* * * *
12/31/2018 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: None issued
Entry alerts: None issued
Trailing stops: None issued
Stop alerts: None issued
The market alert service is a premium level service where we issue intraday alerts relating to the general market conditions, when stocks hit action points (buy, stop, target, etc.), and when we see other information impacting the market or our stocks. To subscribe to the alert service you can sign up at the following link:
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THE MARKET
CHARTS
To view, click on the following links:
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
http://investmenthouse1.com/ihmedia/f/charts/nasdaq100.jpg
MARKET STATS
DJ30
Stats: +265.06 points (+1.15%) to close at 23327.46
Nasdaq
Stats: +50.76 points (+0.77%) to close at 6635.28
Volume: 2.1B (-4.98%)
Up Volume: 1.44B (+110M)
Down Volume: 631.61M (-220.44M)
A/D and Hi/Lo: Advancers led 1.82 to 1
Previous Session: Advancers led 2.23 to 1
New Highs: 9 (+2)
New Lows: 112 (-4)
S&P
Stats: +21.11 points (+0.85%) to close at 2506.85
NYSE Volume: 981.51M (+9.87%)
Up Volume: 669.873M (+222.286M)
Down Volume: 304.105M (-123.277M)
A/D and Hi/Lo: Advancers led 2.48 to 1
Previous Session: Advancers led 1.81 to 1
New Highs: 5 (0)
New Lows: 69 (-30)
SENTIMENT
VIX: 25.42; -2.92
VXN: 31.44; -2.76
VXO: 28.18; -3.46
Put/Call Ratio (CBOE): 0.98; +0.20
Bulls and Bears:
Falling and rebounding to where they were four weeks back. Starting to converge. This coming week's numbers should show a bull dive and bear jump, converging the two to levels not seen since 2016.
Bulls: 39.3 versus 45.5
Bears: 21.4 versus 20.4
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: 39.3 versus 45.4
45.4 versus 46.7 versus 38.3 versus 39.6 versus 42.9 versus 42.5 versus 50.5 versus 51.9 versus 56.3 versus 61.8 versus 60.6 versus 59.0 versus 57.7 versus 60.1 versus 59.6 versus 57.7 versus 57.3 versus 54.9 versus 54.5 versus 54.9 versus 55.3 versus 52.4 versus 47.1 versus 47.6 versus 52.0 versus 55.5 versus 52.9 versus 50.0 versus 49.1 versus 46.6 versus 43.1 versus 43.6 versus 48.0 versus 43.6 versus 42.2 versus 49.5 versus 55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4 versus 66.00
Bears: 21.4 versus 20.4
20.4 versus 21.50 versus 20.6 versus 19.8 versus 19.0 versus 19.8 versus 19.8 versus 19.0 versus 18.3 versus 18.5 versus 18.6 versus 18.3 versus 18.1 versus 18.3 versus 18.1 versus 18.3 versus 18.3 versus 18.6 versus 18.8 versus 18.6 versus 18.5 versus 18.5 versus 18.6 versus 18.4 versus 17.6 versus 17.8 versus 17.7 versus 19.2 versus 19.2 versus 19.4 versus 19.4 versus 20.6 versus 20.8 versus 19.6 versus 19.8 versus 18.6 versus 17.5 versus 16.8 versus 15.7 versus 15.5 versus 14.4 versus 14.6 versus 14.4 versus 15.5 versus 12.6 versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1 versus 15.2 versus 15.1 versus 15.1 versus 15.4 versus 15.4 versus 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
OTHER MARKETS
Bonds: 2.686% versus 2.716%
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.716% versus 2.774% versus 2.811% versus 2.736% versus 2.788% versus 2.803%. versus 2.762% versus 2.821% versus 2.855% versus 2.895% versus 2.913% versus 2.908% versus 2.884% versus 2.863% versus 2.854% versus 2.892% versus 2.915% versus 2.979% versus 2.993% versus 3.032% versus 3.061% versus 3.058% versus 3.059% versus 3.048% versus 3.065% versus 3.074% versus 3.056% versus 3.065% versus 3.116% versus 3.127% versus 3.147% versus 3.186% versus 3.239% versus 3.228% versus 3.222% versus 3.201% versus 3.22% versus 3.146%
EUR/USD: 1.14450 versus 1.14425
Historical: 1.14425 versus 1.1432 versus 1.13588 versus 1.14015 versus 1.13708 versus 1.13828 versus 1.13755 versus 1.13533 versus 1.13049 versus 1.13604 versus 1.1376 versus 1.13244 versus 1.13657 versus 1.1404 versus 1.1376 versus 1.13970 versus 1.13360 versus 1.13199 versus 1.13934 versus 1.13682 versus 1.12973 versus 1.13325 versus 1.13380 versus 1.13829 versus 1.13818 versus 1.14484 versus 1.14172 versus 1.13308 versus 1.13264 versus 1.13124 versus 1.12348 versus 1.13475 versus 1.1364 versus 1.14329 versus 1.14228 versus 1.14090 versus 1.13881 versus 1.14019 versus 1.13394 versus 1.13455 versus 1.13760 versus 1.14042 versus 1.13757 versus 1.3972 versus 1.14682 versus 1.14626 versus 1.1538
USD/JPY: 109.687 versus 110.273. Diving lower against the yen.
Historical: Last below 109 in June 2018: 110.273 versus 110.845 versus 111.190 versus 110.337 versus 111.223 versus 111.21 versus 112.521 versus 112.477 versus 112.653 versus 113.382 versus 113.634 versus 113.634 versus 113.385 versus 113.022 versus 112.66 versus 112.71 versus 112.813 versus 113.581 versus 113.474 versus 113.402 versus 113.559 versus 113.781 versus 113.510 versus 112.972 versus 113.007 versus 113.077 versus 112.617 versus 112.831 versus 113.585 versus 113.576.
Oil: 45.41, +0.08.
Gold: 1281.30, -1.70.
End part 1 of 2
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Monday, December 31, 2018
Market Alert - Pre-Market
Futures vs FV: SP +16.76; DJ +189.60; NASDAQ +50.73
Futures gapped higher early on as Trump talks of a very long and successful phone conference with Xi regarding trade. Trade hopes up, not much other news, year end, stocks resume moving higher in the late Santa Claus rally.
China: Perhaps Xi has reason to strike a US deal. China's PMI turned to contraction (49.4 vs 50.0 in November), showing its lowest reading since 12/2008. New orders 49.7 vs 50.4 Nov. Could it be Trump is . . . winning? No one wants to say anything positive right now, but the intent was to drive China to make a deal when before China had zero incentive to make a deal. Now, if the Fed would let the US economy work we could pull off a fate similar to the USSR. Not saying China communism folds immediately, but if it has to reform to compete it has to reform to compete. Wake up Fed.
GS economic call: Sees US eco growing at 2.0% from 2.4%, predicts just 1 rate hike in 2019.
Lots of stories looking back at they year, the usual end of year worthless recap and even more worthless predictions for 2019. In short, the real news is a China tweet (a tweet mind you) and the Chinese PMI. That is THE news along with the Fed once again missing its policy.
Don't get me wrong, I think the Fed needed to act -- it just needed to act 7 or 8 years ago, not immediately killing off an expansion as soon as it started. That is so . . . Bank of Japan. I said all through the 2000's we had become Japan as people such as Ron Insana argued we were not. Be we have followed all of its policy themes even up to this Fed desire to stop an expansion once it started. The Fed just follows the wrong policies that thus give wrong signals at the wrong times prompting the Fed to make the wrong moves at the wrong times. If you have company executives that consistently implement policies that cause the company earnings to decline, how long would that executive group last? As it is the end of another year where a Fed has torpedoed growth, this one after the first growth in over 10 years, I again ask why do we have the FOMC?
OTHER MARKETS
Bonds: 2.741% vs 2.716% 10 year
EUR/USD: 1.1444 vs 1.1436. Euro continues to rise against $.
USD/JPY: 110.03 vs 110.26. Weaker here as well.
Oil: 46.12, +0.79
Gold: 1282.60, -0.40
Stocks will open higher with a gap after trading in a range all morning. Struggled to hold a move Friday, will see if it can hold again today. Would like the move to hang on, provide another few sessions higher to start 2019, we take some gain then play what the market throws at us after that.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
http://www.investmenthouse.com/alertkey.htm
PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
Customer Support: http://investmenthouse.com/contact_us.php
Futures gapped higher early on as Trump talks of a very long and successful phone conference with Xi regarding trade. Trade hopes up, not much other news, year end, stocks resume moving higher in the late Santa Claus rally.
China: Perhaps Xi has reason to strike a US deal. China's PMI turned to contraction (49.4 vs 50.0 in November), showing its lowest reading since 12/2008. New orders 49.7 vs 50.4 Nov. Could it be Trump is . . . winning? No one wants to say anything positive right now, but the intent was to drive China to make a deal when before China had zero incentive to make a deal. Now, if the Fed would let the US economy work we could pull off a fate similar to the USSR. Not saying China communism folds immediately, but if it has to reform to compete it has to reform to compete. Wake up Fed.
GS economic call: Sees US eco growing at 2.0% from 2.4%, predicts just 1 rate hike in 2019.
Lots of stories looking back at they year, the usual end of year worthless recap and even more worthless predictions for 2019. In short, the real news is a China tweet (a tweet mind you) and the Chinese PMI. That is THE news along with the Fed once again missing its policy.
Don't get me wrong, I think the Fed needed to act -- it just needed to act 7 or 8 years ago, not immediately killing off an expansion as soon as it started. That is so . . . Bank of Japan. I said all through the 2000's we had become Japan as people such as Ron Insana argued we were not. Be we have followed all of its policy themes even up to this Fed desire to stop an expansion once it started. The Fed just follows the wrong policies that thus give wrong signals at the wrong times prompting the Fed to make the wrong moves at the wrong times. If you have company executives that consistently implement policies that cause the company earnings to decline, how long would that executive group last? As it is the end of another year where a Fed has torpedoed growth, this one after the first growth in over 10 years, I again ask why do we have the FOMC?
OTHER MARKETS
Bonds: 2.741% vs 2.716% 10 year
EUR/USD: 1.1444 vs 1.1436. Euro continues to rise against $.
USD/JPY: 110.03 vs 110.26. Weaker here as well.
Oil: 46.12, +0.79
Gold: 1282.60, -0.40
Stocks will open higher with a gap after trading in a range all morning. Struggled to hold a move Friday, will see if it can hold again today. Would like the move to hang on, provide another few sessions higher to start 2019, we take some gain then play what the market throws at us after that.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
http://www.investmenthouse.com/alertkey.htm
PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
Customer Support: http://investmenthouse.com/contact_us.php
Sunday, December 30, 2018
Pause That Refreshes or Start of Next Downside (Weekend Newsletter)
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| Market Summary (continued) The week saw two big upside sessions, Wednesday and Thursday, as the internals and sentiment finally hit levels where all were in place for a bounce. The final key was VIX, and it finally broke through the recent highs and challenged the early 2018 closing high. Both Wednesday and Thursday were marked by very strong across the board buying, making it look very much as if pensions were buying across the market to reach the proper mix of equities to bonds as mandated by their charters. Thursday started much weaker but the buying started early afternoon and surged the indices positive with the Dow moving almost 900 points low to close. Lots of buying. Friday stocks started higher but squandered the move by midmorning. Stocks sloshed around into early afternoon, but at 1:45ET the afternoon rally started like clockwork -- as measured by Thursday -- as pensions looked to buy more stock to rebalance their portfolios. It was just like Thursday -- until it wasn't. At the start of the last hour stocks tested, tried to hold and bounce, but failed. They tumbled back to the session lows by the close, the rally coming and going in two hours. Read "The Daily" Entire Weekend Summary Watch Market Overview Video
As the market sold hard again Monday we banked some more downside gain. CRM (salesforce.com, inc.) Company Profile We entered CRM downside 12/17 as it gapped below the 200 day SMA. We picked up some February $130 strike put options for $7.54 as CRM sold. It was not straight downside, but CRM, despite ups and downs all week, hit the target Monday, 12/24, Christmas Eve. We sold the options for $13.55, banking almost 80%. FFIV (F5 Networks, Inc.) Company Profile As the market bounced Wednesday, we took the rest of the gain on the downside plays on FFIV and SLAB, banking 70% and over 100%, respectively. AMZN (Amazon.com, Inc.) Company Profile We entered an upside play on AMZN on Wednesday 12/26, picking up some February $1400 strike call options for $113.55. The next session AMZN opened a bit lower, moved up from there, but stalled. We opted to sell half the position for $141.10, banking a quick 25% gain. We left the rest and will see if AMZN can push past the 10 day EMA doji Friday and continue to return us some more gain. Receive a 2 week trial and if you stay on receive a $30 per month discount! | ||
| 2) STOCK SPLIT REPORT Here's a leader play and our current analysis.
Company Profile EARNINGS: 03/14/2019 STATUS: Bear flag. COST gapped lower out of its 3 month range, gapping and falling through the 200 day SMA mid-December. Sold to a lower low into Tuesday then rebounded with the market. Friday COST showed a tight doji below the 10 day EMA. If the market stalls its bounce here, COST is in great position to play the next move lower after that initial sharp breakdown from its range. A move to the initial target at the prior low lands a 55%ish gain on the put options. Volume: 2.038M Avg Volume: 2.891M BUY POINT: $199.55 Volume=3M Target=$190.11 Stop=$202.91 POSITION: COST FEB 15 2019 200.00 P - (-46 delta) CHART IMAGE Learn more about our Stock Split Report and how we have made gains of 321% with our powerful stock split plays! Save $360 per year on the Stock Split Report! Plus 2 week trial! | ||
FFIV (F5 Networks--$160.63; +0.10; optionable): Software Company Profile EARNINGS: 01/23/2019 STATUS: Bear flag. Looking at another downside play on FFIV after it just made us money on the last drop. FFIV is in a larger, 6 month head and shoulders, breaking lower from the neckline in that December drop. Tuesday to Friday FFIV rebounded, tapping at the 20 day EMA on the Friday high before fading to a tombstone doji. If the market bounces is over FFIV is in great position to fall again. A move to the prior low lands a 75%ish gain, but there is also a gap that FFIV has not filled and that would take it near 148. Volume: 357.566K Avg Volume: 692.58K BUY POINT: $159.47 Volume=750K Target=$150.08 Stop=$162.84 POSITION: FFIV FEB 15 2019 160.00 P - (-46 delta) CHART IMAGE Save $600 per year and enjoy a 2 week trial of our IH Alerts Service! | ||
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--by the MarketFN STG Team WFC (Wells Fargo & Company) Company Profile Our Success Trading Group will be watching closely for entry points next week on some of our favorite stocks such as Wells Fargo & Company (Ticker: WFC) and Eli Lilly and Company (Ticker: LLY). Our Success Trading Group closed 7 years with 0 losses on our Main Trade Table. In fact, we closed 100% winning trades for the calendar years 2016, 2015, 2013, 2012, 2011, 2010 and 2009 (we still have 1 open position from 2017 (all others were winners) and 1 trade that we opened in 2014 was closed as a losing trade). All of these trades are posted on our Main Trade Table for your review during your free membership trial period. Get Our Next Trade Free - Save $50 per month! Details Here. | ||
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DAL - Delta Air Lines Inc. is currently trading at $50.18. The February $50.00 Calls (DAL20190216C00050000) are trading at $2.82. That provides a return of about 6% if DAL is above $50.00 on expiration Friday in February. Company Profile Learn more about our Covered Call Tables | ||
Stock Split Report: Forbes.com Best of the Web Covered Calls: Allowed in your IRA - Energize your portfolio! The Daily: "The Daily" is a must read for all investors! Success Trading Group: 7 years without a trading loss! | ||
| The foregoing is commentary for informational purposes only. All statements and expressions are the opinions of Online Investment Services, LP., or Split Ventures, Ltd. This information is not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on the related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolios of writers for this issue may, in some instances, include securities mentioned herein and on the related web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors. No one associated herewith receives compensation in any manner from any of the companies that are discussed in this newsletter or on the related websites. This email was sent to tweet@investbilling.com. | ||
|
Saturday, December 29, 2018
The Daily, Part 1 of 3, 12-29-18
* * * *
12/29/2018 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: None issued
Entry alerts: FIVN; TECH
Trailing stops: None issued
Stop alerts: None issued
The market alert service is a premium level service where we issue intraday alerts relating to the general market conditions, when stocks hit action points (buy, stop, target, etc.), and when we see other information impacting the market or our stocks. To subscribe to the alert service you can sign up at the following link:
https://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:
https://investmenthouse1.com/ihmedia/f/mo/mo.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
- Market tries higher again with an afternoon spurt that then fails.
- Indices at the 10 day EMA with doji after two days of rallying. Pause that refreshes or start of next downside is the question.
The week saw two big upside sessions, Wednesday and Thursday, as the internals and sentiment finally hit levels where all were in place for a bounce. The final key was VIX, and it finally broke through the recent highs and challenged the early 2018 closing high. Both Wednesday and Thursday were marked by very strong across the board buying, making it look very much as if pensions were buying across the market to reach the proper mix of equities to bonds as mandated by their charters. Thursday started much weaker but the buying started early afternoon and surged the indices positive with the Dow moving almost 900 points low to close. Lots of buying.
Friday stocks started higher but squandered the move by midmorning. Stocks sloshed around into early afternoon, but at 1:45ET the afternoon rally started like clockwork -- as measured by Thursday -- as pensions looked to buy more stock to rebalance their portfolios.
It was just like Thursday -- until it wasn't. At the start of the last hour stocks tested, tried to hold and bounce, but failed. They tumbled back to the session lows by the close, the rally coming and going in two hours.
SP500 -3.09, -0.12%
NASDAQ 5.03, 0.08%
DJ30 -76.42, -0.33%
SP400 -0.05%
RUTX 0.46%
SOX 0.69%
NASDAQ 100 -0.05%
VOLUME: NYSE -17%, NASDAQ -10%
ADVANCE/DECLINE: NYSE +1.8:1, NASDAQ +2.2:1.
That left all indices but SOX testing the 10 day EMA with a doji on the third day of a rebound off the new lows minted Tuesday.
That raises the fundamental question: pause that then continues the move or a bounce that has shot up its fuel. Monday is 12/31 and a full day of trade. Likely some more buying that session, then some new money put to work to start the year. After all, the indices are still sold down 20% or so, still a 'great' buying opportunity, right? Perhaps short term; I am not that sanguine about the prospects of a rally to new highs from here as chronicled several times last week.
Thus, we still anticipate some more upside on this move, 2 to 3 days perhaps, but have to be ready in the event the Friday doji marked the highwater point for the relief move. Yes, still viewing this as a relief move despite commentary that all the selling was due to the trade war, miscues (Fed or otherwise), etc. Whether it was due to that or not, it is what it is, it happened, the damage is done, and the market is rarely wrong. Rarely. Perhaps never.
Accordingly, despite our belief the rally has some more time to run we have to prepare in the event it does not. We have some upside positions with gain in them, e.g. AMZN, WDAY, AVGO -- some more than others -- but 2 to 3 more days of upside helps a lot. If the move cannot push higher and sellers start to dominate, however, we need to close them out and flip to some downside. Therefore, we have some more downside plays ready in the event the move stalls.
Yes, while there is much commentary on the financial stations, etc. as to how this is not a bear market, how it was just the market mispricing or misinterpreting the Fed actions and data, the charts say otherwise and you don't want to get too enamored with the upside bounce as being some kind of market savior. We are not looking for this move to yield new highs or anything close to new highs, and thus we are not going to imbue it with attributes it does not have. If it cannot move higher, so be it.
THE MARKET
MARKET STATS
DJ30
Stats: -76.42 points (-0.33%) to close at 23062.40
Nasdaq
Stats: +5.03 points (+0.08%) to close at 6584.52
Volume: 2.21B (-9.43%)
Up Volume: 1.33B (-160M)
Down Volume: 852.05M (-50.79M)
A/D and Hi/Lo: Advancers led 2.23 to 1
Previous Session: Advancers led 1.03 to 1
New Highs: 7 (+6)
New Lows: 116 (-185)
S&P
Stats: -3.09 points (-0.12%) to close at 2485.74
NYSE Volume: 893.368M (-16.89%)
Up Volume: 447.587M (-218.977M)
Down Volume: 427.382M (+50.539M)
A/D and Hi/Lo: Advancers led 1.81 to 1
Previous Session: Advancers led 1.18 to 1
New Highs: 5 (-1)
New Lows: 99 (-120)
SENTIMENT
VIX: 28.34; -1.62
VXN: 34.20; -0.17
VXO: 31.64; -2.35
Put/Call Ratio (CBOE): 0.78; -0.18
Bulls and Bears:
Falling and rebounding to where they were four weeks back. Starting to converge. This coming week's numbers should show a bull dive and bear jump, converging the two to levels not seen since 2016.
Bulls: 39.3 versus 45.5
Bears: 21.4 versus 20.4
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: 39.3 versus 45.4
45.4 versus 46.7 versus 38.3 versus 39.6 versus 42.9 versus 42.5 versus 50.5 versus 51.9 versus 56.3 versus 61.8 versus 60.6 versus 59.0 versus 57.7 versus 60.1 versus 59.6 versus 57.7 versus 57.3 versus 54.9 versus 54.5 versus 54.9 versus 55.3 versus 52.4 versus 47.1 versus 47.6 versus 52.0 versus 55.5 versus 52.9 versus 50.0 versus 49.1 versus 46.6 versus 43.1 versus 43.6 versus 48.0 versus 43.6 versus 42.2 versus 49.5 versus 55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4 versus 66.00
Bears: 21.4 versus 20.4
20.4 versus 21.50 versus 20.6 versus 19.8 versus 19.0 versus 19.8 versus 19.8 versus 19.0 versus 18.3 versus 18.5 versus 18.6 versus 18.3 versus 18.1 versus 18.3 versus 18.1 versus 18.3 versus 18.3 versus 18.6 versus 18.8 versus 18.6 versus 18.5 versus 18.5 versus 18.6 versus 18.4 versus 17.6 versus 17.8 versus 17.7 versus 19.2 versus 19.2 versus 19.4 versus 19.4 versus 20.6 versus 20.8 versus 19.6 versus 19.8 versus 18.6 versus 17.5 versus 16.8 versus 15.7 versus 15.5 versus 14.4 versus 14.6 versus 14.4 versus 15.5 versus 12.6 versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1 versus 15.2 versus 15.1 versus 15.1 versus 15.4 versus 15.4 versus 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
OTHER MARKETS
Bonds: 2.716% versus 2.774%. Bonds continue to rise, with TLT working in a flag pattern after breaking higher and reaching the July/August highs. TLT is setting up to break higher and that is not a good indication for the economy, the market.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.774% versus 2.811% versus 2.736% versus 2.788% versus 2.803%. versus 2.762% versus 2.821% versus 2.855% versus 2.895% versus 2.913% versus 2.908% versus 2.884% versus 2.863% versus 2.854% versus 2.892% versus 2.915% versus 2.979% versus 2.993% versus 3.032% versus 3.061% versus 3.058% versus 3.059% versus 3.048% versus 3.065% versus 3.074% versus 3.056% versus 3.065% versus 3.116% versus 3.127% versus 3.147% versus 3.186% versus 3.239% versus 3.228% versus 3.222% versus 3.201% versus 3.22% versus 3.146%
EUR/USD: 1.14425 versus 1.1432. Euro is trying to hold a move over the 50 day MA.
Historical: 1.1432 versus 1.13588 versus 1.14015 versus 1.13708 versus 1.13828 versus 1.13755 versus 1.13533 versus 1.13049 versus 1.13604 versus 1.1376 versus 1.13244 versus 1.13657 versus 1.1404 versus 1.1376 versus 1.13970 versus 1.13360 versus 1.13199 versus 1.13934 versus 1.13682 versus 1.12973 versus 1.13325 versus 1.13380 versus 1.13829 versus 1.13818 versus 1.14484 versus 1.14172 versus 1.13308 versus 1.13264 versus 1.13124 versus 1.12348 versus 1.13475 versus 1.1364 versus 1.14329 versus 1.14228 versus 1.14090 versus 1.13881 versus 1.14019 versus 1.13394 versus 1.13455 versus 1.13760 versus 1.14042 versus 1.13757 versus 1.3972 versus 1.14682 versus 1.14626 versus 1.1538
USD/JPY: 110.273 versus 110.845. Dollar does not look good as it bounces up and down below the 200 day SMA.
Historical: Last below 109 in June 2018: 110.845 versus 111.190 versus 110.337 versus 111.223 versus 111.21 versus 112.521 versus 112.477 versus 112.653 versus 113.382 versus 113.634 versus 113.634 versus 113.385 versus 113.022 versus 112.66 versus 112.71 versus 112.813 versus 113.581 versus 113.474 versus 113.402 versus 113.559 versus 113.781 versus 113.510 versus 112.972 versus 113.007 versus 113.077 versus 112.617 versus 112.831 versus 113.585 versus 113.576.
Oil: 45.33, +0.72. Oil bounced on the week but closed below the 10 day EMA as it continues trending lower below the 10 day EMA.
Gold: 1283.00, +1.90. Gold continued higher after its breakout over the 200 day SMA last week.
End part 1
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12/29/2018 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: None issued
Entry alerts: FIVN; TECH
Trailing stops: None issued
Stop alerts: None issued
The market alert service is a premium level service where we issue intraday alerts relating to the general market conditions, when stocks hit action points (buy, stop, target, etc.), and when we see other information impacting the market or our stocks. To subscribe to the alert service you can sign up at the following link:
https://www.investmenthouse.com/alertdaily.html
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The Market Video is DIVIDED into component parts: Market Overview, Economy, Technical Summary, and the Next Session. Choose the segments you are interested in without having to search a longer video. Click on the link to the portion you wish to view.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
https://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
- Market tries higher again with an afternoon spurt that then fails.
- Indices at the 10 day EMA with doji after two days of rallying. Pause that refreshes or start of next downside is the question.
The week saw two big upside sessions, Wednesday and Thursday, as the internals and sentiment finally hit levels where all were in place for a bounce. The final key was VIX, and it finally broke through the recent highs and challenged the early 2018 closing high. Both Wednesday and Thursday were marked by very strong across the board buying, making it look very much as if pensions were buying across the market to reach the proper mix of equities to bonds as mandated by their charters. Thursday started much weaker but the buying started early afternoon and surged the indices positive with the Dow moving almost 900 points low to close. Lots of buying.
Friday stocks started higher but squandered the move by midmorning. Stocks sloshed around into early afternoon, but at 1:45ET the afternoon rally started like clockwork -- as measured by Thursday -- as pensions looked to buy more stock to rebalance their portfolios.
It was just like Thursday -- until it wasn't. At the start of the last hour stocks tested, tried to hold and bounce, but failed. They tumbled back to the session lows by the close, the rally coming and going in two hours.
SP500 -3.09, -0.12%
NASDAQ 5.03, 0.08%
DJ30 -76.42, -0.33%
SP400 -0.05%
RUTX 0.46%
SOX 0.69%
NASDAQ 100 -0.05%
VOLUME: NYSE -17%, NASDAQ -10%
ADVANCE/DECLINE: NYSE +1.8:1, NASDAQ +2.2:1.
That left all indices but SOX testing the 10 day EMA with a doji on the third day of a rebound off the new lows minted Tuesday.
That raises the fundamental question: pause that then continues the move or a bounce that has shot up its fuel. Monday is 12/31 and a full day of trade. Likely some more buying that session, then some new money put to work to start the year. After all, the indices are still sold down 20% or so, still a 'great' buying opportunity, right? Perhaps short term; I am not that sanguine about the prospects of a rally to new highs from here as chronicled several times last week.
Thus, we still anticipate some more upside on this move, 2 to 3 days perhaps, but have to be ready in the event the Friday doji marked the highwater point for the relief move. Yes, still viewing this as a relief move despite commentary that all the selling was due to the trade war, miscues (Fed or otherwise), etc. Whether it was due to that or not, it is what it is, it happened, the damage is done, and the market is rarely wrong. Rarely. Perhaps never.
Accordingly, despite our belief the rally has some more time to run we have to prepare in the event it does not. We have some upside positions with gain in them, e.g. AMZN, WDAY, AVGO -- some more than others -- but 2 to 3 more days of upside helps a lot. If the move cannot push higher and sellers start to dominate, however, we need to close them out and flip to some downside. Therefore, we have some more downside plays ready in the event the move stalls.
Yes, while there is much commentary on the financial stations, etc. as to how this is not a bear market, how it was just the market mispricing or misinterpreting the Fed actions and data, the charts say otherwise and you don't want to get too enamored with the upside bounce as being some kind of market savior. We are not looking for this move to yield new highs or anything close to new highs, and thus we are not going to imbue it with attributes it does not have. If it cannot move higher, so be it.
THE MARKET
MARKET STATS
DJ30
Stats: -76.42 points (-0.33%) to close at 23062.40
Nasdaq
Stats: +5.03 points (+0.08%) to close at 6584.52
Volume: 2.21B (-9.43%)
Up Volume: 1.33B (-160M)
Down Volume: 852.05M (-50.79M)
A/D and Hi/Lo: Advancers led 2.23 to 1
Previous Session: Advancers led 1.03 to 1
New Highs: 7 (+6)
New Lows: 116 (-185)
S&P
Stats: -3.09 points (-0.12%) to close at 2485.74
NYSE Volume: 893.368M (-16.89%)
Up Volume: 447.587M (-218.977M)
Down Volume: 427.382M (+50.539M)
A/D and Hi/Lo: Advancers led 1.81 to 1
Previous Session: Advancers led 1.18 to 1
New Highs: 5 (-1)
New Lows: 99 (-120)
SENTIMENT
VIX: 28.34; -1.62
VXN: 34.20; -0.17
VXO: 31.64; -2.35
Put/Call Ratio (CBOE): 0.78; -0.18
Bulls and Bears:
Falling and rebounding to where they were four weeks back. Starting to converge. This coming week's numbers should show a bull dive and bear jump, converging the two to levels not seen since 2016.
Bulls: 39.3 versus 45.5
Bears: 21.4 versus 20.4
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: 39.3 versus 45.4
45.4 versus 46.7 versus 38.3 versus 39.6 versus 42.9 versus 42.5 versus 50.5 versus 51.9 versus 56.3 versus 61.8 versus 60.6 versus 59.0 versus 57.7 versus 60.1 versus 59.6 versus 57.7 versus 57.3 versus 54.9 versus 54.5 versus 54.9 versus 55.3 versus 52.4 versus 47.1 versus 47.6 versus 52.0 versus 55.5 versus 52.9 versus 50.0 versus 49.1 versus 46.6 versus 43.1 versus 43.6 versus 48.0 versus 43.6 versus 42.2 versus 49.5 versus 55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4 versus 66.00
Bears: 21.4 versus 20.4
20.4 versus 21.50 versus 20.6 versus 19.8 versus 19.0 versus 19.8 versus 19.8 versus 19.0 versus 18.3 versus 18.5 versus 18.6 versus 18.3 versus 18.1 versus 18.3 versus 18.1 versus 18.3 versus 18.3 versus 18.6 versus 18.8 versus 18.6 versus 18.5 versus 18.5 versus 18.6 versus 18.4 versus 17.6 versus 17.8 versus 17.7 versus 19.2 versus 19.2 versus 19.4 versus 19.4 versus 20.6 versus 20.8 versus 19.6 versus 19.8 versus 18.6 versus 17.5 versus 16.8 versus 15.7 versus 15.5 versus 14.4 versus 14.6 versus 14.4 versus 15.5 versus 12.6 versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1 versus 15.2 versus 15.1 versus 15.1 versus 15.4 versus 15.4 versus 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
OTHER MARKETS
Bonds: 2.716% versus 2.774%. Bonds continue to rise, with TLT working in a flag pattern after breaking higher and reaching the July/August highs. TLT is setting up to break higher and that is not a good indication for the economy, the market.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.774% versus 2.811% versus 2.736% versus 2.788% versus 2.803%. versus 2.762% versus 2.821% versus 2.855% versus 2.895% versus 2.913% versus 2.908% versus 2.884% versus 2.863% versus 2.854% versus 2.892% versus 2.915% versus 2.979% versus 2.993% versus 3.032% versus 3.061% versus 3.058% versus 3.059% versus 3.048% versus 3.065% versus 3.074% versus 3.056% versus 3.065% versus 3.116% versus 3.127% versus 3.147% versus 3.186% versus 3.239% versus 3.228% versus 3.222% versus 3.201% versus 3.22% versus 3.146%
EUR/USD: 1.14425 versus 1.1432. Euro is trying to hold a move over the 50 day MA.
Historical: 1.1432 versus 1.13588 versus 1.14015 versus 1.13708 versus 1.13828 versus 1.13755 versus 1.13533 versus 1.13049 versus 1.13604 versus 1.1376 versus 1.13244 versus 1.13657 versus 1.1404 versus 1.1376 versus 1.13970 versus 1.13360 versus 1.13199 versus 1.13934 versus 1.13682 versus 1.12973 versus 1.13325 versus 1.13380 versus 1.13829 versus 1.13818 versus 1.14484 versus 1.14172 versus 1.13308 versus 1.13264 versus 1.13124 versus 1.12348 versus 1.13475 versus 1.1364 versus 1.14329 versus 1.14228 versus 1.14090 versus 1.13881 versus 1.14019 versus 1.13394 versus 1.13455 versus 1.13760 versus 1.14042 versus 1.13757 versus 1.3972 versus 1.14682 versus 1.14626 versus 1.1538
USD/JPY: 110.273 versus 110.845. Dollar does not look good as it bounces up and down below the 200 day SMA.
Historical: Last below 109 in June 2018: 110.845 versus 111.190 versus 110.337 versus 111.223 versus 111.21 versus 112.521 versus 112.477 versus 112.653 versus 113.382 versus 113.634 versus 113.634 versus 113.385 versus 113.022 versus 112.66 versus 112.71 versus 112.813 versus 113.581 versus 113.474 versus 113.402 versus 113.559 versus 113.781 versus 113.510 versus 112.972 versus 113.007 versus 113.077 versus 112.617 versus 112.831 versus 113.585 versus 113.576.
Oil: 45.33, +0.72. Oil bounced on the week but closed below the 10 day EMA as it continues trending lower below the 10 day EMA.
Gold: 1283.00, +1.90. Gold continued higher after its breakout over the 200 day SMA last week.
End part 1
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Friday, December 28, 2018
Market Alert - PreMarket Continued
Futures vs FV: SP +12.92; DJ +122.18; NASDAQ +32.70
Pardon the pre-release earlier. The alert trailer I suppose.
This time the market is NOT giving up a late surge on the open. WED stocks surged into the close, driving DJ30 up 1000+ points to an all-time point record. THURS stocks opened lower and cut 600+ points off that prior DJ30 gain only to reverse 800+ points to close up over 200.
Today futures are up solidly, not giving up the gains to start. Perhaps the bids are confident and are going to drive stocks higher to yearend in a traditional Santa Claus rally. The massive volatility has given way to a yearend move. We anticipate this move to hold today - - BUT in this market of 1000 Dow point swings, nothing is certain. That said, massive volatility gives way to a bias one way or the other, and this one has birthed upside bias. We anticipate this to continue through today to Monday. Then the new year and we will see; would not be surprised to see it move up a bit more at that time and then face the sellers' wrath.
What is driving stocks? Nothing. This is the rally about nothing, just the same as 'Seinfeld,' the show about nothing. This is technical: massively oversold, massively extreme internals, somewhat (somewhat) extreme sentiment, volatility, then a release of pressure upside. Technical, not news. A rally about nothing -- other than technical, the most important thing there is.
Here is the 'news':
Citi: trader says he is on the golf course because no one knows how to trade this market. There is your sentiment: he is on the golf course missing the relief move, bear market bounce, whatever you want to call it. We are trading it: we played it downside, closed out those positions, now playing the bounce. Hello.
Trump threatens to close the southern border, end Central American aid if no wall is built. The budget arguments continue, the government remains closed (yeah!), we somehow survive without the feds. Indeed, the market is rallying now the government is shut down. I know, it is all coincidence right now, but if there were less government there would be more wealth in more people.
Former Reddit CEO: Intenet metrics are 'completely fake.' Ironic, isn't it? Internet companies know everything about us but we know nothing about the truth of what they are selling us in terms of advertising, etc.
OTHER MARKETS
Bonds: 2.759% vs 2.774% 10 year
EUR/USD: 1.1448 vs 1.1432
USD/JPY: 110.34 vs 110.98. Dollar continues to struggle against yen
Oil: 45.03, +0.43
Gold: 1279.00, -2.10
Futures are off the morning highs but indicating a solid open. Again, we anticipate this to survive the day though some sellers will take a shot at the gap open. The sellers right now, however, are somewhat back on their heels after the THURS action torched many. We will see how the upside gap holds and see if there are any further opportunities to play this move.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
http://www.investmenthouse.com/alertkey.htm
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Pardon the pre-release earlier. The alert trailer I suppose.
This time the market is NOT giving up a late surge on the open. WED stocks surged into the close, driving DJ30 up 1000+ points to an all-time point record. THURS stocks opened lower and cut 600+ points off that prior DJ30 gain only to reverse 800+ points to close up over 200.
Today futures are up solidly, not giving up the gains to start. Perhaps the bids are confident and are going to drive stocks higher to yearend in a traditional Santa Claus rally. The massive volatility has given way to a yearend move. We anticipate this move to hold today - - BUT in this market of 1000 Dow point swings, nothing is certain. That said, massive volatility gives way to a bias one way or the other, and this one has birthed upside bias. We anticipate this to continue through today to Monday. Then the new year and we will see; would not be surprised to see it move up a bit more at that time and then face the sellers' wrath.
What is driving stocks? Nothing. This is the rally about nothing, just the same as 'Seinfeld,' the show about nothing. This is technical: massively oversold, massively extreme internals, somewhat (somewhat) extreme sentiment, volatility, then a release of pressure upside. Technical, not news. A rally about nothing -- other than technical, the most important thing there is.
Here is the 'news':
Citi: trader says he is on the golf course because no one knows how to trade this market. There is your sentiment: he is on the golf course missing the relief move, bear market bounce, whatever you want to call it. We are trading it: we played it downside, closed out those positions, now playing the bounce. Hello.
Trump threatens to close the southern border, end Central American aid if no wall is built. The budget arguments continue, the government remains closed (yeah!), we somehow survive without the feds. Indeed, the market is rallying now the government is shut down. I know, it is all coincidence right now, but if there were less government there would be more wealth in more people.
Former Reddit CEO: Intenet metrics are 'completely fake.' Ironic, isn't it? Internet companies know everything about us but we know nothing about the truth of what they are selling us in terms of advertising, etc.
OTHER MARKETS
Bonds: 2.759% vs 2.774% 10 year
EUR/USD: 1.1448 vs 1.1432
USD/JPY: 110.34 vs 110.98. Dollar continues to struggle against yen
Oil: 45.03, +0.43
Gold: 1279.00, -2.10
Futures are off the morning highs but indicating a solid open. Again, we anticipate this to survive the day though some sellers will take a shot at the gap open. The sellers right now, however, are somewhat back on their heels after the THURS action torched many. We will see how the upside gap holds and see if there are any further opportunities to play this move.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
http://www.investmenthouse.com/alertkey.htm
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Market Alert - PreMarket
This time the market is NOT giving up a late surge on the open. WED stocks surged into the close, driving DJ30 up 1000+ points to an all-time point record. THURS stocks opened lower and cut 600+ points off that prior DJ30
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
http://www.investmenthouse.com/alertkey.htm
PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
Customer Support: http://investmenthouse.com/contact_us.php
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
http://www.investmenthouse.com/alertkey.htm
PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
Customer Support: http://investmenthouse.com/contact_us.php
Thursday, December 27, 2018
The Daily, Part 1 of 3, 12.27-18
* * * *
12/27/2018 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: AMZN
Entry alerts: AVGO; VRSN
Trailing stops: None issued
Stop alerts: LLY
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:
https://www.investmenthouse.com/alertdaily.html
********************************************************************
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
- Stocks try to give up the Wednesday surge, then buyers show up the last two hours with a massive surge. To gains.
- Calls for a bottom abound, but the volatility is so massive it is hard to imagine it means a healthy market.
- CNBC and others hold specials to let you know if this is a bottom or not. Oh, thank you.
- Reasons this is likely not a bottom.
- If it is a bottom, however, we don't mind at all. We will play whatever we get, but of course, are also looking at history.
- Still looks as if there is some more upside and we have some more plays.
Huge down, huge up, then a head fake. The stock indices started lower, hung over from the record move higher on DJ30 Wednesday. What a hangover. DJ30 dropped 611 points at 2:20ET. Looked like another one-day wonder where all the ammunition was shot up Wednesday.
With the turn of a page -- or the microsecond it takes for an algorithm to kick in, stocks turned upside. DJ30 ran 871 points off the low to the close. NASDAQ 242 points low to close. Massive turns as buyers returned, most likely in the form of pension funds rebalancing to include more stocks as the year ends. The result: impressive upside out of very impressive downside.
SP500
This action suggests that a bear market rally is in place. With pension funds still likely in need to buy before yearend, a good push higher Friday, likely Monday, and possibly the momentum continues into the first week of the year.
Thus, we bought some more positions to play the move, AVGO and VRSN to go along with WDAY, AMZN, SAVE, TEAM -- those stocks with a lot of bounce in them. We also have an eye on TTWO, APC, TECD, YUM as possible new entries to play more upside. Definitely software stocks are making big moves upside even from crappy patterns (e.g. DATA, NOW, CRM), leading upside. FAANG is at best so-so, a shadow of the software moves. We do have a position in AMZN and even took some gain early session, leaving half to play the continuing bear rally.
The point: two days upside on the rebound, not a huge upside Thursday, and thus still some more upside up for grabs and we can still pick up some positions to play that pension fund end of year mandated buying.
Bounce versus Bottom
Yes, this is the conversation of conversations. Hell, CNBC is airing a special tonight discussing if this is a bottom or just a bounce.
I don't know what they are saying, but I am going to tick off some things to consider before people buy into the 'buy the dip, this is the bottom.' Sure, near term the character has changed: they bought the weakness Thursday. That happens in these tradable bear market rallies. It allows us to make some upside money on the bounce -- if you don't get married to the idea stocks have bottomed and MUST continue rising. They certainly can. I am not saying this is absolutely, 100% only a bear market bounce. I am saying it matches historical similar selloffs and bounces and that you have to keep that in mind -- AS YOU PLAY the bounce. If the bounce keeps going, well, these plays we have entered will make us more than bounce money and other stocks will build patterns over the recovery to keep the move going. If not -- we make the bounce money and then play some more downside plays as we did on the last drop.
Aside from the recent character, the action is just not action from a healthy market. A sharp selloff that hit a crescendo Christmas Eve. It was overdone, massively so based upon the internals (1200+ new lows, heavily negative A/D, heavy downside to upside volume) and sentiment (record outflows from stock funds, VIX finally, finally breaking upside). Trade issues, weaker economic data, Fed scare, yield curve inversion, and over the weekend Mnuchin calling bank CEO's, calling in the PPT. What a setup for a rally.
Realize also that the market selling started as the Fed began drying up its balance sheet. As it drained the liquidity the market sold off. Holy cow, that is 2000 all over again. From copious, indeed massive, liquidity to a dry, empty pool, veritable dust bowl of liquidity. The market partied as if the spigot would never run dry. It didn't, the Fed is just turning it off. Hard to keep the party going when the party liquor runs out. Oh sure, you can still dance, eat some snacks, make some small talk, try your best lines on the opposite sex, but it is just not the same. New Year's party without the bubbly.
The point: there is a REASON stocks fell. Withdrawing liquidity that the markets used to rally invokes Newton's third law: for every action there is an equal and opposite reaction. Or as Mathew McConaughey said in the movie 'Interstellar,' you have to leave something behind. Inject liquidity, stocks rise. Remove liquidity, stocks fall. Powell, trade, Mnuchin -- they were all just the parsley garnishing the steak.
I wrote often that the market would have to give back the gains based on QE if there was nothing more than QE. Through 2016 there was nothing more. The tax cuts have added something, some real growth, and it will still take place -- IF the Fed does not kill it all off. Remember what I said: the economy was just in a slowdown in a continued rise -- until the Fed stepped in at the wrong time and is turning a slowdown into an economic top. It always does, just hoped Powell was a bit smarter. He talked as if he was at first, but then he took off the mask and revealed the faces of all predecessor Fed chair's in some kind of John Carpenter horror movie monster. Yes, I was a fool for hoping.
The only thing I was wrong about was the catalyst. It would have happened sooner but for the tax reform. The Fed stopped QE but it was not withdrawn. I postulated the stoppage would be enough, but it took the withdrawal to again invoke Newton's third law. It makes some sense: the real action was moving the balance sheet back down versus just stopping adding the garbage to the balance sheet.
That strongly suggests this is not over. That the Fed has, as usual, screwed it all up. That it is tightening into a slowdown and turned a slowdown into a meltdown. It is not done. While it might pause in rate hikes as Art Cashin and others are saying, it is NOT stopping the balance sheet reduction. The bigger of the two? The balance sheet reduction. Greenspan's rate hikes in late 1999 and into 2000 were, at first, not the main catalyst. It was the draining of liquidity that seized up the financial markets and then the economy. The rate hikes were the bird that landed on the car teetering on the cliff and sent the car over the edge. The damage was done; the bird just happened to pick that place to land.
Now the other side of the argument. Perhaps the damage done by the Fed is not that bad. Perhaps the tax cuts are stronger. Perhaps the tax cuts will make up ALL the difference in the balance sheet withdrawal and rate hikes and offset their damage and more, justifying this bounce marking a bottom, maintaining ALL the QE gains and adding more on top of that. I am sorry, but as much as I like these tax cuts in terms of generating real investment and growth (they have -- just look at the new businesses, new jobs, wealth creation), so much more has to be done to generate that kind of economic growth to justify the fake QE gains. We need a real healthcare system, not the ACA disaster. Hundreds of thousands of regulations need tearing up. The playing field between the huge monopoly companies and small businesses needs to be leveled. Lots more. With a divided Congress and the House out to get the President and not let him have one win (the democrats have approved in the past $25B for border security measures yet won't spring for $5B for the President), there won't be enough done to generate that kind of economic reform. The additional tax cuts, etc.? All out the window.
The market knows this. The market has shown this. Most likely, despite the experts saying the market has it wrong, it likely has it right. There are so many saying this massive volatility is normal because of algo trading and a lot of concern about a lot of issues (trade war, impeachment, Fed bungling, government shutdown), that is, they are saying it is different this time. Again, it rarely is different and the market's action usually tells the tale.
The biggest clue: there are damn few great setups in great stocks. Most stocks are bouncing from getting their patterns torn to pieces. There are exceptions such as TEAM, WDAY and a few others, but not the plethora of good patterns ready to lead. Perhaps they set up if the rally holds and the indices consolidate. They tried that from October into December, however, and the trading range broke down in the most recent selling. It had the perfect opportunity to form up patterns, and indeed there were a few then as well, but they folded.
What do I say to that? So what?! We will play the market that is there, whether the market got it right or it defies its past in a huge 'it's different this time' move. I would love the latter as that means the economy will still improve and those hard-fought gains the past 1.5 years continue versus the Fed torpedoing them after the prior 10 years of hell for the middle class Americans. They will start more businesses, take more risks, create more jobs, create wealth -- and put it into the stock market. How great would that be? Clue: very great.
Thus, though I do not expect that, we play the great setups upside just as we are for this one. If it continues, awesome. If it does not, as we suspect, then we bank the upside bounce gains when the move stalls and load up the downside again as on the last drop, playing that continuing trend lower.
Last week I said 'embrace the downside.' Don't take that the wrong way. I am simply saying people need to accept the downside in bear markets lasts a long time and to view it the same way they view making money when the market trends higher: recognize it and take advantage of it when it sets up. When the downside sets in, it can be as good and indeed is often better than the upside as the downside moves often are strong and fast. Use it! Make the money and be cool with it. The upside will return at some point and you will see the patterns set up in great stocks and ask yourself 'why are all the experts so negative when the patterns are so good, when sentiment is so bad, and the economic data is showing glimmers of getting just a bit better?' At that point you will realize they are likely all wrong and when those great patterns break higher, then you buy in on the ground floor of the recovery.
We will play this rally as it has a reason to move, e.g. pension fund rebalancing, first of year money allocation to the market. That can make us great money upside. When it starts to falter we lock up some upside gain and see if there are a lot of good upside patterns forming that just need a test to finish their work, or if a lot of stocks have moved up to resistance and are rolling over. We play what the market presents.
Have a great evening!
THE MARKET
CHARTS
To view, click on the following links:
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
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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
http://investmenthouse1.com/ihmedia/f/charts/nasdaq100.jpg
MARKET STATS
DJ30
Stats: +260.37 points (+1.14%) to close at 23138.82
Nasdaq
Stats: +25.14 points (+0.38%) to close at 6579.49
Volume: 2.44B (-5.06%)
Up Volume: 1.49B (-780M)
Down Volume: 902.84M (+612.84M)
A/D and Hi/Lo: Advancers led 1.03 to 1
Previous Session: Advancers led 3.81 to 1
New Highs: 1 (-6)
New Lows: 301 (-411)
S&P
Stats: +21.13 points (+0.86%) to close at 2488.83
NYSE Volume: 1.075B (+1.22%)
Up Volume: 2.48B (+1.456B)
Down Volume: 376.845M (+340.458M)
A/D and Hi/Lo: Advancers led 1.18 to 1
Previous Session: Advancers led 6.91 to 1
New Highs: 6 (+2)
New Lows: 219 (-589)
SENTIMENT
VIX: 29.96; -0.45. After the breakout, VIX is in a normal breakout test, likely with a couple of days testing to the 10 day EMA. Then it could be ready to break higher again, meaning stocks would be selling.
VXN: 34.37; +0.67
VXO: 33.99; +1.16
Put/Call Ratio (CBOE): 0.96; -0.10
Bulls and Bears:
Falling and rebounding to where they were four weeks back. Starting to converge. This coming week's numbers should show a bull dive and bear jump, converging the two to levels not seen since 2016.
Bulls: 39.3 versus 45.5
Bears: 21.4 versus 20.4
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: 39.3 versus 45.4
45.4 versus 46.7 versus 38.3 versus 39.6 versus 42.9 versus 42.5 versus 50.5 versus 51.9 versus 56.3 versus 61.8 versus 60.6 versus 59.0 versus 57.7 versus 60.1 versus 59.6 versus 57.7 versus 57.3 versus 54.9 versus 54.5 versus 54.9 versus 55.3 versus 52.4 versus 47.1 versus 47.6 versus 52.0 versus 55.5 versus 52.9 versus 50.0 versus 49.1 versus 46.6 versus 43.1 versus 43.6 versus 48.0 versus 43.6 versus 42.2 versus 49.5 versus 55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4 versus 66.00
Bears: 21.4 versus 20.4
20.4 versus 21.50 versus 20.6 versus 19.8 versus 19.0 versus 19.8 versus 19.8 versus 19.0 versus 18.3 versus 18.5 versus 18.6 versus 18.3 versus 18.1 versus 18.3 versus 18.1 versus 18.3 versus 18.3 versus 18.6 versus 18.8 versus 18.6 versus 18.5 versus 18.5 versus 18.6 versus 18.4 versus 17.6 versus 17.8 versus 17.7 versus 19.2 versus 19.2 versus 19.4 versus 19.4 versus 20.6 versus 20.8 versus 19.6 versus 19.8 versus 18.6 versus 17.5 versus 16.8 versus 15.7 versus 15.5 versus 14.4 versus 14.6 versus 14.4 versus 15.5 versus 12.6 versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1 versus 15.2 versus 15.1 versus 15.1 versus 15.4 versus 15.4 versus 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
OTHER MARKETS
Bonds: 2.774% versus 2.811%
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.811% versus 2.736% versus 2.788% versus 2.803%. versus 2.762% versus 2.821% versus 2.855% versus 2.895% versus 2.913% versus 2.908% versus 2.884% versus 2.863% versus 2.854% versus 2.892% versus 2.915% versus 2.979% versus 2.993% versus 3.032% versus 3.061% versus 3.058% versus 3.059% versus 3.048% versus 3.065% versus 3.074% versus 3.056% versus 3.065% versus 3.116% versus 3.127% versus 3.147% versus 3.186% versus 3.239% versus 3.228% versus 3.222% versus 3.201% versus 3.22% versus 3.146%
EUR/USD: 1.1432 versus 1.13588. Euro breaking higher over the 50 day MA, giving a breakout another try.
Historical: 1.13588 versus 1.14015 versus 1.13708 versus 1.13828 versus 1.13755 versus 1.13533 versus 1.13049 versus 1.13604 versus 1.1376 versus 1.13244 versus 1.13657 versus 1.1404 versus 1.1376 versus 1.13970 versus 1.13360 versus 1.13199 versus 1.13934 versus 1.13682 versus 1.12973 versus 1.13325 versus 1.13380 versus 1.13829 versus 1.13818 versus 1.14484 versus 1.14172 versus 1.13308 versus 1.13264 versus 1.13124 versus 1.12348 versus 1.13475 versus 1.1364 versus 1.14329 versus 1.14228 versus 1.14090 versus 1.13881 versus 1.14019 versus 1.13394 versus 1.13455 versus 1.13760 versus 1.14042 versus 1.13757 versus 1.3972 versus 1.14682 versus 1.14626 versus 1.1538
USD/JPY: 110.845 versus 111.190.
Historical: Last below 109 in June 2018: 111.190 versus 110.337 versus 111.223 versus 111.21 versus 112.521 versus 112.477 versus 112.653 versus 113.382 versus 113.634 versus 113.634 versus 113.385 versus 113.022 versus 112.66 versus 112.71 versus 112.813 versus 113.581 versus 113.474 versus 113.402 versus 113.559 versus 113.781 versus 113.510 versus 112.972 versus 113.007 versus 113.077 versus 112.617 versus 112.831 versus 113.585 versus 113.576.
Oil: 44.61, -1.61.
Gold: 1281.10, +8.10. Still moving to a higher high on this breakout.
End part 1
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12/27/2018 Investment House Daily
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Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: AMZN
Entry alerts: AVGO; VRSN
Trailing stops: None issued
Stop alerts: LLY
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:
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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
- Stocks try to give up the Wednesday surge, then buyers show up the last two hours with a massive surge. To gains.
- Calls for a bottom abound, but the volatility is so massive it is hard to imagine it means a healthy market.
- CNBC and others hold specials to let you know if this is a bottom or not. Oh, thank you.
- Reasons this is likely not a bottom.
- If it is a bottom, however, we don't mind at all. We will play whatever we get, but of course, are also looking at history.
- Still looks as if there is some more upside and we have some more plays.
Huge down, huge up, then a head fake. The stock indices started lower, hung over from the record move higher on DJ30 Wednesday. What a hangover. DJ30 dropped 611 points at 2:20ET. Looked like another one-day wonder where all the ammunition was shot up Wednesday.
With the turn of a page -- or the microsecond it takes for an algorithm to kick in, stocks turned upside. DJ30 ran 871 points off the low to the close. NASDAQ 242 points low to close. Massive turns as buyers returned, most likely in the form of pension funds rebalancing to include more stocks as the year ends. The result: impressive upside out of very impressive downside.
SP500
This action suggests that a bear market rally is in place. With pension funds still likely in need to buy before yearend, a good push higher Friday, likely Monday, and possibly the momentum continues into the first week of the year.
Thus, we bought some more positions to play the move, AVGO and VRSN to go along with WDAY, AMZN, SAVE, TEAM -- those stocks with a lot of bounce in them. We also have an eye on TTWO, APC, TECD, YUM as possible new entries to play more upside. Definitely software stocks are making big moves upside even from crappy patterns (e.g. DATA, NOW, CRM), leading upside. FAANG is at best so-so, a shadow of the software moves. We do have a position in AMZN and even took some gain early session, leaving half to play the continuing bear rally.
The point: two days upside on the rebound, not a huge upside Thursday, and thus still some more upside up for grabs and we can still pick up some positions to play that pension fund end of year mandated buying.
Bounce versus Bottom
Yes, this is the conversation of conversations. Hell, CNBC is airing a special tonight discussing if this is a bottom or just a bounce.
I don't know what they are saying, but I am going to tick off some things to consider before people buy into the 'buy the dip, this is the bottom.' Sure, near term the character has changed: they bought the weakness Thursday. That happens in these tradable bear market rallies. It allows us to make some upside money on the bounce -- if you don't get married to the idea stocks have bottomed and MUST continue rising. They certainly can. I am not saying this is absolutely, 100% only a bear market bounce. I am saying it matches historical similar selloffs and bounces and that you have to keep that in mind -- AS YOU PLAY the bounce. If the bounce keeps going, well, these plays we have entered will make us more than bounce money and other stocks will build patterns over the recovery to keep the move going. If not -- we make the bounce money and then play some more downside plays as we did on the last drop.
Aside from the recent character, the action is just not action from a healthy market. A sharp selloff that hit a crescendo Christmas Eve. It was overdone, massively so based upon the internals (1200+ new lows, heavily negative A/D, heavy downside to upside volume) and sentiment (record outflows from stock funds, VIX finally, finally breaking upside). Trade issues, weaker economic data, Fed scare, yield curve inversion, and over the weekend Mnuchin calling bank CEO's, calling in the PPT. What a setup for a rally.
Realize also that the market selling started as the Fed began drying up its balance sheet. As it drained the liquidity the market sold off. Holy cow, that is 2000 all over again. From copious, indeed massive, liquidity to a dry, empty pool, veritable dust bowl of liquidity. The market partied as if the spigot would never run dry. It didn't, the Fed is just turning it off. Hard to keep the party going when the party liquor runs out. Oh sure, you can still dance, eat some snacks, make some small talk, try your best lines on the opposite sex, but it is just not the same. New Year's party without the bubbly.
The point: there is a REASON stocks fell. Withdrawing liquidity that the markets used to rally invokes Newton's third law: for every action there is an equal and opposite reaction. Or as Mathew McConaughey said in the movie 'Interstellar,' you have to leave something behind. Inject liquidity, stocks rise. Remove liquidity, stocks fall. Powell, trade, Mnuchin -- they were all just the parsley garnishing the steak.
I wrote often that the market would have to give back the gains based on QE if there was nothing more than QE. Through 2016 there was nothing more. The tax cuts have added something, some real growth, and it will still take place -- IF the Fed does not kill it all off. Remember what I said: the economy was just in a slowdown in a continued rise -- until the Fed stepped in at the wrong time and is turning a slowdown into an economic top. It always does, just hoped Powell was a bit smarter. He talked as if he was at first, but then he took off the mask and revealed the faces of all predecessor Fed chair's in some kind of John Carpenter horror movie monster. Yes, I was a fool for hoping.
The only thing I was wrong about was the catalyst. It would have happened sooner but for the tax reform. The Fed stopped QE but it was not withdrawn. I postulated the stoppage would be enough, but it took the withdrawal to again invoke Newton's third law. It makes some sense: the real action was moving the balance sheet back down versus just stopping adding the garbage to the balance sheet.
That strongly suggests this is not over. That the Fed has, as usual, screwed it all up. That it is tightening into a slowdown and turned a slowdown into a meltdown. It is not done. While it might pause in rate hikes as Art Cashin and others are saying, it is NOT stopping the balance sheet reduction. The bigger of the two? The balance sheet reduction. Greenspan's rate hikes in late 1999 and into 2000 were, at first, not the main catalyst. It was the draining of liquidity that seized up the financial markets and then the economy. The rate hikes were the bird that landed on the car teetering on the cliff and sent the car over the edge. The damage was done; the bird just happened to pick that place to land.
Now the other side of the argument. Perhaps the damage done by the Fed is not that bad. Perhaps the tax cuts are stronger. Perhaps the tax cuts will make up ALL the difference in the balance sheet withdrawal and rate hikes and offset their damage and more, justifying this bounce marking a bottom, maintaining ALL the QE gains and adding more on top of that. I am sorry, but as much as I like these tax cuts in terms of generating real investment and growth (they have -- just look at the new businesses, new jobs, wealth creation), so much more has to be done to generate that kind of economic growth to justify the fake QE gains. We need a real healthcare system, not the ACA disaster. Hundreds of thousands of regulations need tearing up. The playing field between the huge monopoly companies and small businesses needs to be leveled. Lots more. With a divided Congress and the House out to get the President and not let him have one win (the democrats have approved in the past $25B for border security measures yet won't spring for $5B for the President), there won't be enough done to generate that kind of economic reform. The additional tax cuts, etc.? All out the window.
The market knows this. The market has shown this. Most likely, despite the experts saying the market has it wrong, it likely has it right. There are so many saying this massive volatility is normal because of algo trading and a lot of concern about a lot of issues (trade war, impeachment, Fed bungling, government shutdown), that is, they are saying it is different this time. Again, it rarely is different and the market's action usually tells the tale.
The biggest clue: there are damn few great setups in great stocks. Most stocks are bouncing from getting their patterns torn to pieces. There are exceptions such as TEAM, WDAY and a few others, but not the plethora of good patterns ready to lead. Perhaps they set up if the rally holds and the indices consolidate. They tried that from October into December, however, and the trading range broke down in the most recent selling. It had the perfect opportunity to form up patterns, and indeed there were a few then as well, but they folded.
What do I say to that? So what?! We will play the market that is there, whether the market got it right or it defies its past in a huge 'it's different this time' move. I would love the latter as that means the economy will still improve and those hard-fought gains the past 1.5 years continue versus the Fed torpedoing them after the prior 10 years of hell for the middle class Americans. They will start more businesses, take more risks, create more jobs, create wealth -- and put it into the stock market. How great would that be? Clue: very great.
Thus, though I do not expect that, we play the great setups upside just as we are for this one. If it continues, awesome. If it does not, as we suspect, then we bank the upside bounce gains when the move stalls and load up the downside again as on the last drop, playing that continuing trend lower.
Last week I said 'embrace the downside.' Don't take that the wrong way. I am simply saying people need to accept the downside in bear markets lasts a long time and to view it the same way they view making money when the market trends higher: recognize it and take advantage of it when it sets up. When the downside sets in, it can be as good and indeed is often better than the upside as the downside moves often are strong and fast. Use it! Make the money and be cool with it. The upside will return at some point and you will see the patterns set up in great stocks and ask yourself 'why are all the experts so negative when the patterns are so good, when sentiment is so bad, and the economic data is showing glimmers of getting just a bit better?' At that point you will realize they are likely all wrong and when those great patterns break higher, then you buy in on the ground floor of the recovery.
We will play this rally as it has a reason to move, e.g. pension fund rebalancing, first of year money allocation to the market. That can make us great money upside. When it starts to falter we lock up some upside gain and see if there are a lot of good upside patterns forming that just need a test to finish their work, or if a lot of stocks have moved up to resistance and are rolling over. We play what the market presents.
Have a great evening!
THE MARKET
CHARTS
To view, click on the following links:
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http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
http://investmenthouse1.com/ihmedia/f/charts/nasdaq100.jpg
MARKET STATS
DJ30
Stats: +260.37 points (+1.14%) to close at 23138.82
Nasdaq
Stats: +25.14 points (+0.38%) to close at 6579.49
Volume: 2.44B (-5.06%)
Up Volume: 1.49B (-780M)
Down Volume: 902.84M (+612.84M)
A/D and Hi/Lo: Advancers led 1.03 to 1
Previous Session: Advancers led 3.81 to 1
New Highs: 1 (-6)
New Lows: 301 (-411)
S&P
Stats: +21.13 points (+0.86%) to close at 2488.83
NYSE Volume: 1.075B (+1.22%)
Up Volume: 2.48B (+1.456B)
Down Volume: 376.845M (+340.458M)
A/D and Hi/Lo: Advancers led 1.18 to 1
Previous Session: Advancers led 6.91 to 1
New Highs: 6 (+2)
New Lows: 219 (-589)
SENTIMENT
VIX: 29.96; -0.45. After the breakout, VIX is in a normal breakout test, likely with a couple of days testing to the 10 day EMA. Then it could be ready to break higher again, meaning stocks would be selling.
VXN: 34.37; +0.67
VXO: 33.99; +1.16
Put/Call Ratio (CBOE): 0.96; -0.10
Bulls and Bears:
Falling and rebounding to where they were four weeks back. Starting to converge. This coming week's numbers should show a bull dive and bear jump, converging the two to levels not seen since 2016.
Bulls: 39.3 versus 45.5
Bears: 21.4 versus 20.4
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: 39.3 versus 45.4
45.4 versus 46.7 versus 38.3 versus 39.6 versus 42.9 versus 42.5 versus 50.5 versus 51.9 versus 56.3 versus 61.8 versus 60.6 versus 59.0 versus 57.7 versus 60.1 versus 59.6 versus 57.7 versus 57.3 versus 54.9 versus 54.5 versus 54.9 versus 55.3 versus 52.4 versus 47.1 versus 47.6 versus 52.0 versus 55.5 versus 52.9 versus 50.0 versus 49.1 versus 46.6 versus 43.1 versus 43.6 versus 48.0 versus 43.6 versus 42.2 versus 49.5 versus 55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4 versus 66.00
Bears: 21.4 versus 20.4
20.4 versus 21.50 versus 20.6 versus 19.8 versus 19.0 versus 19.8 versus 19.8 versus 19.0 versus 18.3 versus 18.5 versus 18.6 versus 18.3 versus 18.1 versus 18.3 versus 18.1 versus 18.3 versus 18.3 versus 18.6 versus 18.8 versus 18.6 versus 18.5 versus 18.5 versus 18.6 versus 18.4 versus 17.6 versus 17.8 versus 17.7 versus 19.2 versus 19.2 versus 19.4 versus 19.4 versus 20.6 versus 20.8 versus 19.6 versus 19.8 versus 18.6 versus 17.5 versus 16.8 versus 15.7 versus 15.5 versus 14.4 versus 14.6 versus 14.4 versus 15.5 versus 12.6 versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1 versus 15.2 versus 15.1 versus 15.1 versus 15.4 versus 15.4 versus 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
OTHER MARKETS
Bonds: 2.774% versus 2.811%
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.811% versus 2.736% versus 2.788% versus 2.803%. versus 2.762% versus 2.821% versus 2.855% versus 2.895% versus 2.913% versus 2.908% versus 2.884% versus 2.863% versus 2.854% versus 2.892% versus 2.915% versus 2.979% versus 2.993% versus 3.032% versus 3.061% versus 3.058% versus 3.059% versus 3.048% versus 3.065% versus 3.074% versus 3.056% versus 3.065% versus 3.116% versus 3.127% versus 3.147% versus 3.186% versus 3.239% versus 3.228% versus 3.222% versus 3.201% versus 3.22% versus 3.146%
EUR/USD: 1.1432 versus 1.13588. Euro breaking higher over the 50 day MA, giving a breakout another try.
Historical: 1.13588 versus 1.14015 versus 1.13708 versus 1.13828 versus 1.13755 versus 1.13533 versus 1.13049 versus 1.13604 versus 1.1376 versus 1.13244 versus 1.13657 versus 1.1404 versus 1.1376 versus 1.13970 versus 1.13360 versus 1.13199 versus 1.13934 versus 1.13682 versus 1.12973 versus 1.13325 versus 1.13380 versus 1.13829 versus 1.13818 versus 1.14484 versus 1.14172 versus 1.13308 versus 1.13264 versus 1.13124 versus 1.12348 versus 1.13475 versus 1.1364 versus 1.14329 versus 1.14228 versus 1.14090 versus 1.13881 versus 1.14019 versus 1.13394 versus 1.13455 versus 1.13760 versus 1.14042 versus 1.13757 versus 1.3972 versus 1.14682 versus 1.14626 versus 1.1538
USD/JPY: 110.845 versus 111.190.
Historical: Last below 109 in June 2018: 111.190 versus 110.337 versus 111.223 versus 111.21 versus 112.521 versus 112.477 versus 112.653 versus 113.382 versus 113.634 versus 113.634 versus 113.385 versus 113.022 versus 112.66 versus 112.71 versus 112.813 versus 113.581 versus 113.474 versus 113.402 versus 113.559 versus 113.781 versus 113.510 versus 112.972 versus 113.007 versus 113.077 versus 112.617 versus 112.831 versus 113.585 versus 113.576.
Oil: 44.61, -1.61.
Gold: 1281.10, +8.10. Still moving to a higher high on this breakout.
End part 1
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Market Alert - PreMarket
Futures vs FV: SP-38.55; DJ -338.45; NASDAQ -90.77
Stock futures faded late in the WED post-regular session close and started even lower early THURS. After an opening gap lower and fade, futures have traded in a range the past four hours. This decline represents the last spurt higher WED when the market put it in gear and pushed DJ30 up almost 1100 points. Now the market has to try and digest that oversized move, a move that is not representative of a strong, normal market. As it does that, the sellers have a shot at the big fat gains and they are taking that shot at the open.
Initial jobless claims: 216K versus 217K prior (from 214K).
Initial claims is about the only story out there.
Trade: Trump considering an executive order prohibiting purchases of ZTE and Huawei equipment.
Foxcon reportedly to make iPhones in India in 2019.
China: Industrial profits -7.2% in November.
That is about it in terms of news. Very quiet.
OTHER MARKETS
BONDS: 2.758% vs 2.811%. Bonds back to a safe haven buy, continuing the rally. Not a great endorsement of the WED surge.
EUR/USD: 1.1345 vs 1.1352
USD/JPY: 110.75 vs 111.36. Dollar continues its more recent weakness
Oil: 45.80, -0.42
Gold: 1276.70, +3.70
Futures trading in that range after dropping early. So, the extreme froth from WED will be removed at the open. Will bids then return and continue the rally for another session or will the sellers dictate a one-day wonder where records were set contra the market bias and then the overall bias takes over once again.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
http://www.investmenthouse.com/alertkey.htm
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Stock futures faded late in the WED post-regular session close and started even lower early THURS. After an opening gap lower and fade, futures have traded in a range the past four hours. This decline represents the last spurt higher WED when the market put it in gear and pushed DJ30 up almost 1100 points. Now the market has to try and digest that oversized move, a move that is not representative of a strong, normal market. As it does that, the sellers have a shot at the big fat gains and they are taking that shot at the open.
Initial jobless claims: 216K versus 217K prior (from 214K).
Initial claims is about the only story out there.
Trade: Trump considering an executive order prohibiting purchases of ZTE and Huawei equipment.
Foxcon reportedly to make iPhones in India in 2019.
China: Industrial profits -7.2% in November.
That is about it in terms of news. Very quiet.
OTHER MARKETS
BONDS: 2.758% vs 2.811%. Bonds back to a safe haven buy, continuing the rally. Not a great endorsement of the WED surge.
EUR/USD: 1.1345 vs 1.1352
USD/JPY: 110.75 vs 111.36. Dollar continues its more recent weakness
Oil: 45.80, -0.42
Gold: 1276.70, +3.70
Futures trading in that range after dropping early. So, the extreme froth from WED will be removed at the open. Will bids then return and continue the rally for another session or will the sellers dictate a one-day wonder where records were set contra the market bias and then the overall bias takes over once again.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
http://www.investmenthouse.com/alertkey.htm
PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
Customer Support: http://investmenthouse.com/contact_us.php
Wednesday, December 26, 2018
The Daily, Part 1 of 3, 12-26-18
* * * *
12/26/2018 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: FFIV; SLAB
Entry alerts: AMZN; SAVE; WDAY
Trailing stops: CRM; ULTA; Z
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:
https://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:
https://investmenthouse1.com/ihmedia/f/mo/mo.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
- Trump says buying opportunity, Dow surges an all-time point gain.
- Internals and sentiment align, a need to rebalance pension portfolios triggers the surge.
- Most stocks have tattered patterns but there are some in software, chips that are solid.
- Bulls chortle at the 'return' of the upside, but unless it proves otherwise it is a bounce in a bear market.
Worst Christmas Eve session ever followed by the biggest Dow point gain ever and the largest percentage gain since March 2009 when QE started. It was the worst of times and the best of times? A belated Christmas present? Is Santa Claus providing the rally to yearend?
After the VIX finally joined the other internal and sentiment indicators in a more extreme position (though not nearly so much as the internals), the market was at least in position to start the first bear market bounce. It did.
SP500 116.60, 4.96%
NASDAQ 361.44, 5.84%
DJ30 +1086.25, +4.98%
SP400 4.62%
RUTX 4.96%
SOX 5.77%
NASDAQ 100 6.16%
VOLUME: NYSE +62%, NASDAQ +56%. NYSE trade above average though not exploding higher. NASDAQ trade was similar, moving just above average as well. Not blowout, not really commensurate with the percentage gains.
ADVANCE/DECLINE: NYSE +6.9:1, NASDAQ +3.8:1
NEW LOWS: NYSE 888, NASDAQ 712. Well off the levels Monday (1256 and 1107, respectively) but still quite high.
Trigger? Triggers? To us, it was simply a matter of all the factors getting into place, and that happened Monday.
But what set it off? Many will take credit. The President stated after Monday that this was a great time to buy. Without a doubt he was cheerleading most will say. But was he? Despite his somewhat boorish blustering, he has been right many times on his calls, markets or otherwise.
Then there is the retail results. Amazon said it just logged its best holiday season ever. MC said the season saw a 5.1% increase. Good news in retail trying to offset the abysmal, for the most part, retail charts.
Then you get into the weeds, but very likely the drivers behind the recent sharp last leg of the selloff and the Wednesday rebound.
First, many funds were engaged in late tax loss selling. At least, that is what they are telling you. The week ended 12/19, mutual funds saw $56.2B in outflows. That was the biggest weekly outflow since 10/15/2008 at the height of the financial crisis. Now, consider November's outflow that shocked everyone at $57.4B -- for the month! The $56.2B was one week!!
Okay, so money was leaving funds, and that means the funds have to sell in order to meet the redemptions. Funds sold the most stock they have sold in the last decade to raise money for clients wanting their cash. Tax loss selling? I think they were putting the best picture over an ugly one.
Second, what brought them back? Did investors suddenly have a change of heart when the President said it was a good time to buy? Yea, right. No, pensions moved in to rebalance their portfolios, waiting through the selling to get the best buy prices. Bonds outperformed stocks +1.6% in the quarter versus stocks at -14%. Wells Fargo calculates pensions have to buy $64B in stock to get to the balance required in their funds.
They apparently waited as long as they could as prices fell, and then started to buy Wednesday. That certainly gave a LOT of lift to the upside. They bought hard across the market (note the rather even gains across all market caps), and that forced shorts to cover as the market felt a snowball effect, except it was rolling uphill.
In short, just about EVERY possible upside catalyst came into play, and they combined into a super storm of upside buying.
Now, what does it mean? Of course the bulls were so excited that a bottom is in 'or near.' Heard that from many bulls. They may be right. Likely they are not. Everyone is convinced there is no recession coming, at least that is what I hear about one dozen times a day. That would mean the market is wrong and a few people are right. Rarely happens. It can happen, but it is rare.
Most likely this is exactly what it usually is. A bear market appears to have started, the selling was so intense the internals and sentiment went to extremes, a trigger came along, stocks surged in a bear market rally.
Beyond that, there is not a lot of upside indicia. Selling was ugly. There is no leadership. All areas starting to get torn down, even the utilities and consumer personal products. Still a lot of bad patterns -- of course after such a downside gutting. Sure, there are some good ones, e.g. TEAM, WDAY, but most are just straight dives lower, ripped up by the selling. It is a rare market where stocks undergoing such selling suddenly turn and rally to new highs.
Thus, while we bought AMZN, WDAY, and SAVE to play a bounce higher and liked seeing plays on TEAM surge upside, we are not trying to convince ourselves this is a bottom and new highs are the inevitable outcome. We will play the upside rally as we said, make what we can, then when it fizzles we play the downside once again for likely another strong move, though it would be hard and unlikely to have a drop as massive as the most recent one.
Thursday that means letting the bounce continue and maybe, maybe, picking up a few other upside plays. Nimble is paramount on the upside in the current market.
THE MARKET
CHARTS
All pretty much the same: big moves higher off two weeks of sharp selling.
SP500, DJ30, NASDAQ all similar: surged off the two weeks of sharp selling after breaking down from the bottom of its range. Big bounce, volume just above average. A sharp bounce from equally sharp selling. Looks bear market like.
SOX: Rebounded to the bottom of the range formed from October to last week. SOX sold hard but not that hard and is now rebounding.
SP400, RUTX: Same pattern as the large cap NYSE, i.e. rebounding from three weeks of hard selling.
LEADERSHIP
Chips: almost back to the range already as many big names held on fairly well the prior week, e.g. AMAT, AMD, CY. Others such as AVGO and MLNX look quite good in their patterns.
Software: Some strong names remained strong, e.g. TEAM. WDAY held its pattern and posted a strong break higher off the 50 day SMA. VRSN looks interesting in a 200 day SMA hold and bounce. Others are coming back but need work: CRM, VMW, ADBE.
The rest of the groups are questionable at best, rebounding from dives lower. Even some in the above groups are not great or even close.
MARKET STATS
DJ30
Stats: +1086.25 points (+4.98%) to close at 22878.45
Nasdaq
Stats: +361.44 points (+5.84%) to close at 6554.36
Volume: 2.57B (+55.76%)
Up Volume: 2.27B (+1.962B)
Down Volume: 290M (-1.03B)
A/D and Hi/Lo: Advancers led 3.81 to 1
Previous Session: Decliners led 2.7 to 1
New Highs: 7 (-1)
New Lows: 712 (-395)
S&P
Stats: +116.60 points (+4.96%) to close at 2467.70
NYSE Volume: 1.062B (+62.09%)
Up Volume: 1.024B (+950.635M)
Down Volume: 36.387M (-535.71M)
A/D and Hi/Lo: Advancers led 6.91 to 1
Previous Session: Decliners led 3.74 to 1
New Highs: 4 (+2)
New Lows: 808 (-448)
SENTIMENT
VIX: 30.41; -5.66
VXN: 33.70; -4.98
VXO: 32.83; -4.51
Put/Call Ratio (CBOE): 1.06; -0.26
Bulls and Bears:
Falling and rebounding to where they were four weeks back. Starting to converge. This coming week's numbers should show a bull dive and bear jump, converging the two to levels not seen since 2016.
Bulls: 39.3 versus 45.5
Bears: 21.4 versus 20.4
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: 39.3 versus 45.4
45.4 versus 46.7 versus 38.3 versus 39.6 versus 42.9 versus 42.5 versus 50.5 versus 51.9 versus 56.3 versus 61.8 versus 60.6 versus 59.0 versus 57.7 versus 60.1 versus 59.6 versus 57.7 versus 57.3 versus 54.9 versus 54.5 versus 54.9 versus 55.3 versus 52.4 versus 47.1 versus 47.6 versus 52.0 versus 55.5 versus 52.9 versus 50.0 versus 49.1 versus 46.6 versus 43.1 versus 43.6 versus 48.0 versus 43.6 versus 42.2 versus 49.5 versus 55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4 versus 66.00
Bears: 21.4 versus 20.4
20.4 versus 21.50 versus 20.6 versus 19.8 versus 19.0 versus 19.8 versus 19.8 versus 19.0 versus 18.3 versus 18.5 versus 18.6 versus 18.3 versus 18.1 versus 18.3 versus 18.1 versus 18.3 versus 18.3 versus 18.6 versus 18.8 versus 18.6 versus 18.5 versus 18.5 versus 18.6 versus 18.4 versus 17.6 versus 17.8 versus 17.7 versus 19.2 versus 19.2 versus 19.4 versus 19.4 versus 20.6 versus 20.8 versus 19.6 versus 19.8 versus 18.6 versus 17.5 versus 16.8 versus 15.7 versus 15.5 versus 14.4 versus 14.6 versus 14.4 versus 15.5 versus 12.6 versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1 versus 15.2 versus 15.1 versus 15.1 versus 15.4 versus 15.4 versus 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
OTHER MARKETS
Bonds: 2.811% versus 2.736%. Bonds dropped back to the 10 day EMA after trying to breakout last Wednesday but stumbling.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.736% versus 2.788% versus 2.803%. versus 2.762% versus 2.821% versus 2.855% versus 2.895% versus 2.913% versus 2.908% versus 2.884% versus 2.863% versus 2.854% versus 2.892% versus 2.915% versus 2.979% versus 2.993% versus 3.032% versus 3.061% versus 3.058% versus 3.059% versus 3.048% versus 3.065% versus 3.074% versus 3.056% versus 3.065% versus 3.116% versus 3.127% versus 3.147% versus 3.186% versus 3.239% versus 3.228% versus 3.222% versus 3.201% versus 3.22% versus 3.146%
EUR/USD: 1.13588 versus 1.14015
Historical: 1.14015 versus 1.13708 versus 1.13828 versus 1.13755 versus 1.13533 versus 1.13049 versus 1.13604 versus 1.1376 versus 1.13244 versus 1.13657 versus 1.1404 versus 1.1376 versus 1.13970 versus 1.13360 versus 1.13199 versus 1.13934 versus 1.13682 versus 1.12973 versus 1.13325 versus 1.13380 versus 1.13829 versus 1.13818 versus 1.14484 versus 1.14172 versus 1.13308 versus 1.13264 versus 1.13124 versus 1.12348 versus 1.13475 versus 1.1364 versus 1.14329 versus 1.14228 versus 1.14090 versus 1.13881 versus 1.14019 versus 1.13394 versus 1.13455 versus 1.13760 versus 1.14042 versus 1.13757 versus 1.3972 versus 1.14682 versus 1.14626 versus 1.1538
USD/JPY: 111.190 versus 110.337. Dollar surging back upside after a really brutal 8 sessions lower.
Historical: Last below 109 in June 2018: 110.337 versus 111.223 versus 111.21 versus 112.521 versus 112.477 versus 112.653 versus 113.382 versus 113.634 versus 113.634 versus 113.385 versus 113.022 versus 112.66 versus 112.71 versus 112.813 versus 113.581 versus 113.474 versus 113.402 versus 113.559 versus 113.781 versus 113.510 versus 112.972 versus 113.007 versus 113.077 versus 112.617 versus 112.831 versus 113.585 versus 113.576.
Oil: 46.60, +4.07. Biggest upside day for oil all year -- after 3 months of trending lower following the last September peak.
Gold: 1271.80, +13.70. Bouncing off the test of the 200 day SMA breakout.
End part 1
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12/26/2018 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: FFIV; SLAB
Entry alerts: AMZN; SAVE; WDAY
Trailing stops: CRM; ULTA; Z
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:
https://www.investmenthouse.com/alertdaily.html
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The Market Video is DIVIDED into component parts: Market Overview, Economy, Technical Summary, and the Next Session. Choose the segments you are interested in without having to search a longer video. Click on the link to the portion you wish to view.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
https://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
- Trump says buying opportunity, Dow surges an all-time point gain.
- Internals and sentiment align, a need to rebalance pension portfolios triggers the surge.
- Most stocks have tattered patterns but there are some in software, chips that are solid.
- Bulls chortle at the 'return' of the upside, but unless it proves otherwise it is a bounce in a bear market.
Worst Christmas Eve session ever followed by the biggest Dow point gain ever and the largest percentage gain since March 2009 when QE started. It was the worst of times and the best of times? A belated Christmas present? Is Santa Claus providing the rally to yearend?
After the VIX finally joined the other internal and sentiment indicators in a more extreme position (though not nearly so much as the internals), the market was at least in position to start the first bear market bounce. It did.
SP500 116.60, 4.96%
NASDAQ 361.44, 5.84%
DJ30 +1086.25, +4.98%
SP400 4.62%
RUTX 4.96%
SOX 5.77%
NASDAQ 100 6.16%
VOLUME: NYSE +62%, NASDAQ +56%. NYSE trade above average though not exploding higher. NASDAQ trade was similar, moving just above average as well. Not blowout, not really commensurate with the percentage gains.
ADVANCE/DECLINE: NYSE +6.9:1, NASDAQ +3.8:1
NEW LOWS: NYSE 888, NASDAQ 712. Well off the levels Monday (1256 and 1107, respectively) but still quite high.
Trigger? Triggers? To us, it was simply a matter of all the factors getting into place, and that happened Monday.
But what set it off? Many will take credit. The President stated after Monday that this was a great time to buy. Without a doubt he was cheerleading most will say. But was he? Despite his somewhat boorish blustering, he has been right many times on his calls, markets or otherwise.
Then there is the retail results. Amazon said it just logged its best holiday season ever. MC said the season saw a 5.1% increase. Good news in retail trying to offset the abysmal, for the most part, retail charts.
Then you get into the weeds, but very likely the drivers behind the recent sharp last leg of the selloff and the Wednesday rebound.
First, many funds were engaged in late tax loss selling. At least, that is what they are telling you. The week ended 12/19, mutual funds saw $56.2B in outflows. That was the biggest weekly outflow since 10/15/2008 at the height of the financial crisis. Now, consider November's outflow that shocked everyone at $57.4B -- for the month! The $56.2B was one week!!
Okay, so money was leaving funds, and that means the funds have to sell in order to meet the redemptions. Funds sold the most stock they have sold in the last decade to raise money for clients wanting their cash. Tax loss selling? I think they were putting the best picture over an ugly one.
Second, what brought them back? Did investors suddenly have a change of heart when the President said it was a good time to buy? Yea, right. No, pensions moved in to rebalance their portfolios, waiting through the selling to get the best buy prices. Bonds outperformed stocks +1.6% in the quarter versus stocks at -14%. Wells Fargo calculates pensions have to buy $64B in stock to get to the balance required in their funds.
They apparently waited as long as they could as prices fell, and then started to buy Wednesday. That certainly gave a LOT of lift to the upside. They bought hard across the market (note the rather even gains across all market caps), and that forced shorts to cover as the market felt a snowball effect, except it was rolling uphill.
In short, just about EVERY possible upside catalyst came into play, and they combined into a super storm of upside buying.
Now, what does it mean? Of course the bulls were so excited that a bottom is in 'or near.' Heard that from many bulls. They may be right. Likely they are not. Everyone is convinced there is no recession coming, at least that is what I hear about one dozen times a day. That would mean the market is wrong and a few people are right. Rarely happens. It can happen, but it is rare.
Most likely this is exactly what it usually is. A bear market appears to have started, the selling was so intense the internals and sentiment went to extremes, a trigger came along, stocks surged in a bear market rally.
Beyond that, there is not a lot of upside indicia. Selling was ugly. There is no leadership. All areas starting to get torn down, even the utilities and consumer personal products. Still a lot of bad patterns -- of course after such a downside gutting. Sure, there are some good ones, e.g. TEAM, WDAY, but most are just straight dives lower, ripped up by the selling. It is a rare market where stocks undergoing such selling suddenly turn and rally to new highs.
Thus, while we bought AMZN, WDAY, and SAVE to play a bounce higher and liked seeing plays on TEAM surge upside, we are not trying to convince ourselves this is a bottom and new highs are the inevitable outcome. We will play the upside rally as we said, make what we can, then when it fizzles we play the downside once again for likely another strong move, though it would be hard and unlikely to have a drop as massive as the most recent one.
Thursday that means letting the bounce continue and maybe, maybe, picking up a few other upside plays. Nimble is paramount on the upside in the current market.
THE MARKET
CHARTS
All pretty much the same: big moves higher off two weeks of sharp selling.
SP500, DJ30, NASDAQ all similar: surged off the two weeks of sharp selling after breaking down from the bottom of its range. Big bounce, volume just above average. A sharp bounce from equally sharp selling. Looks bear market like.
SOX: Rebounded to the bottom of the range formed from October to last week. SOX sold hard but not that hard and is now rebounding.
SP400, RUTX: Same pattern as the large cap NYSE, i.e. rebounding from three weeks of hard selling.
LEADERSHIP
Chips: almost back to the range already as many big names held on fairly well the prior week, e.g. AMAT, AMD, CY. Others such as AVGO and MLNX look quite good in their patterns.
Software: Some strong names remained strong, e.g. TEAM. WDAY held its pattern and posted a strong break higher off the 50 day SMA. VRSN looks interesting in a 200 day SMA hold and bounce. Others are coming back but need work: CRM, VMW, ADBE.
The rest of the groups are questionable at best, rebounding from dives lower. Even some in the above groups are not great or even close.
MARKET STATS
DJ30
Stats: +1086.25 points (+4.98%) to close at 22878.45
Nasdaq
Stats: +361.44 points (+5.84%) to close at 6554.36
Volume: 2.57B (+55.76%)
Up Volume: 2.27B (+1.962B)
Down Volume: 290M (-1.03B)
A/D and Hi/Lo: Advancers led 3.81 to 1
Previous Session: Decliners led 2.7 to 1
New Highs: 7 (-1)
New Lows: 712 (-395)
S&P
Stats: +116.60 points (+4.96%) to close at 2467.70
NYSE Volume: 1.062B (+62.09%)
Up Volume: 1.024B (+950.635M)
Down Volume: 36.387M (-535.71M)
A/D and Hi/Lo: Advancers led 6.91 to 1
Previous Session: Decliners led 3.74 to 1
New Highs: 4 (+2)
New Lows: 808 (-448)
SENTIMENT
VIX: 30.41; -5.66
VXN: 33.70; -4.98
VXO: 32.83; -4.51
Put/Call Ratio (CBOE): 1.06; -0.26
Bulls and Bears:
Falling and rebounding to where they were four weeks back. Starting to converge. This coming week's numbers should show a bull dive and bear jump, converging the two to levels not seen since 2016.
Bulls: 39.3 versus 45.5
Bears: 21.4 versus 20.4
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: 39.3 versus 45.4
45.4 versus 46.7 versus 38.3 versus 39.6 versus 42.9 versus 42.5 versus 50.5 versus 51.9 versus 56.3 versus 61.8 versus 60.6 versus 59.0 versus 57.7 versus 60.1 versus 59.6 versus 57.7 versus 57.3 versus 54.9 versus 54.5 versus 54.9 versus 55.3 versus 52.4 versus 47.1 versus 47.6 versus 52.0 versus 55.5 versus 52.9 versus 50.0 versus 49.1 versus 46.6 versus 43.1 versus 43.6 versus 48.0 versus 43.6 versus 42.2 versus 49.5 versus 55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4 versus 66.00
Bears: 21.4 versus 20.4
20.4 versus 21.50 versus 20.6 versus 19.8 versus 19.0 versus 19.8 versus 19.8 versus 19.0 versus 18.3 versus 18.5 versus 18.6 versus 18.3 versus 18.1 versus 18.3 versus 18.1 versus 18.3 versus 18.3 versus 18.6 versus 18.8 versus 18.6 versus 18.5 versus 18.5 versus 18.6 versus 18.4 versus 17.6 versus 17.8 versus 17.7 versus 19.2 versus 19.2 versus 19.4 versus 19.4 versus 20.6 versus 20.8 versus 19.6 versus 19.8 versus 18.6 versus 17.5 versus 16.8 versus 15.7 versus 15.5 versus 14.4 versus 14.6 versus 14.4 versus 15.5 versus 12.6 versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1 versus 15.2 versus 15.1 versus 15.1 versus 15.4 versus 15.4 versus 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
OTHER MARKETS
Bonds: 2.811% versus 2.736%. Bonds dropped back to the 10 day EMA after trying to breakout last Wednesday but stumbling.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.736% versus 2.788% versus 2.803%. versus 2.762% versus 2.821% versus 2.855% versus 2.895% versus 2.913% versus 2.908% versus 2.884% versus 2.863% versus 2.854% versus 2.892% versus 2.915% versus 2.979% versus 2.993% versus 3.032% versus 3.061% versus 3.058% versus 3.059% versus 3.048% versus 3.065% versus 3.074% versus 3.056% versus 3.065% versus 3.116% versus 3.127% versus 3.147% versus 3.186% versus 3.239% versus 3.228% versus 3.222% versus 3.201% versus 3.22% versus 3.146%
EUR/USD: 1.13588 versus 1.14015
Historical: 1.14015 versus 1.13708 versus 1.13828 versus 1.13755 versus 1.13533 versus 1.13049 versus 1.13604 versus 1.1376 versus 1.13244 versus 1.13657 versus 1.1404 versus 1.1376 versus 1.13970 versus 1.13360 versus 1.13199 versus 1.13934 versus 1.13682 versus 1.12973 versus 1.13325 versus 1.13380 versus 1.13829 versus 1.13818 versus 1.14484 versus 1.14172 versus 1.13308 versus 1.13264 versus 1.13124 versus 1.12348 versus 1.13475 versus 1.1364 versus 1.14329 versus 1.14228 versus 1.14090 versus 1.13881 versus 1.14019 versus 1.13394 versus 1.13455 versus 1.13760 versus 1.14042 versus 1.13757 versus 1.3972 versus 1.14682 versus 1.14626 versus 1.1538
USD/JPY: 111.190 versus 110.337. Dollar surging back upside after a really brutal 8 sessions lower.
Historical: Last below 109 in June 2018: 110.337 versus 111.223 versus 111.21 versus 112.521 versus 112.477 versus 112.653 versus 113.382 versus 113.634 versus 113.634 versus 113.385 versus 113.022 versus 112.66 versus 112.71 versus 112.813 versus 113.581 versus 113.474 versus 113.402 versus 113.559 versus 113.781 versus 113.510 versus 112.972 versus 113.007 versus 113.077 versus 112.617 versus 112.831 versus 113.585 versus 113.576.
Oil: 46.60, +4.07. Biggest upside day for oil all year -- after 3 months of trending lower following the last September peak.
Gold: 1271.80, +13.70. Bouncing off the test of the 200 day SMA breakout.
End part 1
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Market Alert - To the Close
Stocks are sprinting higher across the board as all indices are up 4% to 6%. Frenetic buying as Pension funds are rebalancing their portfolios at the last possible moment. The kind of oversold, rip off your face bear market rally that is even beyond expectations. DJ30 came close to +1,000 before backing off some.
We closed what was left of the downside plays that are holding the bounce -- practically all stocks. Picked up some AMZN early and also some WDAY, SAVE. Software is strong as TEAM positions bounce nicely off a nice pattern, WDAY obviously bouncing as well. With these kinds of bear market moves you close the downside and then let the sweet patterns set back up after the rally, then you are on it again.
Oil is up 9.57% as Russia gives the oil market assurances. Seems as if everyone is happy in all markets.
VIX is back down near 30; did its job near term.
How long a bounce? These bear market moves are hard to gauge, particularly when DJ30 is up now over 1,000 points. We play it upside, then get ready for the next downside leg if it shows. Don't think this is the end of the selling, just a rip higher. We will see, however, as the charts will show if leaders emerge with good patterns or if it is just a massively oversold bounce.
SP500 111.06, 4.73%
NASDAQ 349.14, 5.63%
DJ30 1027.07, 4.73%
SP400 4.54%
RUTX 4.42%
SOX 5.38%
NASDAQ 100 6.02%
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
http://www.investmenthouse.com/alertkey.htm
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We closed what was left of the downside plays that are holding the bounce -- practically all stocks. Picked up some AMZN early and also some WDAY, SAVE. Software is strong as TEAM positions bounce nicely off a nice pattern, WDAY obviously bouncing as well. With these kinds of bear market moves you close the downside and then let the sweet patterns set back up after the rally, then you are on it again.
Oil is up 9.57% as Russia gives the oil market assurances. Seems as if everyone is happy in all markets.
VIX is back down near 30; did its job near term.
How long a bounce? These bear market moves are hard to gauge, particularly when DJ30 is up now over 1,000 points. We play it upside, then get ready for the next downside leg if it shows. Don't think this is the end of the selling, just a rip higher. We will see, however, as the charts will show if leaders emerge with good patterns or if it is just a massively oversold bounce.
SP500 111.06, 4.73%
NASDAQ 349.14, 5.63%
DJ30 1027.07, 4.73%
SP400 4.54%
RUTX 4.42%
SOX 5.38%
NASDAQ 100 6.02%
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
http://www.investmenthouse.com/alertkey.htm
PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
Customer Support: http://investmenthouse.com/contact_us.php
Market Alert - PreMarket
Futures vs FV: SP +13.40; DJ +134.80; NASDAQ +60.15
Stocks in modest rebound mode to stat the post-Christmas trade. The President expressed confidence in Powell, Mnuchin -- though said the Fed was raising rates too high -- and said it was a good time to buy. He also said that higher rates were not that bad as those with money in the bank could finally earn some interest. Good for seniors.
Stocks have held modest gains in the morning but are really starting to accelerate upside as the open approaches. Once those algos turn, as we have seen, the moves can be dramatic.
Indeed, the WSJ writes complaining of the algos controlling trade, seeing them as the culprit for the hard selloff. Where was the complaining when they were buying hand over fist? Recall I wrote frequently about the problems the market would face when the algos flipped to the sell side.
Holiday Sales: MC reports a +5.1% increase in sales, the best in many years. AMZN claims its best retail season ever.
Govt Shutdown: Trump says it will continue until we have a wall. Keep it closed. They can do less damage when the government is shut down.
Upgrades: ATVI, AMZN, GOOG are said to be good rebound plays. ROKU upgraded by Needham.
OTHER MARKETS
Bonds: 2.754% vs 2.736% 10 year
EUR/USD: 1.1389 vs 1.14015. Rebounding some from the Monday selloff.
USD/JPY: 110.52 vs 110.37. Rebound less dramatic here.
Oil: 43.10, +0.57
Gold: 1277.80, +6.00
Futures continue strengthening into the open as the BTD advocated by the President is being followed . . . into the open. This market has an issue holding its gains, BUT as chronicled the past several sessions, the internals and sentiment hit extreme levels, and on Friday/Monday VIX finally started breaking out, closing just below the February closing high on Monday. Things are in place for a bounce so we will see if it holds and would like to pick up some AMZN on that play as that can move well in rebounds and the doji Monday after that sharp drop looks promising.
As for downside, most closed at the low and we are interested in lettng them work if they can -- will see how the initial gap higher holds. ULTA showed a doji Monday, and it is one we said we would take at least some more gain if it held a move off that doji.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
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Stocks in modest rebound mode to stat the post-Christmas trade. The President expressed confidence in Powell, Mnuchin -- though said the Fed was raising rates too high -- and said it was a good time to buy. He also said that higher rates were not that bad as those with money in the bank could finally earn some interest. Good for seniors.
Stocks have held modest gains in the morning but are really starting to accelerate upside as the open approaches. Once those algos turn, as we have seen, the moves can be dramatic.
Indeed, the WSJ writes complaining of the algos controlling trade, seeing them as the culprit for the hard selloff. Where was the complaining when they were buying hand over fist? Recall I wrote frequently about the problems the market would face when the algos flipped to the sell side.
Holiday Sales: MC reports a +5.1% increase in sales, the best in many years. AMZN claims its best retail season ever.
Govt Shutdown: Trump says it will continue until we have a wall. Keep it closed. They can do less damage when the government is shut down.
Upgrades: ATVI, AMZN, GOOG are said to be good rebound plays. ROKU upgraded by Needham.
OTHER MARKETS
Bonds: 2.754% vs 2.736% 10 year
EUR/USD: 1.1389 vs 1.14015. Rebounding some from the Monday selloff.
USD/JPY: 110.52 vs 110.37. Rebound less dramatic here.
Oil: 43.10, +0.57
Gold: 1277.80, +6.00
Futures continue strengthening into the open as the BTD advocated by the President is being followed . . . into the open. This market has an issue holding its gains, BUT as chronicled the past several sessions, the internals and sentiment hit extreme levels, and on Friday/Monday VIX finally started breaking out, closing just below the February closing high on Monday. Things are in place for a bounce so we will see if it holds and would like to pick up some AMZN on that play as that can move well in rebounds and the doji Monday after that sharp drop looks promising.
As for downside, most closed at the low and we are interested in lettng them work if they can -- will see how the initial gap higher holds. ULTA showed a doji Monday, and it is one we said we would take at least some more gain if it held a move off that doji.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
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Monday, December 24, 2018
The Daily, Part 1 of 2, 12-24-18
* * * *
12/24/2018 Investment House Daily
* * * *
Investment House Daily Subscribers:
Merry Christmas to all!
Monday: Half session, closing at 1:00ET
Tuesday: Markets closed for Christmas
Wednesday to Friday: Markets open as usual.
No report Tuesday.
MARKET ALERTS:
Targets hit: CRM
Entry alerts: LLY
Trailing stops: None issued
Stop alerts: AEP; PG
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:
https://www.investmenthouse.com/alertdaily.html
********************************************************************
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
- Mnuchin tries to calm markets, fails.
- Talk with bank CEO's overshadows positive news from China.
- SP500 dives into bear market territory as market suffers worst Christmas Eve trade ever.
- VIX finally breaking out.
Worst Christmas Eve session in history. Sometimes you have to laugh in the misery. It helps to play the downside, and we took some gain on CRM as we let the other downside plays run, but you still have to have good humor. It reminds me of a 'Bob Newhart Show' episode where the guys all got together to watch William & Mary play some other team in football. It was tradition after the other team scored to take a hit of some kind of whiskey. The next day Bob nursed a massive hangover. Emily came home and asked him what on earth had happened. 'Worst defeat in William & Mary's history' was Bob's anguished reply.
At -653.17 on the Dow, you would hope that was the worst loss in Christmas Eve history. SP500 dipped into a bear market and also broke the up trendline from the March 2009 low. Serious stuff.
Futures were up overnight, but as the idea of Treasury Secretary Mnuchin calling the CEO's of the top six banks as well as getting a meeting with the Plunge Protection Team (PPT) set up for Monday sunk in, the markets lost their nerve. Any notion of upside, of the start of a Santa Claus rally, was sold hard, landing the indices at their lows on the close.
SP500 -65.62, -2.71%
NASDAQ -140.07, -2.21%
DJ30 -653.17, -2.91%
SP400 -2.74%
RUTX -1.95%
SOX -2.90%
NASDAQ 100 -2.43%
The thing is, the defensive sectors were crushed along with everything else. PG, AEP, CLX, CL were exploded. Drugs were terminal as JNJ, LLY, MRK sold hard. Just old fashioned ugly.
An interesting aspect of the Mnuchin story is that he supposedly made the call and set up the PPT meeting without Trump's knowledge. Likely thought he was doing what Trump would want, but as it did not work -- as markets panicked -- and if it does not turn things starting Wednesday, Mnuchin has just placed himself on the short list of Trump's next purges from the administration. Perhaps Mnuchin did it on purpose, in order to GET dismissed. Who knows? No point in speculating here -- CNBC and other financial stations engaged is wild speculation all session long.
The Mnuchin story overshadowed some better news from other areas. China is reducing tariffs on 700 items to increase imports by $30T. Wow. That is a lot, and it is progress. At the same time, however, the big issue is IP theft. Still, China moves a step at a time, and this is progress. Not that the market gave a flip Monday.
The move leaves the indices still plunging to lower lows, putting SP500 in an official bear market. No change in the downside for now, just selling with abandon. A bounce a half hour into trade was punished after a half hour of upside, giving back those gains and just getting slaughtered into the close.
More and more oversold, right? This morning David Tepper, who a week ago said the Fed made clear what it was going to do, said he was buying stock after the worst market week in years. Hopefully he bought late in the session.
The point is, however, some are seriously starting to average into positions even as the selling, sentiment, etc. makes a crescendo. Perhaps it will be oversold enough to start a Santa Claus rally Wednesday. Perhaps, but as of the Monday close it was clear no buyers in any numbers were making a known presence.
Indicators such as VIX, as discussed over the weekend, are 'getting there.' VIX screamed higher almost 20%, closing at 36.07, +5.96. I said that when it broke free it tends to really fly. It is indeed flying, closing just under the February closing high of 37.32. Another good push higher on a weak Wednesday open might finally just do the trick to turn the market for bear market/Santa Claus combination move. So, we have that one in the hopper for Wednesday. If there is a big selloff Wednesday at the open, we will be taking a lot more downside gain then look for rebounds in stocks such as TEAM, WDAY, AMZN (big doji Monday)
We took some nice gain on half our CRM position, bought some LLY puts, sold AEP and PG as they, after nice holds at key support, folded like cheap pup tents. At some point not too far away there will be a wicked rebound. Just not showing up yet, but again, with VIX surging higher, the last piece of the puzzle for a rebound is falling into place. So, be ready, take some more downside gain on a sharp selloff Wednesday, then get ready to play some of these names above back upside.
Have a very merry Christmas!
MARKET STATS
CHARTS
To view, click on the following links:
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
http://investmenthouse1.com/ihmedia/f/charts/nasdaq100.jpg
http://investmenthouse1.com/ihmedia/f/charts/VIX.jpg
MARKET STATS
DJ30
Stats: -653.17 points (-2.91%) to close at 21792.20
Nasdaq
Stats: -140.08 points (-2.21%) to close at 6192.92
Volume: 1.65B (-63.82%)
Up Volume: 308.28M (-346.33M)
Down Volume: 1.32B (-2.5B)
A/D and Hi/Lo: Decliners led 2.7 to 1
Previous Session: Decliners led 3.78 to 1
New Highs: 8 (0)
New Lows: 1107 (+6)
S&P
Stats: -65.52 points (-2.71%) to close at 2351.10
NYSE Volume: 655.135M (-79.80%)
Up Volume: 73.195M (-349.191M)
Down Volume: 572.097M (-2.224B)
A/D and Hi/Lo: Decliners led 3.74 to 1
Previous Session: Decliners led 3.47 to 1
New Highs: 2 (0)
New Lows: 1256 (+198)
SENTIMENT
VIX: 36.07; +5.96
VXN: 38.68; +4.81
VXO: 37.34; +5.23
Put/Call Ratio (CBOE): 1.32; -0.11
Bulls and Bears:
Falling and rebounding to where they were four weeks back. Starting to converge. This coming week's numbers should show a bull dive and bear jump, converging the two to levels not seen since 2016.
Bulls: 39.3 versus 45.5
Bears: 21.4 versus 20.4
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: 39.3 versus 45.4
45.4 versus 46.7 versus 38.3 versus 39.6 versus 42.9 versus 42.5 versus 50.5 versus 51.9 versus 56.3 versus 61.8 versus 60.6 versus 59.0 versus 57.7 versus 60.1 versus 59.6 versus 57.7 versus 57.3 versus 54.9 versus 54.5 versus 54.9 versus 55.3 versus 52.4 versus 47.1 versus 47.6 versus 52.0 versus 55.5 versus 52.9 versus 50.0 versus 49.1 versus 46.6 versus 43.1 versus 43.6 versus 48.0 versus 43.6 versus 42.2 versus 49.5 versus 55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4 versus 66.00
Bears: 21.4 versus 20.4
20.4 versus 21.50 versus 20.6 versus 19.8 versus 19.0 versus 19.8 versus 19.8 versus 19.0 versus 18.3 versus 18.5 versus 18.6 versus 18.3 versus 18.1 versus 18.3 versus 18.1 versus 18.3 versus 18.3 versus 18.6 versus 18.8 versus 18.6 versus 18.5 versus 18.5 versus 18.6 versus 18.4 versus 17.6 versus 17.8 versus 17.7 versus 19.2 versus 19.2 versus 19.4 versus 19.4 versus 20.6 versus 20.8 versus 19.6 versus 19.8 versus 18.6 versus 17.5 versus 16.8 versus 15.7 versus 15.5 versus 14.4 versus 14.6 versus 14.4 versus 15.5 versus 12.6 versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1 versus 15.2 versus 15.1 versus 15.1 versus 15.4 versus 15.4 versus 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
OTHER MARKETS
Bonds: 2.736% versus 2.788%
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.788% versus 2.803%. versus 2.762% versus 2.821% versus 2.855% versus 2.895% versus 2.913% versus 2.908% versus 2.884% versus 2.863% versus 2.854% versus 2.892% versus 2.915% versus 2.979% versus 2.993% versus 3.032% versus 3.061% versus 3.058% versus 3.059% versus 3.048% versus 3.065% versus 3.074% versus 3.056% versus 3.065% versus 3.116% versus 3.127% versus 3.147% versus 3.186% versus 3.239% versus 3.228% versus 3.222% versus 3.201% versus 3.22% versus 3.146%
EUR/USD: 1.14015 versus 1.13708
Historical: 1.13708 versus 1.13828 versus 1.13755 versus 1.13533 versus 1.13049 versus 1.13604 versus 1.1376 versus 1.13244 versus 1.13657 versus 1.1404 versus 1.1376 versus 1.13970 versus 1.13360 versus 1.13199 versus 1.13934 versus 1.13682 versus 1.12973 versus 1.13325 versus 1.13380 versus 1.13829 versus 1.13818 versus 1.14484 versus 1.14172 versus 1.13308 versus 1.13264 versus 1.13124 versus 1.12348 versus 1.13475 versus 1.1364 versus 1.14329 versus 1.14228 versus 1.14090 versus 1.13881 versus 1.14019 versus 1.13394 versus 1.13455 versus 1.13760 versus 1.14042 versus 1.13757 versus 1.3972 versus 1.14682 versus 1.14626 versus 1.1538
USD/JPY: 110.337 versus 111.223. Diving lower.
Historical: Last below 109 in June 2018: 111.223 versus 111.21 versus 112.521 versus 112.477 versus 112.653 versus 113.382 versus 113.634 versus 113.634 versus 113.385 versus 113.022 versus 112.66 versus 112.71 versus 112.813 versus 113.581 versus 113.474 versus 113.402 versus 113.559 versus 113.781 versus 113.510 versus 112.972 versus 113.007 versus 113.077 versus 112.617 versus 112.831 versus 113.585 versus 113.576.
Oil: 42.53, -3.06. Diving to the next support.
Gold: 1271.80, +13.70. Bouncing off the test of the 200 day SMA breakout.
End part 1 of 2
_______________________________________________________
Member: tweet@investbilling.com
Customer Support: http://www.InvestBilling.com
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PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
12/24/2018 Investment House Daily
* * * *
Investment House Daily Subscribers:
Merry Christmas to all!
Monday: Half session, closing at 1:00ET
Tuesday: Markets closed for Christmas
Wednesday to Friday: Markets open as usual.
No report Tuesday.
MARKET ALERTS:
Targets hit: CRM
Entry alerts: LLY
Trailing stops: None issued
Stop alerts: AEP; PG
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:
https://www.investmenthouse.com/alertdaily.html
********************************************************************
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
- Mnuchin tries to calm markets, fails.
- Talk with bank CEO's overshadows positive news from China.
- SP500 dives into bear market territory as market suffers worst Christmas Eve trade ever.
- VIX finally breaking out.
Worst Christmas Eve session in history. Sometimes you have to laugh in the misery. It helps to play the downside, and we took some gain on CRM as we let the other downside plays run, but you still have to have good humor. It reminds me of a 'Bob Newhart Show' episode where the guys all got together to watch William & Mary play some other team in football. It was tradition after the other team scored to take a hit of some kind of whiskey. The next day Bob nursed a massive hangover. Emily came home and asked him what on earth had happened. 'Worst defeat in William & Mary's history' was Bob's anguished reply.
At -653.17 on the Dow, you would hope that was the worst loss in Christmas Eve history. SP500 dipped into a bear market and also broke the up trendline from the March 2009 low. Serious stuff.
Futures were up overnight, but as the idea of Treasury Secretary Mnuchin calling the CEO's of the top six banks as well as getting a meeting with the Plunge Protection Team (PPT) set up for Monday sunk in, the markets lost their nerve. Any notion of upside, of the start of a Santa Claus rally, was sold hard, landing the indices at their lows on the close.
SP500 -65.62, -2.71%
NASDAQ -140.07, -2.21%
DJ30 -653.17, -2.91%
SP400 -2.74%
RUTX -1.95%
SOX -2.90%
NASDAQ 100 -2.43%
The thing is, the defensive sectors were crushed along with everything else. PG, AEP, CLX, CL were exploded. Drugs were terminal as JNJ, LLY, MRK sold hard. Just old fashioned ugly.
An interesting aspect of the Mnuchin story is that he supposedly made the call and set up the PPT meeting without Trump's knowledge. Likely thought he was doing what Trump would want, but as it did not work -- as markets panicked -- and if it does not turn things starting Wednesday, Mnuchin has just placed himself on the short list of Trump's next purges from the administration. Perhaps Mnuchin did it on purpose, in order to GET dismissed. Who knows? No point in speculating here -- CNBC and other financial stations engaged is wild speculation all session long.
The Mnuchin story overshadowed some better news from other areas. China is reducing tariffs on 700 items to increase imports by $30T. Wow. That is a lot, and it is progress. At the same time, however, the big issue is IP theft. Still, China moves a step at a time, and this is progress. Not that the market gave a flip Monday.
The move leaves the indices still plunging to lower lows, putting SP500 in an official bear market. No change in the downside for now, just selling with abandon. A bounce a half hour into trade was punished after a half hour of upside, giving back those gains and just getting slaughtered into the close.
More and more oversold, right? This morning David Tepper, who a week ago said the Fed made clear what it was going to do, said he was buying stock after the worst market week in years. Hopefully he bought late in the session.
The point is, however, some are seriously starting to average into positions even as the selling, sentiment, etc. makes a crescendo. Perhaps it will be oversold enough to start a Santa Claus rally Wednesday. Perhaps, but as of the Monday close it was clear no buyers in any numbers were making a known presence.
Indicators such as VIX, as discussed over the weekend, are 'getting there.' VIX screamed higher almost 20%, closing at 36.07, +5.96. I said that when it broke free it tends to really fly. It is indeed flying, closing just under the February closing high of 37.32. Another good push higher on a weak Wednesday open might finally just do the trick to turn the market for bear market/Santa Claus combination move. So, we have that one in the hopper for Wednesday. If there is a big selloff Wednesday at the open, we will be taking a lot more downside gain then look for rebounds in stocks such as TEAM, WDAY, AMZN (big doji Monday)
We took some nice gain on half our CRM position, bought some LLY puts, sold AEP and PG as they, after nice holds at key support, folded like cheap pup tents. At some point not too far away there will be a wicked rebound. Just not showing up yet, but again, with VIX surging higher, the last piece of the puzzle for a rebound is falling into place. So, be ready, take some more downside gain on a sharp selloff Wednesday, then get ready to play some of these names above back upside.
Have a very merry Christmas!
MARKET STATS
CHARTS
To view, click on the following links:
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
http://investmenthouse1.com/ihmedia/f/charts/nasdaq100.jpg
http://investmenthouse1.com/ihmedia/f/charts/VIX.jpg
MARKET STATS
DJ30
Stats: -653.17 points (-2.91%) to close at 21792.20
Nasdaq
Stats: -140.08 points (-2.21%) to close at 6192.92
Volume: 1.65B (-63.82%)
Up Volume: 308.28M (-346.33M)
Down Volume: 1.32B (-2.5B)
A/D and Hi/Lo: Decliners led 2.7 to 1
Previous Session: Decliners led 3.78 to 1
New Highs: 8 (0)
New Lows: 1107 (+6)
S&P
Stats: -65.52 points (-2.71%) to close at 2351.10
NYSE Volume: 655.135M (-79.80%)
Up Volume: 73.195M (-349.191M)
Down Volume: 572.097M (-2.224B)
A/D and Hi/Lo: Decliners led 3.74 to 1
Previous Session: Decliners led 3.47 to 1
New Highs: 2 (0)
New Lows: 1256 (+198)
SENTIMENT
VIX: 36.07; +5.96
VXN: 38.68; +4.81
VXO: 37.34; +5.23
Put/Call Ratio (CBOE): 1.32; -0.11
Bulls and Bears:
Falling and rebounding to where they were four weeks back. Starting to converge. This coming week's numbers should show a bull dive and bear jump, converging the two to levels not seen since 2016.
Bulls: 39.3 versus 45.5
Bears: 21.4 versus 20.4
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: 39.3 versus 45.4
45.4 versus 46.7 versus 38.3 versus 39.6 versus 42.9 versus 42.5 versus 50.5 versus 51.9 versus 56.3 versus 61.8 versus 60.6 versus 59.0 versus 57.7 versus 60.1 versus 59.6 versus 57.7 versus 57.3 versus 54.9 versus 54.5 versus 54.9 versus 55.3 versus 52.4 versus 47.1 versus 47.6 versus 52.0 versus 55.5 versus 52.9 versus 50.0 versus 49.1 versus 46.6 versus 43.1 versus 43.6 versus 48.0 versus 43.6 versus 42.2 versus 49.5 versus 55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4 versus 66.00
Bears: 21.4 versus 20.4
20.4 versus 21.50 versus 20.6 versus 19.8 versus 19.0 versus 19.8 versus 19.8 versus 19.0 versus 18.3 versus 18.5 versus 18.6 versus 18.3 versus 18.1 versus 18.3 versus 18.1 versus 18.3 versus 18.3 versus 18.6 versus 18.8 versus 18.6 versus 18.5 versus 18.5 versus 18.6 versus 18.4 versus 17.6 versus 17.8 versus 17.7 versus 19.2 versus 19.2 versus 19.4 versus 19.4 versus 20.6 versus 20.8 versus 19.6 versus 19.8 versus 18.6 versus 17.5 versus 16.8 versus 15.7 versus 15.5 versus 14.4 versus 14.6 versus 14.4 versus 15.5 versus 12.6 versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1 versus 15.2 versus 15.1 versus 15.1 versus 15.4 versus 15.4 versus 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
OTHER MARKETS
Bonds: 2.736% versus 2.788%
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.788% versus 2.803%. versus 2.762% versus 2.821% versus 2.855% versus 2.895% versus 2.913% versus 2.908% versus 2.884% versus 2.863% versus 2.854% versus 2.892% versus 2.915% versus 2.979% versus 2.993% versus 3.032% versus 3.061% versus 3.058% versus 3.059% versus 3.048% versus 3.065% versus 3.074% versus 3.056% versus 3.065% versus 3.116% versus 3.127% versus 3.147% versus 3.186% versus 3.239% versus 3.228% versus 3.222% versus 3.201% versus 3.22% versus 3.146%
EUR/USD: 1.14015 versus 1.13708
Historical: 1.13708 versus 1.13828 versus 1.13755 versus 1.13533 versus 1.13049 versus 1.13604 versus 1.1376 versus 1.13244 versus 1.13657 versus 1.1404 versus 1.1376 versus 1.13970 versus 1.13360 versus 1.13199 versus 1.13934 versus 1.13682 versus 1.12973 versus 1.13325 versus 1.13380 versus 1.13829 versus 1.13818 versus 1.14484 versus 1.14172 versus 1.13308 versus 1.13264 versus 1.13124 versus 1.12348 versus 1.13475 versus 1.1364 versus 1.14329 versus 1.14228 versus 1.14090 versus 1.13881 versus 1.14019 versus 1.13394 versus 1.13455 versus 1.13760 versus 1.14042 versus 1.13757 versus 1.3972 versus 1.14682 versus 1.14626 versus 1.1538
USD/JPY: 110.337 versus 111.223. Diving lower.
Historical: Last below 109 in June 2018: 111.223 versus 111.21 versus 112.521 versus 112.477 versus 112.653 versus 113.382 versus 113.634 versus 113.634 versus 113.385 versus 113.022 versus 112.66 versus 112.71 versus 112.813 versus 113.581 versus 113.474 versus 113.402 versus 113.559 versus 113.781 versus 113.510 versus 112.972 versus 113.007 versus 113.077 versus 112.617 versus 112.831 versus 113.585 versus 113.576.
Oil: 42.53, -3.06. Diving to the next support.
Gold: 1271.80, +13.70. Bouncing off the test of the 200 day SMA breakout.
End part 1 of 2
_______________________________________________________
Member: tweet@investbilling.com
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
Market Alert - Pre-Market
Futures vs FV: SP -13.62; DJ -133.37; NASDAQ -34.06
Nothing is ever status quo under the Trump administration. Over the weekend treasury secretary Mnuchin talked with 6 major bank CEO's to make sure they had sufficient liquidity. They all said they had. Then a letter stating the same was issued. That triggered the snowflake market from upside futures to downside to start another session. Also there are reports the President has discussed firing Powell. He is not the only one; many on Wall Street think Powell screwed up. The President was right about that one -- the Fed is turning a normal pause in an expansion into a bear market and recession.
Mnuchin is not done. He is to meet with the PPT (plunge protection team) today to see what needs to be done if anything re the markets.
Regardless, the market is set to open lower as the market is thrown more uncertainty and of course reacts negatively.
The talk on the financial stations is the economy is fine, fundamentals are great and it is just the market overreacting. Seriously? The market has it wrong this time. A gutsy call, some would say foolish. I know I am not smarter than markets. I know the Fed is not smarter than markets. I seriously doubt the anchors and guests on CNBC, Bloomberg, Fox Business are.
China: Its officials said over the weekend, and overshadowed by the Mnuchin story, that they are ready to resume negotiations to start January. I thought negotiations were ongoing . . . More to the point, China is cutting tariffs on 700 items in order to increase imports by $30T. THAT is some progress, BUT . . . the IP issue remains and will remain. China has to stop stealing.
Retail: WSJ reports retail sales are ending the year on a high note. Another story not getting much play given the major story today.
OTHER MARKETS
Bonds: 2.769% vs 2.788%
EUR/USD: .1414 vs 1.1367
Oil: 110.13 vs 111.21
Oil: 44.69, -0.90
Gold 1265.50, +7.40
Futures hit the lows -- thus far -- at 8:00ET and have recovered but just modestly toward the open. Definitely set to gap lower after they were solidly higher early session. Any Christmas to New Year's Santa rally is not going to be apparent at the open, but we will see if the market, in a pre-holiday cheer move, shakes it off. After all, the plunge protection team is meeting with the Treasury Secretary today. As Hans Gruber told Theo in 'Die Hard' as Theo said it would take a miracle to break the time lock on the Nakatomi safe, it's Christmas, the time of miracles.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
http://www.investmenthouse.com/alertkey.htm
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Nothing is ever status quo under the Trump administration. Over the weekend treasury secretary Mnuchin talked with 6 major bank CEO's to make sure they had sufficient liquidity. They all said they had. Then a letter stating the same was issued. That triggered the snowflake market from upside futures to downside to start another session. Also there are reports the President has discussed firing Powell. He is not the only one; many on Wall Street think Powell screwed up. The President was right about that one -- the Fed is turning a normal pause in an expansion into a bear market and recession.
Mnuchin is not done. He is to meet with the PPT (plunge protection team) today to see what needs to be done if anything re the markets.
Regardless, the market is set to open lower as the market is thrown more uncertainty and of course reacts negatively.
The talk on the financial stations is the economy is fine, fundamentals are great and it is just the market overreacting. Seriously? The market has it wrong this time. A gutsy call, some would say foolish. I know I am not smarter than markets. I know the Fed is not smarter than markets. I seriously doubt the anchors and guests on CNBC, Bloomberg, Fox Business are.
China: Its officials said over the weekend, and overshadowed by the Mnuchin story, that they are ready to resume negotiations to start January. I thought negotiations were ongoing . . . More to the point, China is cutting tariffs on 700 items in order to increase imports by $30T. THAT is some progress, BUT . . . the IP issue remains and will remain. China has to stop stealing.
Retail: WSJ reports retail sales are ending the year on a high note. Another story not getting much play given the major story today.
OTHER MARKETS
Bonds: 2.769% vs 2.788%
EUR/USD: .1414 vs 1.1367
Oil: 110.13 vs 111.21
Oil: 44.69, -0.90
Gold 1265.50, +7.40
Futures hit the lows -- thus far -- at 8:00ET and have recovered but just modestly toward the open. Definitely set to gap lower after they were solidly higher early session. Any Christmas to New Year's Santa rally is not going to be apparent at the open, but we will see if the market, in a pre-holiday cheer move, shakes it off. After all, the plunge protection team is meeting with the Treasury Secretary today. As Hans Gruber told Theo in 'Die Hard' as Theo said it would take a miracle to break the time lock on the Nakatomi safe, it's Christmas, the time of miracles.
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Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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