* * * *
10/28/2017 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: NTNX; DO
Entry alerts: None issued
Trailing stops: None issued
Stop alerts: None issued
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
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can sign up at the following link:
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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:
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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
- Earnings of the mega caps blast NASDAQ, SOX higher.
- Strong moves, narrow breadth.
- Q3 GDP beats upside for back to back 3% gains. Inventories rise
presumptively in anticipation of Q4 holiday sales.
- Stock buybacks down 15% but authorizations are up.
- Some of the big names still in the buy zone and we see other forgotten
names setting up a familiar upside pattern that has returned nice gains.
- Big question: was Friday the start of a new break higher based on new
rotation?
Friday showed definitely no earnings or good news saturation in the stock
market as a sack full of strong earnings provided the fuel for new breaks
higher and new highs for NASDAQ, SP400, SP500 and SOX, and a solid break
higher for RUTX off its test. FB, AMZN, GOOG, AAPL, MSFT, INTC all broke
out as well. Impressive moves and of course all of the financial station
analysts were spluttering all over themselves as is always the case when
there are impressive moves. That is okay; GOOG and others show strong
breakout moves.
SP500 20.67, 0.81%
NASDAQ 144.49, 2.20%
DJ30 33.33, 0.14%
SP500 0.54%
RUTX 0.73%
SOX 2.14%
NASDAQ 100 2.91%
VOLUME: NYSE +2%, NASDAQ +14%. NYSE volume moved a bit farther above
average, matching Wednesday, showing some good accumulation. NASDAQ volume
jumped to the highest in six weeks as it gapped and rallied. Plenty of
NASDAQ accumulation, but in what stocks?
ADVANCE/DECLINE: NYSE 1.65:1, NASDAQ 1.7:1. The breadth shows you which
stocks: the large cap stocks. Huge percentage moves on NASDAQ and SOX and
very decent gains on SP500 and even RUTX. But breadth was paltry by
comparison. It was a large cap move. Not that there is anything wrong with
that -- for the short term.
Impressive breakout move but not a broad move. Money poured into the FAANG
and large cap tech stocks. It stayed in software, machinery, retail,
financial, semiconductors -- most of the same leaders. It continued out of
China stocks and biotechs, very solid leadership groups that are not so
solid now.
With still solid leadership groups and big funds finding love again in FAANG
and massive cap tech, it could be this is a new breakout for a new run
higher. Money moving into new areas fuels moves and everyone has seen how
when money goes to FAANG NASDAQ moves up.
The other side of the coin is this good news is being piled on top of
already reported good news and could be the last hurrah of money moving in
on this earnings season. That would mean the market has hit or is near the
good news saturation point, something discussed over the past week. So one
question is whether the Friday action was the last great surge of this last
part of the rally?
Whether this is a saturation point gap remains to be seen, but other than
overall weak breadth Friday the moves did not have that look. We will wait
and see how they shake out to start the coming week as per the plan, but we
are ready to play upside off of these moves if they set up. The moves were
too strong not to be ready for that.
Moreover, it was not just these gap moves Friday. There are many stocks
again setting up patterns after long declines, trying to 'turn the corner'
back to the upside out of these bases. The semiconductors did this and we
made a lot of money on them. The China stocks did this and the same
outcome. Biotech stocks. Financial stocks. Hated, loathed, despised
downtrodden groups that had the look of turning, did so, and are now loved
and adored market leaders. They have established bases at the lows, the
FAANG and large cap tech have done so off their last rallies, both can rally
and thus continue the overall market rally.
Early this week we will see how sticky is the money that entered the market
Friday. Does it build on the Friday breakouts and do the new areas that are
setting up make breakouts or do the great moves upside reverse indicating
money is using the upside to exit? It will be one or the other, whether it
takes a day or several days to show the verdict.
NEWS/ECONOMY
Q3 GDP, 1st: 3.0% versus 2.8% expected versus 3.1% Q2.
Not a boom, nothing really changed, but many took heart of back to back 3%
reads. Why? Well, after a weak end to 2016 and start of 2017, the economy
is back to 'trend,' though 'trend' the past 9 years has been well below the
3% historical trend.
Indeed, the prior 10 years were the first since the Great Depression to not
have a single year that averaged 3% GDP annual growth. If tax cuts should
perhaps get a relatively quick thumbs up, perhaps confidence could jump and
what looks to be a good quarter 4 gets to be a great quarter 4 and posts the
first 3% annual growth rate in over 10 years? Highly unlikely as Q4 would
need to grow at roughly 4.7%, but there is promise there.
What caused the expectations beat?
INVENTORIES: added 0.7% to GDP. That can be good, that can be bad. In an
upswing economy, rising inventories indicate producers and sellers building
inventories in anticipation of future sales. The holiday season is coming,
and this kind of inventory build shows anticipation of coming sales. That
is economically bullish.
CONSUMPTION: 2.4% versus 2.2% expected and 2.24% prior. Added 1.62 points
to GDP.
Harvey and Irma: Apparently they had NO impact, or they had an impact and
prevented GDP from being huge. I would think the Bureau of Economic
Statistics just muffed the storm impact.
TAKEAWAY: If tax reform is passed the economy gets interesting. If
healthcare reform is passed and gets the ACA monkey off small business'
back, the combination could be a real boom, not just the ultra large cap
company boom seen thus far.
Stock Buybacks: Down 15% through Q3 in 2017. Big market driver as we know.
Buyback authorizations: Corporate resolutions to buy back shares for the
company treasury are way up, they simply have not been implemented. If
companies start announcing buybacks then the rally has new fuel for DJ30 25K
by yearend.
Caveat: It is earnings season, companies are reporting some pretty solid
results (lots of top line beats again versus cost-cutting bottom line beats
the prior 8 years), but they are as of yet not announcing buybacks.
THE MARKET
Of course some huge moves with NASDAQ even outpacing SOX' gain. Yet,
breadth was paltry (1.7:1 NASDAQ, 1.6:1 NYSE) as a few big names led the
move. Staying power? We will see.
CHARTS
NASDAQ: Have to lead with NASDAQ as its components were exploding higher.
Boom, boom, boom, boom. NASDAQ gapped upside rallied through the prior
highs earlier in October, and surged, closing near the session high. Volume
rallied Wednesday to Friday as it tested the 20 day EMA then on the blast
higher Friday.
SOX: SOX worked through its personal problems and chop over the past two
weeks, all the while holding the 10 day EMA. Then Friday, boom, a gap and a
fill, then a race higher and closing at a new post-2000 high near the
session high.
SP400: After a quite volatile week, and indeed Friday, the midcaps surged
to a new high, closing at that high. Not out of the woods but a good move.
SP500: Very similar action to the midcaps, gapping upside, testing the 10
day EMA then rallying to a new high. Lots of volatility the past week but
held support and we will see if this breakout on good volume holds.
RUTX: After lots of volatility the past two weeks, RUTX fell below the 20
day EMA intraday Wednesday but recovered. Friday was the big move, breaking
upside for 3/4%. No new high but got the test and now breaking upside.
LEADERSHIP
China stocks: Struggling as money moves out. BABA earnings this week and
perhaps it can bring them back. BABA trying to hold the 50 day EMA. SINA
breaks the 50 day. BIDU dives lower on earnings. BZUN as well. HTHT
trying to hang on. Overall the sector is a lot weaker.
Biotech: An awful week. CELG gapping lower and lower. AMGN plunges to the
200 day SMA. BIIB breaks the 50 day MA's. IDRA plummets. IMMU, INFI still
solid enough. Overall, very volatile.
FAANG: Of course a big day with AMZN, GOOG leading the way. FB strong as
well, AAPL surging upside. NFLX was quiet but has earnings this week. FB
as well.
Software: MSFT earnings helped surge the market and that stock. Others
were solid as usual, e.g. DATA, NTNX, VMW, CRM.
Financial: A solid week with JPM at a new rally high, BAC ditto. GS testing
decently.
Semiconductors: A big group of course but some big names made big moves,
e.g. INTC, TXN while others held gains and continued higher, e.g. AMAT,
LRCX, ON, BRKS. AMD bombed but even XLNX that had reversed managed a very
nice comeback.
Machinery/Manufacturing: Strong week for CAT, CMI, EMR. HON, HOLI holding
up very well.
Retail: WMT, TGT, WSM all solid either rallying farther or testing a bit.
Others such as TLRD, SIG look as if they might be ready to turn the corner.
MARKET STATS
DJ30
Stats: +33.33 points (+0.14%) to close at 23434.19
Nasdaq
Stats: +144.49 points (+2.20%) to close at 6701.26
Volume: 2.41B (+13.68%)
Up Volume: 1.43B (+571.19M)
Down Volume: 946.7M (-263.3M)
A/D and Hi/Lo: Advancers led 1.7 to 1
Previous Session: Advancers led 1.04 to 1
New Highs: 197 (+65)
New Lows: 76 (+6)
S&P
Stats: +20.67 points (+0.81%) to close at 2581.07
NYSE Volume: 888.7M (+2.31%)
A/D and Hi/Lo: Advancers led 1.64 to 1
Previous Session: Advancers led 1.1 to 1
New Highs: 181 (-6)
New Lows: 79 (-4)
SENTIMENT INDICATORS
VIX: 9.80; -1.50
VXN: 14.30; -1.52
VXO: 8.27; -1.05
Put/Call Ratio (CBOE): 0.88; +0.01
Bulls and Bears: Third week over 60 for the bulls as they are banging at the
top of the sentiment range that has rallies in check. Look at the chart
below: every time the 60 level is hit and holds consistently there is a
selloff. Sentiment has spent a LOT of time in 2017 at 50 or above.
Bulls: 62.3 versus 60.0
Bears: 15.1 versus 15.2
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: 62.3 versus 60.60
60.6 versus 60.4 versus 57.5 versus 54.3 versus 50.5 versus 47.1 versus 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: 15.1 versus 15.2
15.2 versus 15.1 versus 17.0 versus 17.1 versus 19.0 versus 20.2 versus 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: 2.419% versus 2.456%. Bonds were hammered lower with TLT breaking
below the 200 day SMA. A bit of recovery Friday, but hitting the 200 day
SMA from below.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.456%
versus 2.435% versus 2.421% versus 2.366% versus 2.383% versus 2.318% versus
2.341% versus 2.30% versus 2.302% versus 2.275% versus 2.321% versus 2.345%
versus 2.345% versus 2.361% versus 2.348% versus 2.327% versus 2.326% versus
2.341% versus 2.339% versus 2.312% versus 2.307% versus 2.236% versus 2.222%
versus 2.253% versus 2.276% versus 2.273% versus 2.246% versus 2.234% versus
2.201% versus 2.186% versus 2.19% versus 2.167% versus 2.134% versus 2.042%
EUR/USD: 1.16091 versus 1.16330. Dollar rallied, euro dropped below the
September and October lows to close the week. Kind of a 3 month head and
shoulders formed on the euro.
Historical: 1.16330 versus 1.18163 versus 1.17570 versus 1.1759 versus
1.17798 versus 1.18476 versus 1.17995 versus 1.1771 versus 1.17932 versus
1.1823 versus 1.1834 versus 1.18662 versus 1.1813 versus 1.17460 versus
1.17352 versus 1.17100 versus 1.1754 versus 1.17676 versus 1.17315 versus
1.1812 versus 1.17817 versus 1.1746 versus 1.17852 versus 1.18540 versus
1.19476 versus 1.19420 versus 1.19420 versus 1.19954 versus 1.19436 versus
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
USD/JPY: 113.675 versus 114.071. Dollar moving up the 10 day EMA but up
one session, down the next.
Historical: 114.071 versus 113.607 versus 113.913 versus 113.31 versus
113.530 versus 112.561 versus 113.031 versus 112.21 versus 112.20 versus
111.852 versus 112.25 versus 112.413 versus 112.41 versus 112.700 versus
112.653 versus 112.818 versus 112.79 versus 112.667 versus 112.716 versus
112.442 versus 112.86 versus 112.289 versus 111.649 versus 1.12125 versus
111.995 versus 112.454 versus 111.559 versus 111.435 versus 110.846 versus
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
Oil: 53.90, +1.26. Spent all week bumping up at the start of resistance at
the top of the range (52.50ish) then -- boom -- breaking higher Friday.
Key, key test of the February high at 54.90 - 55.00 ahead.
Gold: 1271.80, +2.20. Nice rally from late June to early September
followed by a September fade to the 200 day SMA and 61% Fibonacci
retracement. A bounce then a fade the past two weeks back to that same
level. This setup is typically a pretty darn solid upside setup that would
move gold higher. Why would gold move higher? North Korea? Interesting
incongruity.
MONDAY
The big story? The revival of the front shooter theory in the JFK
assassination after the release of -- almost -- all of the remaining
government documents.
Okay, perhaps that is not the biggest story but it has a lot of people
talking. Also the false flag operations of the CIA and FBI on US soil,
plans to assassinate Castro -- things we kind of knew were happening and
many claim are happening to this day in other areas. Surprise! Or not.
Or how about the first charges in the Russia probe to be released Monday?
Will Mueller be one of the ones charged? From the stories reported, the
whole group on both sides ought to be handcuffed on down to those conducting
the investigation.
No, the reaction to the mega cap Friday move is the first big story though
Personal Income and Spending to come out ahead of the Monday open.
The Friday move was on Friday and it was rather limited to some really big
stocks that announced earnings. Was enough momentum created to keep the
move going, to keep new money chasing the large caps AND continue into
stocks that look to be turning the corner for a new move higher? THAT is
the big question in our view.
If it continues there are stocks we like quite a bit to the upside, some
that have broken out of bases, some that are looking to turn the corner.
Some that are loved, some that are forgotten but are setting up that old
pattern where they consolidate a long downtrend then start turning the
corner. If money stays in the market and continues flowing their way, we
want to be ready to make the plays and move up with them as they turn the
corner and rally. Just as with biotechs, chips, China stocks, etc. as they
made their turns.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6701.26
Resistance:
More new highs
Support:
The 20 day EMA at 6578
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
The 50 day EMA at 6492
The 2016 trendline at 6418
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
The 200 day SMA at 6135
5996 is the recent May 2017 low
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
S&P 500: Closed at 2581.07
Resistance:
New highs again
Support:
The 20 day EMA at 2552
2525 is the upper channel line from the March 2009 uptrend channel
The 50 day EMA at 2520
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
The 200 day SMA at 2418
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
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 23,434.19
Resistance:
Support:
The 10 day EMA at 23,246
The 50 day EMA at 22,579
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
The 200 day SMA at 21,338
21,169 is the March 2017 all-time high
End part 1 of 3
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Sunday, October 29, 2017
Saturday, October 21, 2017
The Daily, Part 1 of 3, 10-21-17
* * * *
10/21/2017 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: CELG
Entry alerts: GS
Trailing stops: None issued
Stop alerts: YNDX
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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Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.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
- A couple of selling attempts do nothing to stymie the market advance.
- Stocks gap higher and rally through expiration.
- Midcaps surge to a new high, small caps break higher off the test.
- All dips are bought thus far, earnings not hurting the rally, status quo
is upside.
- Some leaders testing, some rallying, not many breakdowns.
- A second week lacking many great patterns for new upside entries.
- Trend is higher, aided by those believing it has to end, but still be
vigilant for leaders that break down.
The half day selloff Thursday that resulted in a rebound off a very weak
open apparently renewed the faith of the BTD followers. The faithful
bought, and Friday the move continued as stocks gapped higher and rallied
all expiration session. Of course, there were new highs on DJ30, SP500,
NASDAQ (closing), and SOX (post-2000). SP400 surged to a new high of its
own. RUTX gapped upside and is close to a new high.
Amazing continued strength as stocks rallied hard into expiration. The Dow
is suddenly at 23,300 after just hitting that level for the first time
intraday Tuesday. If this kind of insane melt up continues, 25,000 by
Christmas is doable.
Okay, if you ever wanted a contrary indicator I suppose you just got it.
Sure there were a few sellers this past week -- the market hiccupped Tuesday
and Thursday -- but in the big picture and with this market, that was
nothing. Indeed, the BTD faithful simply bought more. Have to admit, we
bought as well, but it was based on holding support, good patterns, etc.
That didn't make a big difference on the move, but it usually does in most
cases.
The point: there are very few sellers, and even when they show up they are
weak and are pushed out of the way like the weak kid in the school lunch
line.
Yes, we bought on the week though we did not buy that much Friday, just some
GS as it has a great pattern and sported a good upside break after digesting
some post-earnings price tumult. With a gap higher on expiration Friday
after a good run upside, while we would have bought more if they were in
good position, we ended up letting our positions just run.
Well, we did bank about 200% on CELG as it gapped lower Friday after we
bought it just before the Thursday close. That was not the plan, but we
gladly accepted the windfall. As for the upside positions, we had already
banked our October option gain so with the good move we simply let
everything else continue to work higher and will see if next week brings a
continued melt higher.
Can it move higher? With no sellers, talk of the Senate getting taxes done
before yearend (despite what the whiney-voiced guy on CNBC says), nothing
has changed the status quo backdrop, and the status quo is upside. Until
the sellers have a reason -- and the nerve -- to step in and not run at the
first sight of bids, there is no opposition to the upside.
THE MARKET
The upside accelerated on expiration Friday with upside gaps sending SP500,
DJ30 to impressive new highs. SP400 was most impressive as it came from a
quiet, flat consolidation to a gap breakout and new high. Again, no
sellers, all bids.
DJ30: Gapped higher Wednesday to a new high on no volume, sold off on
stronger volume Thursday but managed a recovery, then gapped and rallied to
a higher new high Friday. Now an impressive 6-week run to a series of new
highs. You can argue it is extended near term and it is, but that does not
matter when there are no sellers.
SP500: same action on SP500 with a gap after selling to test below the 10
day EMA Thursday. Gapped and rallied to close near the high and at a new
high.
SP400: Gapped out of the 2.5 week lateral consolidation at the 10 day EMA,
bolting to a new high ahead of RUTX. Nice consolidation, nice new upside
break.
RUTX: After the shakeout down to near the 20 day EMA on the Thursday low,
RUTX rebounded intraday to the 10 day EMA. Friday a gap upside off the 3
week test. No new high, but RUTX put in a great consolidation and is on the
way to a new high.
NASDAQ: after falling to test the 20 day EMA on the Thursday low and
rebounding that session to cut the losses, NASDAQ gapped to a new closing
high Friday. Obviously more sluggish than the NYSE large cap index.
SOX: from testing below the 10 day EMA Thursday to a gap upside and new
post-2000 high Friday. Closed off the high so a strong but not that strong
session.
LEADERSHIP
Financial: GS posted a nice gap move that appears to have resolved any
post-earnings questions. JPM gapped to a new recovery high Friday. BAC
gapped to another post-earnings rally high. C was up off the 50 day EMA
test, but is not convincing upside yet.
Semiconductors: Impressive market leading moves. AMAT, LRCX, ACLS, ON all
moved higher again Friday. TXN surged to a higher rally high. INTC as
well. Others remain solid, e.g. SMTC, SIMO, CAVM.
Software: GLUU had a good week, testing near support. VMW had another GREAT
week with a series of new highs. CRM surged Friday out of its 6 week base.
MSFT ditto, gapping to a new high. COUP still looks good to move higher.
China: Still hot and cold, overall holding up but not the group's best
week. BIDU holding a 10 day EMA test. BABA in a weeklong near support
test. YY started the week great but then stumbled around the rest of the
time. SOHU is testing its super move. SINA fell to the 50 day MA where it
is trying to hold. HTHT put in a great test and looked ready for greatness
Friday, and had it, but closed with a much more modest gain. BZUN trying to
put in a move off a 50 day EMA double bottom.
Biotech/Drugs: Similar to the China stocks, up and down group, though solid
overall. Large caps BIIB, AMGN testing support. CELG imploded as did DRRX
on drug test failures. IDRA, INFA are in decent shape. PTN put in a good
week. BLUE is in good position as is CRMD. CLVS is hanging on.
FAANG: NFLX and GOOG continue to look the best. AMZN, AAPL not so great,
FB is decent.
Machinery/Manufacturing: Great moves, e.g. CMI. Others holding up, e.g.
CAT, HOLI, TEX. HON gapped upside Friday. EMR still looks good.
Metals: Still interesting particularly steel, e.g. SID, AKS. SCHN, RKS
started higher Friday.
Retail: Good moves on the week with TGT, WMT starting back upside Friday.
WSM bombed on results, but as of Friday was back up to pre-earnings levels.
Others that were solid fell a bit Friday, e.g. KIRK, CONN.
MARKET STATS
DJ30
Stats: +165.59 points (+0.71%) to close at 23328.63
Nasdaq
Stats: +23.99 points (+0.36%) to close at 6629.05
Volume: 1.8B (-0.64%)
Up Volume: 1.18B (+386.114M)
Down Volume: 592.44M (-398.53M)
A/D and Hi/Lo: Advancers led 1.59 to 1
Previous Session: Decliners led 1.33 to 1
New Highs: 249 (+173)
New Lows: 38 (-8)
S&P
Stats: +13.11 points (+0.51%) to close at 2575.21
NYSE Volume: 884.1M (+25.90%)
A/D and Hi/Lo: Advancers led 1.54 to 1
Previous Session: Advancers led 1.03 to 1
New Highs: 255 (+132)
New Lows: 39 (+3)
SENTIMENT INDICATORS
VIX: 9.97; -0.08
VXN: 14.32; -0.32
VXO: 7.54; -0.30
Put/Call Ratio (CBOE): 0.81; -0.16
Bulls and Bears: Bulls held the 60 level after jumping there last week.
Bears held the 15 level after dumping there last week That second 60+
reading is another weight on the selling side of the market scales.
Bulls: 60.0 versus 60.4
Bears: 15.2 versus 15.1
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: 60.60 versus 60.4
60.4 versus 57.5 versus 54.3 versus 50.5 versus 47.1 versus 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: 15.2 versus 15.1
15.1 versus 17.0 versus 17.1 versus 19.0 versus 20.2 versus 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: 2.383% versus 2.318%. Gapped back down to the 200 day SMA where it
bottomed two weeks back.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.318%
versus 2.341% versus 2.30% versus 2.302% versus 2.275% versus 2.321% versus
2.345% versus 2.345% versus 2.361% versus 2.348% versus 2.327% versus 2.326%
versus 2.341% versus 2.339% versus 2.312% versus 2.307% versus 2.236% versus
2.222% versus 2.253% versus 2.276% versus 2.273% versus 2.246% versus 2.234%
versus 2.201% versus 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%
EUR/USD: 1.17798 versus 1.18476. Still bouncing along the 50 day MA in a
four week lateral move.
Historical: 1.18476 versus 1.17995 versus 1.1771 versus 1.17932 versus
1.1823 versus 1.1834 versus 1.18662 versus 1.1813 versus 1.17460 versus
1.17352 versus 1.17100 versus 1.1754 versus 1.17676 versus 1.17315 versus
1.1812 versus 1.17817 versus 1.1746 versus 1.17852 versus 1.18540 versus
1.19476 versus 1.19420 versus 1.19420 versus 1.19954 versus 1.19436 versus
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
USD/JPY: 113.530 versus 112.561. Dollar surged Friday, continuing the
Wednesday break higher. Cleared the Sep/Oct highs and now looking at the
July high.
Historical: 112.561 versus 113.031 versus 112.21 versus 112.20 versus
111.852 versus 112.25 versus 112.413 versus 112.41 versus 112.700 versus
112.653 versus 112.818 versus 112.79 versus 112.667 versus 112.716 versus
112.442 versus 112.86 versus 112.289 versus 111.649 versus 1.12125 versus
111.995 versus 112.454 versus 111.559 versus 111.435 versus 110.846 versus
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: 51.84, +0.33. Rallied to the September high at the lower part of the
upper resistance, then faded to test the 20 day EMA. In position for a
higher low to try the top of the range.
Gold: 1280.50, -9.50. Struggling still below the 50 day MA.
MONDAY
Earnings and data. And more government action or inaction on tax reform.
Durable goods, New home sales, GDP, Michigan sentiment final October.
Earnings: Thus far the responses have not been huge, but they have not hurt
the market. Financial earnings were not well received but those stocks held
and are now moving higher, e.g. GS, WSM. NFLX results were not stellar, but
it is holding near support as the financials did, and NASDAQ is not too much
worse for the wear.
It was not the great initial response to earnings that rallied stocks higher
on the news, but there is a delayed effect ongoing.
What you watch for now is how earnings continue to help or at least not
detract from the break higher. Recall, at some point the market likely gets
its fill of the earnings and then it will take a pullback. That is the
typical scenario but of course this market is not typical.
The market was tested a couple of sessions last week, but not much of a
test. It surely shook off whatever negatives it faced.
Thus, we are going to approach this week the same, i.e. that the market has
its head down and is rallying as bids continue returning after even some
hiccups. You always have to watch the Monday following an up expiration --
it tends to trade lower on the Monday -- but with this market that has been
a buying opportunity. Indeed, this past week the bids were eager after the
Thursday dip to near support. Very eager.
Therefore, looking at upside plays again, but are confronted with the same
issues from the prior week: finding quality new plays is difficult after
this kind of upside. Many stocks are still extended. There are some
testing and setting up and we will look at those as vehicles to play a
further rally with new plays, but we are less than wild about the
possibilities these present. So many good stocks have rallied and are
holding their rallies, not in position to enter new plays. We will look at
some new upside while of course, letting our current upside positions
continue to work.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6629.05
Resistance:
More new highs
Support:
The 20 day EMA at 6560
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
The 50 day EMA at 6447
The 2016 trendline at 6394
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
The 200 day SMA at 6109
5996 is the recent May 2017 low
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 2575.21
Resistance:
New highs again
Support:
The 20 day EMA at 2542
2522 is the upper channel line from the March 2009 uptrend channel
The 50 day EMA at 2510
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
The 200 day SMA at 2411
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
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 23,328.63
Resistance:
Support:
The 10 day EMA at 23,004
22,420 is the September high
The 50 day EMA at 22,402
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
The 200 day SMA at 21,252
21,169 is the March 2017 all-time high
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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Entry alerts: GS
Trailing stops: 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.
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
- A couple of selling attempts do nothing to stymie the market advance.
- Stocks gap higher and rally through expiration.
- Midcaps surge to a new high, small caps break higher off the test.
- All dips are bought thus far, earnings not hurting the rally, status quo
is upside.
- Some leaders testing, some rallying, not many breakdowns.
- A second week lacking many great patterns for new upside entries.
- Trend is higher, aided by those believing it has to end, but still be
vigilant for leaders that break down.
The half day selloff Thursday that resulted in a rebound off a very weak
open apparently renewed the faith of the BTD followers. The faithful
bought, and Friday the move continued as stocks gapped higher and rallied
all expiration session. Of course, there were new highs on DJ30, SP500,
NASDAQ (closing), and SOX (post-2000). SP400 surged to a new high of its
own. RUTX gapped upside and is close to a new high.
Amazing continued strength as stocks rallied hard into expiration. The Dow
is suddenly at 23,300 after just hitting that level for the first time
intraday Tuesday. If this kind of insane melt up continues, 25,000 by
Christmas is doable.
Okay, if you ever wanted a contrary indicator I suppose you just got it.
Sure there were a few sellers this past week -- the market hiccupped Tuesday
and Thursday -- but in the big picture and with this market, that was
nothing. Indeed, the BTD faithful simply bought more. Have to admit, we
bought as well, but it was based on holding support, good patterns, etc.
That didn't make a big difference on the move, but it usually does in most
cases.
The point: there are very few sellers, and even when they show up they are
weak and are pushed out of the way like the weak kid in the school lunch
line.
Yes, we bought on the week though we did not buy that much Friday, just some
GS as it has a great pattern and sported a good upside break after digesting
some post-earnings price tumult. With a gap higher on expiration Friday
after a good run upside, while we would have bought more if they were in
good position, we ended up letting our positions just run.
Well, we did bank about 200% on CELG as it gapped lower Friday after we
bought it just before the Thursday close. That was not the plan, but we
gladly accepted the windfall. As for the upside positions, we had already
banked our October option gain so with the good move we simply let
everything else continue to work higher and will see if next week brings a
continued melt higher.
Can it move higher? With no sellers, talk of the Senate getting taxes done
before yearend (despite what the whiney-voiced guy on CNBC says), nothing
has changed the status quo backdrop, and the status quo is upside. Until
the sellers have a reason -- and the nerve -- to step in and not run at the
first sight of bids, there is no opposition to the upside.
THE MARKET
The upside accelerated on expiration Friday with upside gaps sending SP500,
DJ30 to impressive new highs. SP400 was most impressive as it came from a
quiet, flat consolidation to a gap breakout and new high. Again, no
sellers, all bids.
DJ30: Gapped higher Wednesday to a new high on no volume, sold off on
stronger volume Thursday but managed a recovery, then gapped and rallied to
a higher new high Friday. Now an impressive 6-week run to a series of new
highs. You can argue it is extended near term and it is, but that does not
matter when there are no sellers.
SP500: same action on SP500 with a gap after selling to test below the 10
day EMA Thursday. Gapped and rallied to close near the high and at a new
high.
SP400: Gapped out of the 2.5 week lateral consolidation at the 10 day EMA,
bolting to a new high ahead of RUTX. Nice consolidation, nice new upside
break.
RUTX: After the shakeout down to near the 20 day EMA on the Thursday low,
RUTX rebounded intraday to the 10 day EMA. Friday a gap upside off the 3
week test. No new high, but RUTX put in a great consolidation and is on the
way to a new high.
NASDAQ: after falling to test the 20 day EMA on the Thursday low and
rebounding that session to cut the losses, NASDAQ gapped to a new closing
high Friday. Obviously more sluggish than the NYSE large cap index.
SOX: from testing below the 10 day EMA Thursday to a gap upside and new
post-2000 high Friday. Closed off the high so a strong but not that strong
session.
LEADERSHIP
Financial: GS posted a nice gap move that appears to have resolved any
post-earnings questions. JPM gapped to a new recovery high Friday. BAC
gapped to another post-earnings rally high. C was up off the 50 day EMA
test, but is not convincing upside yet.
Semiconductors: Impressive market leading moves. AMAT, LRCX, ACLS, ON all
moved higher again Friday. TXN surged to a higher rally high. INTC as
well. Others remain solid, e.g. SMTC, SIMO, CAVM.
Software: GLUU had a good week, testing near support. VMW had another GREAT
week with a series of new highs. CRM surged Friday out of its 6 week base.
MSFT ditto, gapping to a new high. COUP still looks good to move higher.
China: Still hot and cold, overall holding up but not the group's best
week. BIDU holding a 10 day EMA test. BABA in a weeklong near support
test. YY started the week great but then stumbled around the rest of the
time. SOHU is testing its super move. SINA fell to the 50 day MA where it
is trying to hold. HTHT put in a great test and looked ready for greatness
Friday, and had it, but closed with a much more modest gain. BZUN trying to
put in a move off a 50 day EMA double bottom.
Biotech/Drugs: Similar to the China stocks, up and down group, though solid
overall. Large caps BIIB, AMGN testing support. CELG imploded as did DRRX
on drug test failures. IDRA, INFA are in decent shape. PTN put in a good
week. BLUE is in good position as is CRMD. CLVS is hanging on.
FAANG: NFLX and GOOG continue to look the best. AMZN, AAPL not so great,
FB is decent.
Machinery/Manufacturing: Great moves, e.g. CMI. Others holding up, e.g.
CAT, HOLI, TEX. HON gapped upside Friday. EMR still looks good.
Metals: Still interesting particularly steel, e.g. SID, AKS. SCHN, RKS
started higher Friday.
Retail: Good moves on the week with TGT, WMT starting back upside Friday.
WSM bombed on results, but as of Friday was back up to pre-earnings levels.
Others that were solid fell a bit Friday, e.g. KIRK, CONN.
MARKET STATS
DJ30
Stats: +165.59 points (+0.71%) to close at 23328.63
Nasdaq
Stats: +23.99 points (+0.36%) to close at 6629.05
Volume: 1.8B (-0.64%)
Up Volume: 1.18B (+386.114M)
Down Volume: 592.44M (-398.53M)
A/D and Hi/Lo: Advancers led 1.59 to 1
Previous Session: Decliners led 1.33 to 1
New Highs: 249 (+173)
New Lows: 38 (-8)
S&P
Stats: +13.11 points (+0.51%) to close at 2575.21
NYSE Volume: 884.1M (+25.90%)
A/D and Hi/Lo: Advancers led 1.54 to 1
Previous Session: Advancers led 1.03 to 1
New Highs: 255 (+132)
New Lows: 39 (+3)
SENTIMENT INDICATORS
VIX: 9.97; -0.08
VXN: 14.32; -0.32
VXO: 7.54; -0.30
Put/Call Ratio (CBOE): 0.81; -0.16
Bulls and Bears: Bulls held the 60 level after jumping there last week.
Bears held the 15 level after dumping there last week That second 60+
reading is another weight on the selling side of the market scales.
Bulls: 60.0 versus 60.4
Bears: 15.2 versus 15.1
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: 60.60 versus 60.4
60.4 versus 57.5 versus 54.3 versus 50.5 versus 47.1 versus 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: 15.2 versus 15.1
15.1 versus 17.0 versus 17.1 versus 19.0 versus 20.2 versus 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: 2.383% versus 2.318%. Gapped back down to the 200 day SMA where it
bottomed two weeks back.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.318%
versus 2.341% versus 2.30% versus 2.302% versus 2.275% versus 2.321% versus
2.345% versus 2.345% versus 2.361% versus 2.348% versus 2.327% versus 2.326%
versus 2.341% versus 2.339% versus 2.312% versus 2.307% versus 2.236% versus
2.222% versus 2.253% versus 2.276% versus 2.273% versus 2.246% versus 2.234%
versus 2.201% versus 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%
EUR/USD: 1.17798 versus 1.18476. Still bouncing along the 50 day MA in a
four week lateral move.
Historical: 1.18476 versus 1.17995 versus 1.1771 versus 1.17932 versus
1.1823 versus 1.1834 versus 1.18662 versus 1.1813 versus 1.17460 versus
1.17352 versus 1.17100 versus 1.1754 versus 1.17676 versus 1.17315 versus
1.1812 versus 1.17817 versus 1.1746 versus 1.17852 versus 1.18540 versus
1.19476 versus 1.19420 versus 1.19420 versus 1.19954 versus 1.19436 versus
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
USD/JPY: 113.530 versus 112.561. Dollar surged Friday, continuing the
Wednesday break higher. Cleared the Sep/Oct highs and now looking at the
July high.
Historical: 112.561 versus 113.031 versus 112.21 versus 112.20 versus
111.852 versus 112.25 versus 112.413 versus 112.41 versus 112.700 versus
112.653 versus 112.818 versus 112.79 versus 112.667 versus 112.716 versus
112.442 versus 112.86 versus 112.289 versus 111.649 versus 1.12125 versus
111.995 versus 112.454 versus 111.559 versus 111.435 versus 110.846 versus
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: 51.84, +0.33. Rallied to the September high at the lower part of the
upper resistance, then faded to test the 20 day EMA. In position for a
higher low to try the top of the range.
Gold: 1280.50, -9.50. Struggling still below the 50 day MA.
MONDAY
Earnings and data. And more government action or inaction on tax reform.
Durable goods, New home sales, GDP, Michigan sentiment final October.
Earnings: Thus far the responses have not been huge, but they have not hurt
the market. Financial earnings were not well received but those stocks held
and are now moving higher, e.g. GS, WSM. NFLX results were not stellar, but
it is holding near support as the financials did, and NASDAQ is not too much
worse for the wear.
It was not the great initial response to earnings that rallied stocks higher
on the news, but there is a delayed effect ongoing.
What you watch for now is how earnings continue to help or at least not
detract from the break higher. Recall, at some point the market likely gets
its fill of the earnings and then it will take a pullback. That is the
typical scenario but of course this market is not typical.
The market was tested a couple of sessions last week, but not much of a
test. It surely shook off whatever negatives it faced.
Thus, we are going to approach this week the same, i.e. that the market has
its head down and is rallying as bids continue returning after even some
hiccups. You always have to watch the Monday following an up expiration --
it tends to trade lower on the Monday -- but with this market that has been
a buying opportunity. Indeed, this past week the bids were eager after the
Thursday dip to near support. Very eager.
Therefore, looking at upside plays again, but are confronted with the same
issues from the prior week: finding quality new plays is difficult after
this kind of upside. Many stocks are still extended. There are some
testing and setting up and we will look at those as vehicles to play a
further rally with new plays, but we are less than wild about the
possibilities these present. So many good stocks have rallied and are
holding their rallies, not in position to enter new plays. We will look at
some new upside while of course, letting our current upside positions
continue to work.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6629.05
Resistance:
More new highs
Support:
The 20 day EMA at 6560
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
The 50 day EMA at 6447
The 2016 trendline at 6394
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
The 200 day SMA at 6109
5996 is the recent May 2017 low
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 2575.21
Resistance:
New highs again
Support:
The 20 day EMA at 2542
2522 is the upper channel line from the March 2009 uptrend channel
The 50 day EMA at 2510
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
The 200 day SMA at 2411
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
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 23,328.63
Resistance:
Support:
The 10 day EMA at 23,004
22,420 is the September high
The 50 day EMA at 22,402
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
The 200 day SMA at 21,252
21,169 is the March 2017 all-time high
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
_______________________________________________________
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
Sunday, October 15, 2017
The Daily, Part 1 of 3, 10-14-17
* * * *
10/14/2017 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: DATA; PLAY; SOHU; VMW
Entry alerts: None issued
Trailing stops: BLRX; INFI
Stop alerts: None issued
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
- SOX posts a solid week while the large caps trend slightly higher, small
and midcaps finish up their tests.
- Bank earnings disappoint for the most part, but don't take the financials
out of the upside picture.
- Fed inflation 'mystery' even as inflation is all around it. The solution:
tax reform, healthcare reform to get true growth and stop distorting our
labor and investment markets, not to mention killing the middle class.
- Leaders still look very good and there are plenty of stocks set up to move
higher.
- Earnings season just getting started, still looks to be time to continue
higher.
The week was one that saw SOX post some nice gains but for the rest of the
market it was mostly a series of modest gains and even more modest losses
that kept the trends higher. Some days started softer, some started upside,
but none could really yield strong gains. In the end, the trends held but
the momentum in the large cap indices definitely slowed.
SP500 2.24, 0.09%
NASDAQ 14.29, 0.22%
DJ30 30.71, 0.13%
SP400 -0.05%
RUTX -0.17%
SOX -0.67%
Many leaders, however, continued showing excellent strength as smaller
biotechs and drugs were still great, software was strong again, some retail
posted great gains, chemicals started to rally. Banks started reporting
earnings, and while the stock action was not necessarily great, they left
themselves in position to return to the upside.
Thus, while the overall momentum of the move is slowing, there is still
plenty of leadership that is moving and that continues to set up to continue
moving. Last week we discussed how stocks rallying into earnings often
continue the move during the initial phase if the results are good. The
results were not all that great from the banks, but the stock indices still
held the trends with modest net gains.
Perhaps some good earnings this week can result in some renewed upside from
the rest of the market. Even then, you still have to view this as a market
that has rallied nicely and has lost some momentum -- at least for the large
cap indices. RUTX has put in a nice 2 week test of the 10 day EMA while
SP400 midcaps moved laterally in a tight range. They are set to continue
the move from the look of their consolidation, and that makes sense: they
led the last leg higher, started to test, and the large cap indices started
upside.
Now they are rested after the large caps made their move. Perhaps time for
some rotation back to the smaller caps while the large caps take a breather.
They certainly have some very nice play setups to aide in an upside move.
NEWS/ECONOMY
The news on the week saw mostly mixed data. Actual data was not so great
while sentiment data was again strong.
It also saw the Fed confused by the 'mystery' of low inflation. Well, here
is even more of a mystery: inflation is NOT low. As discussed earlier in
the week, inflation is showing up everywhere except in price increases.
There is 'hidden' inflation everywhere, most predominant in the portions,
amounts, reduced materials, etc. We have known for years that producers and
sellers felt they could not raise prices for fear of losing market share.
So, they kept prices more or less in line while 'raising' them by the other
means cited.
It seems incomprehensible that the Federal Reserve, stacked with ivory tower
economists, would not know this. But of COURSE they do. It is a fiction.
They know they have to get rates higher, and even if 'prices' remain low via
what is charged, they are going to hike.
I really don't have a problem with that; there is inflation in other areas
as discussed. The problem is, there needs to be tax reform to get the
economy really producing and moving versus the subterfuge of pricing. The
ACA needs to be removed to eliminate the strangulation of small businesses,
the distortion of our labor market into millions more sub-29 hour per week
hourly jobs, and to actually get healthcare back to where you can get a good
policy at a decent price.
I cannot understand the fight to preserve a system that has quadrupled and
more premium prices and done the same with deductibles. The statistic of
'coverage' is a red herring: you can be covered because you are forced to
buy a policy, but then have no money left over to go to the doctor and pay
your deductible. Yes there are subsidies for the poorest, but none of the
middle class, or more rightly put, the former middle class, can qualify for
subsidies.
So, you have coverage on paper but in reality these people are basically
uninsured. It reminds me of an old joke: a boy asks his father for help on
his homework. "what is the difference between in theory and in reality?"
the son asks. The father says, "go ask your mother if she would sleep with
a man for a million dollars" and come back and tell me what she said. The
son does, and his mother says "well, it would be wrong, but we could pay off
the house, pay for you kids' college, and have a retirement. If there were
no strings attached, yes I would." The son reports her answer and the
father says "now go ask your sister the same question." The sister responds
"yes I would" without hesitation or any of the other conditions the mother
placed on the deal. The son reports her answer to the father. The father
says "So, here is the difference: in theory we have $2 million; in reality
we live with two concubines."
THE MARKET
CHARTS
SOX: Market leader last week, breaking to a series of new post-2000 highs,
indeed 10 of the last 11 sessions. Solid gains Monday, Tuesday, Wednesday,
and Friday. Okay, good moves and now up three weeks straight in a 45 degree
rise above the 10 day EMA. Perhaps a bit overbought near term as in this
series of rallies SOX typically rallies approximately 3 weeks before needing
a test.
RUTX: Excellent 2 week test back near the 10 day EMA after that mid-August
to early October surge. Amazing move, excellent test. Small caps could be
ready to move back upside next as the large cap indices take a breather.
SP400: The midcaps don't have the textbook test of the 10 day EMA a la
RUTX, but they also have rested, refusing to give up any ground in its 6
session tight lateral test. The 10 day EMA is now just below the
consolidation, and that often continues the move higher.
DJ30: Nice steady trend higher on the week with upside days and minor
downside. Climbing the 10 day EMA with good volume. Now up 5 weeks on this
move and that is extended for the Dow in these rallies. It is getting help
from the DJ20 transports as they broke to a new high Thursday. Gave it up
Friday, but right there.
SP500: Slight trend higher on the week as well, the 10 day EMA catching up
with the move. SP500 broke higher to start September, moving off the 50 day
MA, then tested in a lateral move through late September. Then a new break
higher and rally that took it through the 2007 upper trendline. Nice move,
now testing again. Not necessarily that overextended.
NASDAQ: Similar to SP500, NASDAQ came off the 50 day MA in late September
versus early that month, and it rallied into the prior Friday. Last week it
continued trending higher just over the 10 day EMA though at a much slower
pace. Trying to consolidate while holding the gains. Not sure it can, but
not as extended as DJ30.
Leadership
Software: Not as great a day Friday, but Thursday saw some good moves
upside from GLUU, CRM, VMW, MSFT and others. Looking at COUP as a new play
this week.
Biotechs/Drugs: Some great moves from INFI, IDRA, CNIT, BIIB. Decent
action from others, e.g. ARRY. Not all were great, e.g. BLRX, CNAT, but
there are some great setups we are looking at this weekend.
Semiconductors: A decent to very good week. AMD, AMAT, LRCX, ON, BRKS
showing very solid action. SMTC, SIMO, ADI, SLAB -- all solid. Lots of
strength.
China stocks: Mixed but started upside late week. They run hot and cold --
guess you call that volatile. SOHU exploded higher Friday and we banked
some strong gain. YY trended higher then broke higher Friday. BZUN finally
started upside again Friday. BIDU solid. CTRP looking decent but needs
more volume. BABA is testing the 20 day EMA on stronger volume. WUBA is
interesting.
Retail: Some great moves, e.g. TGT working well for us, WMT the cream of
the class. KORS trying to break out from a consolidation. HD in a nice 10
day EMA test. Not all are great: COST languishing after gapping lower.
JWN, M, DDS down. WSM gapped lower on results but is posting a nice
rebound.
FAANG: Decent just not inspired -- in most cases. FB up to the early
September top of its 3 month lateral range. AMZN breaking higher late week;
we will see if we can get in early week on a test. AAPL still below the 50
day MA. NFLX tested the 10 day EMA, trying to break higher again ahead of
earnings. GOOG posted a great week for us, rallying up the 10 day EMA.
Miscellaneous: Chemicals were great, e.g. CF, AGU. SQ continues a strong
move. NAK surged off the 200 day SMA.
MARKET STATS
DJ30
Stats: +30.71 points (+0.13%) to close at 22871.72
Nasdaq
Stats: +14.29 points (+0.22%) to close at 6605.80
Volume: 1.76B (-12.44%)
Up Volume: 888.95M (-32.3M)
Down Volume: 831M (-219M)
A/D and Hi/Lo: Decliners led 1.08 to 1
Previous Session: Decliners led 1.38 to 1
New Highs: 237 (+14)
New Lows: 47 (+6)
S&P
Stats: +2.24 points (+0.09%) to close at 2553.17
NYSE Volume: 768M (-2.51%)
A/D and Hi/Lo: Advancers led 1.46 to 1
Previous Session: Advancers led 1.11 to 1
New Highs: 264 (+42)
New Lows: 30 (-2)
SENTIMENT INDICATORS
VIX: 9.61; -0.30
VXN: 13.97; -0.36
VXO: 7.57; -0.48
Put/Call Ratio (CBOE): 0.85; -0.20
Bulls and Bears: Whoa, a big spike in bulls continues, moving over the 60
level with bears dropping like a rock. Getting very bullish, indeed too
bullish.
Bulls: 60.4 versus 57.5
Bears: 15.1 versus 17.0
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: 60.4 versus 57.5
57.5 versus 54.3 versus 50.5 versus 47.1 versus 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: 15.1 versus 17.0
17.0 versus 17.1 versus 19.0 versus 20.2 versus 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: 2.275% versus 2.321%. Bonds rallied all week on the economic data
and the belief the Fed may not be able to hike as it wants. TLT tested the
200 day SMA the prior week and rallied right back up to the 50 day MA as of
Friday.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.321%
versus 2.345% versus 2.345% versus 2.361% versus 2.348% versus 2.327% versus
2.326% versus 2.341% versus 2.339% versus 2.312% versus 2.307% versus 2.236%
versus 2.222% versus 2.253% versus 2.276% versus 2.273% versus 2.246% versus
2.234% versus 2.201% versus 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%
EUR/USD: 1.1823 versus 1.1834. Euro recovered back to test the 50 day MA
after breaching it the last week of September.
Historical: 1.1834 versus 1.18662 versus 1.1813 versus 1.17460 versus
1.17352 versus 1.17100 versus 1.1754 versus 1.17676 versus 1.17315 versus
1.1812 versus 1.17817 versus 1.1746 versus 1.17852 versus 1.18540 versus
1.19476 versus 1.19420 versus 1.19420 versus 1.19954 versus 1.19436 versus
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
USD/JPY: 111.852 versus 112.25. Dollar faded toward the 200 day SMA all
week as the data suggests the Fed might not be so tough as it says it will
be.
Historical: 112.25 versus 112.413 versus 112.41 versus 112.700 versus
112.653 versus 112.818 versus 112.79 versus 112.667 versus 112.716 versus
112.442 versus 112.86 versus 112.289 versus 111.649 versus 1.12125 versus
111.995 versus 112.454 versus 111.559 versus 111.435 versus 110.846 versus
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: 51.45, +0.85. Oil held the 200 day SMA test and rebounded Tuesday and
again Friday. Still looks as if this higher low could break it out of its
range.
Gold: 1304.60, +8.10. Gold rallied on the week and then broke back up
through the 50 day MA on Friday. It too doubts the Fed.
MONDAY
Earnings are taking over the headlines as the banks started the show and now
the floodgates open. The initial response was not great as the banks
faded -- for the most part. The question is whether the market has room for
more upside on some good earnings after the gains in DJ30, SOX and to a
lesser extent, NASDAQ and SP500.
As noted before the real question is whether RUTX and SP400, after their
tests, are ready to take up leadership again and move back upside, getting
money pushed their way, as the large cap indices take a break after their
move up that started as RUTX and SP400 started to take a breather.
We think that could be the case. There are plenty of setups in the group,
and they could provide another good leg higher over the next couple of weeks
even if the market decides to cap out the move at that point. That is what
I discussed last week: the continued rally at the first weeks of earnings
that then stalls. With the patterns we see there are still very good setups
to play that move and still make money before a stall.
Thus, we still believe the move could top out once the earnings saturation
comes, typically 2 or so weeks in once the big names start announcing, but
there are also great setups to play during that time as well as letting
positions work and banking gain as it comes. We did a lot of that last
week, particularly with the October expiration coming up this week.
Therefore, we intend to play good moves upside because there are so many
good stocks making good moves and in prime position to continue or start a
move. Yes, as noted last week some can get left at the altar when the move
runs out of steam, but the scenario we are playing allows for some more
upside before that occurs.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6605.80
Resistance:
More new highs
Support:
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
The 50 day EMA at 6433
The 2016 trendline at 6366
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
The 200 day SMA at 6079
5996 is the recent May 2017 low
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 2553.17
Resistance:
New highs again
Support:
2519 is the upper channel line from the March 2009 uptrend channel
The 50 day EMA at 2498
2491 is the August all-time high
2480 the late August and early August highs
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
The 200 day SMA at 2403
2401 is the March 2017 all-time high
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 22,871.72
Resistance:
Support:
The 10 day EMA at 22,740
22,420 is the September high
The 50 day EMA at 22,241
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
The 200 day SMA at 21,170
21,169 is the March 2017 all-time high
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
_______________________________________________________
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
10/14/2017 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: DATA; PLAY; SOHU; VMW
Entry alerts: None issued
Trailing stops: BLRX; INFI
Stop alerts: None issued
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
- SOX posts a solid week while the large caps trend slightly higher, small
and midcaps finish up their tests.
- Bank earnings disappoint for the most part, but don't take the financials
out of the upside picture.
- Fed inflation 'mystery' even as inflation is all around it. The solution:
tax reform, healthcare reform to get true growth and stop distorting our
labor and investment markets, not to mention killing the middle class.
- Leaders still look very good and there are plenty of stocks set up to move
higher.
- Earnings season just getting started, still looks to be time to continue
higher.
The week was one that saw SOX post some nice gains but for the rest of the
market it was mostly a series of modest gains and even more modest losses
that kept the trends higher. Some days started softer, some started upside,
but none could really yield strong gains. In the end, the trends held but
the momentum in the large cap indices definitely slowed.
SP500 2.24, 0.09%
NASDAQ 14.29, 0.22%
DJ30 30.71, 0.13%
SP400 -0.05%
RUTX -0.17%
SOX -0.67%
Many leaders, however, continued showing excellent strength as smaller
biotechs and drugs were still great, software was strong again, some retail
posted great gains, chemicals started to rally. Banks started reporting
earnings, and while the stock action was not necessarily great, they left
themselves in position to return to the upside.
Thus, while the overall momentum of the move is slowing, there is still
plenty of leadership that is moving and that continues to set up to continue
moving. Last week we discussed how stocks rallying into earnings often
continue the move during the initial phase if the results are good. The
results were not all that great from the banks, but the stock indices still
held the trends with modest net gains.
Perhaps some good earnings this week can result in some renewed upside from
the rest of the market. Even then, you still have to view this as a market
that has rallied nicely and has lost some momentum -- at least for the large
cap indices. RUTX has put in a nice 2 week test of the 10 day EMA while
SP400 midcaps moved laterally in a tight range. They are set to continue
the move from the look of their consolidation, and that makes sense: they
led the last leg higher, started to test, and the large cap indices started
upside.
Now they are rested after the large caps made their move. Perhaps time for
some rotation back to the smaller caps while the large caps take a breather.
They certainly have some very nice play setups to aide in an upside move.
NEWS/ECONOMY
The news on the week saw mostly mixed data. Actual data was not so great
while sentiment data was again strong.
It also saw the Fed confused by the 'mystery' of low inflation. Well, here
is even more of a mystery: inflation is NOT low. As discussed earlier in
the week, inflation is showing up everywhere except in price increases.
There is 'hidden' inflation everywhere, most predominant in the portions,
amounts, reduced materials, etc. We have known for years that producers and
sellers felt they could not raise prices for fear of losing market share.
So, they kept prices more or less in line while 'raising' them by the other
means cited.
It seems incomprehensible that the Federal Reserve, stacked with ivory tower
economists, would not know this. But of COURSE they do. It is a fiction.
They know they have to get rates higher, and even if 'prices' remain low via
what is charged, they are going to hike.
I really don't have a problem with that; there is inflation in other areas
as discussed. The problem is, there needs to be tax reform to get the
economy really producing and moving versus the subterfuge of pricing. The
ACA needs to be removed to eliminate the strangulation of small businesses,
the distortion of our labor market into millions more sub-29 hour per week
hourly jobs, and to actually get healthcare back to where you can get a good
policy at a decent price.
I cannot understand the fight to preserve a system that has quadrupled and
more premium prices and done the same with deductibles. The statistic of
'coverage' is a red herring: you can be covered because you are forced to
buy a policy, but then have no money left over to go to the doctor and pay
your deductible. Yes there are subsidies for the poorest, but none of the
middle class, or more rightly put, the former middle class, can qualify for
subsidies.
So, you have coverage on paper but in reality these people are basically
uninsured. It reminds me of an old joke: a boy asks his father for help on
his homework. "what is the difference between in theory and in reality?"
the son asks. The father says, "go ask your mother if she would sleep with
a man for a million dollars" and come back and tell me what she said. The
son does, and his mother says "well, it would be wrong, but we could pay off
the house, pay for you kids' college, and have a retirement. If there were
no strings attached, yes I would." The son reports her answer and the
father says "now go ask your sister the same question." The sister responds
"yes I would" without hesitation or any of the other conditions the mother
placed on the deal. The son reports her answer to the father. The father
says "So, here is the difference: in theory we have $2 million; in reality
we live with two concubines."
THE MARKET
CHARTS
SOX: Market leader last week, breaking to a series of new post-2000 highs,
indeed 10 of the last 11 sessions. Solid gains Monday, Tuesday, Wednesday,
and Friday. Okay, good moves and now up three weeks straight in a 45 degree
rise above the 10 day EMA. Perhaps a bit overbought near term as in this
series of rallies SOX typically rallies approximately 3 weeks before needing
a test.
RUTX: Excellent 2 week test back near the 10 day EMA after that mid-August
to early October surge. Amazing move, excellent test. Small caps could be
ready to move back upside next as the large cap indices take a breather.
SP400: The midcaps don't have the textbook test of the 10 day EMA a la
RUTX, but they also have rested, refusing to give up any ground in its 6
session tight lateral test. The 10 day EMA is now just below the
consolidation, and that often continues the move higher.
DJ30: Nice steady trend higher on the week with upside days and minor
downside. Climbing the 10 day EMA with good volume. Now up 5 weeks on this
move and that is extended for the Dow in these rallies. It is getting help
from the DJ20 transports as they broke to a new high Thursday. Gave it up
Friday, but right there.
SP500: Slight trend higher on the week as well, the 10 day EMA catching up
with the move. SP500 broke higher to start September, moving off the 50 day
MA, then tested in a lateral move through late September. Then a new break
higher and rally that took it through the 2007 upper trendline. Nice move,
now testing again. Not necessarily that overextended.
NASDAQ: Similar to SP500, NASDAQ came off the 50 day MA in late September
versus early that month, and it rallied into the prior Friday. Last week it
continued trending higher just over the 10 day EMA though at a much slower
pace. Trying to consolidate while holding the gains. Not sure it can, but
not as extended as DJ30.
Leadership
Software: Not as great a day Friday, but Thursday saw some good moves
upside from GLUU, CRM, VMW, MSFT and others. Looking at COUP as a new play
this week.
Biotechs/Drugs: Some great moves from INFI, IDRA, CNIT, BIIB. Decent
action from others, e.g. ARRY. Not all were great, e.g. BLRX, CNAT, but
there are some great setups we are looking at this weekend.
Semiconductors: A decent to very good week. AMD, AMAT, LRCX, ON, BRKS
showing very solid action. SMTC, SIMO, ADI, SLAB -- all solid. Lots of
strength.
China stocks: Mixed but started upside late week. They run hot and cold --
guess you call that volatile. SOHU exploded higher Friday and we banked
some strong gain. YY trended higher then broke higher Friday. BZUN finally
started upside again Friday. BIDU solid. CTRP looking decent but needs
more volume. BABA is testing the 20 day EMA on stronger volume. WUBA is
interesting.
Retail: Some great moves, e.g. TGT working well for us, WMT the cream of
the class. KORS trying to break out from a consolidation. HD in a nice 10
day EMA test. Not all are great: COST languishing after gapping lower.
JWN, M, DDS down. WSM gapped lower on results but is posting a nice
rebound.
FAANG: Decent just not inspired -- in most cases. FB up to the early
September top of its 3 month lateral range. AMZN breaking higher late week;
we will see if we can get in early week on a test. AAPL still below the 50
day MA. NFLX tested the 10 day EMA, trying to break higher again ahead of
earnings. GOOG posted a great week for us, rallying up the 10 day EMA.
Miscellaneous: Chemicals were great, e.g. CF, AGU. SQ continues a strong
move. NAK surged off the 200 day SMA.
MARKET STATS
DJ30
Stats: +30.71 points (+0.13%) to close at 22871.72
Nasdaq
Stats: +14.29 points (+0.22%) to close at 6605.80
Volume: 1.76B (-12.44%)
Up Volume: 888.95M (-32.3M)
Down Volume: 831M (-219M)
A/D and Hi/Lo: Decliners led 1.08 to 1
Previous Session: Decliners led 1.38 to 1
New Highs: 237 (+14)
New Lows: 47 (+6)
S&P
Stats: +2.24 points (+0.09%) to close at 2553.17
NYSE Volume: 768M (-2.51%)
A/D and Hi/Lo: Advancers led 1.46 to 1
Previous Session: Advancers led 1.11 to 1
New Highs: 264 (+42)
New Lows: 30 (-2)
SENTIMENT INDICATORS
VIX: 9.61; -0.30
VXN: 13.97; -0.36
VXO: 7.57; -0.48
Put/Call Ratio (CBOE): 0.85; -0.20
Bulls and Bears: Whoa, a big spike in bulls continues, moving over the 60
level with bears dropping like a rock. Getting very bullish, indeed too
bullish.
Bulls: 60.4 versus 57.5
Bears: 15.1 versus 17.0
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: 60.4 versus 57.5
57.5 versus 54.3 versus 50.5 versus 47.1 versus 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: 15.1 versus 17.0
17.0 versus 17.1 versus 19.0 versus 20.2 versus 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: 2.275% versus 2.321%. Bonds rallied all week on the economic data
and the belief the Fed may not be able to hike as it wants. TLT tested the
200 day SMA the prior week and rallied right back up to the 50 day MA as of
Friday.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.321%
versus 2.345% versus 2.345% versus 2.361% versus 2.348% versus 2.327% versus
2.326% versus 2.341% versus 2.339% versus 2.312% versus 2.307% versus 2.236%
versus 2.222% versus 2.253% versus 2.276% versus 2.273% versus 2.246% versus
2.234% versus 2.201% versus 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%
EUR/USD: 1.1823 versus 1.1834. Euro recovered back to test the 50 day MA
after breaching it the last week of September.
Historical: 1.1834 versus 1.18662 versus 1.1813 versus 1.17460 versus
1.17352 versus 1.17100 versus 1.1754 versus 1.17676 versus 1.17315 versus
1.1812 versus 1.17817 versus 1.1746 versus 1.17852 versus 1.18540 versus
1.19476 versus 1.19420 versus 1.19420 versus 1.19954 versus 1.19436 versus
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
USD/JPY: 111.852 versus 112.25. Dollar faded toward the 200 day SMA all
week as the data suggests the Fed might not be so tough as it says it will
be.
Historical: 112.25 versus 112.413 versus 112.41 versus 112.700 versus
112.653 versus 112.818 versus 112.79 versus 112.667 versus 112.716 versus
112.442 versus 112.86 versus 112.289 versus 111.649 versus 1.12125 versus
111.995 versus 112.454 versus 111.559 versus 111.435 versus 110.846 versus
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: 51.45, +0.85. Oil held the 200 day SMA test and rebounded Tuesday and
again Friday. Still looks as if this higher low could break it out of its
range.
Gold: 1304.60, +8.10. Gold rallied on the week and then broke back up
through the 50 day MA on Friday. It too doubts the Fed.
MONDAY
Earnings are taking over the headlines as the banks started the show and now
the floodgates open. The initial response was not great as the banks
faded -- for the most part. The question is whether the market has room for
more upside on some good earnings after the gains in DJ30, SOX and to a
lesser extent, NASDAQ and SP500.
As noted before the real question is whether RUTX and SP400, after their
tests, are ready to take up leadership again and move back upside, getting
money pushed their way, as the large cap indices take a break after their
move up that started as RUTX and SP400 started to take a breather.
We think that could be the case. There are plenty of setups in the group,
and they could provide another good leg higher over the next couple of weeks
even if the market decides to cap out the move at that point. That is what
I discussed last week: the continued rally at the first weeks of earnings
that then stalls. With the patterns we see there are still very good setups
to play that move and still make money before a stall.
Thus, we still believe the move could top out once the earnings saturation
comes, typically 2 or so weeks in once the big names start announcing, but
there are also great setups to play during that time as well as letting
positions work and banking gain as it comes. We did a lot of that last
week, particularly with the October expiration coming up this week.
Therefore, we intend to play good moves upside because there are so many
good stocks making good moves and in prime position to continue or start a
move. Yes, as noted last week some can get left at the altar when the move
runs out of steam, but the scenario we are playing allows for some more
upside before that occurs.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6605.80
Resistance:
More new highs
Support:
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
The 50 day EMA at 6433
The 2016 trendline at 6366
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
The 200 day SMA at 6079
5996 is the recent May 2017 low
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 2553.17
Resistance:
New highs again
Support:
2519 is the upper channel line from the March 2009 uptrend channel
The 50 day EMA at 2498
2491 is the August all-time high
2480 the late August and early August highs
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
The 200 day SMA at 2403
2401 is the March 2017 all-time high
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 22,871.72
Resistance:
Support:
The 10 day EMA at 22,740
22,420 is the September high
The 50 day EMA at 22,241
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
The 200 day SMA at 21,170
21,169 is the March 2017 all-time high
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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Sunday, October 08, 2017
The Daily, Part 1 of 3, 10-7-17
* * * *
10/7/2017 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
- Headline jobs report bad but some internals are not viewed as that bad
though they have their issues as well.
- Stocks pause on the week after the large caps took the leadership while
small and midcaps rest
- Plenty of leadership still in great position, others trying to rise as new
money aids virtuous rotation.
- Higher minimum wages, ACA taking out mid-market San Fran restaurants
- President may strike deal for short-term healthcare action, talks trash to
NK again
Stocks started soft but started to bounce back upside early in the session.
That move was chop-blocked, however, and stocks fell into midday as North
Korea talked of some other test this weekend. That gave reason to think a
bit more about the Trump version of the line from the movie '2010' -- 'You
see, something's going to happen,' says the being that was formerly Dave
Bowman. 'What? What's going to happen' asks Dr. Floyd (Roy Shieder).
'Something wonderful' responds the former Dave Bowman. Trump's version
after a dinner meeting with top military brass isn't so hope filled: 'this
is the calm before the storm.' When a reporter asked what he meant, Trump
responded 'you will see.' With that backdrop, when NK talked of tests and
launches, stocks fell.
You see, something wonderful is going to happen What? What is
going to happen?
Something wonderful.
The indices fell to the early afternoon, but then recovered lost ground into
the last hour. That flipped NASDAQ to positive as the NASDAQ 100 again led
it higher while SOX was already showing very good action all session. The
rest, well, they just limped home flat, happy to get to the weekend after a
week of new highs was followed with a day off from the large cap indices and
a good lateral test by the small caps and midcaps.
SP500 -2.74, -0.11%
NASDAQ 4.82, 0.07%
DJ30 -1.72, -0.01%
SP400 -0.08%
RUTX -0.12%
SOX 0.45%
NASDAQ 100 0.12%
VOLUME: NYSE -7%, NASDAQ -8%. Modest fade in trade on a weak session. That
fits the overall solid price/volume action seen in the rally of late. There
is a lot of complaining about this rally as being overdone, preceding a
sharp drop, etc., but the price/volume action is good and of course there is
good leadership.
ADVANCE/DECLINE: NYSE -1.8:1, NASDAQ -1.1:1. With the small and midcaps
the loss leaders (after leading higher for over a month), breadth was a bit
more negative.
Stocks were already soft pre-market ahead of the jobs report with SP500
lower while DJ30 and NASDAQ traded slightly positive. Then the September
negative jobs report hit and stocks slid to negative. Not a sharp selloff,
they just lost the already Jello-like bids the morning showed.
The jobs report, despite turning in -33K jobs the first negative tally since
sometime back in the financial crisis (2010), actually showed some
ostensibly internal positives. Wages were higher and participation jumped
two tenths. New full-time jobs rose 935K, the fourth highest level every
reported. Further, 1.5M people HAD a job but just could not get to work
because of the storms.
There is some controversy regarding wages. The headline at 0.5% was solid
and the 2.9% year/year was a nice jump from 2.5%. BUT . . . 1) the Food &
Beverage sector (read waiters, busboys), one of the lowest wage sectors,
lost 105,000 jobs. Take out those low wage jobs and you skew the average
wage higher; 2) then you had companies needing workers but could not get
them because they were taking care of their homes, etc. Shortage of workers,
wages go up; 3) Finally, the BLS simply bungled (putting the best light on
it) the data reporting, substituting the preliminary August weekly earnings
in the July revised (final) weekly earnings, making July lower than the
'final' read previously reported and making the rise look greater than it
was, and by a long shot.
Still, the headline negative number was easily explained and there is some
substance in arguing the internals were better. Given that, we thought
stocks would recover off a lower open. They were indeed doing that until
NKorea started flapping its jaws again. Stocks sold and then had to recover
yet again, and on this Friday ahead of Columbus Day (NOT a market holiday
anymore) that was a bridge just too far.
Even so there were some solid moves. NFLX continued upside along with GOOG,
both breakouts from cup with handle bases. AMZN added more upside HTHT took
off upside once more. INFI of the small biotechs still solid. CNAT surged
then faded, catching us in between. AMAT started upside again. There were
some very good moves as noted, but mostly modest gains to flat action.
After the rally on the week, not bad.
Thus, stocks made it to the weekend holding gains on the week, avoided a
potential blowup on the jobs report, and face next week with the same
situation if once again the world avoids any serious pitfalls. Of course
Monday is the Catalonian meeting regarding the independence vote, the market
is significantly overbought, bulls are higher, magazines covers depict bulls
in every market, and the algorithms are still out there. Kind of business
as usual.
Business as usual and thus far none of that has stopped the advance. We let
positions work higher whether that meant watching them make good moves as
noted above or just testing/resting after very good moves. New weeks are
always approached with some apprehension as you wonder if this is the week
the algos hit. Well, I can tell you, if there is a test on NFLX, GOOG, HTHT
or other good movers to start the week, they will be quite tempting to pick
up a few more positions.
THE MARKET
CHARTS
SOX: Leader on Friday after slowing its rally Tuesday to Thursday. Punched
out another post-2000 high after a pause though a Friday move on lighter
trade is not a confirmation of a new move upside.
NASDAQ moved higher as well, overcoming a gap lower to post a very modest
gain. Excellent week, however, continuing the rally to higher hand higher
highs off the 50 day MA test. Big help from FAANG stocks late in the week,
e.g. GOOG, NFLX.
RUTX: So important to the market with its incredible recovery off the
mid-August low, RUTX spent Tuesday to Friday working laterally in a very
tight range after blasting off to a new high yet again on Monday. The rally
put it in an overbought condition and it is trying to work it off while
holding onto all the gains with that tight lateral move. Typically it waits
for or fades a bit to meet the rising 10 day EMA, and that is what gives the
move its rest and support for another break higher, all things remaining
equal.
SP400: The midcaps show similar action, a big Monday move then drifting
upside and sideways into the weekend. Strong move, got a bit over its skis,
now waiting for the 10 day EMA to catch up to the move.
DJ30: Flat Friday after a week that saw DJ30 break higher Monday and resume
the flurry of new highs after 2 weeks of rest. Excellent action.
SP500: Also took Friday off after a strong week that scored four new
all-time highs. Similar to DJ30, SP500 broke higher out of a 2.5 week
lateral consolidation, really aided by strength in financial stocks.
LEADERSHIP
FAANG: NFLX, GOOG led again, joined by AMZN and its move through the 50 day
MA. FB was up but uninspiring while AAPL continues below the 50 day MA.
Software: A solid week again. MSFT broke higher off the 50 day MA. FEYE up
nicely along with RHT. CRM is trying to make its move. PANW is trying to
move higher as well. Still a solid group.
Biotechs: Definitely mixed as some smaller names sold (PACB, IMMU) while
others surged (INFI, IDRA). Big names were mixed as BIIB gapped upside,
AMGN held steady, CELG faded. Overall still very interesting.
China stocks: Faded early week as they ran well already, then rallied late.
SOHU surged Friday along with HTHT. YY in a nice doji test of the 10 day
EMA. BABA, BIDU moving laterally at near support. BZUN tested more than we
wanted but showing doji at the 50 day MA.
Financial: Nice week, taking a breather Friday after trending higher then
breaking upside Thursday. C, BAC, JPM, GS all showing this action.
Semiconductors: Some great tests on the week after good moves, some
starting upside Friday, e.g. AMAT. ON continued marching higher. LRCX in a
great test. HIMX trying to break higher and SIMO heading upside. MU
setting up a nice flag test of the 10 day EMA.
Oil: Continues to intrigue and we picked up some DO on the week. Still
looking at ESV, APC and this weekend CRZO to see if there are some breaks
higher from promising patterns even as oil backs off resistance.
Retail: After good moves mostly testing. DLTR added some upside on the
week. GPS, KORS, CONN testing. ROST trended higher all week. COST sales
were disappointing and it gapped sharply lower Friday.
Metals: Interesting action in some of the group. ZEUS in a nice flag test
of a breakout. Some industrial metals are setting up.
MARKET STATS
DJ30
Stats: -1.72 points (-0.01%) to close at 22773.67
Nasdaq
Stats: +4.82 points (+0.07%) to close at 6590.18
Volume: 1.75B (-7.41%)
Up Volume: 954.54M (-225.46M)
Down Volume: 763.67M (+96.53M)
A/D and Hi/Lo: Decliners led 1.11 to 1
Previous Session: Advancers led 1.63 to 1
New Highs: 193 (-102)
New Lows: 18 (-5)
S&P
Stats: -2.74 points (-0.11%) to close at 2549.33
NYSE Volume: 693.967M (-6.95%)
A/D and Hi/Lo: Decliners led 1.75 to 1
Previous Session: Advancers led 1.58 to 1
New Highs: 172 (-77)
New Lows: 19 (+11)
SENTIMENT INDICATORS
VIX: 9.65; +0.46
VXN: 13.33; +0.45
VXO: 7.85; +0.22
Put/Call Ratio (CBOE): 0.87; +0.03
Bulls and Bears: After dipping as the market started a new spike higher, of
course the bears are back up, pushing into the rarified air near 60 that is
the top of the typical range. Bears held pretty much steady.
Bulls: 57.5 versus 54.3
Bears: 17.0 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: 57.5 versus 54.3
54.3 versus 50.5 versus 47.1 versus 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: 17.0 versus 17.1
17.1 versus 19.0 versus 20.2 versus 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: 2.361% versus 2.348%
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.348%
versus 2.327% versus 2.326% versus 2.341% versus 2.339% versus 2.312% versus
2.307% versus 2.236% versus 2.222% versus 2.253% versus 2.276% versus 2.273%
versus 2.246% versus 2.234% versus 2.201% versus 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%
EUR/USD: 1.17352 versus 1.17100. Still holding the same lows the past two
weeks after breaking below the 50 day MA.
Historical: 1.17100 versus 1.1754 versus 1.17676 versus 1.17315 versus
1.1812 versus 1.17817 versus 1.1746 versus 1.17852 versus 1.18540 versus
1.19476 versus 1.19420 versus 1.19420 versus 1.19954 versus 1.19436 versus
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
USD/JPY: 112.643 versus 112.818. Still in the 1.5 week lateral move along
the 10 day EMA and just below the July and May peaks.
Historical: 112.818 versus 112.79 versus 112.667 versus 112.716 versus
112.442 versus 112.86 versus 112.289 versus 111.649 versus 1.12125 versus
111.995 versus 112.454 versus 111.559 versus 111.435 versus 110.846 versus
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: 49.29, -1.50. Oil faded through the 200 day SMA and held the 50 day
MA. Hit near the top of the trading range and fell again. Very important
test to see if oil can put in a higher low and move back up to challenge the
top of the range. A stronger dollar hampers that effort.
Gold: 1274.90, +1.70. 4.5 week pullback showing a doji that tapped near
the 200 da and rebounded Friday. Gold is acting as if the Fed is going to
hike and reduce its balance sheet.
MONDAY
PPI, CPI, Retail Sales, Michigan sentiment October preliminary. A bit of
data to chew on, but after the jobs report, even with the headline jobs
miss, the Fed will use the higher wages as its cue to continue with its rate
hiking bias with December said to be the next hike. Of course higher wages
are not inflationary if they are higher because there is plenty of work due
to a solid economy. Supply prevents bottlenecks.
It is interesting that San Francisco is finding out that the higher minimum
wage and the high cost of ACA compliance with restaurants is causing some of
the middle market favorites to go out of business. How shocking: in a
low-margin business, forced higher wage costs and forced higher insurance
costs are causing companies to go out of business. For every dollar
increase in the minimum wage, Kevin Alexander has found a $20K reduction in
independent restaurant profits (roughly 10% for the size of restaurants
being tracked). San Fran had a $5/hour hike. Carnage. The ACA added
another $72K of annual expenses (in 2015, and prices have risen since -- a
lot). That takes off another 30% of profits for these businesses. That is
50%? Who can survive that?
Late today it is reported that the President met with Schumer and another
deal of sorts was struck to put in place executive orders re rolling back
some parts of the ACA to make it easier to group together through
"association health plans" and the like, making a year or two deal that
ultimately leads to block grants to the states. We will see.
At the same time Trump tweets of implied war with N. Korea, nothing that
Presidents have talked to NK for 25 years but it has not worked; 'sorry, but
only one thing will work' he tweeted.
Okay, some positives, some not so positive. Status quo I suppose.
Lots of talk about an overdone market with Way too low volatility that
surely must lead to a selloff it is said. Again, a selloff will come, but
look at how the indices have acted of late: RUTX, SP400 on big runs and are
now resting. SP500, DJ30, NASDAQ had rested but then last week they started
back upside with nice rallies.
Put another way, there is virtuous rotation ongoing as an area rallies to
gains, then rests in place or with modest tests while other parts of the
market rally. That means some new money still coming into stocks because if
not, money would be pulled from one area and put into another, with the
former falling while the latter rises.
For now the action in the indices is very good and the action in leadership
is very good. They are moving up, resting, then moving up again. The
algorithms are still out there but thus far the new highs have not been
sold. Can still happen, but we also see a lot of really solid setups --
still -- and we are looking at more upside this week given the action still
shows plenty of leadership with money moving into the market to drive areas
higher.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6590.18
Resistance:
Another new high Friday.
Support:
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
The 50 day EMA at 6397
The 2016 trendline at 6342
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
The 200 day SMA at 6051
5996 is the recent May 2017 low
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 2519.36
Resistance:
New high Friday.
Support:
2515 is the upper channel line from the March 2009 uptrend channel
2491 is the August all-time high
The 50 day EMA at 2486
2480 the late August and early August highs
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 2396
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 22,773.67
Resistance:
Support:
22,420 is the September high
The 10 day EMA at 22,562
22,179 is the August 2017 all-time high
The 50 day EMA at 22,109
22,086 is the mid-August lower high
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 21,097
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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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
- Headline jobs report bad but some internals are not viewed as that bad
though they have their issues as well.
- Stocks pause on the week after the large caps took the leadership while
small and midcaps rest
- Plenty of leadership still in great position, others trying to rise as new
money aids virtuous rotation.
- Higher minimum wages, ACA taking out mid-market San Fran restaurants
- President may strike deal for short-term healthcare action, talks trash to
NK again
Stocks started soft but started to bounce back upside early in the session.
That move was chop-blocked, however, and stocks fell into midday as North
Korea talked of some other test this weekend. That gave reason to think a
bit more about the Trump version of the line from the movie '2010' -- 'You
see, something's going to happen,' says the being that was formerly Dave
Bowman. 'What? What's going to happen' asks Dr. Floyd (Roy Shieder).
'Something wonderful' responds the former Dave Bowman. Trump's version
after a dinner meeting with top military brass isn't so hope filled: 'this
is the calm before the storm.' When a reporter asked what he meant, Trump
responded 'you will see.' With that backdrop, when NK talked of tests and
launches, stocks fell.
You see, something wonderful is going to happen What? What is
going to happen?
Something wonderful.
The indices fell to the early afternoon, but then recovered lost ground into
the last hour. That flipped NASDAQ to positive as the NASDAQ 100 again led
it higher while SOX was already showing very good action all session. The
rest, well, they just limped home flat, happy to get to the weekend after a
week of new highs was followed with a day off from the large cap indices and
a good lateral test by the small caps and midcaps.
SP500 -2.74, -0.11%
NASDAQ 4.82, 0.07%
DJ30 -1.72, -0.01%
SP400 -0.08%
RUTX -0.12%
SOX 0.45%
NASDAQ 100 0.12%
VOLUME: NYSE -7%, NASDAQ -8%. Modest fade in trade on a weak session. That
fits the overall solid price/volume action seen in the rally of late. There
is a lot of complaining about this rally as being overdone, preceding a
sharp drop, etc., but the price/volume action is good and of course there is
good leadership.
ADVANCE/DECLINE: NYSE -1.8:1, NASDAQ -1.1:1. With the small and midcaps
the loss leaders (after leading higher for over a month), breadth was a bit
more negative.
Stocks were already soft pre-market ahead of the jobs report with SP500
lower while DJ30 and NASDAQ traded slightly positive. Then the September
negative jobs report hit and stocks slid to negative. Not a sharp selloff,
they just lost the already Jello-like bids the morning showed.
The jobs report, despite turning in -33K jobs the first negative tally since
sometime back in the financial crisis (2010), actually showed some
ostensibly internal positives. Wages were higher and participation jumped
two tenths. New full-time jobs rose 935K, the fourth highest level every
reported. Further, 1.5M people HAD a job but just could not get to work
because of the storms.
There is some controversy regarding wages. The headline at 0.5% was solid
and the 2.9% year/year was a nice jump from 2.5%. BUT . . . 1) the Food &
Beverage sector (read waiters, busboys), one of the lowest wage sectors,
lost 105,000 jobs. Take out those low wage jobs and you skew the average
wage higher; 2) then you had companies needing workers but could not get
them because they were taking care of their homes, etc. Shortage of workers,
wages go up; 3) Finally, the BLS simply bungled (putting the best light on
it) the data reporting, substituting the preliminary August weekly earnings
in the July revised (final) weekly earnings, making July lower than the
'final' read previously reported and making the rise look greater than it
was, and by a long shot.
Still, the headline negative number was easily explained and there is some
substance in arguing the internals were better. Given that, we thought
stocks would recover off a lower open. They were indeed doing that until
NKorea started flapping its jaws again. Stocks sold and then had to recover
yet again, and on this Friday ahead of Columbus Day (NOT a market holiday
anymore) that was a bridge just too far.
Even so there were some solid moves. NFLX continued upside along with GOOG,
both breakouts from cup with handle bases. AMZN added more upside HTHT took
off upside once more. INFI of the small biotechs still solid. CNAT surged
then faded, catching us in between. AMAT started upside again. There were
some very good moves as noted, but mostly modest gains to flat action.
After the rally on the week, not bad.
Thus, stocks made it to the weekend holding gains on the week, avoided a
potential blowup on the jobs report, and face next week with the same
situation if once again the world avoids any serious pitfalls. Of course
Monday is the Catalonian meeting regarding the independence vote, the market
is significantly overbought, bulls are higher, magazines covers depict bulls
in every market, and the algorithms are still out there. Kind of business
as usual.
Business as usual and thus far none of that has stopped the advance. We let
positions work higher whether that meant watching them make good moves as
noted above or just testing/resting after very good moves. New weeks are
always approached with some apprehension as you wonder if this is the week
the algos hit. Well, I can tell you, if there is a test on NFLX, GOOG, HTHT
or other good movers to start the week, they will be quite tempting to pick
up a few more positions.
THE MARKET
CHARTS
SOX: Leader on Friday after slowing its rally Tuesday to Thursday. Punched
out another post-2000 high after a pause though a Friday move on lighter
trade is not a confirmation of a new move upside.
NASDAQ moved higher as well, overcoming a gap lower to post a very modest
gain. Excellent week, however, continuing the rally to higher hand higher
highs off the 50 day MA test. Big help from FAANG stocks late in the week,
e.g. GOOG, NFLX.
RUTX: So important to the market with its incredible recovery off the
mid-August low, RUTX spent Tuesday to Friday working laterally in a very
tight range after blasting off to a new high yet again on Monday. The rally
put it in an overbought condition and it is trying to work it off while
holding onto all the gains with that tight lateral move. Typically it waits
for or fades a bit to meet the rising 10 day EMA, and that is what gives the
move its rest and support for another break higher, all things remaining
equal.
SP400: The midcaps show similar action, a big Monday move then drifting
upside and sideways into the weekend. Strong move, got a bit over its skis,
now waiting for the 10 day EMA to catch up to the move.
DJ30: Flat Friday after a week that saw DJ30 break higher Monday and resume
the flurry of new highs after 2 weeks of rest. Excellent action.
SP500: Also took Friday off after a strong week that scored four new
all-time highs. Similar to DJ30, SP500 broke higher out of a 2.5 week
lateral consolidation, really aided by strength in financial stocks.
LEADERSHIP
FAANG: NFLX, GOOG led again, joined by AMZN and its move through the 50 day
MA. FB was up but uninspiring while AAPL continues below the 50 day MA.
Software: A solid week again. MSFT broke higher off the 50 day MA. FEYE up
nicely along with RHT. CRM is trying to make its move. PANW is trying to
move higher as well. Still a solid group.
Biotechs: Definitely mixed as some smaller names sold (PACB, IMMU) while
others surged (INFI, IDRA). Big names were mixed as BIIB gapped upside,
AMGN held steady, CELG faded. Overall still very interesting.
China stocks: Faded early week as they ran well already, then rallied late.
SOHU surged Friday along with HTHT. YY in a nice doji test of the 10 day
EMA. BABA, BIDU moving laterally at near support. BZUN tested more than we
wanted but showing doji at the 50 day MA.
Financial: Nice week, taking a breather Friday after trending higher then
breaking upside Thursday. C, BAC, JPM, GS all showing this action.
Semiconductors: Some great tests on the week after good moves, some
starting upside Friday, e.g. AMAT. ON continued marching higher. LRCX in a
great test. HIMX trying to break higher and SIMO heading upside. MU
setting up a nice flag test of the 10 day EMA.
Oil: Continues to intrigue and we picked up some DO on the week. Still
looking at ESV, APC and this weekend CRZO to see if there are some breaks
higher from promising patterns even as oil backs off resistance.
Retail: After good moves mostly testing. DLTR added some upside on the
week. GPS, KORS, CONN testing. ROST trended higher all week. COST sales
were disappointing and it gapped sharply lower Friday.
Metals: Interesting action in some of the group. ZEUS in a nice flag test
of a breakout. Some industrial metals are setting up.
MARKET STATS
DJ30
Stats: -1.72 points (-0.01%) to close at 22773.67
Nasdaq
Stats: +4.82 points (+0.07%) to close at 6590.18
Volume: 1.75B (-7.41%)
Up Volume: 954.54M (-225.46M)
Down Volume: 763.67M (+96.53M)
A/D and Hi/Lo: Decliners led 1.11 to 1
Previous Session: Advancers led 1.63 to 1
New Highs: 193 (-102)
New Lows: 18 (-5)
S&P
Stats: -2.74 points (-0.11%) to close at 2549.33
NYSE Volume: 693.967M (-6.95%)
A/D and Hi/Lo: Decliners led 1.75 to 1
Previous Session: Advancers led 1.58 to 1
New Highs: 172 (-77)
New Lows: 19 (+11)
SENTIMENT INDICATORS
VIX: 9.65; +0.46
VXN: 13.33; +0.45
VXO: 7.85; +0.22
Put/Call Ratio (CBOE): 0.87; +0.03
Bulls and Bears: After dipping as the market started a new spike higher, of
course the bears are back up, pushing into the rarified air near 60 that is
the top of the typical range. Bears held pretty much steady.
Bulls: 57.5 versus 54.3
Bears: 17.0 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: 57.5 versus 54.3
54.3 versus 50.5 versus 47.1 versus 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: 17.0 versus 17.1
17.1 versus 19.0 versus 20.2 versus 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: 2.361% versus 2.348%
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.348%
versus 2.327% versus 2.326% versus 2.341% versus 2.339% versus 2.312% versus
2.307% versus 2.236% versus 2.222% versus 2.253% versus 2.276% versus 2.273%
versus 2.246% versus 2.234% versus 2.201% versus 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%
EUR/USD: 1.17352 versus 1.17100. Still holding the same lows the past two
weeks after breaking below the 50 day MA.
Historical: 1.17100 versus 1.1754 versus 1.17676 versus 1.17315 versus
1.1812 versus 1.17817 versus 1.1746 versus 1.17852 versus 1.18540 versus
1.19476 versus 1.19420 versus 1.19420 versus 1.19954 versus 1.19436 versus
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
USD/JPY: 112.643 versus 112.818. Still in the 1.5 week lateral move along
the 10 day EMA and just below the July and May peaks.
Historical: 112.818 versus 112.79 versus 112.667 versus 112.716 versus
112.442 versus 112.86 versus 112.289 versus 111.649 versus 1.12125 versus
111.995 versus 112.454 versus 111.559 versus 111.435 versus 110.846 versus
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: 49.29, -1.50. Oil faded through the 200 day SMA and held the 50 day
MA. Hit near the top of the trading range and fell again. Very important
test to see if oil can put in a higher low and move back up to challenge the
top of the range. A stronger dollar hampers that effort.
Gold: 1274.90, +1.70. 4.5 week pullback showing a doji that tapped near
the 200 da and rebounded Friday. Gold is acting as if the Fed is going to
hike and reduce its balance sheet.
MONDAY
PPI, CPI, Retail Sales, Michigan sentiment October preliminary. A bit of
data to chew on, but after the jobs report, even with the headline jobs
miss, the Fed will use the higher wages as its cue to continue with its rate
hiking bias with December said to be the next hike. Of course higher wages
are not inflationary if they are higher because there is plenty of work due
to a solid economy. Supply prevents bottlenecks.
It is interesting that San Francisco is finding out that the higher minimum
wage and the high cost of ACA compliance with restaurants is causing some of
the middle market favorites to go out of business. How shocking: in a
low-margin business, forced higher wage costs and forced higher insurance
costs are causing companies to go out of business. For every dollar
increase in the minimum wage, Kevin Alexander has found a $20K reduction in
independent restaurant profits (roughly 10% for the size of restaurants
being tracked). San Fran had a $5/hour hike. Carnage. The ACA added
another $72K of annual expenses (in 2015, and prices have risen since -- a
lot). That takes off another 30% of profits for these businesses. That is
50%? Who can survive that?
Late today it is reported that the President met with Schumer and another
deal of sorts was struck to put in place executive orders re rolling back
some parts of the ACA to make it easier to group together through
"association health plans" and the like, making a year or two deal that
ultimately leads to block grants to the states. We will see.
At the same time Trump tweets of implied war with N. Korea, nothing that
Presidents have talked to NK for 25 years but it has not worked; 'sorry, but
only one thing will work' he tweeted.
Okay, some positives, some not so positive. Status quo I suppose.
Lots of talk about an overdone market with Way too low volatility that
surely must lead to a selloff it is said. Again, a selloff will come, but
look at how the indices have acted of late: RUTX, SP400 on big runs and are
now resting. SP500, DJ30, NASDAQ had rested but then last week they started
back upside with nice rallies.
Put another way, there is virtuous rotation ongoing as an area rallies to
gains, then rests in place or with modest tests while other parts of the
market rally. That means some new money still coming into stocks because if
not, money would be pulled from one area and put into another, with the
former falling while the latter rises.
For now the action in the indices is very good and the action in leadership
is very good. They are moving up, resting, then moving up again. The
algorithms are still out there but thus far the new highs have not been
sold. Can still happen, but we also see a lot of really solid setups --
still -- and we are looking at more upside this week given the action still
shows plenty of leadership with money moving into the market to drive areas
higher.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6590.18
Resistance:
Another new high Friday.
Support:
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
The 50 day EMA at 6397
The 2016 trendline at 6342
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
The 200 day SMA at 6051
5996 is the recent May 2017 low
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 2519.36
Resistance:
New high Friday.
Support:
2515 is the upper channel line from the March 2009 uptrend channel
2491 is the August all-time high
The 50 day EMA at 2486
2480 the late August and early August highs
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 2396
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 22,773.67
Resistance:
Support:
22,420 is the September high
The 10 day EMA at 22,562
22,179 is the August 2017 all-time high
The 50 day EMA at 22,109
22,086 is the mid-August lower high
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 21,097
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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