* * * *
4/28/2018 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: None issued
Entry alerts: XON
Trailing stops: None issued
Stop alerts: CERS
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 Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4
TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/ts/ts.mp4
********************************************************************
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
- Once again, market cannot make much of a much anticipated, strong earnings
report.
- NASDAQ gaps higher, up over 115 points, gives it all back.
- Decently bullish stock index patterns remain, but thus far any upside
upside is used to sell, undermining the patterns.
- Good patterns in many stocks and sectors are failing to provide breakouts,
or if they do, many are quickly lost.
- Money does appear still working into some areas and thus there are
potential upside entries as money reallocates
- Some sectors still look good but with some distribution, can the patterns
hold?
Friday was not a washout, but it was more evidence that the market is having
a hard time coming up with buyers willing to sustain a move higher.
Earnings season has given buyers every reason to buy stocks as results for
the vast majority of stocks have handily topped expectations, and in many
cases, crushing expectations. Yet, the stock indices, while not rolling
over and in some cases still in very decent patterns, cannot sustain an
upside move.
Friday was the most recent case in point. AMZN utterly crushed
expectations. MSFT and INTC both also laughed at their expectations.
Before that it was FB, GOOG, and NFLX. Bada bing, bada boom. Or for the
more cerebral as the NFL announcers, with unintentional hilarity, use to
describe football players, ipso facto. The indices should be surging. Yet,
the indices, down heading into earnings and in prime position to move upside
on great results, have not.
Stocks gapped higher Friday, particularly on NASDAQ as its futures showed a
115+ point opening gain. DJ30, SP500, not so much. Not nearly so. Yet,
they posted some good early moves as well. The move was all on the open,
however. Stocks gapped then sagged into midmorning. NASDAQ swung 115
points high to low, needing to come back to close with a 1.12 point gain.
AMZN lost well over half its early gain by the time it closed. It may rule
retail but it cannot control the markets. Not yet.
SP500 2.97, 0.11%
NASDAQ 1.12, 0.02%
DJ30 -11.15, -0.05%
SP400 -0.16%
RUTX -0.11%
SOX -0.80%
NASDAQ 100 0.10%
VOLUME: NYSE -12%, NASDAQ -4%. At least volume was lower on the reversal
off opening highs. Not a turkey shoot at the stocks that moved higher.
Volume still remains weak overall and mixed in terms of rising volume on up
sessions versus rising volume on down sessions.
ADVANCE/DECLINE: NYSE 1.4:1, NASDAQ 1.1:1. Not the breadth of champions,
but of course with the rollover in the index, a weak A/D line is not
surprising.
No, it was no rollover in and of itself, but it was another in a series of
failed attempts to move higher. There is a pattern of selling into
strength, of breakouts getting pushed back without much upside other than
the day of the breakout, taking down even good moves.
The indices still have relatively decent upside patterns with NASDAQ, SP500,
DJ30 sporting what are arguably triangles forming over key support levels.
Triangles can be positive, can be negative. The key is the index ranges are
narrowing over the past 1.5 months and forming 'points' to the triangles,
and that typically indicates a more serious directional move is coming. In
other words, they are going to break upside or downside. The inability to
utilize good news that one would think SHOULD have yielded upside has not
done so. Indeed, when the news does result in a break higher, as noted
above, the breaks have been turned back on the indices and of course in many
individual stocks as well.
Some areas still look quite good, e.g. oil, but that is arguably for an
entirely different reason than other stocks would rally on. In any event,
money is moving toward oil and it looks as if it is also still interested in
drugs and healthcare.
Other areas are deceptive. Some good patterns are still out there for sure,
but this market has been taking down good areas. Sectors with good looking
patterns just fail to move and then get taken lower. Others that rallied
well and then slipped into pattern building also look good but then get
taken out. Thus, things are a bit deceptive and you find yourself looking
at retail, software and wondering if they are going to break higher from
their consolidations or break lower as others have.
The pattern of giving up breaks higher is not an indication of market
health. Patterns that set up but then cannot breakout and break apart show
changing expectations by the big money: they were being accumulated but then
the money turned off and indeed left.
That is an indication of a market that is distributing, i.e. is a net seller
of stocks as the big money sells on rallies, bounces, good news moves. That
could lead to potentially bullish triangle patterns in the indices to simply
fail to make breaks higher, and indeed break lower.
Why would they do that if the economy still looks solid as Q1 GDP showed
Friday (2.4% vs 1.8% expected vs 2.9% Q4)? Could be the Fed rate hikes and
rising interest rates. Perhaps a yield curve inversion in bonds? The
timing is not that great for the market: late April and often the overall
market turns sluggish and choppy over summer and into the early fall. 'Sell
in May . . .' right?
Sure there will be groups that perform just as always. Oil seems solid,
healthcare/drugs are so far so good as they come back around, and software
is still solid but somewhat worrisome as many tech related groups get sold
off in favor of the very core items such as the commodities, e.g. oil.
Summary: That prognosis is not all that great for the market, but then
again, it is what it is. Patterns are still quite solid enough and that
could turn indecision or selling into buying at some point. Thus far,
however, the solid earnings have failed to do that. Fed hikes, possible
yield curve inversion. Couple those with the still threatened trade wars
and there is reason backward looking earnings are not driving stocks higher.
It is just a gut feeling, but one based upon watching breakouts get thrown
back and good news fail to elicit sustained new moves, at the least the
market continues to work laterally in a trading range. At worst this action
that has the look of accumulation but is also showing distribution ends up
undermining the index and leadership patterns to where they drop over the
summer. You cannot emphasize enough the inability to move higher and hold
moves when Q1 earnings were so solid as an indication of the big money being
indifferent or at worst for the bulls, being actively selling.
Thus, we will continue looking upside in those areas that are receiving
money, that are under accumulation, e.g. oil, drugs/healthcare. In
addition, we nose around for stocks we feel are setting up to fall. After a
move higher with some hope on earnings, and some rebounds on results that
bounced a stock but then dissipates, we can get some good downside. FB
comes to mind as does AAPL, AMAT and others.
Perhaps at some point the bounce that holds will come, but not sure what the
catalyst would be outside of new trade deals with China, Canada, Mexico.
That likely does not happen anytime soon and is thus out there hanging on
the horizon. There is also the worry, though not often voiced, of what
happens if the democrats return to the majority in Congress and the
political turmoil (on top of the current political turmoil of course) that
would result.
What I really think is dogging the market are interest rates. Not really
higher 10 year yields but the possibility of an inverted yield curve.
Historically that is an accurate indicator of economic health and of course
the market reacts to that well ahead of the appearance of economic issues.
Thus the struggles in the market at maintaining breaks higher suggests
preparation for downside to come.
THE MARKET
CHARTS
The Thursday bounce move tried to add to the bounce Friday, but a strong
NASDAQ move failed to ignite buying elsewhere, and in the end the indices
faded. Still not bad overall patterns for the large cap indices as they
narrow their ranges, but they are still not yet reacting well to what
appears to be good news. The small and midcap indices are in patterns that
look bullish enough, and they are showing good action in their stocks, they
just have to make good on the patterns. That has been the problem for this
market: making good on the patterns.
NASDAQ: Gapped upside to the 50 day SMA then closed basically flat.
Thursday NASDAQ gapped up off a doji at its trendline from early 2016 and
looked to extend that Friday, but the move was sold. Still banging around
in the lower half of its channel so has room to move, but even with some
good large cap NASDAQ earnings the past two weeks it is still hard-pressed
to put together a sustained break higher. Two weeks upside from early April
was sold off aggressively into last Tuesday. It did not break down, but
even with some very good NASDAQ large cap earnings it has failed to climb
back up in its channel. It is acting heavy, but there are many large cap
NASDAQ stocks that have not broken down and many smaller NASDAQ stocks
working quite well. Thus, the index for now continues the 2016 trend but is
struggling.
SP500: The SP500 high to low move Friday was not nearly as epic as NASDAQ.
SP500 was down pre-market for quite some time before flipping positive.
Small move, low volume, no big deal. It continues narrowing its pattern the
past month, trying to set up a triangle over the 200 day SMA to deliver some
upside. It certainly can do that, but it has also experienced the same
failure to hold moves as NASDAQ, though perhaps on a less grand scale.
DJ30: See SP500. Basically a bullish pattern though intraday of late
unable to hold gains. Using the 200 day SMA as support, DJ30 is trying for
a higher low and a anew break higher.
SOX: Gapped sharply higher Friday, continuing the Thursday upside gap off
the 200 day SMA. Then it reversed and closed lower with a downside
engulfing pattern that can be an issue for the upside. Head and shoulders
pattern overall, very near the neckline in the right shoulder. Trying to
break higher off the 200 day support to break that pattern up, but the
Friday move was not encouraging.
RUTX: The small caps clearly helped lead the way higher from April's start.
After the January peak it has traded in a range that has formed something of
a large 3+ month pennant. Perhaps the small caps put in a higher low at the
50 day MA's a the midpoint of the pennant and rally for a breakout.
Important group of course given the economic implications.
SP400: A pair of tight doji at the 50 day MA's as the midcap index also
puts in a 3+ month pattern also using the 200 day SMA as support. Not bad
at all, and it could be that the midcaps and small caps again lead the
market, getting money that is pulled from the large cap areas.
MARKET STATS
DJ30
Stats: -11.15 points (-0.05%) to close at 24311.19
Nasdaq
Stats: +1.12 points (+0.02%) to close at 7119.80
Volume: 2.04B (-3.77%)
Up Volume: 921.11M (-548.89M)
Down Volume: 1.1B (+474.26M)
A/D and Hi/Lo: Advancers led 1.05 to 1
Previous Session: Advancers led 1.6 to 1
New Highs: 59 (-6)
New Lows: 54 (-8)
S&P
Stats: +2.97 points (+0.11%) to close at 2669.91
NYSE Volume: 724.2M (-12.30%)
A/D and Hi/Lo: Advancers led 1.35 to 1
Previous Session: Advancers led 2.04 to 1
New Highs: 64 (+4)
New Lows: 48 (-28)
Bulls and Bears:
Bulls bounced back 4.5 points after a precipitous decline. They are falling
hard, bouncing with quick sharp bounces, then falling again. Very similar to
the stock market action. Bears were lower but they are holding the bounce
higher into the 19's.
Bulls: 48.0 versus 43.6
Bears: 19.6 versus 19.8
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: 48.0 versus 43.6
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 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: 19.6 versus 19.8
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: 2.959% versus 2.975%. Bonds rallied back for a second session,
making it to the 10 day EMA and near the 50 day SMA. Possible double bottom
using the February and April lows. Thus far a decent move, more a relief
move.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.975%
versus 3.0245% versus 3.00% versus 2.962% versus 2.96% versus 2.914% versus
2.867% versus 2.83% versus 2.829 versus 2.825% versus 2.781% versus 2.801%
versus 2.805% versus 2.775% versus 2.812% versus 2.806% versus 2.781% versus
2.739% versus 2.714% versus 2.781% versus 2.775% versus 2.854% versus 2.813%
versus 2.814% versus 2.881% versus 2.90% versus 2.852%
EUR/USD: 1.21291 versus 1.21788. Big drop down to the 200 day SMA on the
low, followed by a reversal upside for a nice doji with tail. Euro may have
hit a near term bottom after 7 sessions lower that broke it down from its 3+
month lateral range.
Historical: 1.21788 versus 1.2163 versus 1.22232 versus 1.22094 versus
1.22876 versus 1.23464 versus 1.23748 versus 1.23712 versus 1.238532 versus
1.23313 versus 1.23299 versus 1.23720 versus 1.2359 versus 1.2311 versus
1.22812 versus 1.2247 versus 1.2285 versus 1.22698 versus 1.23073 versus
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
USD/JPY: 109.051 versus 109.28. Dollar rallied through Wednesday, then
spent Thursday and Friday moving laterally, waiting for the 10 day EMA to
catch up to the nice break higher.
Historical: 109.28 versus 109.373 versus 108.894 versus 108.728 versus
107.645 versus 107.404 versus 107.409 versus 107.027 versus 107.010 versus
107.362 versus 107.267 versus 106.882 versus 106.873 versus 107.09 versus
107.16 versus 106.939 versus 107.11 versus 106.816 versus 106.797 versus
105.901 versus 106.286 versus 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
Oil: 68.10, -0.09. Oil is working laterally at the 10 day EMA,
consolidating the break higher and the new recovery high.
Gold: 1323.40, +5.50. Gold rebounded some of the losses on the week that
saw it break lower through the 50 day MA to start. Closing in on the bottom
of its 4 month range.
End part 1
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Sunday, April 29, 2018
Saturday, April 21, 2018
The Daily, Part 1 of 3, 4-21-18
* * * *
4/21/2018 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:
http://www.investmenthouse.com/alertdaily.html
********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4
TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/ts/ts.mp4
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************
The REPORT SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.
Monday a Market Summary video, new plays, play table annotations.
Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.
Access to all current videos will remain assessable each day using the play
links in the reports.
If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.
MARKET SUMMARY
- Expiration sees a second day of selling off the Wednesday recovery peak.
- Volume mixed, not that high (surprise) as stocks sell.
- A lot of positive news in the world, but you would not know it.
- Will the bond yield curve invert? Does it matter?
- Still so many good patterns to drive the market upside. Can they do it
sans chips?
- Looking for more upside positions as earnings ramps up, stocks continue to
set up.
Not a banner expiration for the stock market, and with the worry about a 3%
10 year bond, a 2 year/10 year 40ish basis point yield curve, and weekend
event/news risk, I suppose not that surprising. There was little
volatility -- the action was all to the downside from a soft open. A couple
of bounce attempts were too thinly traded to succeed and by the close the
indices were all lower with the large cap indices back below the 50 day
MA's, now back at the 20 day EMA.
SP500 -22.99, -0.85%
NASDAQ -91.93, -1.27%
DJ30 201.95, -0.82%
SP400 -0.69%
RUTX -0.62%
SOX -1.17%
NASDAQ 10 -1.58%
VOLUME: NYSE +21% (900M); NASDAQ -5%. Some big volume in some NYSE listed
names, e.g. SKX helped push NYSE volume above average for the first session
in 7 sessions. Of course, on the downside. It was, however, expiration so
all volume is suspect.
ADVANCE/DECLINE: NYSE -2.2:1, NASDAQ -1.7:1. Still not disproportionate
and not as bad as the selling percentages would indicate.
After hitting a higher recovery high on this bounce Wednesday, stocks
struggled into the weekend. Chips didn't help, AAPL didn't help, but oil
was good, software as well. Many stocks held up very well even after 2 days
of selling. I know, I have said many leaders are holding up well even in
the weakness. I am still saying it after Friday. RHT, WDAY, FFIV, STX,
VMW, NFLX, HLF, NTNX -- many look good still, trying to offset LRCX and the
chips' drop on the TSMC guidance and all of those worries about iPhone sales
and thus potentially less demand for smartphone chips. Friday was not the
day to pull that off but most still look quite good as of the close with a
lot of important earnings to come.
Ah yes, the earnings season. It is the dominant factor though there is a
lot of talk about a recession with the bond yield curve narrowing. The 2
year and 10 year treasuries have just 40+ basis points between them and the
gap is narrowing. An inversion (2 year yield greater than 10 year yield)
historically signals a coming recession. The Fed has so intervened in the
bond market, however, some argue that the relationship does not hold the
same meaning as in the past. The level of interference/manipulation is
indeed high, but it was during the Greenspan years as well, and still bond
signals were accurate. Recall Greenspan's 'conundrum' comment to Congress
as to why yields remained low despite the Fed hiking the short end. He
opined it was due to heavy foreign buying keeping yields lower. That did
not prevent the subsequent collapse, however; the bond market signals, even
with intervention, still worked well.
Thus, bonds are likely a drag, but the market is set to receive some key
earnings this week that can definitely work a market rebound bid,
particularly with many well-positioned stocks even after Thursday and
Friday. Holding during that pullback shows owners staying with those
stocks, and good earnings brings in more bids.
Remember, we are playing a move to near the prior highs, not a new breakout,
at least not yet. While a possible recession is a huge factor, it is not so
huge near term. The curve has not inverted, stocks are not selling off
wholesale yet. Some good earnings and a rally back to the prior highs is
not far-fetched and is rather normal action.
Not saying that it has to happen. More news can hit that undercuts the
move, good patterns or no. I mean, there is a HISTORIC agreement with North
Korea, one that would be on the front page of every newspaper, the lead
story on every website, but for the mainstream media does not want to give
it much play. They rather lead with the bogus DNC lawsuit against Russia,
Wikileaks, and Trump for harming Clinton's election campaign. The only
thing that harmed the Clinton campaign was Clinton and her advisors who
ignored a big part of the country. That is what many of my left leaning
contacts believe and they are very much pro-democrat. I of course am not
democrat, not republican, but a true conservative; there is no room for me
in EITHER party. Ironically, I find that far left people who truly believe
in the Constitution and its protections can find common ground with me often
more times than republicans or mainstream democrats. Oh well.
The point: there are serious moves in the world to the positive. Not just
NKorea, but Saudi Arabia moving to modernize and aligning with the US and
Israel. These are huge shifts in the dynamics of the world for the good,
yet our headlines trumpet lawsuits that even left leaning pundits and
analysts say are BS, discuss Russia as if it is something other than a
post-communist society that never embraced capitalism and thus remains with
a puny economy that dictates the Cold War antics we see today in order to
project super power status and thus an attempt to remain relevant. Texas
alone could outmuscle Russia economically, and that has to gall Putin, the
little dictator who thinks he could.
Okay, so if the market can see the good through the BS smokescreen, it has
still room to rally and the patterns to carry it. They are still there as
they were before the chips fell. Chips are very big for the market, and if
we were playing for a market breakout this selloff be a major concern
cutting against that kind of move. That is not the case, and therefore with
the good patterns and the vast majority of our positions holding or moving
very well, we still play for that same objective heading into next week.
THE MARKET
CHARTS
A deeper test by the large cap indices broke the 50 day MA.
SP500: After rebound highs were hit Wednesday, SP500 faded into Friday,
ending at the 20 day EMA on the close. Volume rose above average, but with
expiration that must be discounted. SP500 is in a 2-day pullback to the 20
day MA and the early April recovery high and the late February low. Good
place to hold and indeed this is where SP500 needs to continue the rebound.
DJ30: Very similar to SP500, fading to the 20 day EMA and the late February
low on the Friday close as volume moved above average. Still very well
positioned to continue higher.
NASDAQ: Same story, recovery high and doji Wednesday followed by the
Thursday/Friday fade. Closed at the 20 day EMA just below the 50 day EMA.
Volume was lower and still below average on expiration; wow, no dumping for
sure. Not bad action considering the semiconductors had such a lousy end of
the week.
SOX: Speaking of SOX, it was not good. Thursday a gap below the 50 day
MA's and the lower channel trendline. An ugly week for true. That said,
after the nice February to March run, SOX sold as did the rest of the
indices. In early April it bottomed at the 78% Fibonacci retracement of
that rally. Then a bounce, and now last week's drop to match the prior low.
Get where I am heading? Potential double bottom at the 78% Fibonacci
retracement the same as SP500, DJ30. Those two bounced, moved higher, and
are testing that initial move. We will see if SOX can do the same.
SP400: Same action, higher recovery high Wednesday, testing back through
Friday. Nice action with a very good-looking pullback to the 10 day EMA,
filling the gap higher Tuesday. With the gap filled, SP400 will be ready to
move higher. Midcaps along with RUTX led the last move higher, and it looks
as if SP400 is in position to make the new move higher.
RUTX: Solid move up into Wednesday, then threw a tombstone doji. That led
to the Thursday/Friday selling to tap at the 10 day EMA on the Friday low.
Strong, market-leading move, not a pretty significant but normal test toward
the 10 day EMA, just a few points lower than the Friday close. Looking for
RUTX to fade some more early week, perhaps undercut the 10 day, show a doji
with tail, then rebound. That fits with a continuation of the upside move.
LEADERSHIP
FAANG: AAPL dropped to the 200 day SMA Friday on big volume. AMZN dropped
Friday after gapping upside Wednesday and Thursday. A bit of a fade, lower
volume on the drop. FB is working laterally, may try something but may need
more work. NFLX is testing the earnings gap and run higher. Will be a new
entry as it moves back upside. GOOG is working laterally mid-range and is
setting up a new move. Earnings are early week, and entering ahead of time
may not be a great move (LRCX versus NFLX) but it is setting up nicely.
Oil: A very good week though most were down a bit Friday. DO, HAL, APC
posted great moves, needed a rest. Others are setting up after moves, e.g.
CVX. MRO looks very good. Nice group that, after months, is actually
coming through on its patterns.
Semiconductors: SOX at the 78% Fibonacci retracement, so perhaps some of
these can now bounce after a rough week. LRCX is at the 61% Fibonacci
retracement, its second visit; much like SOX, SP500, DJ30. MU trying to
hold near the 50 day MA's, and is right at the November high. Would prefer
to see a hold here given our current position. SLAB was hammered, XLNX,
SWKS -- AAPL did not help these stocks at all.
Software: Faded Friday, but a good week. CRM was off a bit on low trade
Friday. VMW is testing its gaps higher and despite the move can go higher,
and a test is an entry opportunity. FFIV is also making a good test. GLUU
enjoyed a great week. MSFT is testing back after bumping the March peak.
Drugs/Biotech: Continues to be a solid group though diverse. IMMU is in a
nice 1-2-3 test. CERS looked very good though Friday it dropped back to the
10 day MA. AMED continues upside with a nice move. UNH is in a flag test
of the Tuesday upside gap.
Retail: Good moves midweek but fading to end the week. BBY gapped upside
Wednesday, but then faded to close the gap by Friday. HD surged but it too
faded into Friday, testing the move. Still looks very good. TSCO tried to
make the move Friday, but gave it back. Still looks good. COST is in an
excellent breakout test, forming a handle. M starting higher in a nice
pattern. RH still looks good.
MISC: SQ started breaking higher last week, struggled Friday, still looks
good. Testing a good break higher. Works. FCX broke higher, tested a bit
Friday.
Metals: FCX enjoyed a good week. Steel is interesting, possibly setting
up, e.g. AKS, STLD, SCHN.
MARKET STATS
DJ30
Stats: -201.95 points (-0.82%) to close at 24462.94
Nasdaq
Stats: -91.93 points (-1.27%) to close at 7146.13
Volume: 1.88B (-4.57%)
Up Volume: 525.97M (+1.6M)
Down Volume: 1.34B (-80M)
A/D and Hi/Lo: Decliners led 1.68 to 1
Previous Session: Decliners led 1.71 to 1
New Highs: 54 (-19)
New Lows: 63 (+14)
S&P
Stats: -22.99 points (-0.85%) to close at 2670.14
NYSE Volume: 900M (+20.47%)
A/D and Hi/Lo: Decliners led 2 to 1
Previous Session: Decliners led 2.22 to 1
New Highs: 50 (-28)
New Lows: 103 (+8)
SENTIMENT INDICATORS
VIX: 16.88; +0.92
VXN: 21.63; +1.47
VXO: 16.72; +1.46
Put/Call Ratio (CBOE): 0.98; +0.01
Bulls and Bears:
Bulls rose ever so slightly while bears continued to rise. Finally seeing
more movement upside in bears. That is the more significant of the two
because bears have been so low for so long.
Bulls: 43.6 versus 42.2
Bears: 19.8 versus 18.6
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: 43.6 versus 42.2
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 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: 19.8 versus 18.6
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: 2.96% versus 2.914%. Bonds broke lower Thursday, gapping below the
50 day MA. Friday they continued lower. A breakdown and 3+% 10 year yields
look viable.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.914%
versus 2.867% versus 2.83% versus 2.829 versus 2.825% versus 2.781% versus
2.801% versus 2.805% versus 2.775% versus 2.812% versus 2.806% versus 2.781%
versus 2.739% versus 2.714% versus 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%
EUR/USD: 1.22876 versus 1.23464. The euro broke lower below the 50 day
MA's. Not out of the lateral range, but heading toward the lows in the four
month range.
Historical: 1.23464 versus 1.23748 versus 1.23712 versus 1.238532 versus
1.23313 versus 1.23299 versus 1.23720 versus 1.2359 versus 1.2311 versus
1.22812 versus 1.2247 versus 1.2285 versus 1.22698 versus 1.23073 versus
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: 107.645 versus 107.404. Dollar trying to break higher out of the
three week lateral range.
Historical: 107.404 versus 107.409 versus 107.027 versus 107.010 versus
107.362 versus 107.267 versus 106.882 versus 106.873 versus 107.09 versus
107.16 versus 106.939 versus 107.11 versus 106.816 versus 106.797 versus
105.901 versus 106.286 versus 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: 68.40, +0.07. Great week, breaking higher Wednesday after a quick
test of the range breakout. Nice setup to continue the move higher. Toward
80 to 100 as Saudi says? Who knows? The pattern is simply bullish.
Gold: 1338.30, -10.50. Flopped Friday after a tight lateral move all week.
Still in the range, but not breakout out Friday.
MONDAY
Earnings ramp up with GOOG (4/23 after), AMZN (4/26 after). Others are set
as well, and the bulls are looking for these stocks to reignite the upside
move. As noted earlier, there are still very good patterns to drive higher.
Good stocks as well, e.g. NFLX, FFIV, etc.
Therefore we are looking at more positions as the market heads higher with
some of these good patterns. Some oil, some big names, some retail. They
are good, the move is still a bounce, they can still make us money. Still
looking for just a move up to near the prior highs before the move
completely fizzles. It can move higher given all the good patterns, but
with the semiconductors dropping out, that prospect dimmed. If LRCX and
others in the group, including SOX itself, rally off their Fibonacci double
bottoms, that can happen. That would be great, but it has to prove it.
Have a great weekend!
End part 1
_______________________________________________________
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4/21/2018 Investment House Daily
* * * *
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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:
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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
- Expiration sees a second day of selling off the Wednesday recovery peak.
- Volume mixed, not that high (surprise) as stocks sell.
- A lot of positive news in the world, but you would not know it.
- Will the bond yield curve invert? Does it matter?
- Still so many good patterns to drive the market upside. Can they do it
sans chips?
- Looking for more upside positions as earnings ramps up, stocks continue to
set up.
Not a banner expiration for the stock market, and with the worry about a 3%
10 year bond, a 2 year/10 year 40ish basis point yield curve, and weekend
event/news risk, I suppose not that surprising. There was little
volatility -- the action was all to the downside from a soft open. A couple
of bounce attempts were too thinly traded to succeed and by the close the
indices were all lower with the large cap indices back below the 50 day
MA's, now back at the 20 day EMA.
SP500 -22.99, -0.85%
NASDAQ -91.93, -1.27%
DJ30 201.95, -0.82%
SP400 -0.69%
RUTX -0.62%
SOX -1.17%
NASDAQ 10 -1.58%
VOLUME: NYSE +21% (900M); NASDAQ -5%. Some big volume in some NYSE listed
names, e.g. SKX helped push NYSE volume above average for the first session
in 7 sessions. Of course, on the downside. It was, however, expiration so
all volume is suspect.
ADVANCE/DECLINE: NYSE -2.2:1, NASDAQ -1.7:1. Still not disproportionate
and not as bad as the selling percentages would indicate.
After hitting a higher recovery high on this bounce Wednesday, stocks
struggled into the weekend. Chips didn't help, AAPL didn't help, but oil
was good, software as well. Many stocks held up very well even after 2 days
of selling. I know, I have said many leaders are holding up well even in
the weakness. I am still saying it after Friday. RHT, WDAY, FFIV, STX,
VMW, NFLX, HLF, NTNX -- many look good still, trying to offset LRCX and the
chips' drop on the TSMC guidance and all of those worries about iPhone sales
and thus potentially less demand for smartphone chips. Friday was not the
day to pull that off but most still look quite good as of the close with a
lot of important earnings to come.
Ah yes, the earnings season. It is the dominant factor though there is a
lot of talk about a recession with the bond yield curve narrowing. The 2
year and 10 year treasuries have just 40+ basis points between them and the
gap is narrowing. An inversion (2 year yield greater than 10 year yield)
historically signals a coming recession. The Fed has so intervened in the
bond market, however, some argue that the relationship does not hold the
same meaning as in the past. The level of interference/manipulation is
indeed high, but it was during the Greenspan years as well, and still bond
signals were accurate. Recall Greenspan's 'conundrum' comment to Congress
as to why yields remained low despite the Fed hiking the short end. He
opined it was due to heavy foreign buying keeping yields lower. That did
not prevent the subsequent collapse, however; the bond market signals, even
with intervention, still worked well.
Thus, bonds are likely a drag, but the market is set to receive some key
earnings this week that can definitely work a market rebound bid,
particularly with many well-positioned stocks even after Thursday and
Friday. Holding during that pullback shows owners staying with those
stocks, and good earnings brings in more bids.
Remember, we are playing a move to near the prior highs, not a new breakout,
at least not yet. While a possible recession is a huge factor, it is not so
huge near term. The curve has not inverted, stocks are not selling off
wholesale yet. Some good earnings and a rally back to the prior highs is
not far-fetched and is rather normal action.
Not saying that it has to happen. More news can hit that undercuts the
move, good patterns or no. I mean, there is a HISTORIC agreement with North
Korea, one that would be on the front page of every newspaper, the lead
story on every website, but for the mainstream media does not want to give
it much play. They rather lead with the bogus DNC lawsuit against Russia,
Wikileaks, and Trump for harming Clinton's election campaign. The only
thing that harmed the Clinton campaign was Clinton and her advisors who
ignored a big part of the country. That is what many of my left leaning
contacts believe and they are very much pro-democrat. I of course am not
democrat, not republican, but a true conservative; there is no room for me
in EITHER party. Ironically, I find that far left people who truly believe
in the Constitution and its protections can find common ground with me often
more times than republicans or mainstream democrats. Oh well.
The point: there are serious moves in the world to the positive. Not just
NKorea, but Saudi Arabia moving to modernize and aligning with the US and
Israel. These are huge shifts in the dynamics of the world for the good,
yet our headlines trumpet lawsuits that even left leaning pundits and
analysts say are BS, discuss Russia as if it is something other than a
post-communist society that never embraced capitalism and thus remains with
a puny economy that dictates the Cold War antics we see today in order to
project super power status and thus an attempt to remain relevant. Texas
alone could outmuscle Russia economically, and that has to gall Putin, the
little dictator who thinks he could.
Okay, so if the market can see the good through the BS smokescreen, it has
still room to rally and the patterns to carry it. They are still there as
they were before the chips fell. Chips are very big for the market, and if
we were playing for a market breakout this selloff be a major concern
cutting against that kind of move. That is not the case, and therefore with
the good patterns and the vast majority of our positions holding or moving
very well, we still play for that same objective heading into next week.
THE MARKET
CHARTS
A deeper test by the large cap indices broke the 50 day MA.
SP500: After rebound highs were hit Wednesday, SP500 faded into Friday,
ending at the 20 day EMA on the close. Volume rose above average, but with
expiration that must be discounted. SP500 is in a 2-day pullback to the 20
day MA and the early April recovery high and the late February low. Good
place to hold and indeed this is where SP500 needs to continue the rebound.
DJ30: Very similar to SP500, fading to the 20 day EMA and the late February
low on the Friday close as volume moved above average. Still very well
positioned to continue higher.
NASDAQ: Same story, recovery high and doji Wednesday followed by the
Thursday/Friday fade. Closed at the 20 day EMA just below the 50 day EMA.
Volume was lower and still below average on expiration; wow, no dumping for
sure. Not bad action considering the semiconductors had such a lousy end of
the week.
SOX: Speaking of SOX, it was not good. Thursday a gap below the 50 day
MA's and the lower channel trendline. An ugly week for true. That said,
after the nice February to March run, SOX sold as did the rest of the
indices. In early April it bottomed at the 78% Fibonacci retracement of
that rally. Then a bounce, and now last week's drop to match the prior low.
Get where I am heading? Potential double bottom at the 78% Fibonacci
retracement the same as SP500, DJ30. Those two bounced, moved higher, and
are testing that initial move. We will see if SOX can do the same.
SP400: Same action, higher recovery high Wednesday, testing back through
Friday. Nice action with a very good-looking pullback to the 10 day EMA,
filling the gap higher Tuesday. With the gap filled, SP400 will be ready to
move higher. Midcaps along with RUTX led the last move higher, and it looks
as if SP400 is in position to make the new move higher.
RUTX: Solid move up into Wednesday, then threw a tombstone doji. That led
to the Thursday/Friday selling to tap at the 10 day EMA on the Friday low.
Strong, market-leading move, not a pretty significant but normal test toward
the 10 day EMA, just a few points lower than the Friday close. Looking for
RUTX to fade some more early week, perhaps undercut the 10 day, show a doji
with tail, then rebound. That fits with a continuation of the upside move.
LEADERSHIP
FAANG: AAPL dropped to the 200 day SMA Friday on big volume. AMZN dropped
Friday after gapping upside Wednesday and Thursday. A bit of a fade, lower
volume on the drop. FB is working laterally, may try something but may need
more work. NFLX is testing the earnings gap and run higher. Will be a new
entry as it moves back upside. GOOG is working laterally mid-range and is
setting up a new move. Earnings are early week, and entering ahead of time
may not be a great move (LRCX versus NFLX) but it is setting up nicely.
Oil: A very good week though most were down a bit Friday. DO, HAL, APC
posted great moves, needed a rest. Others are setting up after moves, e.g.
CVX. MRO looks very good. Nice group that, after months, is actually
coming through on its patterns.
Semiconductors: SOX at the 78% Fibonacci retracement, so perhaps some of
these can now bounce after a rough week. LRCX is at the 61% Fibonacci
retracement, its second visit; much like SOX, SP500, DJ30. MU trying to
hold near the 50 day MA's, and is right at the November high. Would prefer
to see a hold here given our current position. SLAB was hammered, XLNX,
SWKS -- AAPL did not help these stocks at all.
Software: Faded Friday, but a good week. CRM was off a bit on low trade
Friday. VMW is testing its gaps higher and despite the move can go higher,
and a test is an entry opportunity. FFIV is also making a good test. GLUU
enjoyed a great week. MSFT is testing back after bumping the March peak.
Drugs/Biotech: Continues to be a solid group though diverse. IMMU is in a
nice 1-2-3 test. CERS looked very good though Friday it dropped back to the
10 day MA. AMED continues upside with a nice move. UNH is in a flag test
of the Tuesday upside gap.
Retail: Good moves midweek but fading to end the week. BBY gapped upside
Wednesday, but then faded to close the gap by Friday. HD surged but it too
faded into Friday, testing the move. Still looks very good. TSCO tried to
make the move Friday, but gave it back. Still looks good. COST is in an
excellent breakout test, forming a handle. M starting higher in a nice
pattern. RH still looks good.
MISC: SQ started breaking higher last week, struggled Friday, still looks
good. Testing a good break higher. Works. FCX broke higher, tested a bit
Friday.
Metals: FCX enjoyed a good week. Steel is interesting, possibly setting
up, e.g. AKS, STLD, SCHN.
MARKET STATS
DJ30
Stats: -201.95 points (-0.82%) to close at 24462.94
Nasdaq
Stats: -91.93 points (-1.27%) to close at 7146.13
Volume: 1.88B (-4.57%)
Up Volume: 525.97M (+1.6M)
Down Volume: 1.34B (-80M)
A/D and Hi/Lo: Decliners led 1.68 to 1
Previous Session: Decliners led 1.71 to 1
New Highs: 54 (-19)
New Lows: 63 (+14)
S&P
Stats: -22.99 points (-0.85%) to close at 2670.14
NYSE Volume: 900M (+20.47%)
A/D and Hi/Lo: Decliners led 2 to 1
Previous Session: Decliners led 2.22 to 1
New Highs: 50 (-28)
New Lows: 103 (+8)
SENTIMENT INDICATORS
VIX: 16.88; +0.92
VXN: 21.63; +1.47
VXO: 16.72; +1.46
Put/Call Ratio (CBOE): 0.98; +0.01
Bulls and Bears:
Bulls rose ever so slightly while bears continued to rise. Finally seeing
more movement upside in bears. That is the more significant of the two
because bears have been so low for so long.
Bulls: 43.6 versus 42.2
Bears: 19.8 versus 18.6
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: 43.6 versus 42.2
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 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: 19.8 versus 18.6
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: 2.96% versus 2.914%. Bonds broke lower Thursday, gapping below the
50 day MA. Friday they continued lower. A breakdown and 3+% 10 year yields
look viable.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.914%
versus 2.867% versus 2.83% versus 2.829 versus 2.825% versus 2.781% versus
2.801% versus 2.805% versus 2.775% versus 2.812% versus 2.806% versus 2.781%
versus 2.739% versus 2.714% versus 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%
EUR/USD: 1.22876 versus 1.23464. The euro broke lower below the 50 day
MA's. Not out of the lateral range, but heading toward the lows in the four
month range.
Historical: 1.23464 versus 1.23748 versus 1.23712 versus 1.238532 versus
1.23313 versus 1.23299 versus 1.23720 versus 1.2359 versus 1.2311 versus
1.22812 versus 1.2247 versus 1.2285 versus 1.22698 versus 1.23073 versus
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: 107.645 versus 107.404. Dollar trying to break higher out of the
three week lateral range.
Historical: 107.404 versus 107.409 versus 107.027 versus 107.010 versus
107.362 versus 107.267 versus 106.882 versus 106.873 versus 107.09 versus
107.16 versus 106.939 versus 107.11 versus 106.816 versus 106.797 versus
105.901 versus 106.286 versus 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: 68.40, +0.07. Great week, breaking higher Wednesday after a quick
test of the range breakout. Nice setup to continue the move higher. Toward
80 to 100 as Saudi says? Who knows? The pattern is simply bullish.
Gold: 1338.30, -10.50. Flopped Friday after a tight lateral move all week.
Still in the range, but not breakout out Friday.
MONDAY
Earnings ramp up with GOOG (4/23 after), AMZN (4/26 after). Others are set
as well, and the bulls are looking for these stocks to reignite the upside
move. As noted earlier, there are still very good patterns to drive higher.
Good stocks as well, e.g. NFLX, FFIV, etc.
Therefore we are looking at more positions as the market heads higher with
some of these good patterns. Some oil, some big names, some retail. They
are good, the move is still a bounce, they can still make us money. Still
looking for just a move up to near the prior highs before the move
completely fizzles. It can move higher given all the good patterns, but
with the semiconductors dropping out, that prospect dimmed. If LRCX and
others in the group, including SOX itself, rally off their Fibonacci double
bottoms, that can happen. That would be great, but it has to prove it.
Have a great weekend!
End part 1
_______________________________________________________
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
Sunday, April 15, 2018
The Daily, Part 1 of 3, 4-14-18
* * * *
4/14/2018 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: None issued
Entry alerts: None issued
Trailing stops: None issued
Stop alerts: TJX
The market alert service is a premium level service where we issue intraday
alerts relating to the general market conditions, when stocks hit action
points (buy, stop, target, etc.), and when we see other information
impacting the market or our stocks. To subscribe to the alert service you
can sign up at the following link:
http://www.investmenthouse.com/alertdaily.html
********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4
TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/ts/ts.mp4
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************
The REPORT SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.
Monday a Market Summary video, new plays, play table annotations.
Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.
Access to all current videos will remain assessable each day using the play
links in the reports.
If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.
MARKET SUMMARY
- Too much turmoil and geopolitics for many to buy into the weekend.
- Stocks start higher but fade off the higher highs.
- Indices cannot take out the 50 day MA's yet, but volume and breadth are
light.
- Syria strikes raise risk level, but Trump declares 'mission accomplished.'
- Earnings start with NFLX leading off Monday as indices are in position to
continue the rebound rally.
- Still plenty of leadership in position to move higher.
The week did not end great, but while the stock indices traded lower Friday,
the overall week was positive. Even Friday. No, not a rip higher, but a
second bounce from the February lows, one that produced better internals and
much better moves by some solid leader stocks. The bounce took RUTX past
the 50 day MA's, but the rest of the indices still had to deal with that
level, something we noted as this bounces' first test. Wanted them to move
through and then come back and test from above a la RUTX, but that was not
in the cards. With the move higher on the week and a weekend with still
many potential flashpoint issues, after a higher open the bids dried up and
stocks solid back, really struggling in the afternoon session.
SP500 -7.68, -0.29%
NASDAQ -33.60, -0.47%
DJ30 -122.91, -0.50%
SP400 -0.32%
RUTX -0.50%
SOX -0.77%
VOLUME: NYSE -4%, NASDAQ -13%. Volume, already low, tumbled Friday. NYSE
posted another below average session, NASDAQ faded as well. Volume was
quite light all week with one good upside session Tuesday when the market
kicked in its first good upside move in awhile with some good internals and
leadership.
ADVANCE/DECLINE: NYSE -1.3:1, NASDAQ -1.7:1.
These internals show no selling, just a drying up of the bids ahead of the
weekend. People were not dumping stocks ahead of the weekend, they just
stopped buying given all of the geopolitical issues in the world. Oh, and
it was Friday the 13th as well.
Again, it was not a great week of power. It was, however, the second bounce
off the test of the February lows by SP500 and DJ30. It showed the internal
strength and particularly leadership that the first bounce did not have. As
you are aware, we concluded based upon the internals and the improved action
in leaders that a tradable rally was beginning and thus we started buying
the good moves. It is interesting that Friday Byron Weems said he believed
that the market would test the February low and then move higher from there.
It would appear to us that the February lows have been tested and the market
is already moving upside despite the Friday sluggishness.
Accordingly, we picked up quite a few positions on the week, greatly
expanding our exposure to the market. Some really good names moving really
well. The key now, as noted late week is whether the indices can overcome
the first test, the 50 day MA's, and continue the rally into earnings.
Friday was a 'no,' but that was not the seminal test. This week more
earnings come out and the market is set up quite well to move higher and
continue the rebound.
What about the geopolitics, e.g. the late Friday strike on Syria by the US,
France and UK (Germany sat this one out)? If things spiral out of control
of course all bets are off. Thus far, however, the market is shaking them
off and moving higher, even if on low volume.
Remember, this does not mean we think new highs are going to result. They
can but the market will need a real boost and get a lot more volume to make
that happen. Earnings can provide that as they did in October 2017. Thing
is, the move higher has been steady and straight for a long time. Starting
in January and that four week surge to higher highs, the market moves are
much more volatile. That is something moves tend to show near their end
before a deeper correction is needed.
Also, the patterns developed in the indices suggest a rebound but more has
to be shown to make new highs. Specifically, SP500 and DJ30 set up double
bottoms at the 78% and 61% Fibonacci retracement, respectively, of the
September through January rally. Those are reliable upside bounce plays
with a maximum target at the prior highs. Beyond that, again, needs to have
something more to drive it.
Therefore, on this move we play the pattern move. Then if something more
shows up to drive stocks higher, we enjoy the ride as we are already in, and
we take the opportunities presented in other stocks that will show up. We
know that to be the case because if the move continues beyond a bounce there
will be new leaders and new opportunities to play the upside.
THE MARKET
Friday the lackluster economic data continued as the slow spot I discussed
over a month ago -- and that the Fed just acknowledged this past week --
continues. Michigan Sentiment was not bad but it posted the biggest loss in
18 months.
Then there are the geopolitical issues dominated by trade, and after Friday
evening, perhaps Syria/Russia. One bright spot Friday was Secretary Ross
stating at a conference in Lima, Peru that he anticipates a new deal on
NAFTA by the third week in May.
Thus far, the market, while buffeted day to day by the news, has overcome
the negatives and is rising off the February lows. It is not a massive
surge but it is showing the right credentials in internals (when it counts)
and leadership. Even IBD says the market is now in what it calls a
confirmed uptrend again. As noted, we are playing that move, using rational
expectations.
CHARTS
RUTX: The small caps get the pole position today because they led the move
starting with a Tuesday surge off a higher low. That higher low was a test
of the initial move from the 200 day SMA and selloff that started mid-March.
RUTX broke higher through the 50 day MA's and extended that move into
Thursday. Friday of course it was off, but it is testing from a position of
strength, i.e. from above. That bodes well for RUTX successfully testing
and resuming the move upside.
SP400: Moved through the 50 day MA's Thursday on the high but could not
hold it. Again Friday but could not hold it. Still an improved pattern,
showing a pennant the past 3 months. Looks ready to follow RUTX through
that first resistance.
NASDAQ: Moved up to the 50 day MA's on the week, but was rebuffed Friday.
Holding over the rising 10 day EMA and we anticipate NASDAQ to continue the
move next week given the good leadership. NASDAQ appears to have formed a
new, wider uptrending channel using the 200 day SMA on the lows. Rallied
off that level just over a week back, a quick test, then the move higher
last week.
SOX: Came off the channel lower trendline Monday and posted a great move
into the Friday open. That move SOX through the 50 day MA's, but it could
not hold the move. Still trending in its 5 month channel, coming off the
low the past week as noted.
DJ30: Off the February lows touched just 7 sessions back. February lows,
200 day SMA, 61% Fibonacci retracement -- very good support. Bounced up to
the 50 day EMA Friday, faded modestly, lower trade. Okay, a double bottom
at the February lows, and now something of a downward pointing wedge
forming. Wedges tend to resolve to opposite direction of the point, and in
this case that would be upside.
SP500: Also held the February lows, 200 day SMA, and its 78% Fibonacci
retracement. Bounced through the Friday open, testing the 50 day MA's from
below. Faded that move, but is in very good position to hold and continue
the move higher.
LEADERSHIP
FAANG: NFLX and the four dwarves. NFLX was up all week in a good move.
AAPL up but still lodged in the range. AMZN looks weak below the 50 day MA.
FB managed to bounce on ZBurg playing nice to Congress, but still has to
appear before the EU. GOOG is holding at the 200 day SMA; perhaps some day
it can put in a bounce. For now, money has left all of this group outside
NFLX.
Chips: Still a struggle but working on it. LRCX not bad with a move up on
the week. AVGO gapped upside on a big share buyback program, but still has
to show its pattern can hold up. INTC is back near its high, coming off the
50 day MA. MU is moving up off the 50 day MA. MXWL, AMAT not bad while
MLNX is putting in higher highs. There are leaders.
Drugs/Biotech: AMED, AMAG had good weeks though Friday was off. DVAX was
strong but fell to the 10 day EMA Friday. UNH still trying to set up, ARWR
looks great, INO setting up, MYL not bad. VRX looking good. Good group.
Software: Really improving. RHT a good move last week, FFIV awesome for
us. CRM trying to make a break. GLUU breaking higher in the gaming
software. NOW setting up, COUP looks nice.
Oil: DO working quite well. HAL continues higher. APC as well. A group
of leaders that held up working well. Others are attempting to catch up.
Like NBR.
MARKET STATS
DJ30
Stats: -122.91 points (-0.50%) to close at 24360.14
Nasdaq
Stats: -33.60 points (-0.47%) to close at 7106.65
Volume: 1.76B (-12.87%)
Up Volume: 491.17M (-928.83M)
Down Volume: 1.25B (+675.7M)
A/D and Hi/Lo: Decliners led 1.64 to 1
Previous Session: Advancers led 1.85 to 1
New Highs: 52 (-19)
New Lows: 30 (+8)
S&P
Stats: -7.69 points (-0.29%) to close at 2656.30
NYSE Volume: 717.253M (-3.71%)
A/D and Hi/Lo: Decliners led 1.3 to 1
Previous Session: Advancers led 1.19 to 1
New Highs: 43 (-10)
New Lows: 50 (+8)
SENTIMENT INDICATORS
VIX: 17.41; -1.08
VXN: 22.06; -0.84
VXO: 17.89; -1.40
Put/Call Ratio (CBOE): 0.98; -0.01
Bulls and Bears:
Bulls are falling rapidly after the peak at 66.7. that was a significant
high and bulls have dropped hard into the low 40's. As you would
anticipate, the market sold off but as the bulls sell off the market is
ready for a pre-earnings rally off the lows.
Bulls: 42.2 versus 47.6 versus
Bears: 18.6 versus 18.1
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 42.2 versus 47.6
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 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: 18.6 versus 18.1
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: 2.825% versus 2.825%
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.825%
versus 2.781% versus 2.801% versus 2.805% versus 2.775% versus 2.812% versus
2.806% versus 2.781% versus 2.739% versus 2.714% versus 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: 1.23313 versus 1.23299. Holding steady in its lateral move,
testing the 50 day EMA, still positive pattern overall.
Historical: 1.23299 versus 1.23720 versus 1.2359 versus 1.2311 versus
1.22812 versus 1.2247 versus 1.2285 versus 1.22698 versus 1.23073 versus
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: 107.362 versus 107.267. Trying to break higher out of a tight
weeklong lateral move.
Historical: 107.267 versus 106.882 versus 106.873 versus 107.09 versus
107.16 versus 106.939 versus 107.11 versus 106.816 versus 106.797 versus
105.901 versus 106.286 versus 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: 67.39, +0.32. Nice break higher off the 50 day MA to a higher high,
moving past the last January peak.
Gold: 1347.90, +6.00. Broke higher Wednesday but then fell, only to start
to rebound Friday. A 2.5 month base looks close to breaking out.
MONDAY
The big news Friday was the Syria 'coalition' strikes. Russia claims it
shot down 70-something of around 100 missiles and little damage done. The
Pentagon says it hit all targets. Both could be true the way they phrase
things.
The worry is that causes some further brouhaha, but it helped when Trump's
defense minister said the strikes were a 'one time thing.' Later Trump
stated it was 'mission accomplished.' Now I know that phrase has dubious
meaning what with the Bush II forays into nation building, but in this
situation I am pretty sure it can be taken to mean as a message to Russia
that we are not going to launch further strikes based upon the chemical
poisoning claims.
With the selloff ahead of earnings, the start of the move higher, the lower
volume on the downside sessions, and the ability to thus far shake off
geopolitics, we are still looking for the move upside to continue.
That means a move through the 50 day MA's for the indices as they follow
RUTX and its move into earnings. NFLX gets things going with its results
Monday after the close. LRCX is Tuesday after the close. Some important
names announcing early to try and get the market moving into the first
couple of weeks of the season. These initial earnings will be important for
the move, and we anticipate holding some of the positions on NFLX, LRCX and
of course see if they can carry the rest of the market, and our other
positions higher.
Therefore, though we have several new positions as of last week, there are
plenty of very good-looking stocks still in very good position to make moves
higher.
Have a great weekend!
End part 1 of 3
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The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4
TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
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TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************
The REPORT SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.
Monday a Market Summary video, new plays, play table annotations.
Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.
Access to all current videos will remain assessable each day using the play
links in the reports.
If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.
MARKET SUMMARY
- Too much turmoil and geopolitics for many to buy into the weekend.
- Stocks start higher but fade off the higher highs.
- Indices cannot take out the 50 day MA's yet, but volume and breadth are
light.
- Syria strikes raise risk level, but Trump declares 'mission accomplished.'
- Earnings start with NFLX leading off Monday as indices are in position to
continue the rebound rally.
- Still plenty of leadership in position to move higher.
The week did not end great, but while the stock indices traded lower Friday,
the overall week was positive. Even Friday. No, not a rip higher, but a
second bounce from the February lows, one that produced better internals and
much better moves by some solid leader stocks. The bounce took RUTX past
the 50 day MA's, but the rest of the indices still had to deal with that
level, something we noted as this bounces' first test. Wanted them to move
through and then come back and test from above a la RUTX, but that was not
in the cards. With the move higher on the week and a weekend with still
many potential flashpoint issues, after a higher open the bids dried up and
stocks solid back, really struggling in the afternoon session.
SP500 -7.68, -0.29%
NASDAQ -33.60, -0.47%
DJ30 -122.91, -0.50%
SP400 -0.32%
RUTX -0.50%
SOX -0.77%
VOLUME: NYSE -4%, NASDAQ -13%. Volume, already low, tumbled Friday. NYSE
posted another below average session, NASDAQ faded as well. Volume was
quite light all week with one good upside session Tuesday when the market
kicked in its first good upside move in awhile with some good internals and
leadership.
ADVANCE/DECLINE: NYSE -1.3:1, NASDAQ -1.7:1.
These internals show no selling, just a drying up of the bids ahead of the
weekend. People were not dumping stocks ahead of the weekend, they just
stopped buying given all of the geopolitical issues in the world. Oh, and
it was Friday the 13th as well.
Again, it was not a great week of power. It was, however, the second bounce
off the test of the February lows by SP500 and DJ30. It showed the internal
strength and particularly leadership that the first bounce did not have. As
you are aware, we concluded based upon the internals and the improved action
in leaders that a tradable rally was beginning and thus we started buying
the good moves. It is interesting that Friday Byron Weems said he believed
that the market would test the February low and then move higher from there.
It would appear to us that the February lows have been tested and the market
is already moving upside despite the Friday sluggishness.
Accordingly, we picked up quite a few positions on the week, greatly
expanding our exposure to the market. Some really good names moving really
well. The key now, as noted late week is whether the indices can overcome
the first test, the 50 day MA's, and continue the rally into earnings.
Friday was a 'no,' but that was not the seminal test. This week more
earnings come out and the market is set up quite well to move higher and
continue the rebound.
What about the geopolitics, e.g. the late Friday strike on Syria by the US,
France and UK (Germany sat this one out)? If things spiral out of control
of course all bets are off. Thus far, however, the market is shaking them
off and moving higher, even if on low volume.
Remember, this does not mean we think new highs are going to result. They
can but the market will need a real boost and get a lot more volume to make
that happen. Earnings can provide that as they did in October 2017. Thing
is, the move higher has been steady and straight for a long time. Starting
in January and that four week surge to higher highs, the market moves are
much more volatile. That is something moves tend to show near their end
before a deeper correction is needed.
Also, the patterns developed in the indices suggest a rebound but more has
to be shown to make new highs. Specifically, SP500 and DJ30 set up double
bottoms at the 78% and 61% Fibonacci retracement, respectively, of the
September through January rally. Those are reliable upside bounce plays
with a maximum target at the prior highs. Beyond that, again, needs to have
something more to drive it.
Therefore, on this move we play the pattern move. Then if something more
shows up to drive stocks higher, we enjoy the ride as we are already in, and
we take the opportunities presented in other stocks that will show up. We
know that to be the case because if the move continues beyond a bounce there
will be new leaders and new opportunities to play the upside.
THE MARKET
Friday the lackluster economic data continued as the slow spot I discussed
over a month ago -- and that the Fed just acknowledged this past week --
continues. Michigan Sentiment was not bad but it posted the biggest loss in
18 months.
Then there are the geopolitical issues dominated by trade, and after Friday
evening, perhaps Syria/Russia. One bright spot Friday was Secretary Ross
stating at a conference in Lima, Peru that he anticipates a new deal on
NAFTA by the third week in May.
Thus far, the market, while buffeted day to day by the news, has overcome
the negatives and is rising off the February lows. It is not a massive
surge but it is showing the right credentials in internals (when it counts)
and leadership. Even IBD says the market is now in what it calls a
confirmed uptrend again. As noted, we are playing that move, using rational
expectations.
CHARTS
RUTX: The small caps get the pole position today because they led the move
starting with a Tuesday surge off a higher low. That higher low was a test
of the initial move from the 200 day SMA and selloff that started mid-March.
RUTX broke higher through the 50 day MA's and extended that move into
Thursday. Friday of course it was off, but it is testing from a position of
strength, i.e. from above. That bodes well for RUTX successfully testing
and resuming the move upside.
SP400: Moved through the 50 day MA's Thursday on the high but could not
hold it. Again Friday but could not hold it. Still an improved pattern,
showing a pennant the past 3 months. Looks ready to follow RUTX through
that first resistance.
NASDAQ: Moved up to the 50 day MA's on the week, but was rebuffed Friday.
Holding over the rising 10 day EMA and we anticipate NASDAQ to continue the
move next week given the good leadership. NASDAQ appears to have formed a
new, wider uptrending channel using the 200 day SMA on the lows. Rallied
off that level just over a week back, a quick test, then the move higher
last week.
SOX: Came off the channel lower trendline Monday and posted a great move
into the Friday open. That move SOX through the 50 day MA's, but it could
not hold the move. Still trending in its 5 month channel, coming off the
low the past week as noted.
DJ30: Off the February lows touched just 7 sessions back. February lows,
200 day SMA, 61% Fibonacci retracement -- very good support. Bounced up to
the 50 day EMA Friday, faded modestly, lower trade. Okay, a double bottom
at the February lows, and now something of a downward pointing wedge
forming. Wedges tend to resolve to opposite direction of the point, and in
this case that would be upside.
SP500: Also held the February lows, 200 day SMA, and its 78% Fibonacci
retracement. Bounced through the Friday open, testing the 50 day MA's from
below. Faded that move, but is in very good position to hold and continue
the move higher.
LEADERSHIP
FAANG: NFLX and the four dwarves. NFLX was up all week in a good move.
AAPL up but still lodged in the range. AMZN looks weak below the 50 day MA.
FB managed to bounce on ZBurg playing nice to Congress, but still has to
appear before the EU. GOOG is holding at the 200 day SMA; perhaps some day
it can put in a bounce. For now, money has left all of this group outside
NFLX.
Chips: Still a struggle but working on it. LRCX not bad with a move up on
the week. AVGO gapped upside on a big share buyback program, but still has
to show its pattern can hold up. INTC is back near its high, coming off the
50 day MA. MU is moving up off the 50 day MA. MXWL, AMAT not bad while
MLNX is putting in higher highs. There are leaders.
Drugs/Biotech: AMED, AMAG had good weeks though Friday was off. DVAX was
strong but fell to the 10 day EMA Friday. UNH still trying to set up, ARWR
looks great, INO setting up, MYL not bad. VRX looking good. Good group.
Software: Really improving. RHT a good move last week, FFIV awesome for
us. CRM trying to make a break. GLUU breaking higher in the gaming
software. NOW setting up, COUP looks nice.
Oil: DO working quite well. HAL continues higher. APC as well. A group
of leaders that held up working well. Others are attempting to catch up.
Like NBR.
MARKET STATS
DJ30
Stats: -122.91 points (-0.50%) to close at 24360.14
Nasdaq
Stats: -33.60 points (-0.47%) to close at 7106.65
Volume: 1.76B (-12.87%)
Up Volume: 491.17M (-928.83M)
Down Volume: 1.25B (+675.7M)
A/D and Hi/Lo: Decliners led 1.64 to 1
Previous Session: Advancers led 1.85 to 1
New Highs: 52 (-19)
New Lows: 30 (+8)
S&P
Stats: -7.69 points (-0.29%) to close at 2656.30
NYSE Volume: 717.253M (-3.71%)
A/D and Hi/Lo: Decliners led 1.3 to 1
Previous Session: Advancers led 1.19 to 1
New Highs: 43 (-10)
New Lows: 50 (+8)
SENTIMENT INDICATORS
VIX: 17.41; -1.08
VXN: 22.06; -0.84
VXO: 17.89; -1.40
Put/Call Ratio (CBOE): 0.98; -0.01
Bulls and Bears:
Bulls are falling rapidly after the peak at 66.7. that was a significant
high and bulls have dropped hard into the low 40's. As you would
anticipate, the market sold off but as the bulls sell off the market is
ready for a pre-earnings rally off the lows.
Bulls: 42.2 versus 47.6 versus
Bears: 18.6 versus 18.1
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 42.2 versus 47.6
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 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: 18.6 versus 18.1
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: 2.825% versus 2.825%
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.825%
versus 2.781% versus 2.801% versus 2.805% versus 2.775% versus 2.812% versus
2.806% versus 2.781% versus 2.739% versus 2.714% versus 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: 1.23313 versus 1.23299. Holding steady in its lateral move,
testing the 50 day EMA, still positive pattern overall.
Historical: 1.23299 versus 1.23720 versus 1.2359 versus 1.2311 versus
1.22812 versus 1.2247 versus 1.2285 versus 1.22698 versus 1.23073 versus
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: 107.362 versus 107.267. Trying to break higher out of a tight
weeklong lateral move.
Historical: 107.267 versus 106.882 versus 106.873 versus 107.09 versus
107.16 versus 106.939 versus 107.11 versus 106.816 versus 106.797 versus
105.901 versus 106.286 versus 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: 67.39, +0.32. Nice break higher off the 50 day MA to a higher high,
moving past the last January peak.
Gold: 1347.90, +6.00. Broke higher Wednesday but then fell, only to start
to rebound Friday. A 2.5 month base looks close to breaking out.
MONDAY
The big news Friday was the Syria 'coalition' strikes. Russia claims it
shot down 70-something of around 100 missiles and little damage done. The
Pentagon says it hit all targets. Both could be true the way they phrase
things.
The worry is that causes some further brouhaha, but it helped when Trump's
defense minister said the strikes were a 'one time thing.' Later Trump
stated it was 'mission accomplished.' Now I know that phrase has dubious
meaning what with the Bush II forays into nation building, but in this
situation I am pretty sure it can be taken to mean as a message to Russia
that we are not going to launch further strikes based upon the chemical
poisoning claims.
With the selloff ahead of earnings, the start of the move higher, the lower
volume on the downside sessions, and the ability to thus far shake off
geopolitics, we are still looking for the move upside to continue.
That means a move through the 50 day MA's for the indices as they follow
RUTX and its move into earnings. NFLX gets things going with its results
Monday after the close. LRCX is Tuesday after the close. Some important
names announcing early to try and get the market moving into the first
couple of weeks of the season. These initial earnings will be important for
the move, and we anticipate holding some of the positions on NFLX, LRCX and
of course see if they can carry the rest of the market, and our other
positions higher.
Therefore, though we have several new positions as of last week, there are
plenty of very good-looking stocks still in very good position to make moves
higher.
Have a great weekend!
End part 1 of 3
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Saturday, April 07, 2018
The Daily, Part 1 of 3, 4-7-18
* * * *
4/07/2018 Investment House Daily
* * * *
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The REPORT SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.
Monday a Market Summary video, new plays, play table annotations.
Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.
Access to all current videos will remain assessable each day using the play
links in the reports.
If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.
MARKET SUMMARY
- Another tit in the tit for tat trade blustering and some weak jobs end a
weak 3-day bounce.
- A lack of strong buyers along with a lack of strong sellers leave the
indices in the same place for a second week.
- There are some great leadership stocks, just not enough.
- Earnings are next on tap and expectations are for a great season that will
repair the market. That is the problem, the expectations.
- Stocks are lower heading into earnings season and that provides
opportunity even if an earnings bounce ultimately cannot hold.
The past week did little but establish there are not many buyers in the
market. Not many sellers either, somewhat surprising given all the
negatives you hear from the financial stations each day.
The lack of buyers shows up with the sessions the market did rally. When
the market managed to cobble together gains as it did on the Tuesday to
Thursday, the move showed low volume and narrow breadth. As soon as a
negative story hit, the bids were pulled and stocks slid back, e.g. Friday.
More proposed Trump tariffs scuttled the advance and stocks started lower
and closed lower.
SP500 -58.37, -2.19%
NASDAQ -161.44, -2.28%
DJ30 -572.46, -2.34%
SP400 -1.97%
RUTX -1.92%
SOX -3.06%
NASDAQ 100 -161.63
VOLUME: NYSE +17%, NASDAQ +10%. Ah, once again stronger volume on the
downside than upside, but -- it is also with the indices holding support
again. When a stock or index holds support on volume and coming off the lows
some, that is not terrible action. Okay, a bit of a positive spin there,
but one silver lining is not bad.
ADVANCE/DECLINE: NYSE -3.7:1; NASDAQ -3.6:1. Of course breadth is much
stronger on the downside than up. That is the MO of this market.
When the market sold, however, there was no groundswell of volume indicating
the sellers were pouring in to ravage the market. Monday stocks sold but
volume remained light. Friday they sold again but volume, while higher, was
still below average. The selling was just not that heavy; more as if the
modest bids that led to the low volume rise on the week were pulled and
stocks slid back. The sellers are there, the buyers are there, but both are
in rather small numbers right now.
The result is the indices basically maintained their positions after a week
of volatility. The week should have shown which side would win out as SP500
and DJ30 had tested the February lows while NASDAQ tested is 2016 trendline.
When the bounce came, however, there was no internal strength as noted, and
on the first seriously adverse story, it fell back.
The inability to bounce suggests the upside does not have the chops to
sustain a move. Given the thinner leadership that makes sense, but it does
not mean the move has to fail. The inability to hold a move when bouncing
off a key low is not good action, but the up and down movement over the
February lows the past two weeks actually allows a thin group of leaders to
expand by improving their patterns and thus developing the kind of
leadership and stamina needed to hold a move may eventually emerge.
It is rather clear where the battle lines are drawn. For DJ30 and SP500 it
is the February lows and the 200 day SMA. For NASDAQ it is the 2016
trendline and the 200 day SMA. SOX is working the channel line and the 200
day SMA. SP400, the trendline and the 200 day SMA. Ditto RUTX.
Those are the battle lines, but for now neither side has the army big enough
to overrun the other. A positive for the upside is that after a dramatic
thinning of leaders, they are on the return with some well-known names
coming back to the fore along with some new or perhaps semi-new sectors.
Another positive is that despite all of the negatives impacting the stock
market (tariff threats, slowing economic data (e.g. consumer spending, jobs
report), Fed in a semi-tightening mode) and every opportunity to break
stocks down, the sellers could only hold the indices at support.
Positives for the downside include the failed bounce attempts off key
support, the lack of broad market leadership, and no quick resolution to the
news stories negative to stocks, a main one being the tariff story and its
loose cannon status.
That leaves stocks heading into next week in the same position as this week:
at support, still looking to see if they can bounce. Earnings season gets
underway and after a series of negative stories failed to take stocks lower,
could this finally bring the bids back? The time at support has allowed
some more patterns to develop, and the longer it holds and more patterns set
up, the better the upside potential.
Sure not many feel positive about the market's situation with all the
selling, the headwinds, and the inability to hold a bounce. But if the
sellers cannot take it lower despite all of this, out of the negativity a
good earnings season can cause a very tradable bounce. Certainly stocks are
lower heading into the season, leaving upside room versus being targets
sitting on big moves.
We will see. If upside patterns continue to develop in good stocks, then
they have the opportunity to show us they can make the moves. If earnings
disappoint it could get ugly -- blaming tariff talk could be a line we hear
a lot regarding guidance. That is okay, however. If stocks make the breaks
higher from good patterns on volume, then that is the signal. If they don't
and then break down, we play the break lower at that point because . . . the
pattern will be resolved.
THE MARKET
CHARTS
DJ30: A second week bouncing around the February lows, indeed undercutting
the February low intraday Monday. All the while DJ30 danced at the 61%
Fibonacci retracement of the September to January rally, as well as the 200
day SMA. Two weeks at these levels, perhaps getting a bit too long. Did
try to bounce starting Tuesday and through Thursday, but had no volume or
breadth. Now with the Friday drop DJ30 starts over to try again, but no
doubt it like gives it a shot. Note how it came off the low after tapping
the 61% dead on. Double bottoms at this level have a good history, if all
remains equal, of rallying nicely.
SP500: Very similar to DJ30, also spending a second week near the February
lows, undercutting the closing low Monday through Wednesday on the intraday
lows. It held at the February closing low and the 200 day SMA, and tapped
the 78% Fibonacci retracement on the Monday intraday low before rebounding,
just as it did on that big intraday drop in early February. Thus, basically
the same as DJ30, just at a lower Fibonacci retracement, also a good level
to double bottom and rebound.
NASDAQ: NASDAQ tested down to the early February closing low starting
Monday, and that put in the low for the week though it was tested Tuesday
and Wednesday. On the closes, NASDAQ held very near the trendline from
early 2016. It also held over the still rising 200 day SMA on the lows.
Not a double bottom as explained last week given the higher March high, but
it is in a channel outlined by the highs and lows this year. Perhaps it
will adjust into a new, larger channel than the prior tight one that was of
course aided by the FOMC's spoon feeding the market.
SOX: Very similar to NASDAQ, working in a wider channel but this channel has
held together the past 6 months. Over the rising 200 day SMA, testing the
same as early February. Can put a higher low and continue higher. If it is
going to do it, time to do it.
SP400: Two weeks over the 200 day SMA, holding that level just as in early
February. SP400 looks very sluggish here but it is still trending higher.
RUTX: Sold to the 200 day SMA with the Monday flop, rallied Tuesday to
Thursday, then Friday rolled back over. Okay, RUTX is very similar to
SP400, i.e. sluggish but can put in a higher low at the rising 200 day SMA.
Small caps are economically sensitive and they are struggling, not near
leading the market.
LEADERSHIP
There are stocks improving their looks and some actual breaks higher on the
week, breaks on good volume. One notable aspect is that in many situations
there are a small number of stocks in a sector that are showing good action.
That shows just how undecided the market is when only stocks here and there
are forming up more bullish patterns. The slight increase in leadership
stocks is in part due to that two weeks of holding support and working up
and down, buying time to form up. In order to sustain a move higher, the
market will need more leadership to step up, however, and right now they are
not lining up.
FAANG: Pretty much toothless at this juncture, at least for the upside.
NFLX still has some starch in it, holding at the late January high/50 day
MA, but it has to make the new move. AMZN bounced up to the 50 day MA after
gapping below it late March. Recovered, now looks weak. AAPL is still
slogging through the trading range. FB remains in purgatory. GOOG is
trying to hold the 200 day SMA. Trying. It looks very much as if this
group's leadership mojo is gone.
Chips: Hard to find anything that is really positive. INTC is still
working at the 50 day MA, attempting to shake off a downgrade. MU was
downgraded as well and extended its pullback. KLIC is not bad but far from
'buy me' position. ON fell off a higher high in early March but is now
approaching its lower channel line and could bounce. LRCX is bunching up
over the 200 day SMA and near the 78% Fibonacci retracement. NPTN is
working on a pattern. None of these are in great position right now, and
many chips that were decent are sinking, e.g. XLNX.
Energy: A few are trying to set up. DO, MRO, HAL -- a few.
Tech: NTNX still solid. STX not bad with a 2 week move over the 50 day MA.
AKAM (internet) still good at the 50 day MA. PANW testing a good move.
CREE remains in a nice pattern.
Retail: Off Friday in many cases, but still solid. M testing a 2-day move
as is DDS. TJX tested a 3-day move. BKE, ZUMZ are working well.
Drugs/Healthcare: DVAX nice cup. HIIQ is looking good again.
Construction: FLR is interesting. DHI, PHM in residential construction
have intriguing patterns.
Misc: Z, HLF, TRIP. These still look good but have to show a move that
sticks.
MARKET STATS
DJ30
Stats: -572.46 points (-2.34%) to close at 23932.76
Nasdaq
Stats: -161.44 points (-2.28%) to close at 6915.11
Volume: 2.36B (+10.28%)
Up Volume: 702.08M (-717.92M)
Down Volume: 1.63B (+936.82M)
A/D and Hi/Lo: Decliners led 3.58 to 1
Previous Session: Advancers led 1.69 to 1
New Highs: 40 (-17)
New Lows: 56 (+30)
S&P
Stats: -58.37 points (-2.19%) to close at 2604.47
NYSE Volume: 879.4M (+16.69%)
A/D and Hi/Lo: Decliners led 3.69 to 1
Previous Session: Advancers led 2.72 to 1
New Highs: 31 (-20)
New Lows: 55 (+30)
SENTIMENT INDICATORS
VIX: 21.49; +2.55
VXN: 27.43; +2.40
VXO: 22.93; +2.95
Put/Call Ratio (CBOE): 1.03; +0.18
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: 2.775% versus 2.812%. Of course the trade worries and jobs report
bounced bonds again. After a week pulling back to test the 50 day MA after
breaking over it, a bounce upside Friday in an attempt to continue the new
rally off the February low.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.812%
versus 2.806% versus 2.781% versus 2.739% versus 2.714% versus 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: 1.22812 versus 1.2247. Euro continues in its 3 month lateral
range around the 50 day MA.
Historical: 1.2247 versus 1.2285 versus 1.22698 versus 1.23073 versus
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: 106.939 versus 107.11. Dollar bounced starting late March with
the tariff talk, and last week it broke over the 50 day MA's, testing the
move Friday.
Historical: 107.11 versus 106.816 versus 106.797 versus 105.901 versus
106.286 versus 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: 62.06, -1.48. After bumping the January high two weeks back, oil has
faded and now is fighting to hold the 50 day MA.
Gold: 1336.10, +7.60. Gold tested again on the week, now a 2 week test to
the 50 day MA, attempting to put in a higher low and take on resistance at
1360-65.
MONDAY
Jobs are out of the way and were less than impressive. As I noted last
week, two weeks back, a month back, the US economy has hit a slow spot. It
is likely just a slow spot, but you have to keep watch on the small and
midcaps as they are lagging the rest of the market, and if the tax cuts are
going to kick in and help the economy you would anticipate they would bottom
and start to move back up.
Nearer term there are a couple of competing forces.
Earnings are here and I have heard many, many commentators talk about how
earnings are going to right the market's ship because there is expected 16%
to 19% growth. Okay, great, but those are the expectations. Earnings tend
to work best when expectations are not too grand then companies blow by them
as did FAANG in October 2017. Expectations, the same as gravity as Mountain
Rescue climber Hal noted in the movie 'Cliffhanger,' can be a b**ch. It
sets the bar high and it is a lot easier to disappoint.
On the other hand, stocks deflated valued ahead of earnings and that gives a
nice on ramp to higher prices if earnings are solid and the general
conditions are upbeat. Ah, if general conditions are upbeat. If this
market volatility after a long run upside is forecasting economic issues
then earnings, though they might provide a very tradable rebound from the
recent dip, would not rescue the market. The market looks ahead and
earnings are the past.
The second competing force is leadership. The market can bounce on earnings
given the pullback heading into the season. If the move is going to sustain
then it must have leadership. There is still not enough leadership. The
two weeks bouncing up and down at support has improved some patterns, but
frankly we don't see enough good patterns in sectors that provide leadership
for true moves higher. You need growth to help lead, whether that is growth
in tech, small caps/midcaps, or even the large caps selling to the rest of
the world (e.g. CAT). There are definitely growth stocks in leadership
positions with good patterns. There are just not a ton of them and we are
not seeing a lot developing in the wings. That is a major debilitating
factor for any move higher on earnings.
Thus, this setup ahead of earnings is one that can easily lead to an
earnings bounce. After that, however, unless more and more stocks set up a
bit better and make good upside breaks, any rebound is likely limited in its
height and duration. Certain things have to happen for a market to sustain
a break higher, and leadership is a critical element. Perhaps there are
some groups out there we have discounted too much that will suddenly pull it
all together and lead. That would be awesome and of course we would spot
them quickly. We will watch for those, but if they are forming up right now
they are doing so with very good camouflage.
Therefore, we are going to look at upside for that earnings move higher,
using in many cases stocks we already have on the report. Why? Because they
are the better patterns and this market is short on upside patterns. Energy
needs to show up, software would help, security software is trying to set up
and some are moving, homebuilders are interesting -- but work needs to be
done. Upside plays into earnings season? Yes. Downside plays on deck if
the 2 weeks of bouncing at support fails? Yes as well.
Have a great weekend!
End part 1
_______________________________________________________
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
4/07/2018 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: None issued
Entry alerts: None issued
Trailing stops: None issued
Stop alerts: EPZM
The market alert service is a premium level service where we issue intraday
alerts relating to the general market conditions, when stocks hit action
points (buy, stop, target, etc.), and when we see other information
impacting the market or our stocks. To subscribe to the alert service you
can sign up at the following link:
http://www.investmenthouse.com/alertdaily.html
********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4
TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
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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
- Another tit in the tit for tat trade blustering and some weak jobs end a
weak 3-day bounce.
- A lack of strong buyers along with a lack of strong sellers leave the
indices in the same place for a second week.
- There are some great leadership stocks, just not enough.
- Earnings are next on tap and expectations are for a great season that will
repair the market. That is the problem, the expectations.
- Stocks are lower heading into earnings season and that provides
opportunity even if an earnings bounce ultimately cannot hold.
The past week did little but establish there are not many buyers in the
market. Not many sellers either, somewhat surprising given all the
negatives you hear from the financial stations each day.
The lack of buyers shows up with the sessions the market did rally. When
the market managed to cobble together gains as it did on the Tuesday to
Thursday, the move showed low volume and narrow breadth. As soon as a
negative story hit, the bids were pulled and stocks slid back, e.g. Friday.
More proposed Trump tariffs scuttled the advance and stocks started lower
and closed lower.
SP500 -58.37, -2.19%
NASDAQ -161.44, -2.28%
DJ30 -572.46, -2.34%
SP400 -1.97%
RUTX -1.92%
SOX -3.06%
NASDAQ 100 -161.63
VOLUME: NYSE +17%, NASDAQ +10%. Ah, once again stronger volume on the
downside than upside, but -- it is also with the indices holding support
again. When a stock or index holds support on volume and coming off the lows
some, that is not terrible action. Okay, a bit of a positive spin there,
but one silver lining is not bad.
ADVANCE/DECLINE: NYSE -3.7:1; NASDAQ -3.6:1. Of course breadth is much
stronger on the downside than up. That is the MO of this market.
When the market sold, however, there was no groundswell of volume indicating
the sellers were pouring in to ravage the market. Monday stocks sold but
volume remained light. Friday they sold again but volume, while higher, was
still below average. The selling was just not that heavy; more as if the
modest bids that led to the low volume rise on the week were pulled and
stocks slid back. The sellers are there, the buyers are there, but both are
in rather small numbers right now.
The result is the indices basically maintained their positions after a week
of volatility. The week should have shown which side would win out as SP500
and DJ30 had tested the February lows while NASDAQ tested is 2016 trendline.
When the bounce came, however, there was no internal strength as noted, and
on the first seriously adverse story, it fell back.
The inability to bounce suggests the upside does not have the chops to
sustain a move. Given the thinner leadership that makes sense, but it does
not mean the move has to fail. The inability to hold a move when bouncing
off a key low is not good action, but the up and down movement over the
February lows the past two weeks actually allows a thin group of leaders to
expand by improving their patterns and thus developing the kind of
leadership and stamina needed to hold a move may eventually emerge.
It is rather clear where the battle lines are drawn. For DJ30 and SP500 it
is the February lows and the 200 day SMA. For NASDAQ it is the 2016
trendline and the 200 day SMA. SOX is working the channel line and the 200
day SMA. SP400, the trendline and the 200 day SMA. Ditto RUTX.
Those are the battle lines, but for now neither side has the army big enough
to overrun the other. A positive for the upside is that after a dramatic
thinning of leaders, they are on the return with some well-known names
coming back to the fore along with some new or perhaps semi-new sectors.
Another positive is that despite all of the negatives impacting the stock
market (tariff threats, slowing economic data (e.g. consumer spending, jobs
report), Fed in a semi-tightening mode) and every opportunity to break
stocks down, the sellers could only hold the indices at support.
Positives for the downside include the failed bounce attempts off key
support, the lack of broad market leadership, and no quick resolution to the
news stories negative to stocks, a main one being the tariff story and its
loose cannon status.
That leaves stocks heading into next week in the same position as this week:
at support, still looking to see if they can bounce. Earnings season gets
underway and after a series of negative stories failed to take stocks lower,
could this finally bring the bids back? The time at support has allowed
some more patterns to develop, and the longer it holds and more patterns set
up, the better the upside potential.
Sure not many feel positive about the market's situation with all the
selling, the headwinds, and the inability to hold a bounce. But if the
sellers cannot take it lower despite all of this, out of the negativity a
good earnings season can cause a very tradable bounce. Certainly stocks are
lower heading into the season, leaving upside room versus being targets
sitting on big moves.
We will see. If upside patterns continue to develop in good stocks, then
they have the opportunity to show us they can make the moves. If earnings
disappoint it could get ugly -- blaming tariff talk could be a line we hear
a lot regarding guidance. That is okay, however. If stocks make the breaks
higher from good patterns on volume, then that is the signal. If they don't
and then break down, we play the break lower at that point because . . . the
pattern will be resolved.
THE MARKET
CHARTS
DJ30: A second week bouncing around the February lows, indeed undercutting
the February low intraday Monday. All the while DJ30 danced at the 61%
Fibonacci retracement of the September to January rally, as well as the 200
day SMA. Two weeks at these levels, perhaps getting a bit too long. Did
try to bounce starting Tuesday and through Thursday, but had no volume or
breadth. Now with the Friday drop DJ30 starts over to try again, but no
doubt it like gives it a shot. Note how it came off the low after tapping
the 61% dead on. Double bottoms at this level have a good history, if all
remains equal, of rallying nicely.
SP500: Very similar to DJ30, also spending a second week near the February
lows, undercutting the closing low Monday through Wednesday on the intraday
lows. It held at the February closing low and the 200 day SMA, and tapped
the 78% Fibonacci retracement on the Monday intraday low before rebounding,
just as it did on that big intraday drop in early February. Thus, basically
the same as DJ30, just at a lower Fibonacci retracement, also a good level
to double bottom and rebound.
NASDAQ: NASDAQ tested down to the early February closing low starting
Monday, and that put in the low for the week though it was tested Tuesday
and Wednesday. On the closes, NASDAQ held very near the trendline from
early 2016. It also held over the still rising 200 day SMA on the lows.
Not a double bottom as explained last week given the higher March high, but
it is in a channel outlined by the highs and lows this year. Perhaps it
will adjust into a new, larger channel than the prior tight one that was of
course aided by the FOMC's spoon feeding the market.
SOX: Very similar to NASDAQ, working in a wider channel but this channel has
held together the past 6 months. Over the rising 200 day SMA, testing the
same as early February. Can put a higher low and continue higher. If it is
going to do it, time to do it.
SP400: Two weeks over the 200 day SMA, holding that level just as in early
February. SP400 looks very sluggish here but it is still trending higher.
RUTX: Sold to the 200 day SMA with the Monday flop, rallied Tuesday to
Thursday, then Friday rolled back over. Okay, RUTX is very similar to
SP400, i.e. sluggish but can put in a higher low at the rising 200 day SMA.
Small caps are economically sensitive and they are struggling, not near
leading the market.
LEADERSHIP
There are stocks improving their looks and some actual breaks higher on the
week, breaks on good volume. One notable aspect is that in many situations
there are a small number of stocks in a sector that are showing good action.
That shows just how undecided the market is when only stocks here and there
are forming up more bullish patterns. The slight increase in leadership
stocks is in part due to that two weeks of holding support and working up
and down, buying time to form up. In order to sustain a move higher, the
market will need more leadership to step up, however, and right now they are
not lining up.
FAANG: Pretty much toothless at this juncture, at least for the upside.
NFLX still has some starch in it, holding at the late January high/50 day
MA, but it has to make the new move. AMZN bounced up to the 50 day MA after
gapping below it late March. Recovered, now looks weak. AAPL is still
slogging through the trading range. FB remains in purgatory. GOOG is
trying to hold the 200 day SMA. Trying. It looks very much as if this
group's leadership mojo is gone.
Chips: Hard to find anything that is really positive. INTC is still
working at the 50 day MA, attempting to shake off a downgrade. MU was
downgraded as well and extended its pullback. KLIC is not bad but far from
'buy me' position. ON fell off a higher high in early March but is now
approaching its lower channel line and could bounce. LRCX is bunching up
over the 200 day SMA and near the 78% Fibonacci retracement. NPTN is
working on a pattern. None of these are in great position right now, and
many chips that were decent are sinking, e.g. XLNX.
Energy: A few are trying to set up. DO, MRO, HAL -- a few.
Tech: NTNX still solid. STX not bad with a 2 week move over the 50 day MA.
AKAM (internet) still good at the 50 day MA. PANW testing a good move.
CREE remains in a nice pattern.
Retail: Off Friday in many cases, but still solid. M testing a 2-day move
as is DDS. TJX tested a 3-day move. BKE, ZUMZ are working well.
Drugs/Healthcare: DVAX nice cup. HIIQ is looking good again.
Construction: FLR is interesting. DHI, PHM in residential construction
have intriguing patterns.
Misc: Z, HLF, TRIP. These still look good but have to show a move that
sticks.
MARKET STATS
DJ30
Stats: -572.46 points (-2.34%) to close at 23932.76
Nasdaq
Stats: -161.44 points (-2.28%) to close at 6915.11
Volume: 2.36B (+10.28%)
Up Volume: 702.08M (-717.92M)
Down Volume: 1.63B (+936.82M)
A/D and Hi/Lo: Decliners led 3.58 to 1
Previous Session: Advancers led 1.69 to 1
New Highs: 40 (-17)
New Lows: 56 (+30)
S&P
Stats: -58.37 points (-2.19%) to close at 2604.47
NYSE Volume: 879.4M (+16.69%)
A/D and Hi/Lo: Decliners led 3.69 to 1
Previous Session: Advancers led 2.72 to 1
New Highs: 31 (-20)
New Lows: 55 (+30)
SENTIMENT INDICATORS
VIX: 21.49; +2.55
VXN: 27.43; +2.40
VXO: 22.93; +2.95
Put/Call Ratio (CBOE): 1.03; +0.18
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: 2.775% versus 2.812%. Of course the trade worries and jobs report
bounced bonds again. After a week pulling back to test the 50 day MA after
breaking over it, a bounce upside Friday in an attempt to continue the new
rally off the February low.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.812%
versus 2.806% versus 2.781% versus 2.739% versus 2.714% versus 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: 1.22812 versus 1.2247. Euro continues in its 3 month lateral
range around the 50 day MA.
Historical: 1.2247 versus 1.2285 versus 1.22698 versus 1.23073 versus
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: 106.939 versus 107.11. Dollar bounced starting late March with
the tariff talk, and last week it broke over the 50 day MA's, testing the
move Friday.
Historical: 107.11 versus 106.816 versus 106.797 versus 105.901 versus
106.286 versus 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: 62.06, -1.48. After bumping the January high two weeks back, oil has
faded and now is fighting to hold the 50 day MA.
Gold: 1336.10, +7.60. Gold tested again on the week, now a 2 week test to
the 50 day MA, attempting to put in a higher low and take on resistance at
1360-65.
MONDAY
Jobs are out of the way and were less than impressive. As I noted last
week, two weeks back, a month back, the US economy has hit a slow spot. It
is likely just a slow spot, but you have to keep watch on the small and
midcaps as they are lagging the rest of the market, and if the tax cuts are
going to kick in and help the economy you would anticipate they would bottom
and start to move back up.
Nearer term there are a couple of competing forces.
Earnings are here and I have heard many, many commentators talk about how
earnings are going to right the market's ship because there is expected 16%
to 19% growth. Okay, great, but those are the expectations. Earnings tend
to work best when expectations are not too grand then companies blow by them
as did FAANG in October 2017. Expectations, the same as gravity as Mountain
Rescue climber Hal noted in the movie 'Cliffhanger,' can be a b**ch. It
sets the bar high and it is a lot easier to disappoint.
On the other hand, stocks deflated valued ahead of earnings and that gives a
nice on ramp to higher prices if earnings are solid and the general
conditions are upbeat. Ah, if general conditions are upbeat. If this
market volatility after a long run upside is forecasting economic issues
then earnings, though they might provide a very tradable rebound from the
recent dip, would not rescue the market. The market looks ahead and
earnings are the past.
The second competing force is leadership. The market can bounce on earnings
given the pullback heading into the season. If the move is going to sustain
then it must have leadership. There is still not enough leadership. The
two weeks bouncing up and down at support has improved some patterns, but
frankly we don't see enough good patterns in sectors that provide leadership
for true moves higher. You need growth to help lead, whether that is growth
in tech, small caps/midcaps, or even the large caps selling to the rest of
the world (e.g. CAT). There are definitely growth stocks in leadership
positions with good patterns. There are just not a ton of them and we are
not seeing a lot developing in the wings. That is a major debilitating
factor for any move higher on earnings.
Thus, this setup ahead of earnings is one that can easily lead to an
earnings bounce. After that, however, unless more and more stocks set up a
bit better and make good upside breaks, any rebound is likely limited in its
height and duration. Certain things have to happen for a market to sustain
a break higher, and leadership is a critical element. Perhaps there are
some groups out there we have discounted too much that will suddenly pull it
all together and lead. That would be awesome and of course we would spot
them quickly. We will watch for those, but if they are forming up right now
they are doing so with very good camouflage.
Therefore, we are going to look at upside for that earnings move higher,
using in many cases stocks we already have on the report. Why? Because they
are the better patterns and this market is short on upside patterns. Energy
needs to show up, software would help, security software is trying to set up
and some are moving, homebuilders are interesting -- but work needs to be
done. Upside plays into earnings season? Yes. Downside plays on deck if
the 2 weeks of bouncing at support fails? Yes as well.
Have a great weekend!
End part 1
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