Sunday, July 01, 2018

The Daily, Part 1 of 3, 6-30-18

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6/30/2018 Investment House Daily
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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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of the day of the week.


- Stocks try to continue the Thursday move higher, do a poor job.
- Modest gains Friday fail to shake off the lack of bids, selling, leaving
the character the same heading into the third quarter.
- Indices, key stocks still holding important support, thus far still unable
to move higher.

Friday started out with promise with futures higher as a follow up to the
Thursday upside. While the indices managed to close positive (for the most
part -- RUTX lower), the upside was really nothing by the close. Just more
lateral movement over some key support for NASDAQ, RUTX, SP400, SP500 (50
day MA), the 200 day SMA for DJ30 and SOX. In short, nothing to change the
status of the market as it tries to find footing at key support to continue
the overall uptrend.

Alas, another week of indecisive action other than to hold support by the
indices and many leading stocks. That in itself is not bad, and after 2 to
4 weeks of fading off the most recent highs, that is not the bad action many
claim it to be, e.g. some saying it is the start of a new bear market.
Seriously? Perhaps they are brilliantly prescient, but as for the patterns
I see, there is some seriously good stocks in seriously good position. If
the bids return at these classic bounce points, some seriously good moves
could result.

That is the technical picture: testing important support after a move to new
highs for many indices and stocks, still in the upside trend as they test.

SP500 2.06, 0.08%
NASDAQ 6.62, 0.09%
DJ30 55.36, 0.23%
SP400 0.07%
RUTX -0.12%
SOX 0.16%
NASDAQ 100 0.13%



As for the sentiment aspects, the past two weeks there was/is a lot of talk
about a market top. Of course stocks sold into this test during that time.
New highs in the indices, many new highs in stocks. That typically brings
out calls of a market top.

There is also news, but it is all superseded by the trade discussions,
predictions, fears, rumors, speculation, and weak opinionating. Likely the
most important news of all is not really news, but a story, the story of the
Fed. It remains in the background, ready, by its own words, to continue
hiking in order to be ready for the next crisis. Ironically, and indeed
unsurprisingly, the yield curve is flattening as the Fed says it continues
its path to normalize rates. The Fed typically overacts and causes the
slowdowns it fears. That it is bent on tightening as the yield curve
flattens of course raises investor concerns.

Thus the resolution at this key support we are still waiting for, remains,
to use the President's terminology, huge.

As for trade, Friday there were reports of more 'troubling' developments,
primarily AKIOS reporting Trump is seeking at WTO withdrawal. The White
House responded that was the President was not seeking a withdrawal. Talk
about a nondenial denial. Okay, perhaps the White House wants serious
changes to the US' involvement and willingness to acquiesce to certain
aspects. Good cop, bad cop again, all played by the same person.

Chicago PMI, June: 64.1 versus 61 expected versus 62.7 May

Michigan Sentiment, June: 98.2 versus 99.0 versus 99.3.

Personal Income, May: 0.4 versus 0.4 expected versus 0.2% April (from 0.3%)

Spending, May: 0.2 versus 0.4 expected versus 0.5 April (from 0.6%)

News, important news, but most of it eclipsed, of course, by the trade 'war'
news. And the Fed's ongoing rate hike campaign in the background.


To view, click on the following links:

Still working at key support levels, trying to find footing. Or not. This
is, as noted, a continued key test for the indices.

RUTX: A pair of doji at the 50 day EMA, holding it Thursday and bouncing,
failing to hold an upside move Friday. RUTX has tested the second leg in
the rally that started with the mid-May breakout, holding at the 38%
Fibonacci retracement as well as that 50 day EMA. Excellent position to
bounce, now weighing the impact of the Fed as a negative versus the trade
issues that are a positive.

NASDAQ: Gapped higher, coughed up the move, closed basically flat. Still
over the 50 day MA, now for 5 sessions as it too assesses trade versus the
Fed. Now, if you look at the technical picture, NASDAQ is halfway in the
uptrend channel that is using the early 2016 trendline as the lower channel
line. Now for those of you who have been with us for a bit know that higher
lows at important support inside channels, horizontal trading ranges,
triangles, etc. can lead to breakouts from the patterns. Thus, this is a
positive at this level, but a potential one as NASDAQ will have to make the

SP400: The midcaps also spent the week holding at the 50 day MA. As noted
Thursday, there is the possibility of a bounce to a right shoulder to a head
and shoulders pattern that, if formed, started in May. There is also the
potential for a larger double top from the January and June highs.
Obviously that makes this 50 day MA test very important. Nothing new there.

SP500: Very similar to SP400, also holding the 50 day MA the past week.
Also, a potential head and shoulders to watch for if the index bounces to
2750ish and stalls, it likely has to deal with some downside. Important
higher high at important support.

SOX: Still holding at the 200 day SMA, spending the week there after the
Monday drop. Again, SOX held the 200 day SMA for 2 weeks in late
April/early May, and now we see if it can make the break higher once again.

DJ30: Held 24,000 on the low for the week, trying to rebound as in April
and May. Important test, needs some financials to help out.

Summary: Held the week at key support, but now has to deal with a holiday
shortened week and the month of the summer earnings season. Calls are for
20% earnings growth. Very optimistic but again, the issue is trade, and in
the background the Fed and that flattening yield curve.


Energy continues to set up some good patterns with some breaking higher.
Not many, just some. Energy tends to do that, i.e. look good, be set up,
then fail to make a move. With hold surging it would appear a no brainer,
yet oil stocks don't always follow oil prices.

Names: These stocks are well-known or at least are institutionally known,
and continue looking good at the weekend as much as they did Thursday.

There are other stocks from other groups also setting up well. WSM, RH,
BBY, TJX, SUPN, SIMO, LSCC, PII, RACE -- a diverse group of very good
patterns testing.

Set up yes, but as noted last week, the patterns have to hold, have to
advance off this support. The indices can do it if the leaders and second
tier do so as well. They look good. As noted Thursday, they are not

Friday some attempted to move, most held their ground. Still waiting for
definitive moves by these stocks or perhaps some new group emerges. All the
better. The patterns remain very good, the indices are not yet giving up
support. I am not intending to sound overly optimistic or Polly Anna, but
the market will show what it will do off this test. The yield curve is a
worry -- do not think we are discounting it. Again, however, I am not smart
enough to foretell the market move, just prepare for the probabilities.
Great leadership in good patterns, indices testing key support in the
patterns. We will see how they react this coming week or next. Yes, it
could take that long.

Have a great weekend and Fourth!


Stats: +55.36 points (+0.23%) to close at 24271.41

Stats: +6.62 points (+0.09%) to close at 7510.30
Volume: 2.2B (+0.79%)

Up Volume: 1.25B (-150M)
Down Volume: 914.06M (+142.72M)

A/D and Hi/Lo: Advancers led 1.19 to 1
Previous Session: Advancers led 1.23 to 1

New Highs: 63 (+15)
New Lows: 66 (-70)

Stats: +2.06 points (+0.08%) to close at 2718.37
NYSE Volume: 978.114M (+21.27%)

A/D and Hi/Lo: Advancers led 1.39 to 1
Previous Session: Advancers led 1.5 to 1

New Highs: 53 (+13)
New Lows: 62 (-94)


VIX: 16.09; -0.76
VXN: 20.88; -0.88
VXO: 15.26; -0.92

Put/Call Ratio (CBOE): 1.24; -0.08

Bulls and Bears:

Bulls continue falling back, the past week a very sharp drop while bears
rise put in a fairly significant move of their own. Bulls are off 7.9
points in 2 weeks, a big drop. Typically sentiment is inverse of trade.
Negative sentiment is rallying as stocks test key support. This weighs for
a move back upside.

Bulls: 47.6 versus 52.0

Bears: 18.4 versus 17.6

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: 47.6 versus 52.0
52.0 versus 55.5 versus 52.9 versus 50.0 versus 49.1 versus 46.6 versus 43.1
versus 43.6 versus 48.0 versus 43.6 versus 42.2 versus 49.5 versus 55.5
versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4
versus 66.00 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: 18.4 versus 17.6
17.8 versus 17.7 versus 19.2 versus 19.2 versus 19.4 versus 19.4 versus 20.6
versus 20.8 versus 19.6 versus 19.8 versus 18.6 versus 17.5 versus 16.8
versus 15.7 versus 15.5 versus 14.4 versus 14.6 versus 14.4 versus 15.5
versus 12.6 versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1
versus 15.2 versus 15.1 versus 15.1 versus 15.4 versus 15.4 versus 14.4
versus 14.4 versus 15.1 versus 15.2 versus 15.1 versus 17.0 versus 17.1
versus 19.0 versus 20.2


Bonds: 2.86% versus 2.84%. TLT rallied through the 200 day SMA intraday,
gave it up, falling back to close below it. Important level.

Historical: the last sub-2% rate was in November 2016 (1.867%). 2.84%
versus 2.833% versus 2.877% versus 2.882% versus 2.895% versus 2.899% versus
2.937% versus 2.889% versus 2.915% versus 2.922% versus 2.933% versus 2.977%
versus 2.963% versus 2.952% versus 2.948% versus 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: 1.1638 versus 1.15634. Still working in its 3 week lateral move
below the 50 day EMA.

Historical: 1.15634 versus 1.15602 versus 1.16517 versus 1.17031 versus
1.16572 versus 1.16072 versus 1.15762 versus 1.1586 versus 1.15746 versus
1.2624 versus 1.16245 versus 1.15678 versus 1.17973 versus 1.17454 versus
1.17761 versus 1.17737 versus 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

USD/JPY: 110.687 versus 110.523. Broke over the 200 day SMA again on the
week but again stalled at 111.

Historical: 110.523 versus 110.223 versus 110.097 versus 109.678 versus
109.980 versus 109.895 versus 110.376 versus 110.03 versus 109.783 versus
110.668 versus 110.578 versus 110.247 versus 110.381 versus 110.314 versus
109.466 versus 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: 74.14, +0.70. Impressive 2 week run to a higher high.

Gold: 1254.50, +3.50. Two week decline to near the December 2017 low,
bounced modestly Friday.

End part 1
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