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11/24/2018 Investment House Daily
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Investment House Daily Subscribers:
Wednesday: Market summary, play tables
Thursday: Market closed, no report
Friday: Half session, Alerts
Weekend: Market stats, play table update, any decent plays we just cannot resist for the start of the next week.
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:
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.
- More status quo as stocks struggle to find bids but at least don't sell off again.
- Indices are making the test of the October lows.
- Small caps, midcaps, SOX show relative strength Friday.
- Chips show a few interesting patterns after their own bear market.
- Stoic large cap leaders look about finished with their tests.
- The test of the October low is in, but if stocks bounce it is still treated as a relief move.
- Oil implodes further, giving a lesson in oversold markets.
- New plays
After a modest back and forth Friday half session, stocks finished mostly back not forth. In other words, they started softer, attempted a modest rally, the slid back to close with mostly losses. Lower except for RUTX as the small and midcaps, and even SOX, were relative strength leaders. In this climate, however, that didn't mean a lot on the day, but it could mean something the coming week.
SP500 -17.37, -0.66%
NASDAQ -33.27, -0.48%
DJ30 -178.74, -0.73%
NASDAQ 100 -0.73%
The session left the indices changed little, still well down in their selling, still hanging around the October lows. Again, not much on the day, but perhaps something for the near future. Specifically, many were looking for the test of those October lows, and they got the test, just no bounces yet.
Growth saw some modest gains in a few key stocks. Not the FAANG stocks that everyone still watches, but the newer breed. DATA, VRSN, MCHP, XLNX moved up, but there was just not enough push on the half session for tech to really take over. The relative strength and somewhat decent patterns in chips (e.g. XLNX, ON, ENPH, AMAT, AMD) and telecom helped the small and midcaps lead the market; again, something to watch for the coming week.
While there may be some stirrings emerging from the small and midcaps via chips, telecom, and perhaps some biotechs and techs, the recent leaders in food, drugs, personal products, utilities continued to test, but look very good at near support. PG, LLY, MCD, VZ, PEP, KR, CMG If they are going to continue their uptrends, this is the likely point they launch.
Thus, you have some growth with interesting action but not launching a bounce, and the more stoic, basics stocks (food, drugs, personal care) set up well to continue their uptrends. Positives for this week, and we will of course look at many of the recent leaders testing support to pick up as they bounce. Some of the chips as well as we have plays ready to enter on AMAT, ENPH, MCHP and are already in XLNX and INTC.
As for Black Friday itself, MasterCard reports sales +2B from 2017 Black Friday. Store traffic increases in some areas but others reporting the same as 2017. It will be a strong year, but the retailers suffered another tough session, and the entire weekend is counted as Black Friday so we will have to see if the numbers hold up. Despite the stock market woes of late, I feel they will: shopping habits, like the jobs report, are a lagging indicator.
Oil: 50.42, -4.21. Oil was absolutely crushed Friday as the notion the selling could not get worse was absolutely wrong. Oil is down 8 weeks straight, from near $77 to $50, showing that an oversold market can indeed become even more oversold.
Bonds: 3.048% vs 3.065% 10 year. Bonds are up off the lower low hit in early November, rallying three weeks upside. Last week they broke through the 50 day MA from below. This shows a bit of concern that was not there before.
Okay, so some indices showed relative strength Friday and all of the indices are more or less showing double bottoms at the October low. The full test is here and there are some intriguing patterns as noted. There could actually be a bounce, but of course it has to show it can do so.
If it does, we will play some of those intriguing patterns and we will play those uptrending leaders that spent the past week or so testing their moves higher.
As for the tech, chips, etc. that are in interesting patterns, if they break higher we still have to view the move as a relief move versus a new reset for the uptrend. Lots of damage was done, the leaders from the prior move (e.g. FAANG and other big name leaders such as NVDA) may be just too damaged to participate and help support a bounce. Thus, unless an entirely new crop of growth leaders emerge, a bounce upside into yearend is likely just a bounce upside into yearend. New highs would be unlikely.
Thus, we would play for that specific move higher and not try to convince ourselves it is something more unless some seriously good new leadership shows up. Whether that would be young guns in software, semiconductors (and that sector has already gone through its own bear market) or elsewhere remains to be seen. Heck, even homebuilders look better right now along with airlines. Go figure with 5+% mortgage rates. At least airlines you can understand with the collapse of oil -- bought my first sub-$2.00 gas in years on Thanksgiving in Bastrop, Texas. THAT will help Christmas shopping if nothing else does.
Anyway, the point is if there is a rebound from this oversold condition, you play it as a rebound, and when it makes it to yearend or wherever and then stalls, that is the time you play the downside.
Accordingly, for now we like the look of the more boring, stoic big names, but if they make money while other areas are hemorrhaging, that is not so boring. We also look at those areas of relative strength and pretty good patterns, e.g. chips.
This weekend I have let everyone off to scatter and celebrate with family. So, I am going to list several stocks we are interested in picking up if they can move, along with the entry point. Given the selloff to this point, they are upside plays. We already have some chip plays ready to go as noted (AMAT, MCHP), but there are some others of interest. Then there are the stodgier stocks that have rallied well and used last week to test.
PEP: Entry: 116.61, JAN 18 2019 115.00c (54 delta), Target 121.91, 70+%
PG: Entry: 92.16, JAN 18 2019 90.00c (63 delta), Target 97.39, 80ish%
VZ: Entry: 59.02, JAN 18 2019 60.00c (40 delta), Target 63, 100+%
ON: Entry: 18.96, Stock and/or JAN 18 2019 18.00c (61 delta), Target 21.45, 80% options
BILI: Entry: 15.52, Stock and/or APR 18 2019 15.00c (59 delta), Target 19.41, 25% stock.
Stats: -178.74 points (-0.73%) to close at 24285.95
Stats: -33.27 points (-0.48%) to close at 6938.98
Volume: 958M (-48.49%)
Up Volume: 512.6M (-807.4M)
Down Volume: 437.56M (-64.84M)
A/D and Hi/Lo: Advancers led 1.18 to 1
Previous Session: Advancers led 2.88 to 1
New Highs: 20 (+9)
New Lows: 82 (-30)
Stats: -17.37 points (-0.66%) to close at 2632.56
NYSE Volume: 432.899M (-44.12%)
Up Volume: 144.582M (-444.665M)
Down Volume: 288.052M (+109.811M)
A/D and Hi/Lo: Decliners led 1.24 to 1
Previous Session: Advancers led 2.83 to 1
New Highs: 4 (-13)
New Lows: 172 (+21)
VIX: 21.52; +0.72
VXN: 27.93; +0.97
VXO: 23.76; +1.28
Put/Call Ratio (CBOE): 1.12; +0.04
Bulls and Bears:
A significant drop in bulls below 40.00 with bears moving back up to 19.8, the recent range top. Bears remain reluctant to surge but bulls are doing a lot of the work for them by dropping into the thirties. This is getting closer to bounce-worthy numbers. Not new bull run numbers, but bounce-worthy.
Bulls: 39.6 versus 42.9
Bears: 19.8 versus 19.0
Theory: When everyone is bullish and has put all their capital to work, where does the ammunition to drive the market come from? There is always new money to start a new year. After that is used will more money be coming? That is the question.
Bulls: 39.6 versus 42.9
42.9 versus 42.5 versus 50.5 versus 51.9 versus 56.3 versus 61.8 versus 60.6 versus 59.0 versus 57.7 versus 60.1 versus 59.6 versus 57.7 versus 57.3 versus 54.9 versus 54.5 versus 54.9 versus 55.3 versus 52.4 versus 47.1 versus 47.6 versus 52.0 versus 55.5 versus 52.9 versus 50.0 versus 49.1 versus 46.6 versus 43.1 versus 43.6 versus 48.0 versus 43.6 versus 42.2 versus 49.5 versus 55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4 versus 66.00
Bears: 19.8 versus 19.0
19.0 versus 19.8 versus 19.8 versus 19.0 versus 18.3 versus 18.5 versus 18.6 versus 18.3 versus 18.1 versus 18.3 versus 18.1 versus 18.3 versus 18.3 versus 18.6 versus 18.8 versus 18.6 versus 18.5 versus 18.5 versus 18.6 versus 18.4 versus 17.6 versus 17.8 versus 17.7 versus 19.2 versus 19.2 versus 19.4 versus 19.4 versus 20.6 versus 20.8 versus 19.6 versus 19.8 versus 18.6 versus 17.5 versus 16.8 versus 15.7 versus 15.5 versus 14.4 versus 14.6 versus 14.4 versus 15.5 versus 12.6 versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1 versus 15.2 versus 15.1 versus 15.1 versus 15.4 versus 15.4 versus 14.4 versus 14.4 versus 15.1 versus 15.2 versus 15.1 versus 17.0 versus 17.1 versus 19.0 versus 20.2
Bonds: 3.048% versus 3.065%. Through the 50 day MA for now.
Historical: the last sub-2% rate was in November 2016 (1.867%). 3.065% versus 3.074% versus 3.056% versus 3.065% versus 3.116% versus 3.127% versus 3.147% versus 3.186% versus 3.239% versus 3.228% versus 3.222% versus 3.201% versus 3.22% versus 3.146% versus 3.149% versus 3.119% versus 3.089% versus 3.079% versus 3.126% versus 3.111% versus 3.1692% versus 3.20% versus 3.196% versus 3.1779% versus 3.209% versus 3.165% versus 3.158% versus 3.167% versus 3.146% versus 3.169 versus 3.206% versus 3.233% versus 3.189% versus 3.183% versus 3.061% versus 3.087% versus 3.061% versus 3.052% versus 3.048% versus 3.048% versus 3.085% versus 3.066% versus 3.068% versus 3.076% versus 3.057% versus 2.99% versus 3.00% versus 2.972% versus 2.963% versus 2.977% versus 2.937%
EUR/USD: 1.13380 versus 1.13829. Euro down hard Friday.
Historical: 1.13829 versus 1.13818 versus 1.14484 versus 1.14172 versus 1.13308 versus 1.13264 versus 1.13124 versus 1.12348 versus 1.13475 versus 1.1364 versus 1.14329 versus 1.14228 versus 1.14090 versus 1.13881 versus 1.14019 versus 1.13394 versus 1.13455 versus 1.13760 versus 1.14042 versus 1.13757 versus 1.3972 versus 1.14682 versus 1.14626 versus 1.1538 versus 1.14556 versus 1.14961 versus 1.1578 versus 1.15906 versus 1.15592 versus 1.15901 versus 1.15324 versus 1.4966 versus 1.4916 versus 1.1598 versus 1.15164 versus 1.14762 versus 1.15517 versus 1.15774 versus 1.16038 versus 1.16357 versus 1.17501 versus 1.17658 versus 1.17476 versus 1.17486 versus 1.17772
USD/JPY: 112.972 versus 113.007. Dollar holding at the 50 day MA.
Historical: Last below 109 in June 2018: 113.007 versus 113.077 versus 112.617 versus 112.831 versus 113.585 versus 113.576. Was at 110 three weeks back.
Oil: 50.42, -4.21.
Gold: 1223.20, -4.80
End part 1 of 2
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