Sunday, June 10, 2018

The Daily, Part 1 of 3, 6-9-18

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6/9/2018 Investment House Daily
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Investment House Daily Subscribers:


Targets hit: CDXS; GALT
Entry alerts: None issued
Trailing stops: None issued
Stop alerts: None issued

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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.

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links in the reports.

If any market circumstances arise where we see additional plays we want to
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- G-7 meeting contentious as expected, Canada accused of backstabbing was
unexpected, but Trump lays it on the table for all to see, offering true
free trade between the EU and the US. Bets if ANY nation will agree to
truly free trade?
- New highs on many indices, others close, and those lagging are looking
- Will the market outlook regarding the future remain the same and yield
breaks higher from these good patterns? There is a better chance of that
than countries agreeing to true free trade.

The big story over the weekend was the G-7 (fka G-8, aka G6+1). Not that
there were no agreements and not that Trump and his advisors called Canada's
Trudeau dishonest and a backstabber. Those were indeed humorous moments,
and the latter not expected.

No, the real story was what Trump proposed after Europe complained about the
US' call for tariffs on the EU. After hearing all the euros complain about
the US placing tariffs on EU products because the EU placed tariffs on US
products and misused NAFTA, Trump called their bluff -- Trump offered NO
tariffs at all between the EU and the US. The old saying be careful what
you say you want because you might get it was never more in play. Only
Merkel had the guts to say something, and it was at least not negative: she
would consider that proposal.

Take that Paul Ryan, Mitch McConnell and all the other fake free trade
stooges. They are whining against Trump's tariff proposals because, they
say, we have to have 'free' trade with our allies. But there IS NO free
trade. The EU imposes all kinds of tariffs on all kinds of US goods. Every
day. Saying the US should not impose tariffs because it would disrupt free
trade is thus on its face absurd. Why were THEY not saying 'yes we want
free trade, so Europe, drop your tariffs on our goods and we won't impose
tariffs on yours. Quid pro quo. A bargained for exchange that helps all

Now the question is out there: do the euros REALLY want free trade? Do the
congressional republicans really want free trade or are they protecting
their donors? It is out there. We could have free trade. Are there the
guts to really take it?

Classic Trump bargaining. Everyone screams he is a madman. Robert DeNiro
unleashed a tirade this week that was not only obscene but makes you wonder
if senility has fully set in. Trump is actually bargaining, actually
negotiating as he did every day in business. The goal is clear, just as he
said while campaigning: free trade is fair trade, and our trade deals are
neither. He has shown he is the one wanting free trade. He made the
proposal. Again, does anyone have the guts to grab it? Does anyone REALLY
want true free trade?


SP500 8.66, 0.31%
NASDAQ 10.44, 0.14%
DJ30 75.12, 0.30%
SP400 0.50%
RUTX 0.28%
SOX -0.85%
NASDAQ 100 flat

VOLUME: NYSE -12%, NASDAQ -16%. Friday volume fade on a session that was
both ways. Not bad, no heavy selling, just some low volume movement after
good breaks higher.

ADVANCE/DECLINE: NYSE 1.4:1, NASDAQ 1.1:1. Modest as you would expect on a
flattish day.

Friday saw the midcaps lead, clearing to a new all-time high intraday. They
faded a bit, closing with a new all-time closing high. Another index hits
the A-T level, SP400 putting in a nice 6-session run.

SP500 put in a very acceptable week, finally clearing the May peaks. That
is all. It still has a lot of work, but started to do some work. Many
industrial stocks have some very interesting patterns. Ah, the pretty
picture syndrome NASDAQ experienced for a while. Then NASDAQ stocks broke
higher as did chips. All of them, of course, following RUTX and its string
of new highs.

RUTX is indeed impressive, rallying to another new high on Monday, Tuesday,
and Wednesday. Thursday it hit a new all-time high but faded. Friday was a
modest upside session. Still very strong if a bit extended -- again.

NASDAQ rallied to a new high on the week, dropped rather hard Thursday, then
Friday added some back. Solid pattern, waiting for the 10 day EMA to catch
up to it. When it does it is likely to surge again.

SOX rallied up to the March all-time high then faded Thursday and Friday to
the 10 day EMA. The chips came back to life and helped the market rally,
helped those other indices hit the new highs. Now we will see if the chips
can add their own new all-time high.

DJ30 posted a good week, continuing the prior Friday move up off the 50 day
SMA. DJ30 cleared the May highs and is now similarly situated as SP500 with
the March and February highs just overhead, still a long way off from that
January all-time high. Large caps have lagged, but their patterns are good.
As asked before, will the pretty patterns turn into good breakouts upside?


Industrials: Still looking good, still need to show the good patterns can
convert. IP has a very nice look. UTX as well. HON started upside last
week. CAT still solid and DE continues to look ready to make the move.

Metals: This group has some nice patterns as well. SCHN, STLD, X. Perhaps
anticipating things not going so well at G-7. We will see how they react

Software: Some struggled to end the week. NOW dumped Thursday, hung in
Friday. DATA also fell to near support. UIS enjoyed a great week. ATVI
remains solid. RHT, TTWO look good to go as well. MSFT testing the 10 day
MA, not bad at all.

Chips: NVDA looks very good with a 4-session test of the 10 day EMA. MXIM
testing the same level as well. TXN as well. NPTN looks quite good. Some
others as well, e.g. AAOI, MU -- these could provide new entries this week.

FAANG: FB in a nice 20 day EMA test on the week, weathering the continued
stream of bad news. GOOG looks ready to break higher again off the 10 day
EMA. AMZN may come back all the way to the 10 day and provide an entry.
NFLX is testing the 10 day as well and could provide something this week.

China: ATHM with a nice doji with tail tapping the 20 day EMA and
rebounding. HTHT tested the 10 day EMA as well, bounced Friday. BABA
tested to the 20 day, bounced Friday. Familiar story: test to near support,
bounce. IQ surged to a new all-time high with a 6+% gain; okay not all
tested the 10 day EMA.

Oil: Some broke higher starting Thursday. CRZO gapped and rallied that
session. COP continued climbing after the drop to the 50 day EMA the prior
week. XOM cracked to a higher recovery high.

Drugs/Biotech: Mixed bag, still many good stocks. ARWR testing the 10 and
20 day EMA on the week after a good rally. IMGN looked very good but then
reversed ugly Thursday and Friday. VVUS surged Friday; dang -- we watched
it, then watched it break higher. BLUE at the 50 day EMA and a 'must hold'
level. Other healthcare is not bad, e.g. EXAS, FATE looking quite good.


Stats: +75.12 points (+0.30%) to close at 25316.53

Stats: +10.44 points (+0.14%) to close at 7645.51
Volume: 1.94B (-16.38%)

Up Volume: 1.16B (+110M)
Down Volume: 722.78M (-517.22M)

A/D and Hi/Lo: Advancers led 1.1 to 1
Previous Session: Decliners led 1.27 to 1

New Highs: 154 (-123)
New Lows: 18 (-14)

Stats: +8.66 points (+0.31%) to close at 2779.03
NYSE Volume: 774.1M (-12.35%)

A/D and Hi/Lo: Advancers led 1.43 to 1
Previous Session: Advancers led 1.2 to 1

New Highs: 117 (-49)
New Lows: 23 (-34)


VIX: 12.18; +0.05
VXN: 16.51; +0.06
VXO: 11.33; -0.40

Put/Call Ratio (CBOE): 0.95; +0.03

Bulls and Bears:

Bulls edged higher as part of a 4 week recovery from the plummet from the 65
range. Hardly a new surge. Bears are holding a rebound from the prior five
months, but frankly, it is not that much of a bounce.

Bulls: 50.0 versus 49.1

Bears: 19.2 versus 19.2

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: 50.0 versus 49.1
49.1 versus 46.6 versus 43.1 versus 43.6 versus 48.0 versus 43.6 versus 42.2
versus 49.5 versus 55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5
versus 41.9 versus 54.4 versus 66.00 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: 19.2 versus 19.2
19.4 versus 19.4 versus 20.6 versus 20.8 versus 19.6 versus 19.8 versus 18.6
versus 17.5 versus 16.8 versus 15.7 versus 15.5 versus 14.4 versus 14.6
versus 14.4 versus 15.5 versus 12.6 versus 12.8 versus 12.7 versus 13.5
versus 15.2 versus 15.1 versus 15.2 versus 15.1 versus 15.1 versus 15.4
versus 15.4 versus 14.4 versus 14.4 versus 15.1 versus 15.2 versus 15.1
versus 17.0 versus 17.1 versus 19.0 versus 20.2


Bonds: 2.948% versus 2.928%. Bonds continued selling on the week but
Thursday surged back up through the 50 day MA. Held that level with a 50
day MA Friday with a doji. Yields faded some, but the recovery of bonds over
the 50 day MA is an interesting development.

Historical: the last sub-2% rate was in November 2016 (1.867%). 2.928%
versus 2.974% versus 2.935% versus 2.944% versus 2.902% versus 2.86% versus
2.857% versus 2.79% versus 2.931% versus 2.992% versus 2.982% versus 3.063%
versus 3.056% versus 3.06% versus 3.123% versus 3.096% versus 3.069% versus
2.997% versus 2.97% versus 2.966% versus 3.006% versus 2.952% versus 2.948%
versus 2.968% versus 2.954% versus 2.959% versus 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%

EUR/USD: 1.17737 versus 1.17987. Euro recovered last week, then tested
back to the 20 day MA. Will the G-* conclusion send the euro up again?

Historical: 1.17987 versus 1.1774 versus 1.1762 versus 1.1697 versus 1.166
versus 1.16993 versus 1.16643 versus 1.15446 versus 1.17148 versus 1.17096
versus 1.17022 versus 1.17826 versus 1.1786 versus 1.17714 versus 1.1802
versus 1.1811 versus 1.18272 versus 1.19358 versus 1.19411 versus 1.1913
versus 1.18533 versus 1.18672 versus 1.19150 versus 1.19619 versus 1.1983
versus 1.1978 versus 1.19896 versus 1.20741 versus 1.21291 versus 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

USD/JPY: 109.466 versus 109.705. Dollar tested the 50 day MA to end the
week after recovering over that important level 9 sessions prior.

Historical: 109.705 versus 110.164 versus 109.878 versus 109.90 versus
109.53 versus 108.767 versus 108.699 versus 108.699 versus 109.385 versus
109.667 versus 109.502 versus 110.833 versus 110.95 versus 110.76 versus
110.935 versus 110.376 versus 110.246 versus 109.693 versus 109.384 versus
109.40 versus 109.746 versus 109.038 versus 109.022 versus 109.08 versus
109.175 versus 109.628 versus 109.91 versus 109.354 versus 109.051 versus
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

Oil: 65.74, -0.21. Oil sold off to end May, start June. Thursday a
bounce, Friday flat. Not that strong and this bounce likely hits the 10 day
EMA then rolls back over.

Gold: 1302.70, -0.30.


Thursday was a bit rocky for the growth indices such as NASDAQ and SOX, but
they recovered decently Friday and remain in good patterns. The setups in
the indices are still quite nice though RUTX may need some more time to test
and consolidate before it rallies again.

That leaves the other indices that have lagged as likely candidates to
rally. SP500, SP400 look good. Industrials are showing better patterns
whether machinery or metals. Money looked to be going their way last week,
but not definitive just yet. We are looking at IP, still looking at DE, and
watching to see if CAT and HON can deliver upside.

There are also many other groups looking good, some that have rallied well
and just tested near support. GOOG, NVDA are examples. They too provide
that push to not only NASDAQ but SP500 as well.

In short, there are many good patterns in the market, and that suggests the
indices will continue to climb -- if they can keep the same outlook toward
the futures after G-7 and the US/North Korea meeting on 6/14, we could see a
lot of new breaks higher.

Our plays to start the week are a mix of healthcare, chips, big names,
China, industrial. Will see what groups receive the money.

Have a great weekend!

End part 1
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1 comment:

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