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5/27/2017 Investment House Daily
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Targets hit: None issued.
Entry alerts: DIOD; GRUB; VECO
Trailing stops: None issued
Stop alerts: None issued
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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.
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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 pauses after a 6-day recovery, before Memorial Day weekend.
- Economic data continues to erode, market doesn't mind. So far.
- Corporate profits decline according to what is reported to the IRS.
- Business investment continues a second month of nothing.
- Leaders still in good shape.
Friday the market was quiet, and quite flat, as it digested six days of
upside following that Wednesday one-day selloff. Often of late the Friday
ahead of a 3-day weekend is contra-trend, and with the markets in an uptrend
and the leading indices overcoming the Wednesday thumping, Friday was due
for some weakness. If that was it, however, it certainly was not much.
SP500 0.75, 0.03%
NASDAQ 4.93, 0.08%
DJ30 -2.67, -0.01%
NASDAQ 100 0.17%
VOLUME: NYSE -16%, NASDAQ -12%. Volume down ahead of the long weekend.
Advance/Decline: NYSE 1.1:1, NASDAQ -1.1:1. Definitely a large cap
session, at least on NASDAQ.
It was an unexciting day on a day that nothing was going to excite the
market. Trump was still overseas and had not had his handshake war with the
new French President, had not knocked over the G-7's card table about the
Paris climate accord, Merkel had not stated that Britain and the US could no
longer be relied upon, had not told Abbas that he lied to Trump in DC, etc.
All that fun transpired over the weekend.
The market only had the second iteration of Q1 GDP and Durable Goods Orders
to chew on. Both were less than satisfactory and bonds still look ready to
break higher as a result of the weaker economics. RBC even said its
indicators are flashing an 'imminent yield breakdown' is threatened.
GDP Q1 2nd: 1.2% vs 0.8% expected vs 0.7% first read (2.1% Q4 final)
Consumption: 0.6% vs 0.3% prior. This added 0.44% to bottom line GDP
(+0.23% prior reading)
Corporate Profits: -1.9% vs +0.5% prior.
Whoa. How can profits be lower when companies just reported one of the best
earnings and profits quarters in a very long time? Several reasons, two
First, the big corporations that have done so well since the handouts
starting with the Obama stimulus and carried through the ACA, executive
orders, etc. has continued thus far under Trump because his administration
just got started and it has been unable to push through tax or healthcare
reform. A lot of executive orders and regulations are getting rolled back
and that helps, but it takes awhile.
Second, and more immediately germane to this last report: the profits
reported to the IRS are actual, GAAP profits, not the non-GAAP fiction
designed to jump stock prices that are reported to shareholders and the
markets each quarter. So, you have corporate profits actually lower. Sorry
to burst bubbles, but then again, the market does not care about that. Big
moves on made up earnings in a market that is made up of years of Fed easy
Nonetheless, the market moved, perhaps not higher, but not lower. This even
with more calls that the end of the equity rally is over. Indeed, on many
of the more negative websites there are more and more stories with headlines
including 'the last time this happened' warnings of a major, end of this
stage of western society market and economic event.
Durables Orders, April: -0.7% vs -1.8% expected vs 2.3 prior (from 0.7%)
Ex-Tansports: -0.4% vs +0.4% expected vs 0.8% prior (from -0.2%)
Business Investment: 0.0% vs 0.5% prior. 2017 low as businesses,
supposedly so flush with profits, are not investing.
Nonetheless, the indices held their gains on the week and SOX even nicely
extended its move to higher highs. The market continued its indifference to
weakening economic data, a bond chart that looks ready to break higher, and
at least through Friday, the issues in DC. Of course with Trump back in
country and leakers, the press, etc. hell bent on fighting the
administration every step of the way, that could all change.
That said, last week once again showed how the indices are quick to shake
off disruptive market moves and continue the trends.
SP500: Added fractionally to its new high as it successfully recaptured the
Wednesday losses and Thursday put a bit of distance on the old high.
NASDAQ: Also added a nominally higher new high as it too put distance on
the prior high Thursday. Still trending up the 10 day EMA, having quickly
recaptured it after that Wednesday upheaval.
SOX: Impressive session, starting lower, rallying positive and adding some
padding to its break to a higher post-2000 high. Many chips continue to
recover and set up to deliver more upside.
DJ30: Lost a bit of ground Friday, still just shy of its March all-time
high, but set up to make a new high. Of course, it has not done so and MACD
is lower as it tests that high. Not exactly an upside juggernaut but the
other big cap indices are leading.
SP400/RUTX: Up on the week but only made it to mid-range before fading some
to the weekend. SP400 is nicely over the 50 day MA's, in position to move
if the bids come. RUTX shows the same action, pausing after breaking back
up through the 50 day MA's.
Semiconductors: Still leading, having posted a nice comeback. AVGO to a
higher high late week. QRVO rallied sharply, off a bit Friday. MU broke to
a higher closing high. DIOD jumped higher on stronger volume. NVDA broke
to a higher high on strong volume. SIMO posted a great break higher on the
week. CY looks good and MXL and PXLW look good to go higher again.
China: Still solid though some took a powder. SOHU in a nice test, setting
for a new move. BABA continues up the 10 day EMA. SINA is strong. QIWI
made us another higher high. CTRP looks ready to break higher again. BIDU
looks ready to make a new break higher.
Casual eateries were off Friday but good on the week: SONC, WEN, DRI, YUM
Manufacturing enjoyed a good week: ZBRA, HON still showing good uptrends
Transports: Very solid across the board. Airlines DAL, UAL. Rails rallied,
making us quite upset about selling KSU prematurely.
Internet: GOOG still very solid. BCOR ditto. GRUB posted a great move
Miscellaneous: Great moves continued in several of our plays across
sectors. MNST, STMP, SQ, COL.
Medical/Healthcare: IMGN looks good to move again. CO rallied nicely.
Some of these look to be forming up better.
Stats: -2.67 points (-0.01%) to close at 21080.28
Stats: +4.94 points (+0.08%) to close at 6210.19
Volume: 1.57B (-11.8%)
Up Volume: 868.45M (-271.55M)
Down Volume: 652.1M (+41.73M)
A/D and Hi/Lo: Decliners led 1.13 to 1
Previous Session: Advancers led 1.16 to 1
New Highs: 135 (-86)
New Lows: 65 (+1)
Stats: +0.75 points (+0.03%) to close at 2415.82
NYSE Volume: 682.8M (-15.63%)
A/D and Hi/Lo: Advancers led 1.11 to 1
Previous Session: Advancers led 1.1 to 1
New Highs: 157 (-80)
New Lows: 39 (-3)
VIX: 9.81; -0.18
VXN: 12.26; -0.32
VXO: 9.16; -0.1
Put/Call Ratio (CBOE): 0.91; +0.05
Bulls and Bears: Bulls faded HARD. Bears jumped HARD. Lots of pessimism
quickly injected itself into the market. Lots of fund managers and market
mavens are negative and it is spreading around. That is good.
Bulls: 51.9 versus 58.1
Bears: 18.3 versus 17.1
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 51.9 versus 58.1
58.1 versus 58.7 versus 58.5 versus 54.7 versus 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
Bears: 18.3 versus 17.1
18.3 versus 17.3 versus 17.9 versus 17.9 versus 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
Bonds (10 year): 2.26% versus 2.255%. Bonds still look ready to break
higher once more.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.255%
versus 2.252% versus 2.287% versus 2.254% versus 2.233% versus 2.229% versus
2.223% versus 2.32% versus 2.34% versus 2.34% versus 2.393% versus 2.401%
versus 2.394% versus 2.381% versus 2.354% versus 2.322% versus 2.289% versus
2.322% versus 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
EUR/USD: 1.11810 versus 1.12148
Historical: 1.12148 versus 1.12240 versus 1.11868 versus 1.12390 versus
1.11916 versus 1.23077 versus 1.10985 versus 1.11557 versus 1.10862 versus
1.09833 versus 1.09328 versus 1.08655 versus 1.08671 versus 1.08843 versus
1.09286 versus 1.09994 versus 1.09086 versus 1.08923 versus 1.09284 versus
1.090984 versus 1.08987 versus 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: 111.217 versus 111.828
Historical: 111.828 versus 111.678 versus 111.835 versus 111.076 versus
111.534 versus 111.271 versus 111.584 versus 111.167 versus 112.414 versus
113.074 versus 113.749 versus 113.349 versus 113.759 versus 114.263 versus
113.771 versus 113.217 versus 112.683 versus 112.495 versus 112.782 versus
112.779 versus 111.793 versus 111.524 versus 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
Oil: 49.80, +0.90. Oil imploded Thursday after hitting 52. That stalled
it a bit below the range highs (53-55). Friday a recovery of the 200 day
SMA, but still problematic. Can oil recovery the same as equity markets?
Gold: 1268.10, +11.70. Solid break higher after the weeklong consolidation
of the move that recovered the 200 day SMA. Gold still looks ready to move
Market closed Monday for Memorial Day. That means plenty of time for the
Asian and European markets to work through the weekend stories from the G-7,
etc. Then we see if the US markets pick up where the left off, including
the US stock indices. SOX, NASDAQ, and SP500 at higher highs. Will they
continue higher and pull the others with them?
Lots of negatives still swirl in the headlines and just because the indices
hit new highs does not mean they will necessarily hold or extend them.
True, but thus far the indices have met adversity with steady buying. Did
it again last week.
Thus this weekend we have more upside plays to take advantage of good setups
and more upside if the market can deliver. Semiconductors are leading
again, internet is still moving higher, Chinese stocks, FAANG, and others
are working as well.
Have a great Memorial Day!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6210.19
6170 is the recent all-time high
The 50 day EMA at 6003
5996 is the recent May 2017 low
The 50 day SMA at 5983
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
The 2016 trendline at 5882
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 5568
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 2415.82
The 2016 trendline at 2437
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
The 50 day EMA at 2374
The 50 day SMA at 2372
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
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 2262
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 21,080.28
21,169 is the March 2017 all-time high
The 50 day EMA at 20,787
The 50 day SMA at 20,786
20,553 is the lows of the week of May 15
20,547 is the lower gap point from late April 2017
20,412 is the March 2017 low
20,400 is the mid-April 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
19,732 is the January 2017 low
The 200 day SMA at 19,633
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
End part 1 of 3
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