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4/28/2017 Investment House Daily
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Targets hit: None issued
Entry alerts: None issued
Trailing stops: None issued
Stop alerts: AMKR
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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.
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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.
- 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
- 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%
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.
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
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.
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
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
Tech: WDC surged to a new high. MSFT likewise. CSCO continued its two
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
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.
Stats: -40.82 points (-0.19%) to close at 20940.51
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)
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)
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
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
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%
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
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
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
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
The 2016 trendline at 2398
2390 is the March secondary peak
2401 is the March 2017 all-time high
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
21,000 is the March secondary high
21,169 is the March 2017 all-time high
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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