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11/11/2017 Investment House Daily
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The Market Video is DIVIDED into component parts: Market Overview, Economy,
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Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4
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The REPORT SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.
Monday a Market Summary video, new plays, play table annotations.
Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.
Access to all current videos will remain assessable each day using the play
links in the reports.
If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.
MARKET SUMMARY
- 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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