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9/15/2017 Investment House Daily
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Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: LLNW; TTWO; VMW
Entry alerts: None issued
Trailing stops: None issued
Stop alerts: BEAT; GRUB; IPXL
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
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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
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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
- Upside rally continues through Friday with another low to high move
despite a best yet NKorean missile launch.
- SOX surges to a new post-2008 closing high, playing catchup to the other
indices.
- New highs logged by most of the indices, and the move post-highs is quite
similar to the prior rallies.
- Economic data remains weak as retail sales miss, revised lower, in need of
tax and healthcare reform.
- SOX move to leadership is important for the post-new highs rally health.
The market move according to its pattern or MO if you prefer is right on
target with its prior rallies in this upside trend. In this pattern, often
after the new high is made the indices continue upside with incremental, not
necessarily strong gains. That is very much what the indices showed to end
the week after a sudden start upside Monday and Tuesday: the rest of the
week was rather slow go upside, particularly for SP500 and NASDAQ. Yes SOX
was strong, but it is playing catchup to the other indices. Doing a good
job of it.
The Friday session was a third straight with a lower open followed by a
recovery to flat or better. Obviously the bids are returning at this level
versus converting to sell orders. That keeps the rally going, and with SOX
stepping up its game, perhaps the post-new high rally can improve on past
performance.
SP500 4.61, 0.18%
NASDAQ 19.39, 0.30%
DJ30 64.86, 0.29%
SP400 0.41%
RUTX 0.47%
SOX 1.71%
VOLUME: NYSE +157%; NASDAQ +54%. Expiration, so cannot write too much into
this showing.
ADVANCE/DECLINE: NYSE 1.7:1, NASDAQ 1.5:1. Outside of SOX and a few
others, not a lot of movement.
DJ30 has taken the lead in the new high department, hitting a high Wednesday
and extending to a new all-time high Thursday and Friday. SP500 was the
first to garner a new high on this last leg this week, clearing to a new
closing high Monday and adding to it through Friday, scoring its own
all-time high as well. NASDAQ put in some new all-time closing highs though
it gave up the early week highs Friday. Even SOX came to life and with two
solid back to back moves to end the week it put in a new post-2008 closing
high. SOX is very important for this market, and if SOX continues to show
such strength, the rally may have more to it than just one of the more
'typical' post-new high moves.
SP400 and RUTX look solid to continue their moves, but SP400 is at important
resistance and both are still quite a way from a new high. Working on it.
Given the timing of the moves, the large cap indices are at new highs and
indeed have traded at them for at least a few days now. In the prior new
high move in July to August and even before that, the indices put in
anywhere from 5 to 10 to 12 sessions after the new high before they started
topping out and set up for the next move lower.
Thus, if you look at the past action as a guide to the market's, and more
specifically the algorithm's, pattern they are working on the last stages of
this particular leg with anywhere from 2 to 10 days left.
Now, of course, this is all rather loose in terms of days. The important
point is the indices are putting in new highs, and if the algorithms hold
their trading patterns then the top will be put in sooner than later. We
have taken gain along the way, and will take more as the move progresses.
At the same time it is possible the market just continues to run higher. It
is showing good action in several groups and the semiconductors came to life
to end the week, though not all -- NVDA made a huge move and it is a
heavyweight in the group. Nonetheless, it is an important group and its
reassertion as a leadership group could lead to a more sustained run this
particular leg. Thus, we did pick up some good stocks and positions as the
market rally continued, and quite frankly there are STILL some good-looking
buys heading into next week; if they continue higher these leaders we are
looking at will help lead the current rally higher. We plan to take gain as
noted, but we also plan to keep participating if great stocks show great
entry points.
NEWS/ECONOMY
The economic data? At best uninspired. Retail sales Friday disappointed
big time as did Industrial Production. At least New York PMI beat
expectations. The week before, jobs were terrible overall though showed
some positives in the jobs mix. All in all, however, the results are, as
noted, uninspiring.
Retail Sales, August: -0.2% versus 0.1% expected versus 0.3% July (from
0.6%)
Ex-autos: 0.2% versus 0.5% expected versus 0.4% prior (from 0.5%)
Control Group: -0.2% versus +0.2% expected
Building materials: -0.5% but that will change after the storms.
Food: 0.3%
Gas stations: 2.5%
Apparel: -1.0%
**Online sales -1.1%, the worst showing since 4/2014.
What does it mean? Just another in a string of continued mediocre economic
data that the US has suffered through for years. It underscores the need
for meaningful tax reform that includes healthcare reform. I can tell you
firsthand stories of the crisis the ACA is bringing to workers wanting
healthcare. The will is there for business to make new investments and move
the economy forward. The problem is the structure that blocks growth by
bleeding off funds for inflated insurance costs.
Just a quick example: we used to be able to purchase for employees a family
healthcare plan for $321/month with 100% coverage after a $5,000 deductible.
They combined that with an HSA account where they contributed tax free
dollars to build up the account to pay for day to day medical expenses plus
the deductible. We matched contributions up to $150/month to help new
employees build up their accounts although they could contribute more. It
worked beautifully.
Today a similar, though not as good coverage plan, costs $1440/month with a
$12,000 deductible. You can contribute to an HSA, but under the ACA the
Health Savings Accounts were gutted and vastly limited as cannot be used for
nonprescription items. The result? People have doctors write prescriptions
for over the counter items, thus jacking up the costs all around.
Incredibly stupid, but not really because the goal was to make a 'fix' that
was unworkable as a stepping stone to total government healthcare.
That is why I am so encouraged by the Graham/Santorum/and others healthcare
bill being introduced in Congress, the one I wrote about before. It puts
the decision-making as to what kind of program the state wants to offer with
the state itself. If they want the ACA, they can have it. If not, they can
try their own ideas.
There is also hope in tax reform with democrats such as Munchin a democrat
from West Virginia saying the negotiations are "very promising." One can
only hope.
THE MARKET
CHARTS
SOX: With NVDA waking up out of a 9-week lateral range Friday and blasting
to a 6+% gain, SOX was finally able to play some much-needed catchup. Not a
new post-2008 high, but at least a post-2008 closing high as SOX moves
through the June peak. INTC threw in with NVDA along with SWKS and even
AVGO showed some life Friday. With the big names and smaller names moving,
SOX gets the first billing this week. Very important group that bodes well
for perhaps this market move extending beyond what has been the 'typical'
moves post new highs in this market.
DJ30: Gapped to yet another new all-time high, making it 2 straight as well
as 3 straight new closing highs. Very much what prior new high moves have
shown, i.e. a break higher and then a more or less steady, albeit
unspectacular, move higher.
SP500: Creeping along to higher highs Tuesday to Friday, putting in a new
one Friday, closing just over the 2500 level. Still has not taken it out
with any authority. This is also quite typical of the post-new high moves
in this market rally: new high, then less than spectacular moves. Higher
yes, but less than spectacular.
NASDAQ: New closing highs on the week but after that move a fade to test
the 10 day EMA. Friday a test and rebound upside. No new high Friday, but
a solid test of the move, holding at near support. Now we see if NASDAQ can
resume the leadership role after a quick test of the new high. It has shown
better post-new high moves, e.g. in July, so it is capable of using this
good setup for a new break higher.
SP400: Not a bad week at all. SP400 lagged the move higher, but it started
making up ground with a pair of gap and runs Monday and Tuesday. A move
over the 50 day SMA, then a test through Thursday. Friday a break higher
with a new rally high. SP400 looks quite good to continue the move higher
as it is handline 1750 well with the next resistance at 17170ish.
RUTX: Small caps posted a solid week, up 4 of 5 sessions and moving through
resistance from March, April, and indeed past the June high as well.
Obviously a bit more than just a relief bounce off the July to August
selling, doing its best to break up any notion of a head and shoulders top
formation over the past 5 months.
LEADERSHIP
Semiconductors: Chips got the first billing Thursday with their work, and
Friday they were at it again. NVDA blasted higher and had the bald-headed
guy on CNBC was all lathered up; surely if flies to the moon -- taking our
existing position nicely deep into the money. AVGO didn't break out but it
did finally contribute upside, helping SOX. INTC cleared the August high.
XLNX, SLAB, SWKS, AMAT and others enjoyed great weeks. The others? BRKS,
ON. Very important group for the market and performing well as more and
more of these stocks start breaking higher.
China stocks: A good week for many though the end of the week was
anti-climactic. SINA a great week. BITA as well. WUBA walking up the 10
day EMA to a new high. BABA surged midweek then tested the rest of the
week. JD looks ready to make a break higher. HTHT in a 20 day EMA test.
Others are setting up for a move, e.g. YNDX, YY,
Financial: A good recovery week. C touched the top of its range, backed
off some, good position. JPM bounced off the 200 day SMA but still very
much range bound. BAC solid upside but still in the range. Lots of moves up
but not saying this is a group I want to get into right now.
Machinery: TEX broke out on the week and shot straight up. CAT continues
working higher up the 10 day EMA. HOLI a bit wild Friday, but holding a
nice trend higher.
Retail: AMZN broke higher Wednesday but could not keep that move going.
Nice test, however. KSS still running higher on its breakout. COST broke
higher, testing its move late week. Same action with ROST, GPS: Good
breaks higher, testing to end the week.
Drugs/biotechs: PFE put in a nice breakout move on the week. Big biotechs
testing the move, e.g. BIIB, CELG. AMGN still moved well. SRPT had a good
week. BLUE broke higher Thursday but could not hold the move. Smaller
stocks are not bad. IDRA starting to move back up. Setting up well, ARRY,
IMGN, IMMU.
Software: VMW put in another good week and we took some big gain on part of
the position. TTWO tested laterally, still solid. MSFT moving decently
enough. CRM testing the 20 day EMA, not a bad test at all, setting up a new
entry.
FAANG: AAPL just over the 50 day MA with a 2 week pullback to the prior
high from May and June. AMZN broke higher Wednesday, tested to the weekend,
still solid; has some possible tax fraud issues. FB holding the 20 day EMA
on a test. NFLX surged through Tuesday, tested into Friday, setting up
another potential entry. GOOG tried to hold the handle and set up the move
but it could not do it, breaking lower Thursday and Friday.
MARKET STATS
DJ30
Stats: +64.86 points (+0.29%) to close at 22268.34
Nasdaq
Stats: +19.39 points (+0.3%) to close at 6448.47
Volume: 2.744B (+53.53%)
Up Volume: 1.834B (+1.113B)
Down Volume: 861.049M (-97.13M)
A/D and Hi/Lo: Advancers led 1.47 to 1
Previous Session: Decliners led 1.21 to 1
New Highs: 148 (+23)
New Lows: 34 (+13)
S&P
Stats: +4.61 points (+0.18%) to close at 2500.32
NYSE Volume: 2.2B (+157.73%)
A/D and Hi/Lo: Advancers led 1.74 to 1
Previous Session: Advancers led 1.11 to 1
New Highs: 114 (+15)
New Lows: 8 (-1)
SENTIMENT INDICATORS
VIX: 10.17; -0.27
VXN: 12.51; -0.89
VXO: 7.8; -0.49
Put/Call Ratio (CBOE): 1.08; +0.29
Bulls and Bears: Of course, sentiment drops just before the market breaks
higher.
Bulls: 47.1 versus 49.5
Bears: 20.2 versus 19.1
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: 47.1 versus 49.5
49.5 versus 49.5 versus 48.1 versus 50.5 versus 57.5 versus 60.0 versus 60.2
versus 57.8 versus 50.0 versus 52.5 versus 54.9 versus 51.5 versus 50.00
versus 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: 20.2 versus 19.1
19.1 versus 19.1 versus 18.3 versus 18.1 versus 17.0 versus 16.2 versus 16.5
versus 16.7 versus 18.6 versus 18.8 versus 18.6 versus 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 versus 24.3
OTHER MARKETS
Bonds: 2.201% versus 2.186%. Bonds started the week gapping lower and sold
back hard to the 50 day EMA. Tried a modest bounce Friday.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.186%
versus 2.19% versus 2.167% versus 2.134% versus 2.042% versus 2.105% versus
2.072% versus 2.166% versus 2.210% versus 2.136% versus 2.129% versus 2.175%
versus 2.169% versus 2.189% versus 2.217% versus 2.183% versus 2.197% versus
2.185% versus 2.225% versus 2.264% versus 2.24% versus 2.191% versus 2.201
versus 2.246% versus 2.262% versus 2.257% versus 2.264% versus 2.221% versus
2.266% versus 2.253% versus 2.296% versus 2.291% versus 2.303% versus 2.287%
versus 2.330% versus 2.255% versus 2.241% versus 2.270% versus 2.261% versus
2.318% versus 2.331%
EUR/USD: 1.19436 versus 1.1918. Tested back to the 50 day MA, started to
bounce off that level Thursday and Friday, but not that strong a move.
Historical: 1.1918 versus 1.1874 versus 1.19706 versus 1.19551 versus
1.20379 versus 1.2025 versus 1.19258 versus 1.19143 versus 1.18621 versus
1.19131 versus 1.18938 versus 1.19731 versus 1.19678 versus 1.19212 versus
1.18 versus 1.17516 versus 1.1813 versus 1.17595 versus 1.17107 versus
1.17812 versus 1.17445 versus 1.17751 versus 1.18216 versus 1.17652 versus
1.17596 versus 1.17619 versus 1.17975 versus 1.1774 versus 1.18718 versus
1.18457 versus 1.18072 versus 1.18281 versus 1.18293 versus 1.1683 versus
1.17419 versus 1.1646 versus 1.1637 versus 1.16640 versus 1.16271 versus
1.15280 versus 1.15549 versus 1.14735 versus 1.14672 versus 1.13986 versus
1.14335 versus 1.14682 versus 1.13964
USD/JPY: 110.846 versus 110.01. Dollar continued its bounced off the lows
that started the prior Friday. Closed in on the 200 day SMA on the Friday
high, backed off to close. Good bounce, 200 day is logical resistance, but
the top of the range is near 114.50.
Historical: 110.01 versus 110.62 versus 110.216 versus 109.434 versus
107.847 versus 108.444 versus 109.132 versus 108.747 versus 110.254 versus
110.049 versus 110.289 versus 109.652 versus 108.04 versus 109.160 versus
109.573 versus 109.195 versus 109.648 versus 109.173 versus 109.205 versus
109.333 versus 109.842 versus 110.6621 versus 109.927 versus 109.183 versus
109.177 versus 110.03 versus 109.09 versus 110.09 versus 110.757 versus
110.689 versus 109.963 versus 110.717 versus 110.368 versus 110.28 versus
110.704 versus 111.07 versus 111.166 versus 111.897 versus 111.176
Oil: 49.89, 0.00. Broke through the 200 day SMA Thursday, held flat
Friday. Failed here in early August, so obviously an important test for
this rebound in oil.
Gold: 1325.20, -4.10. Spent the week testing back to the 20 day EMA.
Strong rally, new high, and a normal test to near support.
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6448.47
Resistance:
6450 is the early September high
6461 is the July 2017 prior all-time high
Support:
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
The 50 day EMA at 6326
The 2016 trendline at 6267
6205 is the late May all-time high
5996 is the recent May 2017 low
The 200 day SMA at 5969
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
5601 is the January lower gap point
S&P 500: Closed at 2500.23
Resistance:
2504 is the upper channel line from the March 2009 uptrend channel
Support:
2491 is the August all-time high
2480 the late August and early August highs
The 50 day EMA at 2458
2453.46 is the June prior all-time closing high
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
The 200 day SMA at 2375
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
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 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 22,268.34
Resistance:
Support:
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
The 10 day EMA at 22,053
The 50 day EMA at 21,798
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
21,169 is the March 2017 all-time high
The 200 day SMA at 20,882
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
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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