.
There is still a lot of news flow, economic, political, and geopolitical,
but the market has weathered it all, made a good upside move, is testing it,
and is in position to move higher. We will see if the new money helps push
it to those higher highs.
Last week we banked gain ahead of some earnings but also left money on the
table to work for the after earnings action. The reason is the market
setup: the rebound that was set up but no one believed would happen, the
test to end the week that really didn't give much back, the reception of
earnings, the continued numbers of good patterns in the market. Now we will
see if that pays off and look at picking up more positions on a renewed
breakout effort by the indices.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6047.61
Resistance:
Support:
The 10 day EMA at 5975
5937 is the all-time high from April, hit intraday
The 50 day SMA at 5879
The 50 day EMA at 5855
The 2016 trendline at 5789
5800 from the February consolidation lows
5661 is the late January upper gap point
5601 is the January lower gap point
The 200 day SMA at 5469
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
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
S&P 500: Closed at 2384.20
Resistance:
The 2016 trendline at 2398
2390 is the March secondary peak
2401 is the March 2017 all-time high
Support:
The 50 day SMA at 2363
The 50 day EMA at 2350
2329 is the March and April twin lows
2322 is the March 2017 low
2319 is the 78% Fibonacci retracement
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The 200 day SMA at 2241
The November 2016 all-time high at 2213.25
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
Dow: Closed at 20,940.51
Resistance:
21,000 is the March secondary high
21,169 is the March 2017 all-time high
Support:
The 50 day SMA at 20,760
The 50 day EMA at 20,613
20,412 is the March 2017 low
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
19750 is the lows of the December/January range
The 200 day SMA at 19,389
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.
End part 1 of 3
_______________________________________________________
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Sunday, April 30, 2017
Saturday, April 22, 2017
The Daily, Part 1 of 3, 4-21-17
* * * *
4/21/2017 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: BABA; UNH
Entry alerts: AUPH; SPLK; VIPS
Trailing stops: None issued
Stop alerts: CRK; IMMU
The market alert service is a premium level service where we issue intraday
alerts relating to the general market conditions, when stocks hit action
points (buy, stop, target, etc.), and when we see other information
impacting the market or our stocks. To subscribe to the alert service you
can sign up at the following link:
http://www.investmenthouse.com/alertdaily.html
********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4
TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/ts/ts.mp4
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************
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
- Talk, promises of tax and healthcare reform keep the market afloat late
week.
- Expiration rather lackluster, stocks close lower but hold their moves for
the week.
- Recovery keeps several indices in more bullish patterns, but can they do
anything with the recovery this time?
- French election has the status quo worried.
- Can the market make anything out of the hold of support?
But you made me promises, promises . . . that you knew you would not keep .
. .
That line from the Naked Eyes song 'Promises, Promises' appears apropos to
the political, economic, and market situations as of Friday. Once more
there were promises of tax and healthcare reform, but we have heard that
before. This time is different was the apparent view Thursday as stocks
rallied purportedly on Mnuchin statement as to tax reform, but Friday, even
as the administration pressed harder, stocks were less than impressed,
closing lower. Modestly lower, but they certainly received no push from the
promises.
SP500 -7.15, -0.30%
NASDAQ -6.26, -0.11%
DJ30 -30.95, -0.15%
SP400 -0.19%
RUTX -0.31%
SOX -0.46%
VOLUME: NYSE +4%, NASDAQ -2%. Expiration so higher volume is expected.
Got just a whisker higher trade as volume remains quite light.
A/D: NYSE -1.2:1, NASDAQ -1.4:1.
What was promised? Given that Paul Ryan is the Speaker of the House and has
an entirely different agenda and plan for America than what he reveals to
his constituents and the President, the administration is promising the
moon. We hear the Freedom Caucus is about ready to flip to favor a new
healthcare bill that does not repeal the ACA as promised, and likely will do
nothing to change the healthcare plight for working US citizens. But that
does not matter now does it? Control healthcare, control the people. That
is what Ryan, Graham, McCain, Flake, Schumer, and on and on want to
maintain. Repeal the ACA? It will never happen unless Trump balks at the
Ryan plans and takes the case to the people a la Ronald Reagan.
As for taxes, we were promised another 'biggest tax cut ever' to be unveiled
next week. Well, the 2-3 week unveiling promised back in February kind of
passed its deadline, and now we hear it is finally will be revealed next
week. Yet, from what we hear, no one in Congress we know of has seen it.
There is likely a reason for that: Trump worked with Ryan on that hideous
Ryan-Care bill and Ryan and others told Trump it easily had the votes. Then
it didn't. Then Ryan sets out on his own agenda that apparently does not
include tax reform or healthcare reform. So, the White House decided it was
burned by trusting or trying to use the oily Congressman from Wisconsin and
is now taking it upon itself to drive legislative agendas. Good luck with
that. That market was obviously not buying it Friday.
THE MARKET
The indices traded up one day, down the next all week long. Friday it was
the downside's turn, but it was not much of a drop. The indices held their
patterns. That is not the greatest compliment, but after a very rocky end
to the prior week, the indices executed rather well in working on firming up
at support. Given all of the 'great news' about healthcare and tax reform I
suppose they should have performed better. There is still plenty of reason
to be concerned about the upside prospects, but once again the indices
turned some ugly patterns into something the upside can work with.
CHARTS
SP500: Managed to close the week over the 50 day EMA and the March low as
SP500 continues in a 2 month consolidation. The pattern is not bad at all,
holding at the 78% Fibonacci retracement on the lows after the February
rally, forming a pennant/triangle over that support. Sure is a lot of angst
about the market for such a decent upside pattern.
DJ30: Similar to SP500 but the Dow had to overcome IBM and VZ earnings
issues. It did, holding near the 61% Fibonacci retracement with that
potential double bottom still intact. As noted early in the week, this is
the same kind of consolidation shown in December to early January ahead of
the February rally. It has now matched that consolidation in the number of
weeks. As with SP500, a lot of angst over a not so terrible pattern with
upside potential.
NASDAQ: Started the week at the 50 day MA after selling the prior Friday.
NASDAQ rallied right back up to the top of its 9 week range and put in a new
closing high Thursday. Decent volume Wednesday to Friday. NASDAQ is trying
to provide the leadership higher, and it managed to hold SP500 and DJ30 at
support, perhaps even helped SOX back over the 50 day MA.
SOX: Appeared to have broken with a gap lower and drop through the 50 day
MA's and trendline into the prior Friday. Then it reversed, gapped back
over the 50 day EMA Wednesday, and rallied over the 50 day SMA Thursday. A
test Friday, but holding the 50 day. That said, SOX is now at the February
interim peak before the run into March. Meaning? SOX is potentially at the
apex of a right shoulder to a head and shoulders pattern. We will see. The
sellers had it cold but SOX recovered over support. Perhaps a failed
breakdown. Again, we will see.
SP400: Held the March low and rebounded to the top of its 4 week range.
Not overly impressive; it recovered but it is still at a resistance point.
RUTX: Very similar to SP400, rallying off the bottom of its range (and the
range from December to early February) back up near the top of those ranges.
Head and shoulders pattern, but those often form and never consummate. As
with SOX, this index and the other indices have to show if they can continue
after they saved themselves at support.
LEADERSHIP
Recovered with the indices but still wobbly. Earnings season is, despite
some high visibility misses (IBM, VZ), not hurting and stocks are holding
up. After investors get comfortable the results, given the indices have
weathered the selling attempts, they are in position to move higher.
Semiconductors: A good week for the sector overall as it recovered. A
really good week for some as they broke out, e.g. MVIS, AMKR, BRKS. Other
chip leaders continued to work as SWKS recovered and QRVO moved back up to
test the early April higher high. PLAB moved well off its 200 day SMA test.
FAANG: FB rallied to a higher high on the week, pausing Friday. AMZN
bounced off a 20 day EMA test, faded the rest of the week but holding the 10
day EMA. AAPL is trying to bounce up off a 2 week test over the 50 day SMA.
GOOG surged Monday then trended modestly higher to close the week at the
late January high. NFLX sold hard midweek, recovered modestly. These
stocks are decent, are moving up, and that is helping NASDAQ move to a
higher high.
Biotechs/Drugs: Mixed week with big moves up and down. XOMA was strong,
breaking over the 200 day SMA. CNAT rallied very nicely. IMGN and SPPI
surged. Others struggled. IMMU flopped. BLUE looked good but then faded
and is struggling. Others yet look as if they can still move: FOLD, AUPH.
Oil: Really struggling with oil prices as OPEC cannot get its story
straight about a production cut extension. Many sold on the week,
continuing some selling form the prior week. CRK, AMD, APC, CVX. Long
list.
Financial: Earnings are out and the stocks are still slogging along in a
range below the 50 day MA. C, BAC, JPM. Managing to hold support but that
is about all.
Industrial: Some good moves on earnings, e.g. UTX, HON. Machinery is still
problematic as CMI and DE look weak.
Retail: HD and LOW are starting to break higher from consolidations.
Restaurants/eateries broke higher on the week: WEN, BWLD, MCD, DRI. The
leadership in retail is spreading out.
MARKET STATS
DJ30
Stats: -30.95 points (-0.15%) to close at 20547.76
Nasdaq
Stats: -6.26 points (-0.11%) to close at 5910.52
Volume: 1.705B (-1.81%)
Up Volume: 660.84M (-639.16M)
Down Volume: 939.84M (+567.93M)
A/D and Hi/Lo: Decliners led 1.39 to 1
Previous Session: Advancers led 2.53 to 1
New Highs: 100 (-38)
New Lows: 44 (+5)
S&P
Stats: -7.15 points (-0.3%) to close at 2348.69
NYSE Volume: 900M (+3.91%)
A/D and Hi/Lo: Decliners led 1.18 to 1
Previous Session: Advancers led 2.49 to 1
New Highs: 112 (-11)
New Lows: 16 (-7)
SENTIMENT INDICATORS
VIX: 14.63; +0.48
VXN: 14.87; +0.41
VXO: 13.36; +0.69
Put/Call Ratio (CBOE): 1.04; +0.14. Jumped over 1.0 on a rather calm
session. Likely just expiration causing additional rolling out given the
market's rebound on the week.
Bulls and Bears: After peaking over 60 and holding that level for 7 weeks,
bulls fell as the market struggled. That kind of spike leads to selling.
The market has sold -- modestly.
Bulls: 51.9 versus 56.3. Market fell, bulls fell.
Bears: 18.3 versus 17.5. And bears rose as you would anticipate.
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: 51.9 versus 56.3
56.3 versus 55.8 versus 49.5 versus 56.7 versus 53.4 versus 57.7 versus 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%
Bears: 18.3 versus 17.5
17.5 versus 18.3 versus 18.1 versus 17.3 versus 13.75 versus 17.3 versus
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): 2.236% versus 2.234%. After gapping and running through
the base interim highs, TLT paused to test Wednesday to Friday, holding the
10 day EMA. Normal test of a good breakout, suggesting bonds still have room
to rally though likely the French election has had an impact upside for
bonds and likely will have an impact after Sunday.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.236%
versus 2.234% versus 2.21% versus 2.15% versus 2.248% versus 2.232% versus
2.264% versus 2.30% versus 2.36% versus 2.37% versus 2.34% versus 2.33%
versus 2.34% versus 2.33% versus 2.35% versus 2.40% versus 2.41% versus
2.382% versus 2.418% versus 2.376% versus 2.40% versus 2.41% versus 2.40%
versus 2.43% versus 2.463% versus 2.50% versus 2.529% versus 2.502% versus
2.602
EUR/USD: 1.07255 versus 1.07188.
Historical: 1.07188 versus 1.0717 versus 1.07304 versus 1.06431 versus
1.06138 versus 1.0671 versus 1.06068 versus 1.05984 versus 1.05906 versus
1.0645 versus 1.06760 versus 1.06804 versus 1.06702 versus 1.06584 versus
1.06855 versus 1.07546 versus 1.0815 versus 1.08640 versus 1.07894 versus
1.07670 versus 1.07920 versus 1.08117 versus 1.0748 versus 1.07395 versus
1.07710 versus 1.0732 versus 1.06070 versus 1.0636 versus 1.06746 versus
1.06746 versus 1.05384 versus 1.0566 versus 1.05764 versus 1.06266 versus
1.05214
USD/JPY: 109.00 versus 109.357
Historical: 109.357 versus 108.974 versus 108.525 versus 109.150 versus
109.170 versus 108.926 versus 109.691 versus 110.704 versus 111.096 versus
110.85 versus 110.794 versus 110.705 versus 111.386 versus 111.255 versus
111.114 versus 110.581 versus 111.335 versus 111.242 versus 111.295 versus
111.502 versus 112.289 versus 112.707 versus 113.349 versus 113.447 versus
114.726 versus 114.833 versus 114.807 versus 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
Oil: 49.62, -1.09. Oil bombed lower on the week with big moves lower
Wednesday and Friday. That landed oil at the 200 day SMA on the low.
Important level for oil after failing a the same resistance to start the
week.
Gold: 1289.10, +5.30. Continued higher early week then tested the 10 day
EMA into Thursday. Friday gold started back up off the test. Gold is a bit
worried about the world conflicts, the French election, general economic
issues as well.
MONDAY
Who will the French vote for? If the 'wrong' people get clear majorities
world markets could sell, giving something of a 'Trump election'
opportunity? Perhaps. It will not be the end of the world, markets, or
anything other than perhaps a bloated bureaucracy of control that is the EU.
Let's face it, the EU is more about control for those in power versus better
markets for its constituents. It is like the UN: lofty stated ideals that
are a cover for corruption and the most heinous of actions against people
who it is supposed to help (e.g. sexual assault on children, slavery rings).
Concentrate too much power in too few and you get corruption.
Ok, off the soap box. The status quo won't like threats to the status quo
so the reaction is initially negative but the markets figure out it won't be
the end. Wasn't for the UK, wasn't for the US, won't be for France.
Indeed, if France STAYS in the EU the death of its people and culture is
more assured. Just look at the Greeks: 7 years of economic collapse, no
improvement, no hope of improvement. The birth rate has plummeted as
surveys show again and again that the people have no hope for the future.
Truly a Greek tragedy.
Once again the US stock market will be influenced by outside factors, but
again, I think that just as with Brexit and the US election, the fears are
much overblown.
The issues are more with world economies and whether things are as rosy as
we are told. I believe the US has negative growth right now and that Q1 was
actually negative (as we will see when it is revised in the future). Fed
surveys indicate Q2 has slowed even more than late Q1; that only bolsters my
argument the US is likely in recession as a weaker Q2 would likely be a
second of negative growth.
And why would things be improving? There was a lot of hope post-election
and even in the weekly word from the administration that tax and healthcare
reform are on their way. Yet, NO policies have been passed or implemented
and it does not appear that any are close to being ready to implement. Yes
there was a burst of post-election activity, but that has not carried over
to 2017, and the longer it takes, the less people believe in it and the less
they will go out on a limb ahead of actual policy passage and make
expenditures.
That is, however, just opinion. How the market reacts is always the true
read.
As noted before, lots of pessimism about the market's prospects. At the
same time the indices are not in bad shape, at least SP500, DJ30, NASDAQ,
SOX (thanks to its recovery), and there is leadership as well as some new
arrivals such as the restaurants joining other retailers.
Not in bad shape, but still have to prove they can do more than just rebound
off selling as they did this past week. The proof is in the stocks moving
higher, so we will look at more upside plays for the break higher, but also
keep some downside ready to go as well, though those plays that broke lower
are trying to rebound just as IWM (RUTX ETF) rebounded.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 5910.52
Resistance:
5937 is the all-time high from April, hit intraday
Support:
The 50 day SMA at 5853
The 50 day EMA at 5816
5800 from the February consolidation lows
The 2016 trendline at 5767
5661 is the late January upper gap point
5601 is the January lower gap point
The 200 day SMA at 5443
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
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
S&P 500: Closed at 2348.69
Resistance:
The 50 day SMA at 2357
The 2016 trendline at 2388
2390 is the March interim recovery high
2401 is the all-time high
Support:
The 50 day EMA at 2342
2329 is the March and April twin lows
2322 is the March 2017 low
2319 is the 78% Fibonacci retracement
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The 200 day SMA at 2234
The November 2016 all-time high at 2213.25
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
Dow: Closed at 20,547.76
Resistance:
The 50 day SMA at 20,705
21,100 is the March interim recovery high
21,169 is the all-time high
Support:
The 50 day EMA at 20,541
20,412 is the March 2017 low
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
19750 is the lows of the December/January range
The 200 day SMA at 19,320
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.
End part 1 of 3
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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
- Talk, promises of tax and healthcare reform keep the market afloat late
week.
- Expiration rather lackluster, stocks close lower but hold their moves for
the week.
- Recovery keeps several indices in more bullish patterns, but can they do
anything with the recovery this time?
- French election has the status quo worried.
- Can the market make anything out of the hold of support?
But you made me promises, promises . . . that you knew you would not keep .
. .
That line from the Naked Eyes song 'Promises, Promises' appears apropos to
the political, economic, and market situations as of Friday. Once more
there were promises of tax and healthcare reform, but we have heard that
before. This time is different was the apparent view Thursday as stocks
rallied purportedly on Mnuchin statement as to tax reform, but Friday, even
as the administration pressed harder, stocks were less than impressed,
closing lower. Modestly lower, but they certainly received no push from the
promises.
SP500 -7.15, -0.30%
NASDAQ -6.26, -0.11%
DJ30 -30.95, -0.15%
SP400 -0.19%
RUTX -0.31%
SOX -0.46%
VOLUME: NYSE +4%, NASDAQ -2%. Expiration so higher volume is expected.
Got just a whisker higher trade as volume remains quite light.
A/D: NYSE -1.2:1, NASDAQ -1.4:1.
What was promised? Given that Paul Ryan is the Speaker of the House and has
an entirely different agenda and plan for America than what he reveals to
his constituents and the President, the administration is promising the
moon. We hear the Freedom Caucus is about ready to flip to favor a new
healthcare bill that does not repeal the ACA as promised, and likely will do
nothing to change the healthcare plight for working US citizens. But that
does not matter now does it? Control healthcare, control the people. That
is what Ryan, Graham, McCain, Flake, Schumer, and on and on want to
maintain. Repeal the ACA? It will never happen unless Trump balks at the
Ryan plans and takes the case to the people a la Ronald Reagan.
As for taxes, we were promised another 'biggest tax cut ever' to be unveiled
next week. Well, the 2-3 week unveiling promised back in February kind of
passed its deadline, and now we hear it is finally will be revealed next
week. Yet, from what we hear, no one in Congress we know of has seen it.
There is likely a reason for that: Trump worked with Ryan on that hideous
Ryan-Care bill and Ryan and others told Trump it easily had the votes. Then
it didn't. Then Ryan sets out on his own agenda that apparently does not
include tax reform or healthcare reform. So, the White House decided it was
burned by trusting or trying to use the oily Congressman from Wisconsin and
is now taking it upon itself to drive legislative agendas. Good luck with
that. That market was obviously not buying it Friday.
THE MARKET
The indices traded up one day, down the next all week long. Friday it was
the downside's turn, but it was not much of a drop. The indices held their
patterns. That is not the greatest compliment, but after a very rocky end
to the prior week, the indices executed rather well in working on firming up
at support. Given all of the 'great news' about healthcare and tax reform I
suppose they should have performed better. There is still plenty of reason
to be concerned about the upside prospects, but once again the indices
turned some ugly patterns into something the upside can work with.
CHARTS
SP500: Managed to close the week over the 50 day EMA and the March low as
SP500 continues in a 2 month consolidation. The pattern is not bad at all,
holding at the 78% Fibonacci retracement on the lows after the February
rally, forming a pennant/triangle over that support. Sure is a lot of angst
about the market for such a decent upside pattern.
DJ30: Similar to SP500 but the Dow had to overcome IBM and VZ earnings
issues. It did, holding near the 61% Fibonacci retracement with that
potential double bottom still intact. As noted early in the week, this is
the same kind of consolidation shown in December to early January ahead of
the February rally. It has now matched that consolidation in the number of
weeks. As with SP500, a lot of angst over a not so terrible pattern with
upside potential.
NASDAQ: Started the week at the 50 day MA after selling the prior Friday.
NASDAQ rallied right back up to the top of its 9 week range and put in a new
closing high Thursday. Decent volume Wednesday to Friday. NASDAQ is trying
to provide the leadership higher, and it managed to hold SP500 and DJ30 at
support, perhaps even helped SOX back over the 50 day MA.
SOX: Appeared to have broken with a gap lower and drop through the 50 day
MA's and trendline into the prior Friday. Then it reversed, gapped back
over the 50 day EMA Wednesday, and rallied over the 50 day SMA Thursday. A
test Friday, but holding the 50 day. That said, SOX is now at the February
interim peak before the run into March. Meaning? SOX is potentially at the
apex of a right shoulder to a head and shoulders pattern. We will see. The
sellers had it cold but SOX recovered over support. Perhaps a failed
breakdown. Again, we will see.
SP400: Held the March low and rebounded to the top of its 4 week range.
Not overly impressive; it recovered but it is still at a resistance point.
RUTX: Very similar to SP400, rallying off the bottom of its range (and the
range from December to early February) back up near the top of those ranges.
Head and shoulders pattern, but those often form and never consummate. As
with SOX, this index and the other indices have to show if they can continue
after they saved themselves at support.
LEADERSHIP
Recovered with the indices but still wobbly. Earnings season is, despite
some high visibility misses (IBM, VZ), not hurting and stocks are holding
up. After investors get comfortable the results, given the indices have
weathered the selling attempts, they are in position to move higher.
Semiconductors: A good week for the sector overall as it recovered. A
really good week for some as they broke out, e.g. MVIS, AMKR, BRKS. Other
chip leaders continued to work as SWKS recovered and QRVO moved back up to
test the early April higher high. PLAB moved well off its 200 day SMA test.
FAANG: FB rallied to a higher high on the week, pausing Friday. AMZN
bounced off a 20 day EMA test, faded the rest of the week but holding the 10
day EMA. AAPL is trying to bounce up off a 2 week test over the 50 day SMA.
GOOG surged Monday then trended modestly higher to close the week at the
late January high. NFLX sold hard midweek, recovered modestly. These
stocks are decent, are moving up, and that is helping NASDAQ move to a
higher high.
Biotechs/Drugs: Mixed week with big moves up and down. XOMA was strong,
breaking over the 200 day SMA. CNAT rallied very nicely. IMGN and SPPI
surged. Others struggled. IMMU flopped. BLUE looked good but then faded
and is struggling. Others yet look as if they can still move: FOLD, AUPH.
Oil: Really struggling with oil prices as OPEC cannot get its story
straight about a production cut extension. Many sold on the week,
continuing some selling form the prior week. CRK, AMD, APC, CVX. Long
list.
Financial: Earnings are out and the stocks are still slogging along in a
range below the 50 day MA. C, BAC, JPM. Managing to hold support but that
is about all.
Industrial: Some good moves on earnings, e.g. UTX, HON. Machinery is still
problematic as CMI and DE look weak.
Retail: HD and LOW are starting to break higher from consolidations.
Restaurants/eateries broke higher on the week: WEN, BWLD, MCD, DRI. The
leadership in retail is spreading out.
MARKET STATS
DJ30
Stats: -30.95 points (-0.15%) to close at 20547.76
Nasdaq
Stats: -6.26 points (-0.11%) to close at 5910.52
Volume: 1.705B (-1.81%)
Up Volume: 660.84M (-639.16M)
Down Volume: 939.84M (+567.93M)
A/D and Hi/Lo: Decliners led 1.39 to 1
Previous Session: Advancers led 2.53 to 1
New Highs: 100 (-38)
New Lows: 44 (+5)
S&P
Stats: -7.15 points (-0.3%) to close at 2348.69
NYSE Volume: 900M (+3.91%)
A/D and Hi/Lo: Decliners led 1.18 to 1
Previous Session: Advancers led 2.49 to 1
New Highs: 112 (-11)
New Lows: 16 (-7)
SENTIMENT INDICATORS
VIX: 14.63; +0.48
VXN: 14.87; +0.41
VXO: 13.36; +0.69
Put/Call Ratio (CBOE): 1.04; +0.14. Jumped over 1.0 on a rather calm
session. Likely just expiration causing additional rolling out given the
market's rebound on the week.
Bulls and Bears: After peaking over 60 and holding that level for 7 weeks,
bulls fell as the market struggled. That kind of spike leads to selling.
The market has sold -- modestly.
Bulls: 51.9 versus 56.3. Market fell, bulls fell.
Bears: 18.3 versus 17.5. And bears rose as you would anticipate.
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: 51.9 versus 56.3
56.3 versus 55.8 versus 49.5 versus 56.7 versus 53.4 versus 57.7 versus 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%
Bears: 18.3 versus 17.5
17.5 versus 18.3 versus 18.1 versus 17.3 versus 13.75 versus 17.3 versus
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): 2.236% versus 2.234%. After gapping and running through
the base interim highs, TLT paused to test Wednesday to Friday, holding the
10 day EMA. Normal test of a good breakout, suggesting bonds still have room
to rally though likely the French election has had an impact upside for
bonds and likely will have an impact after Sunday.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.236%
versus 2.234% versus 2.21% versus 2.15% versus 2.248% versus 2.232% versus
2.264% versus 2.30% versus 2.36% versus 2.37% versus 2.34% versus 2.33%
versus 2.34% versus 2.33% versus 2.35% versus 2.40% versus 2.41% versus
2.382% versus 2.418% versus 2.376% versus 2.40% versus 2.41% versus 2.40%
versus 2.43% versus 2.463% versus 2.50% versus 2.529% versus 2.502% versus
2.602
EUR/USD: 1.07255 versus 1.07188.
Historical: 1.07188 versus 1.0717 versus 1.07304 versus 1.06431 versus
1.06138 versus 1.0671 versus 1.06068 versus 1.05984 versus 1.05906 versus
1.0645 versus 1.06760 versus 1.06804 versus 1.06702 versus 1.06584 versus
1.06855 versus 1.07546 versus 1.0815 versus 1.08640 versus 1.07894 versus
1.07670 versus 1.07920 versus 1.08117 versus 1.0748 versus 1.07395 versus
1.07710 versus 1.0732 versus 1.06070 versus 1.0636 versus 1.06746 versus
1.06746 versus 1.05384 versus 1.0566 versus 1.05764 versus 1.06266 versus
1.05214
USD/JPY: 109.00 versus 109.357
Historical: 109.357 versus 108.974 versus 108.525 versus 109.150 versus
109.170 versus 108.926 versus 109.691 versus 110.704 versus 111.096 versus
110.85 versus 110.794 versus 110.705 versus 111.386 versus 111.255 versus
111.114 versus 110.581 versus 111.335 versus 111.242 versus 111.295 versus
111.502 versus 112.289 versus 112.707 versus 113.349 versus 113.447 versus
114.726 versus 114.833 versus 114.807 versus 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
Oil: 49.62, -1.09. Oil bombed lower on the week with big moves lower
Wednesday and Friday. That landed oil at the 200 day SMA on the low.
Important level for oil after failing a the same resistance to start the
week.
Gold: 1289.10, +5.30. Continued higher early week then tested the 10 day
EMA into Thursday. Friday gold started back up off the test. Gold is a bit
worried about the world conflicts, the French election, general economic
issues as well.
MONDAY
Who will the French vote for? If the 'wrong' people get clear majorities
world markets could sell, giving something of a 'Trump election'
opportunity? Perhaps. It will not be the end of the world, markets, or
anything other than perhaps a bloated bureaucracy of control that is the EU.
Let's face it, the EU is more about control for those in power versus better
markets for its constituents. It is like the UN: lofty stated ideals that
are a cover for corruption and the most heinous of actions against people
who it is supposed to help (e.g. sexual assault on children, slavery rings).
Concentrate too much power in too few and you get corruption.
Ok, off the soap box. The status quo won't like threats to the status quo
so the reaction is initially negative but the markets figure out it won't be
the end. Wasn't for the UK, wasn't for the US, won't be for France.
Indeed, if France STAYS in the EU the death of its people and culture is
more assured. Just look at the Greeks: 7 years of economic collapse, no
improvement, no hope of improvement. The birth rate has plummeted as
surveys show again and again that the people have no hope for the future.
Truly a Greek tragedy.
Once again the US stock market will be influenced by outside factors, but
again, I think that just as with Brexit and the US election, the fears are
much overblown.
The issues are more with world economies and whether things are as rosy as
we are told. I believe the US has negative growth right now and that Q1 was
actually negative (as we will see when it is revised in the future). Fed
surveys indicate Q2 has slowed even more than late Q1; that only bolsters my
argument the US is likely in recession as a weaker Q2 would likely be a
second of negative growth.
And why would things be improving? There was a lot of hope post-election
and even in the weekly word from the administration that tax and healthcare
reform are on their way. Yet, NO policies have been passed or implemented
and it does not appear that any are close to being ready to implement. Yes
there was a burst of post-election activity, but that has not carried over
to 2017, and the longer it takes, the less people believe in it and the less
they will go out on a limb ahead of actual policy passage and make
expenditures.
That is, however, just opinion. How the market reacts is always the true
read.
As noted before, lots of pessimism about the market's prospects. At the
same time the indices are not in bad shape, at least SP500, DJ30, NASDAQ,
SOX (thanks to its recovery), and there is leadership as well as some new
arrivals such as the restaurants joining other retailers.
Not in bad shape, but still have to prove they can do more than just rebound
off selling as they did this past week. The proof is in the stocks moving
higher, so we will look at more upside plays for the break higher, but also
keep some downside ready to go as well, though those plays that broke lower
are trying to rebound just as IWM (RUTX ETF) rebounded.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 5910.52
Resistance:
5937 is the all-time high from April, hit intraday
Support:
The 50 day SMA at 5853
The 50 day EMA at 5816
5800 from the February consolidation lows
The 2016 trendline at 5767
5661 is the late January upper gap point
5601 is the January lower gap point
The 200 day SMA at 5443
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
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
S&P 500: Closed at 2348.69
Resistance:
The 50 day SMA at 2357
The 2016 trendline at 2388
2390 is the March interim recovery high
2401 is the all-time high
Support:
The 50 day EMA at 2342
2329 is the March and April twin lows
2322 is the March 2017 low
2319 is the 78% Fibonacci retracement
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The 200 day SMA at 2234
The November 2016 all-time high at 2213.25
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
Dow: Closed at 20,547.76
Resistance:
The 50 day SMA at 20,705
21,100 is the March interim recovery high
21,169 is the all-time high
Support:
The 50 day EMA at 20,541
20,412 is the March 2017 low
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
19750 is the lows of the December/January range
The 200 day SMA at 19,320
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.
End part 1 of 3
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Saturday, April 15, 2017
The Daily, Part 1 of 3, 4-13-17
* * * *
4/13/2017 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: XLNX
Entry alerts: IWM
Trailing stops: None issued
Stop alerts: CX; NE; SN; WFT
The market alert service is a premium level service where we issue intraday
alerts relating to the general market conditions, when stocks hit action
points (buy, stop, target, etc.), and when we see other information
impacting the market or our stocks. To subscribe to the alert service you
can sign up at the following link:
http://www.investmenthouse.com/alertdaily.html
********************************************************************
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
- Only NASDAQ is left holding the 50 day EMA.
- Leadership is thinner once again, some breakouts falter, some reverse.
- Economic data, other markets indicate the US is in recession right now.
- Recession is a good thing: it may panic Congress into acting. Problem is,
they will be in denial until the hard numbers slap their faces.
- Perhaps NASDAQ can be the Maximus of the market, i.e. the savior just as
Maximus in the move 'Gladiator.'
- In case NASDAQ falters as well, some downside plays along with the biotech
upside plays.
An inauspicious close to a holiday shortened week. The market prepared for
Good Friday with a bit of mourning as DJ30 and SP500 broke below their 50
day MA's and closed below them for the first time in 2017. SOX did the deed
Wednesday as SP400 and RUTX continued below their 50 day MA's after the
Wednesday selling. Only NASDAQ is still holding its 50 day EMA and can
still keep a higher low if it does hang on. It has to play Lone Wolf
McQuaid if it is going to do it.
SP500 -15.98, -0.68%
NASDAQ -31.01, -0.53%
DJ30 -138.61, -0.67%
SP400 -1.11%
RUTX -1.03%
SOX -0.68%
VOLUME: NYSE flat; NASDAQ -4%. At least volume remained well below average
on NYSE and even farther below average on NASDAQ.
A/D: NYSE -2.4:1, NASDAQ -2.2:1. Another day where the downside breadth
outpaced upside breadth on days the market gained.
It was argued that the market lost its mojo Thursday when word hit that the
US dropped the largest non-nuclear bomb in its arsenal (the MOAB) on the
tunnel system and fortifications of ISIS in Afghanistan. Perhaps that was
it; the coming of war is always hard on markets. The start of war usually
starts the rally. This is currently the lead-in phase -- on three fronts
apparently.
As for the stock indices, perhaps NASDAQ can pull off that higher low and
rally, but that is fighting the weight of the other indices. Nothing is
viewed as positive right now and frankly there are not a lot of positives
even if the market was looking for them. Economic change is stymied, and
that even before the war drums started to beat loudly. Now there is Syria,
North Korea, the MOAB (Mother Of All Bombs) dropped in Afghanistan (as a not
so subtle example to Iran, Pakistan) taking the President's attention.
Maybe he can multi-task. Maybe Trump and Xi will solve the Korean issue
finally, 60 years later. Maybe they can team up on other issues. Sure that
is an unlikely scenario, but it is setting up that way for Korea. The
problem is not so much Trump could not take on domestic issues, it's just
that he has to deal with the entrenched members of Congress -- democrat AND
republican. Paul Ryan just wants his name on the healthcare bill, usurping
Obama and going down in history. Never mind it is an utterly terrible plan
that solves none of the ACA's issues that keep the ACA from working. There
is no market in healthcare under either plan. The US needs a free market
with cooperatives, savings accounts -- anything the free market can come up
with to reduce costs. As Rand Paul said today, the Ryan plan puts in a
subsidy for $14,000. That means there is a floor of $14,000 that insurance
costs will never fall below. Markets are how you get lower prices, not
governmental edicts.
In any event, maybe Trump can shock the market and pull off healthcare
reform in a stealth move and that would of course bring tax reform back to
life in a hurry. The markets, however, are not buying that scenario.
Other markets?
Bonds are rallying, gold broke through the 200 day SMA, bonds broke out of a
5 month trading range -- to the upside. The dollar was trying to set up a
move off the 200 day MA and it did; the only issue is that it was a downside
move from an upside setup.
None of those markets are broadcasting economic bliss ahead, and the
economic data Thursday and again Friday appear to bear this out.
US already in recession.
Indeed, I say right now that THE US IS IN RECESSION. There was spending
post-election by businesses in anticipation of growth. There was asset
inflation in anticipation of growth. But that MASKED the slowing economy as
the market basked in the hope of growth to come.
The consumer, however, CANNOT spend what it does not have. STILL poor jobs
growth, STILL declining real wages, STILL a middle class less than 50%,
STILL crushing ACA costs . . . and now NO RELIEF in sight. By the time our
leaders figure out we are in recession and panic, it will be too late for
many Americans that needed help NOW.
In the move 'Cliffhanger,' mountain rescue climber Hal noted, after one of
his adversaries plunged to his death off the mountainside, that 'gravity is
a b**ch.' Well, for economics hard data is the b**ch.
CPI, March: -0.3% versus -.0% expected versus 0.1% February.
Core CPI: -0.1% versus 0.2% expected versus 0.2% February.
This is the first decline in core CPI in 7+ years.
The good: energy costs -3.2%, gasoline -6.2% (but now on the rise again .
.). Not burning more disposable income in the gas tank is better for the
US.
The bad: Food +0.3%. 'Food at Home' rose 0.5%, the biggest jump since
5/2014.
Core: Biggest decline since 1/2010.
Retail Sales March, -0.2% versus -0.1% expected versos -0.3% February (from
0.1%)
Ex-Autos: 0.0% versus 0.2% expected versus 0.0% February (from 0.2%)
Second consecutive month of negative month/month retail sales. Building
materials (-1.5%) and motor vehicles (-1.2%). Vehicles was expected given
the crashing used car prices and ramping up of new car incentives. Building
materials? High mortgage rates, low real wages hurt affordability.
Real Weekly Wages: We like looking at the weekly wages versus just the
hourly wages because hourly doesn't tell you how much people are really
bringing home. Weekly gives you that figure because you know the hours
worked and have a real figure, not just some 'this is what they would make
per hour' without factoring the reduced hours per week/per month thanks to
the ACA and its 29 hour threshold for insurance requirements kicking in.
Real weekly wages are now DOWN for two consecutive months. Any surprise
retail sales are down month/month for two consecutive months as well?
Even Producer Prices stalled, falling 0.1% in March, the first decline in 7
months.
The one good thing about recessions? It forces Congress' hand. In 1981,
Reagan was able to push through a massive tax reform package the old
fashioned way with no reconciliation nonsense (that is utter crapula, by the
way) AND a Democrat controlled Congress. His popularity, the country's
need, and his statesmanship did the job.
Me saying we are in recession, however, holds no weight. The democrats
won't believe that their beloved Obama could have led us to recession (one
we would have been in much sooner if he had actually fully implemented the
horror of the ACA) until the data shows a recession, and that is always
after the fact. That means unless Trump can pull off something such as
described below, there is not a lot for the US middle class to hope for any
time soon.
Don't forget the Fed.
Ever hear the one about the Federal Reserve hiking rates right into a
recession? Sure you have. It happens more times than not. By the time the
Fed gets the nerve to hike rates, the cycle is already mature. Then it
hikes rates to 'prevent inflation' and manages to simply accelerate the end
of the up cycle. Q1 GDP is expected at 1%, and without tax and healthcare
change that number likely won't change much. Many in the US do not have
time to wait for Congress to get its act together. Electing Trump was their
hope, and now they are seeing that hope turn to wars. Again. That is not
what those backing the President voted for.
The middle class has not surged back over 50% these first three months.
They still see their health declining as they cannot use the insurance they
are forced to buy. Thus the US is now in 28th place in life expectancy for
industrial nations -- dead last. Things are dire. Action is needed.
Perhaps the bombs are necessary, but so are the domestic fixes.
Then we hear that Trump actually likes Yellen, an about face from the
campaign. Trying to butter her up to keep those rates low as he told the
WSJ Wednesday? Low rates and a weak currency never caused a country to
prosper. Countries prosper when they are viewed as THE place for
opportunity and to invest capital -- a growing economy, strong currency, and
bright prospects. Until there is tax reform, healthcare reform, and
regulatory relaxation, that is not happening here. And, of course, the Fed
is hiking rates.
Healthcare and Trump not out.
Trump may be slicker than many realize, however. A couple of weeks ago when
healthcare reform failed he said he would just let the system collapse, and
predicted it would rather quickly, and then democrats would come to him to
negotiate a better deal.
We hear that Trump is going to do what should have already been done:
eliminate the pilfering of the dividends received by the GSE's Fannie and
Freddie to pay subsidies to insurance companies to keep them in markets
where there would be no carriers but for the subsidies. That is the proof
positive the system does not work: you have to pay companies to stay in
because without them the market does not support offering insurance. The
epitome of a controlled market, the farthest thing on earth the US was
founded upon.
If Trump cuts off this stealing of the public's funds and using them for
what a lower court has already ruled illegal, the insurance companies would
pull out immediately, leaving much of the country without insurance
carriers. The system would indeed implode. As I said earlier, it should
already have been done.
If Trump REALLY wants to get healthcare reform done and done quickly, that
is the move to make. Don't be surprised if after Easter this is one of the
first things done. The entire timetable would be back on with that action.
Along with it, renewed market hope for economic improvement and strength.
THE MARKET
Well, now SP500 has broken its trend, the one from June early 2016, but
still over the March low. SOX broke its June to present up trendline.
There is another one lower from January 2016, but it is a long way down.
NASDAQ is hanging on to its support and trends, but it is the holdout. With
trends starting to break, some leadership struggling (e.g. some chips, tech,
machinery), you close some upside as we have done and enter some downside.
CHARTS
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
SP500/DJ30: Again actin in unison, both breaking below the 50 day EMA on
Thursday. First time in 2017. Sounds horrible, right? Well, they can
still hold the mid-March low and continue a lateral move.
NASDAQ: NASDAQ faded all week, continuing the same fade from the prior week
after putting in a higher high then reversing all in one session.
Traumatic, how could this happen in a controlled market? Okay, down for two
weeks, low volume, at the 50 day EMA. Can put in a higher low, but with the
rest of the market breaking the 50 day, will it?
SOX: Broke through the 50 day MA's on the Tuesday gap lower, continuing
lower through the June 2016 trendline Wednesday and Thursday. It closed
below the 50 day MA, something it has only down twice in the past 11 months.
SOX is a leader, it has broken lower, Thursday showing a doji and perhaps
ready to bounce upside.
SP400: The midcaps looked decent through Tuesday, moving up off the bottom
of a right shoulder to a short inverted head and shoulders. Wednesday it
stalled, Thursday it sold. Landed near the March lows, pretty much blowing
up any inverted head and shoulders hopes. Moving back into the larger head
and shoulders pattern of the past 5 months.
RUTX: Small caps proceeded to wreck their inverted head and shoulders
attempt with a Wednesday/Thursday selloff of its own. Still over the March
low but the pattern has punted into the larger head and shoulders. Tough
going for the small and midcaps given the prevalent view is now the economy
is not going to do so well, or at least not grow as anticipated without the
healthcare and tax reform.
LEADERSHIP
Getting some breakouts that are faltering, e.g. MU, QRVO, MLNX, FB, SWKS,
GOOG. Not all of them are rolling over, but after moving to a higher high
they were sold. Stocks such as QRVO, FB, SWKS and others can still hold the
line, but it is always a negative for the upside when breaks higher stumble
just after leaving the starting blocks. Biotech/Drugs, for now, remains a
solid group.
FAANG: Not bad at all, just at highs and a bit sluggish. FB is testing,
dropping below the 20 day EMA this week and we closed the position to see
where it lands. AMZN tested a bit more, setting up its next move higher
even better. AAPL slipped as well, but held up rather well. NFLX started
bouncing off the 50 day EMA early week but faded Wednesday and Thursday.
GOOG is struggling a bit just below the 50 day MA. Not bad, and AMZN, NFLX
are in good position to move higher.
Semiconductors: Very mixed. MXWL moved higher Friday after a pretty solid
week that saw SOX dominated Tuesday to Thursday by the drop in QCOM. BRKS,
PLAB, QRVO still look pretty solid. SLAB is falling from a bear flag. SWKS
went from a break higher a week back then reversed it through Thursday. MU
and AMD are heading lower, AMD gapping downside Thursday.
Metals: AKS dropping below the 200 day SMA. RS broke the 200 day on strong
volume. STLD broke lower but is still in its pattern as is ZEUS. AA is at
a lower low on this selling.
Retail: Still looks good. AMZN in position to resume its breakout. EBAY
near a high. JWN in a good double bottom pattern. COST was solid but broke
hard Thursday. DLTR slid all week but is still solid.
Financial: JPM reported good earnings, surged, sold. C showed the same
action. BAC similar. Financials not happy with lower interest rates.
Machinery/Industrials: Not super. CAT down sharply for two sessions,
breaking the 50 day MA. CMI broke hard downside.
Oil stocks: Tough session to end the week. APC plunked over 2%, APA sold
back from its good move on the week. NE, SN, WFT sold. Threatening to
break up some good patterns.
Biotechs/Drugs: Still mostly solid with some of the same names working
well, e.g. CNAT up another 6+%. XOMA looks good to move higher. IMMU also
looks good. OSUR looks very good to move higher. Sure some are off their
feed but we are in some good ones.
MARKET STATS
DJ30
Stats: -138.61 points (-0.67%) to close at 20453.25
Nasdaq
Stats: -31.01 points (-0.53%) to close at 5805.15
Volume: 1.58B (-4.13%)
Up Volume: 468.16M (-84.14M)
Down Volume: 1.08B (0)
A/D and Hi/Lo: Decliners led 2.2 to 1
Previous Session: Decliners led 2.19 to 1
New Highs: 44 (-24)
New Lows: 54 (+16)
S&P
Stats: -15.98 points (-0.68%) to close at 2328.95
NYSE Volume: 765.2M (+0.21%)
A/D and Hi/Lo: Decliners led 2.43 to 1
Previous Session: Decliners led 2.16 to 1
New Highs: 61 (-24)
New Lows: 29 (+15)
SENTIMENT INDICATORS
VIX: 15.96; +0.19
VXN: 15.9; +0.34
VXO: 14.4; +1.37
Put/Call Ratio (CBOE): 0.98; +0.03
Bulls and Bears: Bulls jumped back up to the higher end of the range after
a week of market doubt. When the market did not plunge farther off that
nasty Tuesday break lower a couple of weeks back, confidence stabilized.
Still cannot forget the 7 weeks over 60%, however, and that is still lurking
out there and is historically a market top indicator, just not a timing
indicator. Don't forget those 60+ readings in the equation.
Bulls: 56.3 versus 55.8. Bulls continued a second week of rebounding after
a panic week, but you can bet after this past week bulls will falter some.
Bears: 17.5 versus 18.3. Bears faded back below 18 as they lost enthusiasm
as bulls regained a bit more.
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: 56.3 versus 55.8
55.8 versus 49.5 versus 56.7 versus 53.4 versus 57.7 versus 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%
Bears: 17.5 versus 18.3
18.3 versus 18.1 versus 17.3 versus 13.75 versus 17.3 versus 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): 2.232% versus 2.264%. Impressive break higher on the
week, pausing Thursday, but only after adding a bit more to the rally.
Again, bonds are not giving the economy a vote of confidence.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.264%
versus 2.30% versus 2.36% versus 2.37% versus 2.34% versus 2.33% versus
2.34% versus 2.33% versus 2.35% versus 2.40% versus 2.41% versus 2.382%
versus 2.418% versus 2.376% versus 2.40% versus 2.41% versus 2.40% versus
2.43% versus 2.463% versus 2.50% versus 2.529% versus 2.502% versus 2.602
versus 2.617% versus 2.58% versus 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%
EUR/USD: 1.06138 versus 1.0671. After a Wednesday surge on the Trump weak
dollar comments, the dollar recovered and euro failed to move through the 50
day MA.
Historical: 1.0671 versus 1.06068 versus 1.05984 versus 1.05906 versus
1.0645 versus 1.06760 versus 1.06804 versus 1.06702 versus 1.06584 versus
1.06855 versus 1.07546 versus 1.0815 versus 1.08640 versus 1.07894 versus
1.07670 versus 1.07920 versus 1.08117 versus 1.0748 versus 1.07395 versus
1.07710 versus 1.0732 versus 1.06070 versus 1.0636 versus 1.06746 versus
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
USD/JPY: 109.170 versus 108.926. Modest recovery after breaking the 200
day SMA Tuesday. Dollar still below the 200 day, however.
Historical: 108.926 versus 109.691 versus 110.704 versus 111.096 versus
110.85 versus 110.794 versus 110.705 versus 111.386 versus 111.255 versus
111.114 versus 110.581 versus 111.335 versus 111.242 versus 111.295 versus
111.502 versus 112.289 versus 112.707 versus 113.349 versus 113.447 versus
114.726 versus 114.833 versus 114.807 versus 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
Oil: 53.18, +0.07. Oil has slowed as the rally reaches the resistance at
the 54 - 55 level.
Gold: 1288.50, +10.40. Gold continued upside, gapping to a doji Thursday
to end the week at least in the US.
MONDAY
Three day weekend with a two week fade leading in. Earnings are starting,
and financial results were not bad, but the market was in no mood. That
pretty much reflects the mood you hear on the financial stations and the
websites: the Trump rally has run its course. The same people are calling
for a major crash that were calling for a major crash in November, others
have just dialed back the bullishness.
Again, it makes sense there is a belief in a pullback with the Trump agenda
now geopolitical. Perhaps he is just playing the game, appeasing the war
mongers with war, diverting their attention while he resets the attempt at
the ACA. That is what we heard last night and today, and tonight I see a
headline about Trump 'threatening' to shut down the pilfering of the GSE
dividends. Perhaps the market gets caught expecting the worse and then
rather quickly gets a pleasant surprise.
That is a low probability play, not one you can really count on. If the
stocks set up good patterns, and we are ready for them, if it does happen
then we are ready to be in the move. If current positions hold we let them
work as long as they hold trends and patterns. The market is not being
destroyed by this move, at least not yet. NASDAQ is hardly dead while SP500
and DJ30 are still over their March lows. Leadership is a bit worrisome as
it is thinning again for the second time in a couple of months.
The areas that are good are quite good, e.g. biotechs. Retail looks as if
it can be a winner as many stocks are pretty solid, but you still have to
look at the real winners such as AMZN. And AMZN looks good for a new move.
If it doesn't make that move, that is quite a market tell.
Heading into next week it behooves you to look upside and downside. NASDAQ
is still trending higher so some plays look that way. Other areas are
breaking lower from metals, to materials, industrials, and one of the
recently promising areas, oil. As Elrond said in one of the 'Lord of the
Rings' books, the list off allies grows thin. Lack of leadership or a
significant decline in leadership is a warning flag. There you have it.
Been closing positions but letting some work as some are working very well.
Downside likely needs a bit of a rebound to get some good entries. As some
downside plays gapped lower on us, a relief move to test helps set up better
entries.
The market is in transition, looks weak, has not broken yet. No need to
press to get into plays though we did pick up some IWM puts just to have
some more downside exposure. After a test of this week's breaks below
support there will be some more downside setups if and when any relief move
runs out of gas. And if the market reversed sharply again, well there will
be upside from those still solid upside patterns and others setting up after
that test.
Hate these times but they are inevitable. Just keep watching the sectors
and see how they are setting up, whether upside or downside.
Have a great Easter, Passover, etc.
SUPPORT AND RESISTANCE
NASDAQ: Closed at 5805.15
Resistance:
The 50 day SMA at 5832
5912
5928 is the March all-time high.
Support:
The 50 day EMA at 5802.20
5800 from the February consolidation lows
The 2016 trendline at 5747
5661 is the late January upper gap point
5601 is the January lower gap point
The 200 day SMA at 5417
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
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 2328.95
Resistance:
The 50 day EMA at 2341
The 50 day SMA at 2352
The 2016 trendline at 2379
2390 is the March interim recovery high
2401 is the all-time high
Support:
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The 200 day SMA at 2228
The November 2016 all-time high at 2213.25
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 20,453.25
Resistance:
The 50 day EMA at 20,542
The 50 day SMA at 20,655
21,100 is the March interim recovery high
21,169 is the all-time high
Support:
20,412 is the March 2017 low
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
19750 is the lows of the December/January range
The 200 day SMA at 19,254
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.
End part 1 of 3
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4/13/2017 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
- Only NASDAQ is left holding the 50 day EMA.
- Leadership is thinner once again, some breakouts falter, some reverse.
- Economic data, other markets indicate the US is in recession right now.
- Recession is a good thing: it may panic Congress into acting. Problem is,
they will be in denial until the hard numbers slap their faces.
- Perhaps NASDAQ can be the Maximus of the market, i.e. the savior just as
Maximus in the move 'Gladiator.'
- In case NASDAQ falters as well, some downside plays along with the biotech
upside plays.
An inauspicious close to a holiday shortened week. The market prepared for
Good Friday with a bit of mourning as DJ30 and SP500 broke below their 50
day MA's and closed below them for the first time in 2017. SOX did the deed
Wednesday as SP400 and RUTX continued below their 50 day MA's after the
Wednesday selling. Only NASDAQ is still holding its 50 day EMA and can
still keep a higher low if it does hang on. It has to play Lone Wolf
McQuaid if it is going to do it.
SP500 -15.98, -0.68%
NASDAQ -31.01, -0.53%
DJ30 -138.61, -0.67%
SP400 -1.11%
RUTX -1.03%
SOX -0.68%
VOLUME: NYSE flat; NASDAQ -4%. At least volume remained well below average
on NYSE and even farther below average on NASDAQ.
A/D: NYSE -2.4:1, NASDAQ -2.2:1. Another day where the downside breadth
outpaced upside breadth on days the market gained.
It was argued that the market lost its mojo Thursday when word hit that the
US dropped the largest non-nuclear bomb in its arsenal (the MOAB) on the
tunnel system and fortifications of ISIS in Afghanistan. Perhaps that was
it; the coming of war is always hard on markets. The start of war usually
starts the rally. This is currently the lead-in phase -- on three fronts
apparently.
As for the stock indices, perhaps NASDAQ can pull off that higher low and
rally, but that is fighting the weight of the other indices. Nothing is
viewed as positive right now and frankly there are not a lot of positives
even if the market was looking for them. Economic change is stymied, and
that even before the war drums started to beat loudly. Now there is Syria,
North Korea, the MOAB (Mother Of All Bombs) dropped in Afghanistan (as a not
so subtle example to Iran, Pakistan) taking the President's attention.
Maybe he can multi-task. Maybe Trump and Xi will solve the Korean issue
finally, 60 years later. Maybe they can team up on other issues. Sure that
is an unlikely scenario, but it is setting up that way for Korea. The
problem is not so much Trump could not take on domestic issues, it's just
that he has to deal with the entrenched members of Congress -- democrat AND
republican. Paul Ryan just wants his name on the healthcare bill, usurping
Obama and going down in history. Never mind it is an utterly terrible plan
that solves none of the ACA's issues that keep the ACA from working. There
is no market in healthcare under either plan. The US needs a free market
with cooperatives, savings accounts -- anything the free market can come up
with to reduce costs. As Rand Paul said today, the Ryan plan puts in a
subsidy for $14,000. That means there is a floor of $14,000 that insurance
costs will never fall below. Markets are how you get lower prices, not
governmental edicts.
In any event, maybe Trump can shock the market and pull off healthcare
reform in a stealth move and that would of course bring tax reform back to
life in a hurry. The markets, however, are not buying that scenario.
Other markets?
Bonds are rallying, gold broke through the 200 day SMA, bonds broke out of a
5 month trading range -- to the upside. The dollar was trying to set up a
move off the 200 day MA and it did; the only issue is that it was a downside
move from an upside setup.
None of those markets are broadcasting economic bliss ahead, and the
economic data Thursday and again Friday appear to bear this out.
US already in recession.
Indeed, I say right now that THE US IS IN RECESSION. There was spending
post-election by businesses in anticipation of growth. There was asset
inflation in anticipation of growth. But that MASKED the slowing economy as
the market basked in the hope of growth to come.
The consumer, however, CANNOT spend what it does not have. STILL poor jobs
growth, STILL declining real wages, STILL a middle class less than 50%,
STILL crushing ACA costs . . . and now NO RELIEF in sight. By the time our
leaders figure out we are in recession and panic, it will be too late for
many Americans that needed help NOW.
In the move 'Cliffhanger,' mountain rescue climber Hal noted, after one of
his adversaries plunged to his death off the mountainside, that 'gravity is
a b**ch.' Well, for economics hard data is the b**ch.
CPI, March: -0.3% versus -.0% expected versus 0.1% February.
Core CPI: -0.1% versus 0.2% expected versus 0.2% February.
This is the first decline in core CPI in 7+ years.
The good: energy costs -3.2%, gasoline -6.2% (but now on the rise again .
.). Not burning more disposable income in the gas tank is better for the
US.
The bad: Food +0.3%. 'Food at Home' rose 0.5%, the biggest jump since
5/2014.
Core: Biggest decline since 1/2010.
Retail Sales March, -0.2% versus -0.1% expected versos -0.3% February (from
0.1%)
Ex-Autos: 0.0% versus 0.2% expected versus 0.0% February (from 0.2%)
Second consecutive month of negative month/month retail sales. Building
materials (-1.5%) and motor vehicles (-1.2%). Vehicles was expected given
the crashing used car prices and ramping up of new car incentives. Building
materials? High mortgage rates, low real wages hurt affordability.
Real Weekly Wages: We like looking at the weekly wages versus just the
hourly wages because hourly doesn't tell you how much people are really
bringing home. Weekly gives you that figure because you know the hours
worked and have a real figure, not just some 'this is what they would make
per hour' without factoring the reduced hours per week/per month thanks to
the ACA and its 29 hour threshold for insurance requirements kicking in.
Real weekly wages are now DOWN for two consecutive months. Any surprise
retail sales are down month/month for two consecutive months as well?
Even Producer Prices stalled, falling 0.1% in March, the first decline in 7
months.
The one good thing about recessions? It forces Congress' hand. In 1981,
Reagan was able to push through a massive tax reform package the old
fashioned way with no reconciliation nonsense (that is utter crapula, by the
way) AND a Democrat controlled Congress. His popularity, the country's
need, and his statesmanship did the job.
Me saying we are in recession, however, holds no weight. The democrats
won't believe that their beloved Obama could have led us to recession (one
we would have been in much sooner if he had actually fully implemented the
horror of the ACA) until the data shows a recession, and that is always
after the fact. That means unless Trump can pull off something such as
described below, there is not a lot for the US middle class to hope for any
time soon.
Don't forget the Fed.
Ever hear the one about the Federal Reserve hiking rates right into a
recession? Sure you have. It happens more times than not. By the time the
Fed gets the nerve to hike rates, the cycle is already mature. Then it
hikes rates to 'prevent inflation' and manages to simply accelerate the end
of the up cycle. Q1 GDP is expected at 1%, and without tax and healthcare
change that number likely won't change much. Many in the US do not have
time to wait for Congress to get its act together. Electing Trump was their
hope, and now they are seeing that hope turn to wars. Again. That is not
what those backing the President voted for.
The middle class has not surged back over 50% these first three months.
They still see their health declining as they cannot use the insurance they
are forced to buy. Thus the US is now in 28th place in life expectancy for
industrial nations -- dead last. Things are dire. Action is needed.
Perhaps the bombs are necessary, but so are the domestic fixes.
Then we hear that Trump actually likes Yellen, an about face from the
campaign. Trying to butter her up to keep those rates low as he told the
WSJ Wednesday? Low rates and a weak currency never caused a country to
prosper. Countries prosper when they are viewed as THE place for
opportunity and to invest capital -- a growing economy, strong currency, and
bright prospects. Until there is tax reform, healthcare reform, and
regulatory relaxation, that is not happening here. And, of course, the Fed
is hiking rates.
Healthcare and Trump not out.
Trump may be slicker than many realize, however. A couple of weeks ago when
healthcare reform failed he said he would just let the system collapse, and
predicted it would rather quickly, and then democrats would come to him to
negotiate a better deal.
We hear that Trump is going to do what should have already been done:
eliminate the pilfering of the dividends received by the GSE's Fannie and
Freddie to pay subsidies to insurance companies to keep them in markets
where there would be no carriers but for the subsidies. That is the proof
positive the system does not work: you have to pay companies to stay in
because without them the market does not support offering insurance. The
epitome of a controlled market, the farthest thing on earth the US was
founded upon.
If Trump cuts off this stealing of the public's funds and using them for
what a lower court has already ruled illegal, the insurance companies would
pull out immediately, leaving much of the country without insurance
carriers. The system would indeed implode. As I said earlier, it should
already have been done.
If Trump REALLY wants to get healthcare reform done and done quickly, that
is the move to make. Don't be surprised if after Easter this is one of the
first things done. The entire timetable would be back on with that action.
Along with it, renewed market hope for economic improvement and strength.
THE MARKET
Well, now SP500 has broken its trend, the one from June early 2016, but
still over the March low. SOX broke its June to present up trendline.
There is another one lower from January 2016, but it is a long way down.
NASDAQ is hanging on to its support and trends, but it is the holdout. With
trends starting to break, some leadership struggling (e.g. some chips, tech,
machinery), you close some upside as we have done and enter some downside.
CHARTS
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
SP500/DJ30: Again actin in unison, both breaking below the 50 day EMA on
Thursday. First time in 2017. Sounds horrible, right? Well, they can
still hold the mid-March low and continue a lateral move.
NASDAQ: NASDAQ faded all week, continuing the same fade from the prior week
after putting in a higher high then reversing all in one session.
Traumatic, how could this happen in a controlled market? Okay, down for two
weeks, low volume, at the 50 day EMA. Can put in a higher low, but with the
rest of the market breaking the 50 day, will it?
SOX: Broke through the 50 day MA's on the Tuesday gap lower, continuing
lower through the June 2016 trendline Wednesday and Thursday. It closed
below the 50 day MA, something it has only down twice in the past 11 months.
SOX is a leader, it has broken lower, Thursday showing a doji and perhaps
ready to bounce upside.
SP400: The midcaps looked decent through Tuesday, moving up off the bottom
of a right shoulder to a short inverted head and shoulders. Wednesday it
stalled, Thursday it sold. Landed near the March lows, pretty much blowing
up any inverted head and shoulders hopes. Moving back into the larger head
and shoulders pattern of the past 5 months.
RUTX: Small caps proceeded to wreck their inverted head and shoulders
attempt with a Wednesday/Thursday selloff of its own. Still over the March
low but the pattern has punted into the larger head and shoulders. Tough
going for the small and midcaps given the prevalent view is now the economy
is not going to do so well, or at least not grow as anticipated without the
healthcare and tax reform.
LEADERSHIP
Getting some breakouts that are faltering, e.g. MU, QRVO, MLNX, FB, SWKS,
GOOG. Not all of them are rolling over, but after moving to a higher high
they were sold. Stocks such as QRVO, FB, SWKS and others can still hold the
line, but it is always a negative for the upside when breaks higher stumble
just after leaving the starting blocks. Biotech/Drugs, for now, remains a
solid group.
FAANG: Not bad at all, just at highs and a bit sluggish. FB is testing,
dropping below the 20 day EMA this week and we closed the position to see
where it lands. AMZN tested a bit more, setting up its next move higher
even better. AAPL slipped as well, but held up rather well. NFLX started
bouncing off the 50 day EMA early week but faded Wednesday and Thursday.
GOOG is struggling a bit just below the 50 day MA. Not bad, and AMZN, NFLX
are in good position to move higher.
Semiconductors: Very mixed. MXWL moved higher Friday after a pretty solid
week that saw SOX dominated Tuesday to Thursday by the drop in QCOM. BRKS,
PLAB, QRVO still look pretty solid. SLAB is falling from a bear flag. SWKS
went from a break higher a week back then reversed it through Thursday. MU
and AMD are heading lower, AMD gapping downside Thursday.
Metals: AKS dropping below the 200 day SMA. RS broke the 200 day on strong
volume. STLD broke lower but is still in its pattern as is ZEUS. AA is at
a lower low on this selling.
Retail: Still looks good. AMZN in position to resume its breakout. EBAY
near a high. JWN in a good double bottom pattern. COST was solid but broke
hard Thursday. DLTR slid all week but is still solid.
Financial: JPM reported good earnings, surged, sold. C showed the same
action. BAC similar. Financials not happy with lower interest rates.
Machinery/Industrials: Not super. CAT down sharply for two sessions,
breaking the 50 day MA. CMI broke hard downside.
Oil stocks: Tough session to end the week. APC plunked over 2%, APA sold
back from its good move on the week. NE, SN, WFT sold. Threatening to
break up some good patterns.
Biotechs/Drugs: Still mostly solid with some of the same names working
well, e.g. CNAT up another 6+%. XOMA looks good to move higher. IMMU also
looks good. OSUR looks very good to move higher. Sure some are off their
feed but we are in some good ones.
MARKET STATS
DJ30
Stats: -138.61 points (-0.67%) to close at 20453.25
Nasdaq
Stats: -31.01 points (-0.53%) to close at 5805.15
Volume: 1.58B (-4.13%)
Up Volume: 468.16M (-84.14M)
Down Volume: 1.08B (0)
A/D and Hi/Lo: Decliners led 2.2 to 1
Previous Session: Decliners led 2.19 to 1
New Highs: 44 (-24)
New Lows: 54 (+16)
S&P
Stats: -15.98 points (-0.68%) to close at 2328.95
NYSE Volume: 765.2M (+0.21%)
A/D and Hi/Lo: Decliners led 2.43 to 1
Previous Session: Decliners led 2.16 to 1
New Highs: 61 (-24)
New Lows: 29 (+15)
SENTIMENT INDICATORS
VIX: 15.96; +0.19
VXN: 15.9; +0.34
VXO: 14.4; +1.37
Put/Call Ratio (CBOE): 0.98; +0.03
Bulls and Bears: Bulls jumped back up to the higher end of the range after
a week of market doubt. When the market did not plunge farther off that
nasty Tuesday break lower a couple of weeks back, confidence stabilized.
Still cannot forget the 7 weeks over 60%, however, and that is still lurking
out there and is historically a market top indicator, just not a timing
indicator. Don't forget those 60+ readings in the equation.
Bulls: 56.3 versus 55.8. Bulls continued a second week of rebounding after
a panic week, but you can bet after this past week bulls will falter some.
Bears: 17.5 versus 18.3. Bears faded back below 18 as they lost enthusiasm
as bulls regained a bit more.
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: 56.3 versus 55.8
55.8 versus 49.5 versus 56.7 versus 53.4 versus 57.7 versus 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%
Bears: 17.5 versus 18.3
18.3 versus 18.1 versus 17.3 versus 13.75 versus 17.3 versus 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): 2.232% versus 2.264%. Impressive break higher on the
week, pausing Thursday, but only after adding a bit more to the rally.
Again, bonds are not giving the economy a vote of confidence.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.264%
versus 2.30% versus 2.36% versus 2.37% versus 2.34% versus 2.33% versus
2.34% versus 2.33% versus 2.35% versus 2.40% versus 2.41% versus 2.382%
versus 2.418% versus 2.376% versus 2.40% versus 2.41% versus 2.40% versus
2.43% versus 2.463% versus 2.50% versus 2.529% versus 2.502% versus 2.602
versus 2.617% versus 2.58% versus 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%
EUR/USD: 1.06138 versus 1.0671. After a Wednesday surge on the Trump weak
dollar comments, the dollar recovered and euro failed to move through the 50
day MA.
Historical: 1.0671 versus 1.06068 versus 1.05984 versus 1.05906 versus
1.0645 versus 1.06760 versus 1.06804 versus 1.06702 versus 1.06584 versus
1.06855 versus 1.07546 versus 1.0815 versus 1.08640 versus 1.07894 versus
1.07670 versus 1.07920 versus 1.08117 versus 1.0748 versus 1.07395 versus
1.07710 versus 1.0732 versus 1.06070 versus 1.0636 versus 1.06746 versus
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
USD/JPY: 109.170 versus 108.926. Modest recovery after breaking the 200
day SMA Tuesday. Dollar still below the 200 day, however.
Historical: 108.926 versus 109.691 versus 110.704 versus 111.096 versus
110.85 versus 110.794 versus 110.705 versus 111.386 versus 111.255 versus
111.114 versus 110.581 versus 111.335 versus 111.242 versus 111.295 versus
111.502 versus 112.289 versus 112.707 versus 113.349 versus 113.447 versus
114.726 versus 114.833 versus 114.807 versus 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
Oil: 53.18, +0.07. Oil has slowed as the rally reaches the resistance at
the 54 - 55 level.
Gold: 1288.50, +10.40. Gold continued upside, gapping to a doji Thursday
to end the week at least in the US.
MONDAY
Three day weekend with a two week fade leading in. Earnings are starting,
and financial results were not bad, but the market was in no mood. That
pretty much reflects the mood you hear on the financial stations and the
websites: the Trump rally has run its course. The same people are calling
for a major crash that were calling for a major crash in November, others
have just dialed back the bullishness.
Again, it makes sense there is a belief in a pullback with the Trump agenda
now geopolitical. Perhaps he is just playing the game, appeasing the war
mongers with war, diverting their attention while he resets the attempt at
the ACA. That is what we heard last night and today, and tonight I see a
headline about Trump 'threatening' to shut down the pilfering of the GSE
dividends. Perhaps the market gets caught expecting the worse and then
rather quickly gets a pleasant surprise.
That is a low probability play, not one you can really count on. If the
stocks set up good patterns, and we are ready for them, if it does happen
then we are ready to be in the move. If current positions hold we let them
work as long as they hold trends and patterns. The market is not being
destroyed by this move, at least not yet. NASDAQ is hardly dead while SP500
and DJ30 are still over their March lows. Leadership is a bit worrisome as
it is thinning again for the second time in a couple of months.
The areas that are good are quite good, e.g. biotechs. Retail looks as if
it can be a winner as many stocks are pretty solid, but you still have to
look at the real winners such as AMZN. And AMZN looks good for a new move.
If it doesn't make that move, that is quite a market tell.
Heading into next week it behooves you to look upside and downside. NASDAQ
is still trending higher so some plays look that way. Other areas are
breaking lower from metals, to materials, industrials, and one of the
recently promising areas, oil. As Elrond said in one of the 'Lord of the
Rings' books, the list off allies grows thin. Lack of leadership or a
significant decline in leadership is a warning flag. There you have it.
Been closing positions but letting some work as some are working very well.
Downside likely needs a bit of a rebound to get some good entries. As some
downside plays gapped lower on us, a relief move to test helps set up better
entries.
The market is in transition, looks weak, has not broken yet. No need to
press to get into plays though we did pick up some IWM puts just to have
some more downside exposure. After a test of this week's breaks below
support there will be some more downside setups if and when any relief move
runs out of gas. And if the market reversed sharply again, well there will
be upside from those still solid upside patterns and others setting up after
that test.
Hate these times but they are inevitable. Just keep watching the sectors
and see how they are setting up, whether upside or downside.
Have a great Easter, Passover, etc.
SUPPORT AND RESISTANCE
NASDAQ: Closed at 5805.15
Resistance:
The 50 day SMA at 5832
5912
5928 is the March all-time high.
Support:
The 50 day EMA at 5802.20
5800 from the February consolidation lows
The 2016 trendline at 5747
5661 is the late January upper gap point
5601 is the January lower gap point
The 200 day SMA at 5417
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
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 2328.95
Resistance:
The 50 day EMA at 2341
The 50 day SMA at 2352
The 2016 trendline at 2379
2390 is the March interim recovery high
2401 is the all-time high
Support:
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The 200 day SMA at 2228
The November 2016 all-time high at 2213.25
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 20,453.25
Resistance:
The 50 day EMA at 20,542
The 50 day SMA at 20,655
21,100 is the March interim recovery high
21,169 is the all-time high
Support:
20,412 is the March 2017 low
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
19750 is the lows of the December/January range
The 200 day SMA at 19,254
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.
End part 1 of 3
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Sunday, April 09, 2017
The Daily, Part 1 of 3, 4-8-17
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4/8/2017 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
- US bombs, Jobs Report bombs, stock market hangs in its trends.
- SP500, DJ30, SOX testing 50 day EMA, NASDAQ holds its trend, while
RUTX/SP400 try to return to more bullish looks.
- Jobs report weak and weather is blamed as retail and construction drop.
- Steel stocks show signs of returning to the upside as did retail before
them.
- Market still sets up new patterns and they are breaking higher as well.
Friday you had your choice for breakfast, 59 Tomahawk missiles that bombed
Syria or a Jobs Report that bombed itself. Neither were good market
scenarios. Futures were lower as you would expect, but not horrid.
Overnight when news of the bombing broke, stock futures dove into the abyss,
more or less. They quickly recovered, however. It took a crappy jobs
report to send them back down ahead of the open. From there, however, a
steady recovery into early afternoon. That even took the market positive --
before it gave up the recovery and all but RUTX and SOX closed flat.
SP500 -1.95, -0.08%
NASDAQ -1.14, -0.02%
DJ30 -6.85%, -0.03%
SP400 -0.10%
RUTX 0.01%
SOX 0.47%
VOLUME: NYSE -6%, NASDAQ -10%
A/D: NYSE -1.1:1, NASDAQ slightly negative breadth.
All in all, considering the news, this was not bad action. Reason to sell
but no sellers. Meaning? SP500 and DJ30 continued holding support of the
50 day MA. NASDAQ is holding its position near the top of its range, using
the 20 day EMA as support. SOX did a good job of testing the 50 day MA late
week and bouncing.
The two black sheep, SP400 and RUTX, are attempting to rejoin the flock.
SP400 midcaps are in something of a 4+ month head and shoulders, but the
past 6 weeks look as if they are putting in an inverted head and shoulders.
RUTX is similar, though not quite as elegant perhaps as SP400.
Mind you Friday was no great shakes, but it avoided a selloff when it would
appear the market could have found plenty of reason to sell.
Jobs Report
Q1 ended with weak jobs, particularly from retail that saw another loss,
dropping 30K jobs. So much for the 'predictive' powers of the ADP report.
And it was supposedly redesigned a couple of years ago to more closely track
the BLS number. Sounds as if another iteration is needed.
Non-Farm Payrolls: 98K versus 175K expected versus 219K prior (from 235K)
Unemployment 4.5% versus 4.7% expected and 4.7% February
Hourly Wages: 0.2% versus 0.3% expected versus 0.3% February (from 0.2%)
Year/year: 2.7% versus 2.6%
Workweek: 34.3 versus 34.4 expected versus 34.3 prior (from 34.4)
Participation rate: 63.0% versus 63.0% February. 94.213M working aged
people are still outside the working class. Impressive number of
non-working working aged people. Retirees? Some brush off the number
saying they are just baby boomers. But with so many older people joining
the workforce the past 8 years to make ends meet there are many younger
workers who are out of the workforce, opting to draw upon the various
programs available to nonworkers versus take on one of the menial jobs this
economy is good at producing. Why have the hassle of a job you are
overqualified for when you can play video games and stay on social media all
day and get paid to do it? I know of people who are doing this and have
been doing this for quite some time. The old adage is as true as it ever
was: if you pay someone not to work, unless the options for working are VERY
good, the person won't work. We make it very easy for people to choose not
to work.
Where the jobs are and are not:
Retail: -30K, another sharp decline
Professional/Business services: +56K
Healthcare: +14K
Mining: +11K
Manufacturing: +11K (26K prior month)
Construction: +6K (down from 59K, 46K Feb and Jan)
Most are saying, given the construction numbers, that weather knocked down
the number. Plausible explanation, for the very weak report, but there is
no question the jobs numbers remain, despite Zandi's commentary that the
market is roaring, are not that powerful.
Interestingly, last week Trump penned an order sharply limiting the use (and
abuse) of H1-b visas. Tech companies, the ones screaming the loudest about
not enough qualified labor, have used the program to bring in tech workers
(exempted from any restrictions) and REPLACE US-born workers. Trump removed
that exemption for tech, requiring the people to meet the requirements for
all other areas. Now the tech titans will scream all the more. Hey, it
takes a lot of cheap labor to make your billions. Hmmm, WHERE in US history
have we seen imported free or low-cost labor used to prop up the wealthy
class? I believe that was pre-civil war . . .
THE MARKET
CHARTS
All of the large cap indices held the same relative position. It was the
SP400 and RUTX that may be altering their patterns in a more upside
direction, but at this point they are still not there. You have to keep an
open mind when looking at chart patterns. They do not always speak to you,
at least clearly, and in those situations you have to be patient and let
them work through the patterns, keeping an eye on how leaders are
performing.
SP400: Peaked to start March and has since worked in a range of lower highs
and lower lows, but as noted earlier, has the possibility of a 6 week
inverted head and shoulders setting up. Possibility. It has to show it.
SP500, DJ30: Still holding over the 50 day MA's in their 3 week tight
lateral ranges, holding that important support level.
NASDAQ: Just off the all-time highs bumped in March and last week.
Trending higher, still has tech, software, and chip support.
SOX: This is a promising result for the entire market. SOX trended up the
20 day EMA after bouncing off the 50 day EMA in December. It went ahead and
made the 50 day MA test, getting it out of the way, somewhat clearing the
decks for a new move higher. As with SP500, DJ30, a test of an important
level.
RUTX: You can trace out a potential inverted head and shoulders the past 5
weeks somewhat similar to SP400 pattern. A bit rougher but the same idea,
and if SP400 uses it to break higher, the odds are RUTX would follow.
LEADERSHIP
Recently the market showed new life in retail and oil. Some others are
attempting to join the continuing group of leaders.
Metals: Yes some of them are back. AKS, ZEUS, STLD are very interesting.
Semiconductors: Keep pulling winners out of the hat. QRVO broke higher
Friday. SWKS as well. SIMO still looks very good as does AMKR, BRKS, PLAB,
MU.
Retail: Some are taking a breather after a great move, others still look
good. PIR broke higher Friday on good volume. WSM is taking a breather as
is LL after blistering break higher.
Oil: Not a grand week, but working on the move. APC still setting up the
inverted head and shoulders. APA started back up last week. SWN still
looks very strong to move higher. HAL is even putting in something of a
bottom at the 200 day SMA.
Biotechs/Drugs: Some fell out of patterns but many did not. CNAT is
screaming upside again. INVA is setting up for another move higher as is
TTPH.
China: Some of these stocks are coming around again, e.g. CTRP, VIPS.
Financial: Noncommittal, trying to ascertain what the Fed comments re the
balance sheet reduction mean for rates. BAC, JPM, KEY look less than great.
MARKET STATS
DJ30
Stats: -6.85 points (-0.03%) to close at 20656.1
Nasdaq
Stats: -1.14 points (-0.02%) to close at 5877.81
Volume: 1.656B (-9.4%)
Up Volume: 784.91M (-305.09M)
Down Volume: 852.69M (+179.8M)
A/D and Hi/Lo: Decliners led 1.02 to 1
Previous Session: Advancers led 2.14 to 1
New Highs: 66 (+18)
New Lows: 41 (-24)
S&P
Stats: -1.95 points (-0.08%) to close at 2355.54
NYSE Volume: 752.7M (-5.59%)
A/D and Hi/Lo: Decliners led 1.12 to 1
Previous Session: Advancers led 3.14 to 1
New Highs: 72 (-20)
New Lows: 11 (-23)
SENTIMENT INDICATORS
VIX: 12.87; +0.48
VXN: 13.49; +0.76
VXO: 11.66; +0.35
Put/Call Ratio (CBOE): 0.95; +0.05
Bulls and Bears: Bulls jumped back up to the higher end of the range after
a week of market doubt. When the market did not plunge farther off that
nasty Tuesday break lower a couple of weeks back, confidence stabilized.
Still cannot forget the 7 weeks over 60%, however, and that is still lurking
out there and is historically a market top indicator, just not a timing
indicator. Don't forget those 60+ readings in the equation.
Bulls: 55.8 versus 49.5. After a panic week, bulls rebound.
Bears: 18.3 versus 18.1. The bear rose as well but that means they were
more bearish, moving the opposite direction in terms of the view of the
market.
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: 55.8 versus 49.5
49.5 versus 56.7 versus 53.4 versus 57.7 versus 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: 18.3 versus 18.1
18.1 versus 17.3 versus 13.75 versus 17.3 versus 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): 2.37% versus 2.34%. Double bottom, inverted head and
shoulders, whatever, bonds look as if they want to break higher again near
term.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.34%
versus 2.33% versus 2.34% versus 2.33% versus 2.35% versus 2.40% versus
2.41% versus 2.382% versus 2.418% versus 2.376% versus 2.40% versus 2.41%
versus 2.40% versus 2.43% versus 2.463% versus 2.50% versus 2.529% versus
2.502% versus 2.602 versus 2.617% versus 2.58% versus 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%
EUR/USD: 1.05906 versus 1.0645. Euro breaking lower from the lateral
consolidation at the 50 day MA.
Historical: 1.0645 versus 1.06760 versus 1.06804 versus 1.06702 versus
1.06584 versus 1.06855 versus 1.07546 versus 1.0815 versus 1.08640 versus
1.07894 versus 1.07670 versus 1.07920 versus 1.08117 versus 1.0748 versus
1.07395 versus 1.07710 versus 1.0732 versus 1.06070 versus 1.0636 versus
1.06746 versus 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
USD/JPY: 111.096 versus 110.85. Little double bottom at the 200 day SMA.
Historical: 110.85 versus 110.794 versus 110.705 versus 111.386 versus
111.255 versus 111.114 versus 110.581 versus 111.335 versus 111.242 versus
111.295 versus 111.502 versus 112.289 versus 112.707 versus 113.349 versus
113.447 versus 114.726 versus 114.833 versus 114.807 versus 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
Oil: 52.24, +0.54. Broke through the 50 day SMA and is trying to get back
to the 55ish level that has acted as resistance.
Gold: 1257.30, +4.00. Surged through the 200 day SMA Friday, but could not
hold that move. Reminiscent of late February when it tested the 200 day but
could not make the break.
MONDAY
US carrier battlegroup is steaming to North Korea, Russian warships steaming
to Syria, and who knows what more will transpire ahead of Monday. Similar
news Friday did not sink stocks. Didn't help them, but the sellers were not
selling.
SP500, DJ30, SOX are in good 50 day MA tests. NASDAQ is holding the 20 day
EMA. Could it be that SP400 and RUTX are forming up near term upside
patterns?
Some metals stocks, namely steel, are setting up new patterns, getting money
thrown at them. Retail, chips, drugs/biotechs still look solid. Oil is
trying to follow oil prices higher; perhaps those stocks will move if oil
breaks 55/bbl.
The point: there is leadership and some nascent new leadership trying to
form up. The indices are holding support, and those that broke just might
try to put in an upside pattern. As improbable as it would appear given the
Fed tightening and wanting to dump its balance sheet, the lack of tax and
healthcare reform, weaker Q1 economic activity, and a lot more international
intrigue, stocks are not selling and indeed appear as if they could move
higher. Again.
The Jobs Report stunk it up, again not acting as a catalyst up or down. The
market has not surged after those reports, but it has shown a slow build
upside with the leaders making the moves.
With that background we will continue looking at solid upside plays in solid
sectors. We have some really good ones to go for Monday, and if the
patterns in the market hold, there will be more of those as we have a pretty
good list from this weekend. Again, as improbable as the continuing move
may seem, it continues not to crack and to produce good upside patterns, and
importantly, breakouts.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 5877.81
Resistance:
5912
5928 is the March all-time high.
Support:
5800 from the February consolidation lows
The 50 day SMA at 5815
The 50 day EMA at 5795
The 2016 trendline at 5723
5661 is the late January upper gap point
5601 is the January lower gap point
The November prior all-time high at 5404
The 200 day SMA at 5395
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
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 2355.54
Resistance:
2390 is the March interim recovery high
2401 is the all-time high
Support:
The 2016 trendline at 2371
The 50 day SMA at 2347
The 50 day EMA at 2341
2301 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The 200 day SMA at 2222
The November 2016 all-time high at 2213.25
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 20,656.10
Resistance:
21,100 is the March interim recovery high
21,169 is the all-time high
Support:
The 50 day SMA at 20,604
The 50 day EMA at 20,535
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
19750 is the lows of the December/January range
The 200 day SMA at 19,192
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.
End part 1 of 3
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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
- US bombs, Jobs Report bombs, stock market hangs in its trends.
- SP500, DJ30, SOX testing 50 day EMA, NASDAQ holds its trend, while
RUTX/SP400 try to return to more bullish looks.
- Jobs report weak and weather is blamed as retail and construction drop.
- Steel stocks show signs of returning to the upside as did retail before
them.
- Market still sets up new patterns and they are breaking higher as well.
Friday you had your choice for breakfast, 59 Tomahawk missiles that bombed
Syria or a Jobs Report that bombed itself. Neither were good market
scenarios. Futures were lower as you would expect, but not horrid.
Overnight when news of the bombing broke, stock futures dove into the abyss,
more or less. They quickly recovered, however. It took a crappy jobs
report to send them back down ahead of the open. From there, however, a
steady recovery into early afternoon. That even took the market positive --
before it gave up the recovery and all but RUTX and SOX closed flat.
SP500 -1.95, -0.08%
NASDAQ -1.14, -0.02%
DJ30 -6.85%, -0.03%
SP400 -0.10%
RUTX 0.01%
SOX 0.47%
VOLUME: NYSE -6%, NASDAQ -10%
A/D: NYSE -1.1:1, NASDAQ slightly negative breadth.
All in all, considering the news, this was not bad action. Reason to sell
but no sellers. Meaning? SP500 and DJ30 continued holding support of the
50 day MA. NASDAQ is holding its position near the top of its range, using
the 20 day EMA as support. SOX did a good job of testing the 50 day MA late
week and bouncing.
The two black sheep, SP400 and RUTX, are attempting to rejoin the flock.
SP400 midcaps are in something of a 4+ month head and shoulders, but the
past 6 weeks look as if they are putting in an inverted head and shoulders.
RUTX is similar, though not quite as elegant perhaps as SP400.
Mind you Friday was no great shakes, but it avoided a selloff when it would
appear the market could have found plenty of reason to sell.
Jobs Report
Q1 ended with weak jobs, particularly from retail that saw another loss,
dropping 30K jobs. So much for the 'predictive' powers of the ADP report.
And it was supposedly redesigned a couple of years ago to more closely track
the BLS number. Sounds as if another iteration is needed.
Non-Farm Payrolls: 98K versus 175K expected versus 219K prior (from 235K)
Unemployment 4.5% versus 4.7% expected and 4.7% February
Hourly Wages: 0.2% versus 0.3% expected versus 0.3% February (from 0.2%)
Year/year: 2.7% versus 2.6%
Workweek: 34.3 versus 34.4 expected versus 34.3 prior (from 34.4)
Participation rate: 63.0% versus 63.0% February. 94.213M working aged
people are still outside the working class. Impressive number of
non-working working aged people. Retirees? Some brush off the number
saying they are just baby boomers. But with so many older people joining
the workforce the past 8 years to make ends meet there are many younger
workers who are out of the workforce, opting to draw upon the various
programs available to nonworkers versus take on one of the menial jobs this
economy is good at producing. Why have the hassle of a job you are
overqualified for when you can play video games and stay on social media all
day and get paid to do it? I know of people who are doing this and have
been doing this for quite some time. The old adage is as true as it ever
was: if you pay someone not to work, unless the options for working are VERY
good, the person won't work. We make it very easy for people to choose not
to work.
Where the jobs are and are not:
Retail: -30K, another sharp decline
Professional/Business services: +56K
Healthcare: +14K
Mining: +11K
Manufacturing: +11K (26K prior month)
Construction: +6K (down from 59K, 46K Feb and Jan)
Most are saying, given the construction numbers, that weather knocked down
the number. Plausible explanation, for the very weak report, but there is
no question the jobs numbers remain, despite Zandi's commentary that the
market is roaring, are not that powerful.
Interestingly, last week Trump penned an order sharply limiting the use (and
abuse) of H1-b visas. Tech companies, the ones screaming the loudest about
not enough qualified labor, have used the program to bring in tech workers
(exempted from any restrictions) and REPLACE US-born workers. Trump removed
that exemption for tech, requiring the people to meet the requirements for
all other areas. Now the tech titans will scream all the more. Hey, it
takes a lot of cheap labor to make your billions. Hmmm, WHERE in US history
have we seen imported free or low-cost labor used to prop up the wealthy
class? I believe that was pre-civil war . . .
THE MARKET
CHARTS
All of the large cap indices held the same relative position. It was the
SP400 and RUTX that may be altering their patterns in a more upside
direction, but at this point they are still not there. You have to keep an
open mind when looking at chart patterns. They do not always speak to you,
at least clearly, and in those situations you have to be patient and let
them work through the patterns, keeping an eye on how leaders are
performing.
SP400: Peaked to start March and has since worked in a range of lower highs
and lower lows, but as noted earlier, has the possibility of a 6 week
inverted head and shoulders setting up. Possibility. It has to show it.
SP500, DJ30: Still holding over the 50 day MA's in their 3 week tight
lateral ranges, holding that important support level.
NASDAQ: Just off the all-time highs bumped in March and last week.
Trending higher, still has tech, software, and chip support.
SOX: This is a promising result for the entire market. SOX trended up the
20 day EMA after bouncing off the 50 day EMA in December. It went ahead and
made the 50 day MA test, getting it out of the way, somewhat clearing the
decks for a new move higher. As with SP500, DJ30, a test of an important
level.
RUTX: You can trace out a potential inverted head and shoulders the past 5
weeks somewhat similar to SP400 pattern. A bit rougher but the same idea,
and if SP400 uses it to break higher, the odds are RUTX would follow.
LEADERSHIP
Recently the market showed new life in retail and oil. Some others are
attempting to join the continuing group of leaders.
Metals: Yes some of them are back. AKS, ZEUS, STLD are very interesting.
Semiconductors: Keep pulling winners out of the hat. QRVO broke higher
Friday. SWKS as well. SIMO still looks very good as does AMKR, BRKS, PLAB,
MU.
Retail: Some are taking a breather after a great move, others still look
good. PIR broke higher Friday on good volume. WSM is taking a breather as
is LL after blistering break higher.
Oil: Not a grand week, but working on the move. APC still setting up the
inverted head and shoulders. APA started back up last week. SWN still
looks very strong to move higher. HAL is even putting in something of a
bottom at the 200 day SMA.
Biotechs/Drugs: Some fell out of patterns but many did not. CNAT is
screaming upside again. INVA is setting up for another move higher as is
TTPH.
China: Some of these stocks are coming around again, e.g. CTRP, VIPS.
Financial: Noncommittal, trying to ascertain what the Fed comments re the
balance sheet reduction mean for rates. BAC, JPM, KEY look less than great.
MARKET STATS
DJ30
Stats: -6.85 points (-0.03%) to close at 20656.1
Nasdaq
Stats: -1.14 points (-0.02%) to close at 5877.81
Volume: 1.656B (-9.4%)
Up Volume: 784.91M (-305.09M)
Down Volume: 852.69M (+179.8M)
A/D and Hi/Lo: Decliners led 1.02 to 1
Previous Session: Advancers led 2.14 to 1
New Highs: 66 (+18)
New Lows: 41 (-24)
S&P
Stats: -1.95 points (-0.08%) to close at 2355.54
NYSE Volume: 752.7M (-5.59%)
A/D and Hi/Lo: Decliners led 1.12 to 1
Previous Session: Advancers led 3.14 to 1
New Highs: 72 (-20)
New Lows: 11 (-23)
SENTIMENT INDICATORS
VIX: 12.87; +0.48
VXN: 13.49; +0.76
VXO: 11.66; +0.35
Put/Call Ratio (CBOE): 0.95; +0.05
Bulls and Bears: Bulls jumped back up to the higher end of the range after
a week of market doubt. When the market did not plunge farther off that
nasty Tuesday break lower a couple of weeks back, confidence stabilized.
Still cannot forget the 7 weeks over 60%, however, and that is still lurking
out there and is historically a market top indicator, just not a timing
indicator. Don't forget those 60+ readings in the equation.
Bulls: 55.8 versus 49.5. After a panic week, bulls rebound.
Bears: 18.3 versus 18.1. The bear rose as well but that means they were
more bearish, moving the opposite direction in terms of the view of the
market.
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: 55.8 versus 49.5
49.5 versus 56.7 versus 53.4 versus 57.7 versus 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: 18.3 versus 18.1
18.1 versus 17.3 versus 13.75 versus 17.3 versus 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): 2.37% versus 2.34%. Double bottom, inverted head and
shoulders, whatever, bonds look as if they want to break higher again near
term.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.34%
versus 2.33% versus 2.34% versus 2.33% versus 2.35% versus 2.40% versus
2.41% versus 2.382% versus 2.418% versus 2.376% versus 2.40% versus 2.41%
versus 2.40% versus 2.43% versus 2.463% versus 2.50% versus 2.529% versus
2.502% versus 2.602 versus 2.617% versus 2.58% versus 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%
EUR/USD: 1.05906 versus 1.0645. Euro breaking lower from the lateral
consolidation at the 50 day MA.
Historical: 1.0645 versus 1.06760 versus 1.06804 versus 1.06702 versus
1.06584 versus 1.06855 versus 1.07546 versus 1.0815 versus 1.08640 versus
1.07894 versus 1.07670 versus 1.07920 versus 1.08117 versus 1.0748 versus
1.07395 versus 1.07710 versus 1.0732 versus 1.06070 versus 1.0636 versus
1.06746 versus 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
USD/JPY: 111.096 versus 110.85. Little double bottom at the 200 day SMA.
Historical: 110.85 versus 110.794 versus 110.705 versus 111.386 versus
111.255 versus 111.114 versus 110.581 versus 111.335 versus 111.242 versus
111.295 versus 111.502 versus 112.289 versus 112.707 versus 113.349 versus
113.447 versus 114.726 versus 114.833 versus 114.807 versus 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
Oil: 52.24, +0.54. Broke through the 50 day SMA and is trying to get back
to the 55ish level that has acted as resistance.
Gold: 1257.30, +4.00. Surged through the 200 day SMA Friday, but could not
hold that move. Reminiscent of late February when it tested the 200 day but
could not make the break.
MONDAY
US carrier battlegroup is steaming to North Korea, Russian warships steaming
to Syria, and who knows what more will transpire ahead of Monday. Similar
news Friday did not sink stocks. Didn't help them, but the sellers were not
selling.
SP500, DJ30, SOX are in good 50 day MA tests. NASDAQ is holding the 20 day
EMA. Could it be that SP400 and RUTX are forming up near term upside
patterns?
Some metals stocks, namely steel, are setting up new patterns, getting money
thrown at them. Retail, chips, drugs/biotechs still look solid. Oil is
trying to follow oil prices higher; perhaps those stocks will move if oil
breaks 55/bbl.
The point: there is leadership and some nascent new leadership trying to
form up. The indices are holding support, and those that broke just might
try to put in an upside pattern. As improbable as it would appear given the
Fed tightening and wanting to dump its balance sheet, the lack of tax and
healthcare reform, weaker Q1 economic activity, and a lot more international
intrigue, stocks are not selling and indeed appear as if they could move
higher. Again.
The Jobs Report stunk it up, again not acting as a catalyst up or down. The
market has not surged after those reports, but it has shown a slow build
upside with the leaders making the moves.
With that background we will continue looking at solid upside plays in solid
sectors. We have some really good ones to go for Monday, and if the
patterns in the market hold, there will be more of those as we have a pretty
good list from this weekend. Again, as improbable as the continuing move
may seem, it continues not to crack and to produce good upside patterns, and
importantly, breakouts.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 5877.81
Resistance:
5912
5928 is the March all-time high.
Support:
5800 from the February consolidation lows
The 50 day SMA at 5815
The 50 day EMA at 5795
The 2016 trendline at 5723
5661 is the late January upper gap point
5601 is the January lower gap point
The November prior all-time high at 5404
The 200 day SMA at 5395
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
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 2355.54
Resistance:
2390 is the March interim recovery high
2401 is the all-time high
Support:
The 2016 trendline at 2371
The 50 day SMA at 2347
The 50 day EMA at 2341
2301 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The 200 day SMA at 2222
The November 2016 all-time high at 2213.25
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 20,656.10
Resistance:
21,100 is the March interim recovery high
21,169 is the all-time high
Support:
The 50 day SMA at 20,604
The 50 day EMA at 20,535
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
19750 is the lows of the December/January range
The 200 day SMA at 19,192
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.
End part 1 of 3
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