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3/30/2018 Investment House Daily
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The Market Video is DIVIDED into component parts: Market Overview, Economy,
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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
- DJ30, SP500 hold again at support, start to move higher.
- A bounce on volume to end the week and quarter, but was it just the
quarter end driving the action?
- Bounce or no, the market is in need of a few, indeed more than a few, good
leaders.
After another down week the market indices posted gains Friday on some
better volume. They held where the needed, DJ30 and SP500 at the February
closing lows, NASDAQ at one of the early 2016 trendlines. Some leaders held
the 50 day EMA and rebounded a bit, e.g. NFLX, SQ, LRCX, MU, INTC.
SP500 35.87, 1.38%
NASDAQ 114.21, 1.64%
DJ30 254.69, 1.07%
SP400 1.35%
RUTX 1.08%
SOX 2.24%
NASDAQ 100 1.86%
VOLUME: NYSE +2%, NASDAQ +7.5%. Solid above average trade on NASDAQ after a
jump in trade Wednesday as it tested the 2016 trendline. That holds some
promise similar to how NASDAQ bounced off the trendline in early February.
NYSE trade moved above average as NYSE recaptured the 200 day SMA and SP500
moved up off the 200 day. As with NASDAQ, SP500 showed similar action on
the February intraday low that tapped the 200 day and reversed on rising,
above average volume.
ADVANCE/DECLINE: NYSE +3.6:1, NASDAQ +2.2:1.
Was this the start of a bounce from support similar to the NASDAQ and SP500
February bounces from similar support levels as noted above, OR was it
simply end of the quarter ahead of a 3-day market holiday position squaring?
The answer to that question will play out this week. There needs to be more
leadership in the market, pure and simple. Some of those names above, e.g.
MU, NFLX, are at the 50 day MA that should act as support and perhaps they
move up from there to lead a rally. Many stocks that were recently leaders
or leader wannabes, however, don't have the patterns, at the moment, to
lead. If the market bounces gratis some leaders such as MU, then they can
have time to work on rebuilding their patterns. Again, that will play out
in the coming week and next.
The gist of last week was a test of the February lows on DJ30 and SP500 as
well as a hold of those lows, i.e. they did not sink lower. Now they have
to show the new break higher. Thursday was an upside relief session, but
again, with the quarter end you cannot put that much faith in it. If good
quality stocks start breaking higher and provide the move support, then the
historical pattern of corrections in otherwise good economies and markets
holds. If not, then the economy is likely not as strong as believed or
there is some other issue out there the stock market is worried about, e.g.
war -- trade or otherwise -- political upheaval, etc.
CHARTS
DJ30: After piercing lower to almost the February intraday low the prior
Friday, The Dow held at the February closing low as a floor all last week.
That keeps the Dow over the 200 day, at the prior lows, and the 61%
Fibonacci retracement of the September to January rally. Lots of support,
lots of reasons to hold and rally based upon this pattern. Now it shows if
it can.
SP500: Very similar to DJ30, testing the February closing low the prior
Friday, holding over that level all last week. In addition, that keeps
SP500 over the 200 day SMA and a potential double bottom near the 78%
Fibonacci retracement. The technical pattern is there, but SP500 needs to
find the leadership.
NASDAQ: Tried to rally early week, failed as a lot of its leaders broke
their patterns. Faded to the uptrend from early 2016, held it Wednesday on
strong volume, rallied Thursday on strong volume. NASDAQ can hold its
uptrend if it finds some leaders. NFLX, GOOG, INTC are possibilities, but
others such as NVDA just do not look that good. NASDAQ could stand to find
some other stocks to lead. STX is not NASDAQ, but it is tech and is in good
shape.
SOX: Three week fade off the top of channel trendline. No doubt that acted
as resistance and sent SOX lower. It is below the closer trendline, now at
a lower trendline off the August low. At this point everyone is watching
for where SOX makes its stand. Can do it here, will need INTC, LRCX, MU to
make good on some good patterns.
RUTX: Not many good things to say about RUTX other than it held the early
March low and the October peak. The pattern is not generating warm fuzzies
as it has a head and shoulder-ish look.
SP400: Very similar to RUTX but it is holding over the 200 day SMA and a
trendline off the August and February lows. Some possibility there with
this test, but at this juncture it will have to show it -- just as all the
indices.
LEADERSHIP
FAANG: With FB under heavy scrutiny and AMZN feeling the problems of a
President that doesn't like you, FAANG is struggling. AAPL is still
range-bound. NFLX is pretty decent at the 50 day EMA. GOOG is trying to
put in a bounce at the 200 day SMA and off the summer range highs.
Chips: Struggled as a group the past three weeks after SOX hit the top of
the range and some are not in great shape. MU is solid, NPTN is breaking
higher. INTC continues looking good. LRCX is trying to bounce off the 78%
Fibonacci retracement. KLIC looks very interesting in an inverted head and
shoulders. Some solid patterns there; they need to take the lead.
Biotechs/Drugs: Ran into trouble. There are some that are setting up, e.g.
TLGT. Drug-related stocks are working, e.g. AMAG, and now IDXX is setting
up.
Retail: Continues to look better with the President taking shots at AMZN.
DDS still looks solid to move higher. TJX, TLRD, M, KSS as well. If they
can continue it looks as if we will be buying retail. What about AMZN? It
gapped below the 50 day MA's and has yet to recover.
China: As with many sectors, Chinese stocks have some solid leaders, e.g.
ATHM, QIWI, BZUN. BABA has possibilities as it looks as if it is going to
move higher off a higher low. Others are really struggling, e.g. NTES,
BIDU, SINA, SOHU. Hot or cold.
Metals: A bit of an interesting look to keep watching, e.g. STLD, FCX. SCHN
has a potential double bottom at the 61% Fibonacci retracement. FCX is
showing one at the 61% Fibonacci retracement.
Oil: Remains in the game. MRO shook us out Wednesday but was back in the
game Thursday. APC is not bad. Many are, however.
MISC: HLF remains ready to move. SQ is holding the 50 day MA's and could
be a new entry.
MARKET STATS
DJ30
Stats: +254.69 points (+1.07%) to close at 24103.11
Nasdaq
Stats: +114.22 points (+1.64%) to close at 7063.44
Volume: 2.59B (+1.97%)
Up Volume: 1.76B (+836.25M)
Down Volume: 792.28M (-797.72M)
A/D and Hi/Lo: Advancers led 2.23 to 1
Previous Session: Decliners led 1.24 to 1
New Highs: 45 (+19)
New Lows: 80 (-33)
S&P
Stats: +35.87 points (+1.38%) to close at 2640.87
NYSE Volume: 995.465M (+7.39%)
A/D and Hi/Lo: Advancers led 3.6 to 1
Previous Session: Advancers led 1.08 to 1
New Highs: 33 (+14)
New Lows: 59 (-55)
SENTIMENT INDICATORS
VIX: 19.97; -2.90
VXN: 26.68; -3.51
VXO: 22.05; -1.74
Put/Call Ratio (CBOE): 0.95; -0.39
Bulls and Bears: Bulls dove, bounced, then dove once more. Getting a bit
out of the stratosphere, a good thing to happen, but not that low yet.
Bears are up, but still relatively weak compared to bulls.
Bulls: 49.5 versus 55.5
Bears: 17.5 versus 16.8
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: 49.5 versus 55.5
55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4
versus 66.00 versus 64.7 versus 66.7 versus 64.4 versus 61.9 versus 64.1
versus 64.2 versus 62.3 versus 61.5 versus 63.5 versus 64.4 versus 63.5
versus 62.3 versus 60.6 versus 60.4 versus 57.5 versus 54.3 versus 50.5
versus 47.1 versus 49.5 versus 49.5 versus 48.1 versus 50.5 versus 57.5
versus 60.0 versus 60.2 versus 57.8 versus 50.0 versus 52.5 versus 54.9
versus 51.5 versus 50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1
versus 58.7 versus 58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8
versus 49.5
Bears: 17.5 versus 16.8
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: 2.714% versus 2.781%. Bonds continue rallying after breaking up
through the 50 day MA's.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.781%
versus 2.775% versus 2.854% versus 2.813% versus 2.814% versus 2.881% versus
2.90% versus 2.852% versus 2.826% versus 2.819% versus 2.844% versus 2.866%
versus 2.896% versus 2.872% versus 2.879% versus 2.863% versus 2.879% versus
2.868% versus 2.799% versus 2.875% versus 2.893% versus 2.864% versus 2.866%
versus 2.934% versus 2.952% versus 2.893% versus 2.873% versus 2.904% versus
2.913% versus 2.833% versus 2.857% versus 2.8577% versus 2.844% versus
2.813% versus 2.805% versus 2.707% versus 2.841% versus 2.792%
EUR/USD: 1.23234 versus 1.2302. Still in the lateral move along the 50 day
MA.
Historical: 1.23234 versus 1.2406 versus 1.24494 versus 1.2351 versus
1.23301 versus 1.23467 versus 1.22478 versus 1.2342 versus 1.2287 versus
1.2304 versus 1.23782 versus 1.2392 versus 1.23412 versus 1.2305 versus
1.2305 versus 1.24017 versus 1.2411 versus 1.2344 versus 1.23187 versus
1.22822 versus 1.21894 versus 1.21893 versus 1.23257 versus 1.2296 versus
1.2324 versus 1.22820 versus 1.23431 versus 1.2411 versus 1.25083 versus
1.2450 versus 1.23528 versus 1.22887 versus 1.22524 versus 1.2273 versus
1.2377 versus 1.24573 versus 1.2502 versus 1.2404 versus 1.2402 versus
1.23832 versus 1.24308 versus 1.24159 versus 1.24340 versus 1.23083 versus
1.22567
USD/JPY: 106.286 versus 106.81
Historical: 106.81 versus 105.397 versus 105.473 versus 104.789 versus
104.829 versus 105.892 versus 106.478 versus 105.945 versus 105.946 versus
106.344 versus 105.846 versus 106.42 versus 106.335 versus 106.77 versus
106.41 versus 106.105 versus 105.752 versus 106.359 versus 105.734 versus
106.03 versus 106.695 versus 107.381 versus 106.96 versus 106.886 versus
106.85 versus 107.581 versus 107.435 versus 106.294 versus 106.153 versus
106.782 versus 107.77 versus 108.669 versus 108.669
Oil: 64.94, +0.56. Setting up a handle to a 2 month cup, forming up right
below the January peak.
Gold: 1327.30, -2.70.
MONDAY
After 3 days off and the quarter end there are a few things to watch for.
First, does new money enter and help keep the Thursday move alive. Higher
volume gains that session, but that could be due to adjusting positions
ahead of quarter end. New money is good and needed, but it can run out
after a session or two.
Second, do gains hold versus the high to low action.
Third, does volatility calm down. That shows the buyers and sellers are
resolving their issues. Of course volatility can end with stocks rallying
or selling off. One side or the other will win out.
Fourth, do leaders emerge upside? Will new leaders, perhaps from metals or
drug-related , emerge? Will current leaders testing key levels reengage as
leaders? A market rally has to have leadership. A market can start a
rally, but if significant leadership fails to emerge, the rally fails as
well. Will MU, HLF, STX, NFLX, metals, drugs, retail emerge to lead?
Okay, plenty to watch for but the Dow and SP500 have set up in the double
bottom at the early February lows at the 61% and 78% Fibonacci retracement,
respectively. If these leadership stocks start to make a new break higher
with volume, we will play them based upon their patterns and the index
patterns.
Have a great weekend!
End part 1
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