* * * *
11/18/2017 Investment House Daily
* * * *
NOTE: This weekend there is no video. Jon Johnson is traveling and under
the weather at the same time and has basically lost his voice. Videos will
return to start the week when Mr. Johnson and his voice show back up.
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Trailing stops: None issued
Stop alerts: None issued
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The REPORT SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.
Monday a Market Summary video, new plays, play table annotations.
Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.
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
- Thursday break higher was set up, but Friday stocks stalled, some reversed
strong early surges.
- Mueller subpoenas blamed for the selling, but regardless the cause, stocks
sold.
- Some FAANG other large cap techs suddenly show weakness after solid moves.
- Friday expiration may be behind the less than stellar upside action, but
these stocks have to show that was the case.
Friday was a rather strange session, somewhat disappointing, not just in
that the indices sported losses in some cases but some of the moves by the
big names was not a continuation of the Thursday recovery rally. Indeed,
some of them, e.g. GOOG, AMAT, reversed that move and more.
After a solid move Thursday and futures rallying after the Thursday close,
the morning saw a story that special prosecutor Mueller had issued subpoenas
to high ranking trump campaign members, some supposedly in the White House.
That is credited for turning futures lower, and when you look at the story's
timing and futures, there is correlation. Stocks were, however, recovering
into the open. They even looked as if they could turn the news into a rally
thanks to some good earnings in retail and elsewhere, but that was not to
be.
It was not a meltdown as the stocks did not roll over, but it was without
doubt disappointing they found it so hard to advance. Yes, after such a
strong move I said the market could take a day off. For many, that is what
Friday was. For some, however, it was not just a pause, but giving back
what Thursday gave.
Now it was November expiration. Perhaps that had something to do with the
early strength turned weakness in some of the big names. We will see if
that is the culprit; the last thing you want to see for the upside is that
the leaders, and leaders that broke out relatively recently in the bigger
picture, roll over their moves.
It was not a bad day for all sectors. Retail stocks again showed some solid
moves as earnings continue to surprise. After the beatings they suffered,
you would think a bit of news would help a recovery, and it is. GPS, ROST,
KORS, RH, HD are helping push the retail sector.
Could it be some rotation from some areas to others? Always possible. We
don't see, however, a lot of wholesale changes to new groups, just as we
don't see a lot of wholesale selloffs of leaders. Some nasty intraday pulls
from high to low that show there WAS some dumping of these stocks at higher
highs (LRCX, AMAT) but not enough break them. THAT remains to be seen this
coming week. That the moves occurred on expiration does suggest they were
less rotational and more positioning heading into the year end.
SP500 -6.79, -0.26%
NASDAQ -10.50, -0.15%
DJ30 -100.12, -0.43%
SP400 +4.35, +0.24%
RUTX +5.94, +0.40%
SOX -6.18, -0.48%
NASDAQ 100 -24.63, -0.39%. NASDAQ large caps were the targets.
VOLUME: NYSE +12%; NASDAQ -5%. Volume Friday was tied to expiration so you
cannot read that much into it. I will say that NYSE trade rose as the small
and midcaps scored gains. Not bad. NASDAQ trade faded as some names sold,
also not bad.
ADVANCE/DECLINE: NYSE 1.9:1, NASDAQ 1.5:1. Not horrid at all for the day,
indicating that smaller issues were moving a bit better. But, of course, a
few big names can send NASDAQ lower even if breadth is positive. Look at
NASDAQ 100 versus NASDAQ overall: -0.39% versus -0.15%.
THE MARKET
CHARTS
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
NASDAQ: After a gap and rally to a new closing high Thursday, NASDAQ backed
down some and volume faded. Okay, price/volume action was more or less in
line. NASDAQ 100, where much of the NASDAQ selling occurred, was not bad
either, easily holding over the 10 day EMA. Big rip, modest selling. At a
new high, however, the volume was quiet Thursday, and you want to see the
modest Friday expiration indecision return to buying next week.
RUTX: Unlike NASDAQ, RUTX continued the Thursday break higher. While it is
not at a new high, it is looking much better after going ahead with a test
closer to the 38% Fibonacci retracement and the July peak. Buyers entered
off that intraday test Wednesday, and buyers have been active since.
SP400: No new closing high here either, but getting close. SP400 also
continued the Thursday rally and is within spitting distance of a new high.
SOX: Gapped higher Friday, continuing the Thursday gap and rally off that
doji just over the 20 day EMA. Earnings from AMAT helped at first as that
stock gapped upside, but as AMAT reversed to a loss at the 10 day EMA and
INTC faded to the 20 day EMA, SOX lost its mojo. It closed lower but also
easily held over the 10 day EMA. Not a rollover but how those big names
react this week now that expiration is over is important for the index, and
given SOX' market importance, important for the market as well.
SP500: SP500 also gapped and rallied Thursday off a doji, the Wednesday
doji below the 20 day EMA. SP500 moved back up through the 10 day EMA but
not to a new high. Friday a test that held near both the 10 and 20 day EMA.
Not a rollover, but as with NASDAQ, not a lot of volume on the move that
tests the recent high that didn't show a ton of volume either.
DJ30: Similar action, falling to the 20 day EMA after the Thursday gap
above the 20 day and rally. DJ30 volume less than constructive of late and
even though the Thursday move looked promising to avoid a 50 day MA test,
DJ30 remains flirting with that larger dip after such a good rally higher.
LEADERSHIP
Semiconductors: Thursday I noted that INTC and NVDA did not rally, keeping
SOX from leadership that day. Others did move well, e.g. LRCX, AMAT.
Friday INTC was down harder, NVDA went nowhere, and AMAT and LRCX, after
good breaks higher, reversed those moves. VSH was higher again, AVGO held
its gain from Thursday, CREE was up and MU was good enough, but it was not
good enough for SOX overall. The group still has some good stocks but some
key names have to show the Friday action was just an expiration thing. AMAT
and LRCX hit new highs then coughed them up with sharp reversals. Watching
those closely this week.
Financial: The Wednesday moves were head fakes as the group was weak again.
Not tanking just a false move as interest rates fell again.
FAANG: Similar to AMAT and LRCX, after good moves Wednesday, some FAANG
reverse the gain. GOOG was the clearest culprit as it returned near the 20
day EMA after the Thursday gap off a doji at the 20 day. FB was down
marginally, holding the 10 day EMA; fine. AMZN gave up the Thursday bounce
but still over the 10 day and volume remained low. AAPL faded off the
Thursday gap to a doji at the 10 day; not the best move Thursday as noted at
the time. NFLX faded from the 20 day MA, still caught between that level
and the 50 day MA's. Looked promising; we will see.
Software: Still solid as a group. CRM added 0.51%, VMW 0.45%. FFIV broke
higher and we moved in. TTWO testing modestly as is GLUU. MSFT
disappointed, dropping back to the 20 day EMA.
Big Names: MMM still solid, showing good upside volume Friday. JNJ
continued lower toward the 50 day MA. CAT holding the 20 day EMA still.
Retail: Excellent week. WMT gave some back Friday, but that was after a
solid upside move. GPS, ROST gapped on earnings. SKX up again. HD looks
ready to move again. CONN could make a move. Even TGT, after its
disastrous earnings call, jumped 5.5% Friday, coming way off that Wednesday
low.
MARKET STATS
DJ30
Stats: -10.50 points (-0.15%) to close at 6782.79
Volume: 1.9B (-5%)
Up Volume: 1.17B (-470M)
Down Volume: 800.27M (+453M)
A/D and Hi/Lo: Advancers led 1.5 to 1
Previous Session: Advancers led 3.29 to 1
New Highs: 132 (-11)
New Lows: 32 (-7)
S&P
Stats: -6.79 points (-0.26%) to close at 2578.85
NYSE Volume: 861.4M (+11.55%)
A/D and Hi/Lo: Advancers led 1.84 to 1
Previous Session: Advancers led 2.96 to 1
New Highs: 113 (-8)
New Lows: 28 (-18)
SENTIMENT INDICATORS
VIX: 11.43; -0.33
VXN: 13.79; -0.52
VXO: 9.75; +0.27
Put/Call Ratio (CBOE): 0.80; -0.15
Bulls and Bears: Bulls dipped a bit but still over 60.0 for now six weeks.
That is certainly putting in the time for a top. Bears rose, indicating it
was not just a dip in bulls but bears are a bit more concerned.
Bulls: 63.5 versus 64.4
Bears: 15.4 versus 14.4
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: 63.5 versus 64.4
64.4 versus 63.5 versus 62.3 versus 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
Bears: 15.4 versus 14.4
14.4 versus 14.4 versus 15.1 versus 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: 2.345% versus 2.37%. A wild two weeks for bonds that saw bond prices
end a 3 week upside move, gap sharply lower through the 50 day MA, then
Wednesday gap back over the 50 day MA's. Closed the week holding that move.
Why are yields lower if all is well and the Fed is hiking? The next two
weeks will be important to see if bonds settle down and if they sell.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.37%
versus 2.336% versus 2.375% versus 2.407% versus 2.402% versus 2.34% versus
2.326% versus 2.316% versus 2.32% versus 2.332% versus 2.349% versus 2.358%
versus 2.378% versus 2.37% versus 2.419% versus 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: 1.1791 versus 1.1787. Euro surged Tuesday through the 50 day MA,
held it with a lateral test through Friday.
Historical: 1.1787 versus 1.1786 versus 1.1799 versus 1.16443 versus 1.16646
versus 1.16439 versus 1.15871 versus 1.15954 versus 1.1609 versus 1.16092
versus 1.16575 versus 1.15480 versus 1.1644 versus 1.16091 versus 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
USD/JPY: 112.124 versus 112.91. After peaking in early November at a
higher high, the dollar has rolled over against the yen, falling through the
50 day MA Thursday and extending that move lower Friday. Heading back to
the October low roughly coincident with the 200 day SMA.
Historical: 112.91 versus 112.879 versus 113.430 versus 113.615 versus
113.526 versus 113.379 versus 113.99 versus 113.723 versus 113.758 versus
114.064 versus 114.010 versus 114.010 versus 113.845 versus 113.640 versus
113.175 versus 113.675 versus 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
Oil: 56.71 +1.36. After a 2 week test of the breakout of the range and move
to a higher high, oil was up sharply Friday, bouncing off the 20 day EMA
test.
Gold: 1296.50, +18.30. Lots of movement in markets Friday on expiration,
and gold surged out of its 5 week consolidation, moving up through the 50
day MA's. The double bottom looks to be yielding a move up finally.
MONDAY
Earnings are for the most part in the bank. The indices performed well
through the season, keeping the October/November move working. Expiration
saw some hiccups just as a consolidation in NASDAQ, SOX and some of the big
names in each broke higher but then suffered some selling on expiration.
As noted earlier, how those stocks handle that action this coming week tells
an important story: was money starting to move out, or was it just a quick
expiration move? Is there rotation starting to other areas at the expense
of some leaders, or will money continue to move to the market versus just
move around the market? Or, for that matter, leave the market?
The patterns looked good going into Thursday and they broke higher. After
Friday there are some worrisome charts from LRCX, AMAT. GOOG more or less.
Not a ton of stocks, but important ones to the market. Overall the patterns
remain fine, but whenever you have the market logging 5 weeks or more of
high confidence, bonds rallying when they should be fading, gold jumping,
you have to start paying very close attention to the leading stocks. A LOT
of these just came out of consolidations of prior moves, looking ready to
break higher.
Will they continue the moves upside this week? If FAANG and other big names
that broke out of bases that formed during the summer, give up the new moves
after a short consolidation, that is not good for the market UNLESS breadth
spreads out a LOT more than it has shown of late. The big names are capable
of driving the market higher on their own. If they lose their bids and
other parts of the market do not improve significantly, the rally has lost
its legs.
We still see some upside possibilities, and some we passed on Friday due to
strong moves that were a bit too strong for a Friday or that rallied then
faded off the highs could still look good Monday. If so, we go where the
money goes.
And that is key as well for the big name FAANG and other stocks that set up
those great bases, broke out, tested, then started back up. If they lose
money that is big news. Then you have to see if other areas receive the
money and rally or if the move is dead, that Dennis Gartman was right.
To us the big names still look good, can still make the moves, but as always
they have to show it. You don't like seeing GOOG put in a break higher then
toss it back. That is not good action coming off a breakout test and trying
for a higher high. If GOOG, the other FAANG stocks, and the big chips
continue to show poor action, then the upside move is at risk unless more
areas pick up the slack.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6782.79
Resistance:
6796 is the November 2017 all-time high
Support:
The 20 day EMA at 6715
6641 is the October high
The 50 day EMA at 6609
6477 is the September intraday high
The 2016 trendline at 6463
6461 is the July 2017 prior all-time high
6450 is the early September high
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
The 200 day SMA at 6220
6205 is the late May all-time high
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 2578.85
Resistance:
2597 is the November 2017 all-time high
Support:
The 20 day EMA at 2575
The 50 day EMA at 2548
2535 is the upper channel line from the March 2009 uptrend channel
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 2441
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 23,358.24
Resistance:
23,602 is the November 2017 all-time high
Support:
The 20 day EMA at 23,343
The 50 day EMA at 23,968
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
The 200 day SMA at 21,603
21,529 is the June 2017 high
21,169 is the March 2017 all-time high
End part 1 of 3
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Sunday, November 12, 2017
The Daily, Part 1 of 3, 11-11-17
* * * *
11/11/2017 Investment House Daily
* * * *
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Entry alerts: PII; RHT; SKX
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
- More calls that the top is here as the market tests rather normally.
- Small caps continue their struggle as GOP tax ineptitude dims hopes or any
substantive relief, especially for small caps.
- Leadership still looks fully capable of pushing more upside as retail
improves, oil improves, software rallies, and chips and FAANG test recent
moves.
The stock indices started the week higher but then could not find any
further upside impetus, trailing off into the weekend. That left the
indices down for the week but at near support at the 10 or 20 day EMA. RUTX
was the lone index out, dropping to the 50 day MA midweek but holding it
through Friday.
SP500 -2.23, -0.09%
NASDAQ +0.89, 0.01%
DJ30 -39.73, -0.17%
SP400 -0.02%
RUTX +0.02%
SOX +0.65%
VOLUME: NYSE -2%; NASDAQ -12%. Volume remained above average but faded to
near average on both exchanges. Strong all week, not so bad on the early
week upside, more of some churn as the indices struggled.
ADVANCE/DECLINE: NYSE -1.3:1, NASDAQ +1.1:1. Still chronically weak
breadth.
Hardly the end of the world as many made it out to be. Indeed. This was
called a 'dress rehearsal' for the 'big one' yet to come or an outright
start of a large selloff. Anyone can be right on any market call at a given
time, but looking across the market it is hard to see where the breakdowns
are occurring that would label this the start of a major selloff.
VIX is oft discussed, but VIX did not rise as the stock market rose, the
classic major top signal VIX can flash. Yes when VIX is low it CAN suggest
a selloff, but VIX can be low for a long time before stocks sell; that makes
this a very hit or miss indicator. The worrisome one is that VIX uptrend as
stocks uptrend; major tops -- the kind being discussed by many as what is
coming -- typically have VIX rise with stocks as part of the blow off phase.
Further, leadership is holding up. More than that, over the past couple of
weeks some old leaders were recycled to new leaders as FAANG stocks broke
out from trading ranges. At the same time most of the recent leaders
continued looking solid enough and they are even picking up some help from
oil stocks. Leadership appears more than solid enough to keep the market
working.
The market IS showing some issues in at least two respects: 1) small caps
struggling most likely over the pathetic GOP handling of the tax reform
effort, and 2) a chronic lack of breadth. Both of those conditions are of
course somewhat tied together.
Small caps led the move higher on the tax reform pass-through proposal. The
subsequent handling has been utterly feckless and there are also those in
the GOP who will, as explained last week, never support anything that would
give President Trump a major win. The small caps tested normally at first,
but as the missteps mounted, the test became more volatile and this past
week RUTX flopped to the 50 day MA, still well above the 38% Fibonacci
retracement of the August to October move.
Some say the market cannot rally without the small caps. Nonsense. The
market has rallied many times without the small caps. It can and has
rallied on just the FAANG and a few other mega caps. Sure it would be great
to have all stocks working higher, but it is not a prerequisite.
As for the breadth, it stinks. That is the result of the small caps fading
even as the mega caps work reasonably well though they were off a bit last
week. Ultimately if the majority of the market does not follow that
eventually leads to failure. With the big names just posting breakouts from
consolidations, however, they look fully capable of leading to the upside at
least through yearend.
THE MARKET
CHARTS
NASDAQ: Moved higher through Wednesday as the mega caps continued their
moves, then faded through Friday, testing the 20 day EMA intraday Thursday
and recovering, and holding the 10 day EMA in a narrow range Friday. Still
a very solid uptrend, making a test of the 20 day EMA as it did in late
October. This makes the second test of the 20 day after rising off a 50 day
MA test in September. MACD broke out to a higher high with price, upside
volume on the break higher from late October is great, big names are leading
upside. This does not look to be an index that is in the throes of a
rollover.
SOX: Similar to NASDAQ, SOX gapped higher Monday and rallied to a higher
post-2000 high Wednesday. Thursday was rougher, gapping lower, selling
through the 10 day EMA, but recovering to hold that near support Friday. A
bit more extended than NASDAQ as SOX has not tasted the 50 day MA since late
August, trending up the 10 day EMA in a steady rise.
RUTX: Much is being made about the small caps, and that is understandable
after its scintillating move from mid-August to October on the pass-through
rates -- rates that now are showing ZERO change in the Senate plan. The
easy test turned volatile and that continued last week as a move higher
through Monday collapsed Tuesday and RUTX fell to the 50 day MA to end the
week. Still 24 points above the 38% Fibonacci retracement and the July high.
SP400: The midcaps shook off the tax issues. Lower on the week, but a very
modest test to the 20 day EMA, holding that level Thursday and Friday with
doji. Not powerful, but holding its move higher at near support.
SP500: SP500 and SP500 are very similar right now. SP500 put in a new high
Wednesday then tested it Thursday and Friday, closing just below the 10 day
EMA for the week. Still a very nice trend upside.
DJ30: Finally tested after the 9 week move. Thursday DJ30 tapped the 20
day EMA on the low, the first touch of this level since early September when
DJ30 rose off the 50 day EMA. Pretty normal test.
LEADERSHIP
FAANG: Solid early week, tested late week. AAPL rallied through Wednesday
to new highs, modest test to Friday well over the 10 day EMA. AMZN rallied
through Wednesday, modest test into Friday, well over the 10 day EMA. FB
bounced Monday and Tuesday, faded into Friday, still a nice consolidation of
the break higher. GOOG up through Wednesday, faded to the 10 day EMA to
test on Friday. NFLX fell to the 50 day MA with a doji Friday and we will
see if it can reset and start a new move higher; did this the last two times
it tested the 50 day.
Oil: Some really decent moves and some good setups. DVN working well after
breaking through the 200 day SMA. DO solidly moving. CRR, MRO, NOG, TELL
and many others look solid.
Semiconductors: A week were many of the leaders tested, e.g. INTC, TXN,
AVGO, SWKS, XLNX, SLAB -- lots of tests of near support making this coming
week an important one for these stocks to show they can move back up and
continue leadership.
Software: VMW started back upside. RHT breaking higher from a nice
consolidation. CRM rallying to a higher high once more. TTWO broke out
with a gap and is testing. CALD testing a breakout.
Financial: Tested back on the week as interest rates fell. JPM is on the
50 day MA. BAC and C testing the 50 day as well.
Retail: Some solid moves from PII, SKX Friday. KSS was under a lot of
pressure after earnings but surged back quite nicely. WMT still strong. HD
holding the weeklong 50 day EMA test.
MARKET STATS
DJ30
Stats: -39.73 points (-0.17%) to close at 23422.21
Nasdaq
Stats: +0.89 points (+0.01%) to close at 6750.94
Volume: 1.98B (-11.61%)
Up Volume: 1.1B (+270.73M)
Down Volume: 830.17M (-539.83M)
A/D and Hi/Lo: Advancers led 1.08 to 1
Previous Session: Decliners led 1.62 to 1
New Highs: 76 (+7)
New Lows: 66 (-26)
S&P
Stats: -2.32 points (-0.09%) to close at 2582.30
NYSE Volume: 848.7M (-1.96%)
A/D and Hi/Lo: Decliners led 1.32 to 1
Previous Session: Decliners led 1.64 to 1
New Highs: 77 (+4)
New Lows: 61 (-9)
SENTIMENT INDICATORS
VIX: 11.29; +0.79
VXN: 15.03; -0.01
VXO: 9.80; +0.54
Put/Call Ratio (CBOE): 1.18; +0.08
Bulls and Bears: Bulls put in the fifth consecutive week above 60.0, rising
to a cycle high at 64.4. Definitely enough bullishness to work against a
continued upside move.
Bulls: 64.4 versus 63.5
Bears: 14.4 versus 14.4
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: 64.4 versus 63.5
63.5 versus 62.3 versus 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
Bears: 14.4 versus 14.4
14.4 versus 15.1 versus 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: 2.402% versus 2.34%. Wow, from a rally over the 50 day SMA that
looked solid, followed by a short test, bonds plunged Friday, gapping lower
and dropping back to the 200 day SMA.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.34%
versus 2.326% versus 2.316% versus 2.32% versus 2.332% versus 2.349% versus
2.358% versus 2.378% versus 2.37% versus 2.419% versus 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: 1.16646 versus 1.16439. Euro rebounded late week though still
well off the September high.
Historical: 1.16439 versus 1.15871 versus 1.15954 versus 1.1609 versus
1.16092 versus 1.16575 versus 1.15480 versus 1.1644 versus 1.16091 versus
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
USD/JPY: 113.526 versus 113.379. Dollar faded on the week, holding at the
20 day EMA to close the festivities.
Historical: 113.379 versus 113.99 versus 113.723 versus 113.758 versus
114.064 versus 114.010 versus 114.010 versus 113.845 versus 113.640 versus
113.175 versus 113.675 versus 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
Oil: 56.74, -0.43. Oil Surged into Monday with a new breakout rally high,
then tested laterally the rest of the week, waiting for the 10 day EMA to
catch up to the move.
Gold: 1274.20, -13.30. Gold edged higher off the 200 day SMA into
Thursday, hit the 50 day EMA, then flopped Friday.
MONDAY
Tons of data on the week. PPI, CPI, New York and Philly PMI, Retail sales
for October, Inventories, Capacity and Utilization. Lots of data for the
market to chew on in addition to what is becoming the tail end of earnings
season.
Last week saw the small caps really struggle with the GOP tax reform
ineptitude and impotence. The big names that just broke out of bases tested
their moves but are holding up very well. Chips tested as well, coming back
to near support. Software is still solid, oil is making some good moves and
more are set up to make good moves.
There is plenty of potential for the upside to resume. As noted earlier,
there are calls that the selling has just started or is about to start. It
may, but from the action last week and the leaders that are still out in the
market, I am not seeing imminent failure. There can ALWAYS be events that
appear to upset even the best setups. Plenty of geopolitics, growing
threats in the Middle East, continuing threats from Korea. The continued
playing politics in our cesspool of a federal government, playing with our
lives and our finances as they play power politics.
The market, however, has shown strength through it all. For now, at least,
there is still the notion that the upside potential outweighs the downside
given the status of the Fed and the chairman transition, the regulation
rollback, a more business friendly climate (for all but certain groups it
would appear), and still the outside hope of a meeting of the minds and
votes on tax reform.
Therefore with the setups we see, we are still looking mostly upside. Oil,
semiconductors, big industrials, retail, FAANG still sport solid setups we
want to ride higher if they show the moves higher.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6750.94
Resistance:
6796 is the November 2017 all-time high
Support:
The 20 day EMA at 6688
6641 is the October high
The 50 day EMA at 6576
6477 is the September intraday high
The 2016 trendline at 6463
6461 is the July 2017 prior all-time high
6450 is the early September high
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 6193
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 2582.30
Resistance:
2597 is the November 2017 all-time high
Support:
The 20 day EMA at 2573
The 50 day EMA at 2541
2535 is the upper channel line from the March 2009 uptrend channel
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 2434
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 23,422.21
Resistance:
23,602 is the November 2017 all-time high
Support:
The 20 day EMA at 23,316
The 50 day EMA at 23,876
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 21,517
21,169 is the March 2017 all-time high
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
- More calls that the top is here as the market tests rather normally.
- Small caps continue their struggle as GOP tax ineptitude dims hopes or any
substantive relief, especially for small caps.
- Leadership still looks fully capable of pushing more upside as retail
improves, oil improves, software rallies, and chips and FAANG test recent
moves.
The stock indices started the week higher but then could not find any
further upside impetus, trailing off into the weekend. That left the
indices down for the week but at near support at the 10 or 20 day EMA. RUTX
was the lone index out, dropping to the 50 day MA midweek but holding it
through Friday.
SP500 -2.23, -0.09%
NASDAQ +0.89, 0.01%
DJ30 -39.73, -0.17%
SP400 -0.02%
RUTX +0.02%
SOX +0.65%
VOLUME: NYSE -2%; NASDAQ -12%. Volume remained above average but faded to
near average on both exchanges. Strong all week, not so bad on the early
week upside, more of some churn as the indices struggled.
ADVANCE/DECLINE: NYSE -1.3:1, NASDAQ +1.1:1. Still chronically weak
breadth.
Hardly the end of the world as many made it out to be. Indeed. This was
called a 'dress rehearsal' for the 'big one' yet to come or an outright
start of a large selloff. Anyone can be right on any market call at a given
time, but looking across the market it is hard to see where the breakdowns
are occurring that would label this the start of a major selloff.
VIX is oft discussed, but VIX did not rise as the stock market rose, the
classic major top signal VIX can flash. Yes when VIX is low it CAN suggest
a selloff, but VIX can be low for a long time before stocks sell; that makes
this a very hit or miss indicator. The worrisome one is that VIX uptrend as
stocks uptrend; major tops -- the kind being discussed by many as what is
coming -- typically have VIX rise with stocks as part of the blow off phase.
Further, leadership is holding up. More than that, over the past couple of
weeks some old leaders were recycled to new leaders as FAANG stocks broke
out from trading ranges. At the same time most of the recent leaders
continued looking solid enough and they are even picking up some help from
oil stocks. Leadership appears more than solid enough to keep the market
working.
The market IS showing some issues in at least two respects: 1) small caps
struggling most likely over the pathetic GOP handling of the tax reform
effort, and 2) a chronic lack of breadth. Both of those conditions are of
course somewhat tied together.
Small caps led the move higher on the tax reform pass-through proposal. The
subsequent handling has been utterly feckless and there are also those in
the GOP who will, as explained last week, never support anything that would
give President Trump a major win. The small caps tested normally at first,
but as the missteps mounted, the test became more volatile and this past
week RUTX flopped to the 50 day MA, still well above the 38% Fibonacci
retracement of the August to October move.
Some say the market cannot rally without the small caps. Nonsense. The
market has rallied many times without the small caps. It can and has
rallied on just the FAANG and a few other mega caps. Sure it would be great
to have all stocks working higher, but it is not a prerequisite.
As for the breadth, it stinks. That is the result of the small caps fading
even as the mega caps work reasonably well though they were off a bit last
week. Ultimately if the majority of the market does not follow that
eventually leads to failure. With the big names just posting breakouts from
consolidations, however, they look fully capable of leading to the upside at
least through yearend.
THE MARKET
CHARTS
NASDAQ: Moved higher through Wednesday as the mega caps continued their
moves, then faded through Friday, testing the 20 day EMA intraday Thursday
and recovering, and holding the 10 day EMA in a narrow range Friday. Still
a very solid uptrend, making a test of the 20 day EMA as it did in late
October. This makes the second test of the 20 day after rising off a 50 day
MA test in September. MACD broke out to a higher high with price, upside
volume on the break higher from late October is great, big names are leading
upside. This does not look to be an index that is in the throes of a
rollover.
SOX: Similar to NASDAQ, SOX gapped higher Monday and rallied to a higher
post-2000 high Wednesday. Thursday was rougher, gapping lower, selling
through the 10 day EMA, but recovering to hold that near support Friday. A
bit more extended than NASDAQ as SOX has not tasted the 50 day MA since late
August, trending up the 10 day EMA in a steady rise.
RUTX: Much is being made about the small caps, and that is understandable
after its scintillating move from mid-August to October on the pass-through
rates -- rates that now are showing ZERO change in the Senate plan. The
easy test turned volatile and that continued last week as a move higher
through Monday collapsed Tuesday and RUTX fell to the 50 day MA to end the
week. Still 24 points above the 38% Fibonacci retracement and the July high.
SP400: The midcaps shook off the tax issues. Lower on the week, but a very
modest test to the 20 day EMA, holding that level Thursday and Friday with
doji. Not powerful, but holding its move higher at near support.
SP500: SP500 and SP500 are very similar right now. SP500 put in a new high
Wednesday then tested it Thursday and Friday, closing just below the 10 day
EMA for the week. Still a very nice trend upside.
DJ30: Finally tested after the 9 week move. Thursday DJ30 tapped the 20
day EMA on the low, the first touch of this level since early September when
DJ30 rose off the 50 day EMA. Pretty normal test.
LEADERSHIP
FAANG: Solid early week, tested late week. AAPL rallied through Wednesday
to new highs, modest test to Friday well over the 10 day EMA. AMZN rallied
through Wednesday, modest test into Friday, well over the 10 day EMA. FB
bounced Monday and Tuesday, faded into Friday, still a nice consolidation of
the break higher. GOOG up through Wednesday, faded to the 10 day EMA to
test on Friday. NFLX fell to the 50 day MA with a doji Friday and we will
see if it can reset and start a new move higher; did this the last two times
it tested the 50 day.
Oil: Some really decent moves and some good setups. DVN working well after
breaking through the 200 day SMA. DO solidly moving. CRR, MRO, NOG, TELL
and many others look solid.
Semiconductors: A week were many of the leaders tested, e.g. INTC, TXN,
AVGO, SWKS, XLNX, SLAB -- lots of tests of near support making this coming
week an important one for these stocks to show they can move back up and
continue leadership.
Software: VMW started back upside. RHT breaking higher from a nice
consolidation. CRM rallying to a higher high once more. TTWO broke out
with a gap and is testing. CALD testing a breakout.
Financial: Tested back on the week as interest rates fell. JPM is on the
50 day MA. BAC and C testing the 50 day as well.
Retail: Some solid moves from PII, SKX Friday. KSS was under a lot of
pressure after earnings but surged back quite nicely. WMT still strong. HD
holding the weeklong 50 day EMA test.
MARKET STATS
DJ30
Stats: -39.73 points (-0.17%) to close at 23422.21
Nasdaq
Stats: +0.89 points (+0.01%) to close at 6750.94
Volume: 1.98B (-11.61%)
Up Volume: 1.1B (+270.73M)
Down Volume: 830.17M (-539.83M)
A/D and Hi/Lo: Advancers led 1.08 to 1
Previous Session: Decliners led 1.62 to 1
New Highs: 76 (+7)
New Lows: 66 (-26)
S&P
Stats: -2.32 points (-0.09%) to close at 2582.30
NYSE Volume: 848.7M (-1.96%)
A/D and Hi/Lo: Decliners led 1.32 to 1
Previous Session: Decliners led 1.64 to 1
New Highs: 77 (+4)
New Lows: 61 (-9)
SENTIMENT INDICATORS
VIX: 11.29; +0.79
VXN: 15.03; -0.01
VXO: 9.80; +0.54
Put/Call Ratio (CBOE): 1.18; +0.08
Bulls and Bears: Bulls put in the fifth consecutive week above 60.0, rising
to a cycle high at 64.4. Definitely enough bullishness to work against a
continued upside move.
Bulls: 64.4 versus 63.5
Bears: 14.4 versus 14.4
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: 64.4 versus 63.5
63.5 versus 62.3 versus 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
Bears: 14.4 versus 14.4
14.4 versus 15.1 versus 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: 2.402% versus 2.34%. Wow, from a rally over the 50 day SMA that
looked solid, followed by a short test, bonds plunged Friday, gapping lower
and dropping back to the 200 day SMA.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.34%
versus 2.326% versus 2.316% versus 2.32% versus 2.332% versus 2.349% versus
2.358% versus 2.378% versus 2.37% versus 2.419% versus 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: 1.16646 versus 1.16439. Euro rebounded late week though still
well off the September high.
Historical: 1.16439 versus 1.15871 versus 1.15954 versus 1.1609 versus
1.16092 versus 1.16575 versus 1.15480 versus 1.1644 versus 1.16091 versus
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
USD/JPY: 113.526 versus 113.379. Dollar faded on the week, holding at the
20 day EMA to close the festivities.
Historical: 113.379 versus 113.99 versus 113.723 versus 113.758 versus
114.064 versus 114.010 versus 114.010 versus 113.845 versus 113.640 versus
113.175 versus 113.675 versus 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
Oil: 56.74, -0.43. Oil Surged into Monday with a new breakout rally high,
then tested laterally the rest of the week, waiting for the 10 day EMA to
catch up to the move.
Gold: 1274.20, -13.30. Gold edged higher off the 200 day SMA into
Thursday, hit the 50 day EMA, then flopped Friday.
MONDAY
Tons of data on the week. PPI, CPI, New York and Philly PMI, Retail sales
for October, Inventories, Capacity and Utilization. Lots of data for the
market to chew on in addition to what is becoming the tail end of earnings
season.
Last week saw the small caps really struggle with the GOP tax reform
ineptitude and impotence. The big names that just broke out of bases tested
their moves but are holding up very well. Chips tested as well, coming back
to near support. Software is still solid, oil is making some good moves and
more are set up to make good moves.
There is plenty of potential for the upside to resume. As noted earlier,
there are calls that the selling has just started or is about to start. It
may, but from the action last week and the leaders that are still out in the
market, I am not seeing imminent failure. There can ALWAYS be events that
appear to upset even the best setups. Plenty of geopolitics, growing
threats in the Middle East, continuing threats from Korea. The continued
playing politics in our cesspool of a federal government, playing with our
lives and our finances as they play power politics.
The market, however, has shown strength through it all. For now, at least,
there is still the notion that the upside potential outweighs the downside
given the status of the Fed and the chairman transition, the regulation
rollback, a more business friendly climate (for all but certain groups it
would appear), and still the outside hope of a meeting of the minds and
votes on tax reform.
Therefore with the setups we see, we are still looking mostly upside. Oil,
semiconductors, big industrials, retail, FAANG still sport solid setups we
want to ride higher if they show the moves higher.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6750.94
Resistance:
6796 is the November 2017 all-time high
Support:
The 20 day EMA at 6688
6641 is the October high
The 50 day EMA at 6576
6477 is the September intraday high
The 2016 trendline at 6463
6461 is the July 2017 prior all-time high
6450 is the early September high
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 6193
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 2582.30
Resistance:
2597 is the November 2017 all-time high
Support:
The 20 day EMA at 2573
The 50 day EMA at 2541
2535 is the upper channel line from the March 2009 uptrend channel
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 2434
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 23,422.21
Resistance:
23,602 is the November 2017 all-time high
Support:
The 20 day EMA at 23,316
The 50 day EMA at 23,876
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 21,517
21,169 is the March 2017 all-time high
End part 1 of 3
_______________________________________________________
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Sunday, November 05, 2017
The Daily, Part 1 of 3, 11-4-17
* * * *
11/4/2017 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: AVGO
Entry alerts: FB; INFI
Trailing stops: DATA
Stop alerts: None issued
The market alert service is a premium level service where we issue intraday
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points (buy, stop, target, etc.), and when we see other information
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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:
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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
- NASDAQ, SOX find large cap strength and lead higher.
- Big NASDAQ names, FAANG breakout of consolidations, attempting to assume
leadership once again.
- Tax plan leaves small and midcaps mostly out in the cold.
- Jobs report is not good in most respects but the manufacturing jobs
continue to impress and belie the prior administration's claims those jobs
were gone for good.
- Now we see if FAANG and company actually will lead.
The past week solidified more of a turn from the small and midcaps to the
large cap NASDAQ stocks. Not that the small and midcaps rolled over; no,
they are still testing good moves. What we saw, however, was a return to
some of the big names in FAANG and other large cap NASDAQ stocks that led
the market higher into mid-summer, then spent 3 to 4 to 5 months
consolidating in trading ranges. This earnings season broke them out of
their consolidations and they are testing the move (FB, MSFT) and in some
cases already starting back upside after the test (AVGO, AMZN, GOOG, TXN).
That helped push the indices higher with emphasis on SOX and NASDAQ while
SP500, DJ30 put in steady advances up the 10 day EMA. SP400 and RUTX did
not do much; SP400 continued a choppy move up the 10 day EMA while RUTX
continued a very volatile pullback around the 20 day EMA.
SP500 7.99, 0.31%
NASDAQ 49.50, 0.74%
DJ30 22.93, 0.10%
SP400 0.25%
RUTX -0.11%
SOX 1.77%
VOLUME: NYSE -10%, NASDAQ -3%. Above average volume on NASDAQ as it surged
to a new high. Volume faded to just above average on NYSE as it posted a
new high.
ADVANCE/DECLINE: NYSE -1.1:1; NASDAQ -1.02:1. It was all the large caps on
Friday. All large caps.
The tax proposal may still help small business and thus move RUTX and SP400
up out of their tests, but in reviewing the proposed tax plan the small
business pass-through tax treatment is rather complex (so much for the
postcard tax form Ryan touted) and is not as generous as that paid out to
the big C corporations. So, I guess you form a C corp to try and get the
20% rate (and have to worry about double taxation) or just take a modest tax
cut on the uppermost income the business makes and try to cram it into what
they consider 'capital income' and the 25% rate versus 'wage income' at the
39.6% rate. As the movie starring Alec Baldwin and Meryl Streep was titled,
"It's Complicated." Oh that is rich: more complex and not that much, if any
benefit.
But, I digress. The key for the market was the big name FAANG and other
NASDAQ stocks broke out from their consolidations/trading ranges. They look
as if they are ready to take back some leadership.
The key to any rally is a continued stream of leadership. These big names
led into the summer, small caps and midcaps took over along with industrial
names of all market caps, chips were in their own world as they rotated
among themselves higher and higher, and now the big names are back in the
leadership mix. Along the way China stocks led, biotechs made good
leadership moves, but then faded back in many cases. All of that is
rotation as some fall while others pick up the slack. That is healthy for
the market.
Throw into this that there are some potential new areas working upside, e.g.
new entries shaping up in retail, some telecom showing life, oil making some
moves -- and you have even more potential leaders or at least supporting
roles setting up to try and add to the upside.
Thus, though the stock market's rally seems rather implausible in that it is
still going after avoiding the traditional September and October weakness,
with the reemergence of the big names it appears the stock indices could
rally into yearend even without that traditional early fall selloff. A
tightening but gradual Fed, lower regulation making a difference (as seen in
the productivity numbers), still tax reform hope are all still driving
upside momentum.
NEWS/ECONOMY
Yes there was a jobs report Friday but it was an afterthought, something
that did not inhibit the action and would not unless it was too extreme one
way or the other. As it was the report was not that great. That was okay
for the market; I guess it assumed the Fed would be held to its prior
schedule.
October Jobs Report
Non-farm Jobs: 261K vs 300K vs 18K (from -33K); Aug revised up 39K, so 99K
jobs added back the 2 prior months.
Unemployment: 4.1 vs 4.2 vs 4.2. But, it was an exodus from the workforce
that caused the drop. Very similar to the Obama years; want to lower
unemployment, lower the number of workers. Magic.
Wages: 0.0 vs 0.1 vs 0.5 prior. Terrible wage performance in terms of the
drop off. Just no consistency.
Participation: 62.7%. Labor force -765K; total out of work force -968K.
'Yewge' drop out from the workforce with now a new record 95.385M people are
out of the work force.
Food and Drink: +89K
Biz Professional +50K
Manufacturing +24K. This is still pretty amazing as the percentage of
manufacturing jobs and not just the total number is WAY above the Obama
years when we were told thee jobs were gone for good. Hmm.
Retail -8400. Wow this happened relatively fast did it not? From being one
of the leading hiring groups to bleeding jobs the past six months.
Mining -2000. Back to negative after some gains.
THE MARKET
CHARTS
SOX: The past two Fridays saw chips scream upside. The prior week it was
earnings from INTC, TXN. This past Friday it was QCOM and AVGO as they
screamed higher on word AVGO may acquire QCOM. So AVGO came back to the US
with a lot of fanfare in order to buy QCOM? Hmm.
NASDAQ: Also a big mover over the Fridays with a general trend higher in
between. Rising above the 10 day EMA as NASDAQ looks impressive, not
surprising given the breakouts in the large caps on their earnings.
SP500: New closing high as it continues rising up the 10 day EMA. Not a
huge move but is working through its volatility, keeping the move higher
going.
DJ30: A slower week after leading the move two weeks back, still trending
up the 10 day EMA but letting others take the lead.
RUTX: Holding near the 20 day EMA in now the fifth week of pullback, and
struggling with a lot of volatility. The sellers and buyers are still
evenly matched as RUTX trades in big intraday ranges but holds its near
support.
SP400: Volatile as well, but working up the 10 day EMA nonetheless. Not as
volatile as RUTX and it is also maintaining its uptrend while it bounces
around intraday.
LEADERSHIP
FAANG: AMZN started back up after the test of its earnings report breakout.
FB showing a nice doji test of its break higher. AAPL gapped upside on its
earnings. GOOG continued higher on still not much volume. NFLX just
sliding modestly higher along the 10 day EMA.
Semiconductors: The potential AVGO/QCOM deal had the group very excited as
those stocks surged. AVGO was already better on the AAPL earnings as was
SWKS. ON, BRKS still moving higher as did TXN. MU remains solid. Some
wild moves, e.g. COHU sold off hard then reversed to hold its trend. QRVO
is interesting and some of the solar stocks such as JASO, FSLR look good.
Software: Tested more on the week e.g. VMW, but CRM moved higher on the
week. FFIV still looks as if it could move upside and CALD did blast
higher. DATA was a big disappointment on its earnings.
Oil: Some good setups again, but will they move? DO testing its earnings
move, SN looks really good to move higher. ESV, DVN and others look good.
Financial: Overall testing the moves, holding at the 10 day EMA, e.g. JPM,
BAC, though they are getting ready to move.
Retail: WMT continues higher. AMZN started to bounce from its test. CONN
looks ready to bounce. TLRD still in a nice test. Some very solid, some
not, some trying to hang on, e.g. HD.
Machinery/Manufacturing: Started cracking as EMR, TEX, CMI really struggled
on the week. CAT, HOLI still nice.
Telecom: setting up in some key names. CAMP looks very good. GLW in a cup
with handle after a surge two weeks back.
MARKET STATS
DJ30
Stats: +22.93 points (+0.10%) to close at 23539.19
Nasdaq
Stats: +49.49 points (+0.74%) to close at 6764.44
Volume: 2.2B (-3.08%)
Up Volume: 1.34B (+250M)
Down Volume: 812.21M (-337.79M)
A/D and Hi/Lo: Decliners led 1.02 to 1
Previous Session: Advancers led 1.3 to 1
New Highs: 156 (+28)
New Lows: 83 (+7)
S&P
Stats: +7.99 points (+0.31%) to close at 2587.84
NYSE Volume: 810.6M (-9.93%)
A/D and Hi/Lo: Decliners led 1.08 to 1
Previous Session: Decliners led 1.02 to 1
New Highs: 138 (-17)
New Lows: 80 (-12)
SENTIMENT INDICATORS
VIX: 9.14; -0.79
VXN: 13.90; -0.80
VXO: 8.09; -0.69
Put/Call Ratio (CBOE): 0.94; +0.07
Bulls and Bears: Bulls continue rising for the fourth week over 60.0 and
bears fall to lows not seen since 2014 and 2015. 60+ has been a governor on
market rises, but it is not an immediate cause and effect. In other words,
you hit the levels, but the market can continue to rally.
Bulls: 63.5 versus 62.3
Bears: 14.4 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: 63.5 versus 62.3
62.3 versus 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
Bears: 14.4 versus 15.1
15.1 versus 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: 2.332% versus 2.349%. Bonds rallied for another week, making it to
the 50 day SMA and the mid-October high. Okay, serious resistance here.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.349%
versus 2.358% versus 2.378% versus 2.37% versus 2.419% versus 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: 1.16092 versus 1.16575. After moving up to the 10 day EMA in a
recovery move, Friday the euro started lower again. The rounded top looks to
be in against the dollar and the euro is heading lower.
Historical: 1.16575 versus 1.15480 versus 1.1644 versus 1.16091 versus
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: 114.064 versus 114.010. Rallied back to the prior week's high and
the July high. First real test of the new move upside.
Historical: 114.010 versus 114.010 versus 113.845 versus 113.640 versus
113.175 versus 113.675 versus 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: 55.64, +1.10. Breaking through the top of the range. Okay, oil is
now trying the breakout.
Gold: 1269.20, -8.90. Still trying to get off the second bottom at the 200
day SMA.
MONDAY
A huge week of data and decisions and earnings, and now another week of
earnings as the season, similar to professional basketball, seems
interminable.
As noted in the opening, despite all the data and the Fed intrigue and
earnings, it is the action in the NASDAQ large caps that held the week's
key. Earnings certainly aided: these stocks were set to move and the
earnings helped them make the breaks. Good tests have them set to move
higher. We picked up some FB Friday, looking at AMZN this week, and still
looking at GOOG as well.
Other big names in chips, software, even drugs worked and we let positions
run, picked up new ones, and plan on picking up more.
Yes that sounds bullish, and with sentiment over 60.0 for a month, that is a
bit worrisome. The market, however, keeps rotating and finding new
leadership or should I say recycled leadership in the case of the NASDAQ
large caps and FAANG? It appears that way.
That keeps us looking for upside plays -- with a smattering of downside here
and there in those sectors that were leading but are in the process of
testing.
There is news this weekend as Saudi Arabia, under its new prince, cleans
house in what is described as fighting corruption. That has Prince CNBC
(Alwaleed Bin Talal) arrested on corruption charges. Saudi also said it
intercepted a missile from Yemen aimed at one of Saudi's airfields near its
capitol. Maybe that means something, but it won't to this market.
Plenty of bullishness for certain, but as I noted last week again after
discussing it over a month ago, all of those billionaire money managers that
so loudly proclaimed they were out of the market because it was surely ready
to crash those that followed their advice are being forced back into the
market. That provides the fuel to continue the move because their billions
are now what helps drive the market higher.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6754.44
Resistance:
More new highs
Support:
6641 is the October high
The 20 day EMA at 6637
The 50 day EMA at 6534
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
The 2016 trendline at 6446
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 6164
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 2587.84
Resistance:
New highs again
Support:
The 20 day EMA at 2563
2531 is the upper channel line from the March 2009 uptrend channel
The 50 day EMA at 2530
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 2426
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 23,539.19
Resistance:
Support:
The 10 day EMA at 23,384
The 50 day EMA at 22,736
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
_______________________________________________________
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
11/4/2017 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: AVGO
Entry alerts: FB; INFI
Trailing stops: DATA
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
- NASDAQ, SOX find large cap strength and lead higher.
- Big NASDAQ names, FAANG breakout of consolidations, attempting to assume
leadership once again.
- Tax plan leaves small and midcaps mostly out in the cold.
- Jobs report is not good in most respects but the manufacturing jobs
continue to impress and belie the prior administration's claims those jobs
were gone for good.
- Now we see if FAANG and company actually will lead.
The past week solidified more of a turn from the small and midcaps to the
large cap NASDAQ stocks. Not that the small and midcaps rolled over; no,
they are still testing good moves. What we saw, however, was a return to
some of the big names in FAANG and other large cap NASDAQ stocks that led
the market higher into mid-summer, then spent 3 to 4 to 5 months
consolidating in trading ranges. This earnings season broke them out of
their consolidations and they are testing the move (FB, MSFT) and in some
cases already starting back upside after the test (AVGO, AMZN, GOOG, TXN).
That helped push the indices higher with emphasis on SOX and NASDAQ while
SP500, DJ30 put in steady advances up the 10 day EMA. SP400 and RUTX did
not do much; SP400 continued a choppy move up the 10 day EMA while RUTX
continued a very volatile pullback around the 20 day EMA.
SP500 7.99, 0.31%
NASDAQ 49.50, 0.74%
DJ30 22.93, 0.10%
SP400 0.25%
RUTX -0.11%
SOX 1.77%
VOLUME: NYSE -10%, NASDAQ -3%. Above average volume on NASDAQ as it surged
to a new high. Volume faded to just above average on NYSE as it posted a
new high.
ADVANCE/DECLINE: NYSE -1.1:1; NASDAQ -1.02:1. It was all the large caps on
Friday. All large caps.
The tax proposal may still help small business and thus move RUTX and SP400
up out of their tests, but in reviewing the proposed tax plan the small
business pass-through tax treatment is rather complex (so much for the
postcard tax form Ryan touted) and is not as generous as that paid out to
the big C corporations. So, I guess you form a C corp to try and get the
20% rate (and have to worry about double taxation) or just take a modest tax
cut on the uppermost income the business makes and try to cram it into what
they consider 'capital income' and the 25% rate versus 'wage income' at the
39.6% rate. As the movie starring Alec Baldwin and Meryl Streep was titled,
"It's Complicated." Oh that is rich: more complex and not that much, if any
benefit.
But, I digress. The key for the market was the big name FAANG and other
NASDAQ stocks broke out from their consolidations/trading ranges. They look
as if they are ready to take back some leadership.
The key to any rally is a continued stream of leadership. These big names
led into the summer, small caps and midcaps took over along with industrial
names of all market caps, chips were in their own world as they rotated
among themselves higher and higher, and now the big names are back in the
leadership mix. Along the way China stocks led, biotechs made good
leadership moves, but then faded back in many cases. All of that is
rotation as some fall while others pick up the slack. That is healthy for
the market.
Throw into this that there are some potential new areas working upside, e.g.
new entries shaping up in retail, some telecom showing life, oil making some
moves -- and you have even more potential leaders or at least supporting
roles setting up to try and add to the upside.
Thus, though the stock market's rally seems rather implausible in that it is
still going after avoiding the traditional September and October weakness,
with the reemergence of the big names it appears the stock indices could
rally into yearend even without that traditional early fall selloff. A
tightening but gradual Fed, lower regulation making a difference (as seen in
the productivity numbers), still tax reform hope are all still driving
upside momentum.
NEWS/ECONOMY
Yes there was a jobs report Friday but it was an afterthought, something
that did not inhibit the action and would not unless it was too extreme one
way or the other. As it was the report was not that great. That was okay
for the market; I guess it assumed the Fed would be held to its prior
schedule.
October Jobs Report
Non-farm Jobs: 261K vs 300K vs 18K (from -33K); Aug revised up 39K, so 99K
jobs added back the 2 prior months.
Unemployment: 4.1 vs 4.2 vs 4.2. But, it was an exodus from the workforce
that caused the drop. Very similar to the Obama years; want to lower
unemployment, lower the number of workers. Magic.
Wages: 0.0 vs 0.1 vs 0.5 prior. Terrible wage performance in terms of the
drop off. Just no consistency.
Participation: 62.7%. Labor force -765K; total out of work force -968K.
'Yewge' drop out from the workforce with now a new record 95.385M people are
out of the work force.
Food and Drink: +89K
Biz Professional +50K
Manufacturing +24K. This is still pretty amazing as the percentage of
manufacturing jobs and not just the total number is WAY above the Obama
years when we were told thee jobs were gone for good. Hmm.
Retail -8400. Wow this happened relatively fast did it not? From being one
of the leading hiring groups to bleeding jobs the past six months.
Mining -2000. Back to negative after some gains.
THE MARKET
CHARTS
SOX: The past two Fridays saw chips scream upside. The prior week it was
earnings from INTC, TXN. This past Friday it was QCOM and AVGO as they
screamed higher on word AVGO may acquire QCOM. So AVGO came back to the US
with a lot of fanfare in order to buy QCOM? Hmm.
NASDAQ: Also a big mover over the Fridays with a general trend higher in
between. Rising above the 10 day EMA as NASDAQ looks impressive, not
surprising given the breakouts in the large caps on their earnings.
SP500: New closing high as it continues rising up the 10 day EMA. Not a
huge move but is working through its volatility, keeping the move higher
going.
DJ30: A slower week after leading the move two weeks back, still trending
up the 10 day EMA but letting others take the lead.
RUTX: Holding near the 20 day EMA in now the fifth week of pullback, and
struggling with a lot of volatility. The sellers and buyers are still
evenly matched as RUTX trades in big intraday ranges but holds its near
support.
SP400: Volatile as well, but working up the 10 day EMA nonetheless. Not as
volatile as RUTX and it is also maintaining its uptrend while it bounces
around intraday.
LEADERSHIP
FAANG: AMZN started back up after the test of its earnings report breakout.
FB showing a nice doji test of its break higher. AAPL gapped upside on its
earnings. GOOG continued higher on still not much volume. NFLX just
sliding modestly higher along the 10 day EMA.
Semiconductors: The potential AVGO/QCOM deal had the group very excited as
those stocks surged. AVGO was already better on the AAPL earnings as was
SWKS. ON, BRKS still moving higher as did TXN. MU remains solid. Some
wild moves, e.g. COHU sold off hard then reversed to hold its trend. QRVO
is interesting and some of the solar stocks such as JASO, FSLR look good.
Software: Tested more on the week e.g. VMW, but CRM moved higher on the
week. FFIV still looks as if it could move upside and CALD did blast
higher. DATA was a big disappointment on its earnings.
Oil: Some good setups again, but will they move? DO testing its earnings
move, SN looks really good to move higher. ESV, DVN and others look good.
Financial: Overall testing the moves, holding at the 10 day EMA, e.g. JPM,
BAC, though they are getting ready to move.
Retail: WMT continues higher. AMZN started to bounce from its test. CONN
looks ready to bounce. TLRD still in a nice test. Some very solid, some
not, some trying to hang on, e.g. HD.
Machinery/Manufacturing: Started cracking as EMR, TEX, CMI really struggled
on the week. CAT, HOLI still nice.
Telecom: setting up in some key names. CAMP looks very good. GLW in a cup
with handle after a surge two weeks back.
MARKET STATS
DJ30
Stats: +22.93 points (+0.10%) to close at 23539.19
Nasdaq
Stats: +49.49 points (+0.74%) to close at 6764.44
Volume: 2.2B (-3.08%)
Up Volume: 1.34B (+250M)
Down Volume: 812.21M (-337.79M)
A/D and Hi/Lo: Decliners led 1.02 to 1
Previous Session: Advancers led 1.3 to 1
New Highs: 156 (+28)
New Lows: 83 (+7)
S&P
Stats: +7.99 points (+0.31%) to close at 2587.84
NYSE Volume: 810.6M (-9.93%)
A/D and Hi/Lo: Decliners led 1.08 to 1
Previous Session: Decliners led 1.02 to 1
New Highs: 138 (-17)
New Lows: 80 (-12)
SENTIMENT INDICATORS
VIX: 9.14; -0.79
VXN: 13.90; -0.80
VXO: 8.09; -0.69
Put/Call Ratio (CBOE): 0.94; +0.07
Bulls and Bears: Bulls continue rising for the fourth week over 60.0 and
bears fall to lows not seen since 2014 and 2015. 60+ has been a governor on
market rises, but it is not an immediate cause and effect. In other words,
you hit the levels, but the market can continue to rally.
Bulls: 63.5 versus 62.3
Bears: 14.4 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: 63.5 versus 62.3
62.3 versus 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
Bears: 14.4 versus 15.1
15.1 versus 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: 2.332% versus 2.349%. Bonds rallied for another week, making it to
the 50 day SMA and the mid-October high. Okay, serious resistance here.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.349%
versus 2.358% versus 2.378% versus 2.37% versus 2.419% versus 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: 1.16092 versus 1.16575. After moving up to the 10 day EMA in a
recovery move, Friday the euro started lower again. The rounded top looks to
be in against the dollar and the euro is heading lower.
Historical: 1.16575 versus 1.15480 versus 1.1644 versus 1.16091 versus
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: 114.064 versus 114.010. Rallied back to the prior week's high and
the July high. First real test of the new move upside.
Historical: 114.010 versus 114.010 versus 113.845 versus 113.640 versus
113.175 versus 113.675 versus 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: 55.64, +1.10. Breaking through the top of the range. Okay, oil is
now trying the breakout.
Gold: 1269.20, -8.90. Still trying to get off the second bottom at the 200
day SMA.
MONDAY
A huge week of data and decisions and earnings, and now another week of
earnings as the season, similar to professional basketball, seems
interminable.
As noted in the opening, despite all the data and the Fed intrigue and
earnings, it is the action in the NASDAQ large caps that held the week's
key. Earnings certainly aided: these stocks were set to move and the
earnings helped them make the breaks. Good tests have them set to move
higher. We picked up some FB Friday, looking at AMZN this week, and still
looking at GOOG as well.
Other big names in chips, software, even drugs worked and we let positions
run, picked up new ones, and plan on picking up more.
Yes that sounds bullish, and with sentiment over 60.0 for a month, that is a
bit worrisome. The market, however, keeps rotating and finding new
leadership or should I say recycled leadership in the case of the NASDAQ
large caps and FAANG? It appears that way.
That keeps us looking for upside plays -- with a smattering of downside here
and there in those sectors that were leading but are in the process of
testing.
There is news this weekend as Saudi Arabia, under its new prince, cleans
house in what is described as fighting corruption. That has Prince CNBC
(Alwaleed Bin Talal) arrested on corruption charges. Saudi also said it
intercepted a missile from Yemen aimed at one of Saudi's airfields near its
capitol. Maybe that means something, but it won't to this market.
Plenty of bullishness for certain, but as I noted last week again after
discussing it over a month ago, all of those billionaire money managers that
so loudly proclaimed they were out of the market because it was surely ready
to crash those that followed their advice are being forced back into the
market. That provides the fuel to continue the move because their billions
are now what helps drive the market higher.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6754.44
Resistance:
More new highs
Support:
6641 is the October high
The 20 day EMA at 6637
The 50 day EMA at 6534
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
The 2016 trendline at 6446
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 6164
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 2587.84
Resistance:
New highs again
Support:
The 20 day EMA at 2563
2531 is the upper channel line from the March 2009 uptrend channel
The 50 day EMA at 2530
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 2426
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 23,539.19
Resistance:
Support:
The 10 day EMA at 23,384
The 50 day EMA at 22,736
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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