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6/17/2017 Investment House Daily
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Investment House Daily Subscribers:
Targets hit: SEDG; SQ
Entry alerts: AAPL
Trailing stops: None issued
Stop alerts: DIOD
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Market Summary Video, Plays and Play Videos, and Play Table with play
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If any market circumstances arise where we see additional plays we want to
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of the day of the week.
- SOX, NASDAQ take the break from their runs to new highs, DJ30 and NYSE
indices fill in upside while they do.
- FOMC, Trump allegations, crappy economic data take a toll, perhaps not as
deadly as some would believe.
- Still plenty of patterns in leadership, others ready to move higher.
- Plunge protection worked again? We will know more this week.
The past week continued the floundering for the NASDAQ and SOX that started
the prior Friday. This while DJ30 broke to new highs while the other NYSE
indices fell in line behind it with some new highs though they tested to end
SP500 0.69, 0.03%
NASDAQ -13.74, -0.22%
DJ30 24.38, 0.11%
VOLUME: NYSE +180%, NASDAQ +70%
A/D: NYSE 1.4:1, NASDAQ -1.2:1
It was not great action as many leaders from the recent highs struggled. At
the same time, other stocks are trying to step up to leadership. Some of
those are making it stick (e.g. manufacturing), some could not (some oil,
some metals). Even so, most held the line, even those prior leaders that
sold rather hard in the tech and chip sectors.
So, the market had to deal with the FOMC decision to hike rates 25BP and,
more importantly, outline a fairly specific plan for reducing its balance
sheet by $600B. It also had to deal with new allegations the President is
being investigated for obstruction, apparently with regard to his 'give the
buy a break' comments about Flynn to Comey after Flynn was fired from his
post. To top it off, the economic data was relatively crappy. The regional
manufacturing sentiment surveys were decent, but Housing starts plunged
5.5%, retail sales showed the biggest drop in 16 months, the CPI dropped
sharply (not bad in our view), and Michigan sentiment for June missed
expectations with a 94.5 reading, well off its highs the past several
With all that great news and on the heels of SOX and NASDAQ breaking to new
highs, a test is not that surprising. Recall a couple of weeks back I
commented SOX was due for a test after such a solid, steady 3 week move to
new highs. And, while they took a break, the other indices could lead
higher. Didn't think it would be DJ30, but there you go. Okay, SOX is
taking the break and holding the 50 day EMA in the process. Oh my what a
massive disaster. Similar for NASDAQ as it sold to the 50 day EMA on the
Monday low, bounced, then double tapped back at the 50 day on the Thursday
low. Many of the big name NASDAQ stocks of course show the same action.
Even as those two tested, DJ30 put in new highs as did SP500, SP400 and
RUTX. It's just that the Dow held its higher highs while the others tested
late week with the various news stories.
That is not horrible action. Indeed, sifting through the pullback for this
weekend we found many, many good-looking patterns that could deliver solid
new moves upside. Some from new sectors, some from old sectors setting up
after pullbacks. Basically there are possibilities from a wide range of
market sectors, not a bad indication for the upside at all.
Expiration surged volume on the exchanges and we did take the rest of the
June options, banking some solid 300+% on SQ's options and SEDG's 90+% on
its June options. We also put some money downside on AAPL; I know, heresy,
but it looks the most likely of the FAANG to not move back up.
All in all it was a week where the bears could say 'told you so,' but a very
hollow statement. There are still a lot of good patterns out there and the
tech stocks that looked assured to break down held support and even set up
short upside-looking patterns. Perhaps they still break down but they are
showing they are not easy outs. Could it be that the plunge protection team
was successful again? Another selloff from two Fridays back averted, giving
the signal and the time for the bids to return? How stocks respond this
week will tell more of that tale.
DJ30: Punched out a new high two Fridays back and continued higher through
Friday. Taking over for NASDAQ and SOX as they tested.
SP500: New high Tuesday, early Wednesday as well, but then faded to close a
the 10 day EMA for the week. Still very good action.
NASDAQ and SOX: Both sold back as we anticipated for SOX, and both held the
50 day EMA, both bouncing and then re-tapping at the 50 day EMA late week.
Not out of the woods but showing they can hold up.
RUTX and SP400: Both put in higher highs on the week, then tested back to
end the week. That test gave up the new highs as many smaller issues in
metals, energy that had moved higher struggled late week. Still in very
good position to hold and put in new highs once more in a replay of the last
As noted, many groups are sporting some good looking patterns. Biotech,
chips, tech, telecom, manufacturing, some oil, financial, software. The
possible leadership is there if it will step up.
FAANG: FB double tapped the 50 day MA's, bounced Friday. AAPL sagged all
week and was lower Friday; not great for the upside. AMZN is buying WFM and
it gapped up off its second doji at the 50 day MA. GOOG is showing a double
tap at the 50 day EMA as well.
Chips: AAOI, MRVL, NVDA are not bad at all. AVGO so-so. QRVO not great.
SLAB, SWKS stink, but SLAB is in the same pattern as RTEC as of its Thursday
close and RTEC surged upside Friday.
China: NTES still looks decent, bouncing off the 50 day EMA test. SINA at
its 50 day MA test. SOHU in a double bottom at the 61% Fibonacci
Manufacturing: DE, CAT breaking higher. HOLI ready to roll higher in its
range. Very interesting.
Biotech: CLVS, BLUE, VRTX -- some really good patterns.
Telecom: Getting interesting, e.g. VIAV, CIEN.
Financial: Still some nice pullbacks, e.g. TCBI, OZRK. Very nice.
Stats: +24.38 points (+0.11%) to close at 21384.28
Stats: -13.74 points (-0.22%) to close at 6151.76
Volume: 3.13B (+68.28%)
Up Volume: 1.27B (+755.92M)
Down Volume: 1.52B (+200M)
A/D and Hi/Lo: Decliners led 1.22 to 1
Previous Session: Decliners led 1.78 to 1
New Highs: 75 (+18)
New Lows: 60 (-11)
Stats: +0.69 points (+0.03%) to close at 2433.15
NYSE Volume: 2.3B (+177.51%)
A/D and Hi/Lo: Advancers led 1.36 to 1
Previous Session: Decliners led 1.61 to 1
New Highs: 131 (+34)
New Lows: 73 (-2)
VIX: 10.38; -0.52
VXN: 16.3; +0.1
VXO: 8.89; -0.84
Put/Call Ratio (CBOE): 1.09; +0.11. Jumped back over 1.0 on the close but
this was more a function of expiration.
Bulls and Bears: Bouncing up and down after hitting over 60 for several
weeks in the spring. This kind of yo-yo action shows a confused and
apprehensive investor class. Looks as if those weeks in the 60's is taking
Bulls: 50.0 versus 55.8 versus 50.0
Bears: 18.6 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: 50.00 versus 55.8
55.8 versus 50.00 versus 51.9 versus 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: 18.6 versus 18.3
18.3 versus 19.2 versus 18.3 versus 17.1 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
Bonds: 2.155% versus 2.162%. Bonds gapped higher Wednesday, held it
post-FOMC, and added upside Friday. Really does not make a lot of sense if
the Fed has all under control and is hiking rates.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.162%
versus 2.209% versus 2.21% versus 2.21% versus 2.19% versus 2.176% versus
2.14% versus 2.183% versus 2.154% versus 2.21% versus 2.20% 2.26% versus
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%
EUR/USD: 1.11968 versus 1.11466. After a rough Thursday, the euro
rebounded to hold the 20 day EMA and the trend Friday.
Historical: 1.11466 versus 1.12213 versus 1.12086 versus 1.11930 versus
1.11965 versus 1.1199 versus 1.12491 versus 1.12798 versus 1.12684 versus
1.12811 versus 1.12181 versus 1.12547 versus 1.11768 versus 1.11810 versus
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
USD/JPY: 110.873 versus 110.854. Dollar surged to the 50 day MA Thursday
then stalled a bit Friday. Big move off the lows, will see where it goes
Historical: 110.854 versus 109.560 versus 110.060 versus 109.97 versus
110.334 versus 110.299 versus 109.355 versus 110.038 versus 110.446 versus
111.595 versus 110.909 versus 111.086 versus 111.217 versus 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
Oil: 44.97, +0.51. Trying to bounce off a bit deeper test in the range.
Still over the 43ish level that is the bottom.
Gold: 1256.50, +1.90. Sold on the week, surged Wednesday, but then dropped
post-FOMC. That makes more sense.
Okay the PPT entered, blunted the selloff two Fridays back, bought time for
the big NASDAQ stocks to hold support. As that occurred, money moved into
DJ30 and pushed it and the other NYSE indices to new highs though only DJ30
held it through Friday. That makes sense: as the leading NASDAQ and SOX
test the 50 day MA after pretty amazing moves higher, the other indices that
lagged took to leadership and put in their own new highs. Rotation.
Now we see if the double taps at support on many of the FAANG, large tech,
semiconductor stocks holds and they too move back up after a 50 day MA test.
Recall, that is the 'normal' scenario in a trend higher: a series of moves
up the 10 and/or 20 day EMA, then after 4 to 5 such moves, a deeper test of
the 50 day MA. If the trend is to hold, that acts as support and starts a
new set of moves up to and over the 10 and 20 day EMA.
If they can move up and the NYSE indices move up as well, that is a powerful
combination and upsets the 'market rally over' predictions and calls. We
like the patterns we see enough that we are putting all upside on the report
this weekend. Now we see if these nice looking patterns can deliver nice
Have a great weekend and Father's Day!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6151.76
6205 is the late May all-time high
6341.70 is the Friday all-time high.
The 50 day EMA at 6099
6170 is the recent all-time high
5996 is the recent May 2017 low
The 2016 trendline at 5946
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
5800 from the February consolidation lows
5661 is the late January upper gap point
The 200 day SMA at 5631
5601 is the January lower gap point
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 2433.15
2439 is the all-time closing high
The 2016 trendline at 2464
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
The 50 day EMA at 2399
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
The 200 day SMA at 2280
2277.53 is the December 2016 high
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 21,384.28
21,169 is the March 2017 all-time high
The 50 day EMA at 20,978
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
The 200 day SMA at 19,821
19750 is the lows of the December/January range
19,732 is the January 2017 low
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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