Tuesday, November 27, 2018

The Daily, Part 1 of 3, 11-27-18

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11/27/2018 Investment House Daily
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Investment House Daily Subscribers:


Targets hit: None issued
Entry alerts: BABA; PG; VZ
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.

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.


- Tariff comments start all indices lower but NYSE large caps recover decently.
- NASDAQ trades well enough given the tariff issues for AAPL.
- Small and midcaps struggle.
- Large cap NYSE rebound but chips, China not bad.
- CRM afterhours earnings may provide the next boost in the rally attempt.

Tuesday was a tale of two markets, both of them sluggish. All started lower after the President's comments Monday night that if talks with China do not work out he would likely place 10% tariffs on other thus far non-tariffed Chinese manufactured good, and that would include AAPL. Nothing like running right at one of the favored companies in the US to get things off to a slow start.

From that lower start, however, the indices diverged. SP400 and RUTX started lower and then trended lower the entire session posting hefty losses. The large cap indices started lower then trended higher. NASDAQ and SOX did so until midmorning, faded, tried again in mid-afternoon. SP500 and DJ30 just trended higher all day long to the close. In the end their gains were nowhere near the severity of the smaller caps' losses, but they did recover from a bad open. Even AAPL managed to close positive on the session. Another tariff scare, but the market came back. Not bad resilience.

SP500 8.72, 0.33%
NASDAQ 0.85, 0.01%
DJ30 108.49, 0.44%
SP400 -0.80%
RUTX -0.87%
SOX 0.20%
NASDAQ 100 0.34%

Okay, not bad resilience, but it was not a great session. Came back from selling and that is good, but the patterns are still problematic: put in a test of the October low, trying to bounce, not convincing anyone that much just yet.

Perhaps DJ30 is a bit different. It was the league leader Tuesday in terms of a percentage move, posting what was truly a good reversal. Why did it perform? It has many of the recent leaders that tested for a week and then resumed the move. Tuesday VZ was stellar with a 2.5% move. MCD continued upside a second session, PG rallied 0.85%, HD rallied 2% after we dropped the play. MRK 1.2%, PFE 1.7%, KO 1%, JNJ 1.3%, UNH 1.9%, WBA 2.2%. You recognize these names, the trending stocks that are trending higher, not lower. Heck, even INTC kicked in 1.3% -- good pattern, just not trending higher yet.

Thus, the same leaders started leading again. Is the market back to DJ30 stocks leading, the rest trending lower?

Chips suggests perhaps not. CRM's great earnings afterhours and the effect on tech stocks such as AMZN, NFLX, AAPL also suggest not. Perhaps it just won't be Dow stocks leading higher as the market tries to put in that bounce off the test of the October low. The resilience Tuesday of AAPL and stocks such as INTC show there is some stomach for a bounce even after the President's comments and before CRMS's strong earnings afterhours. Not even more comments after the Tuesday close from Trump ("I'm not even a little bit happy with my selection of Jay [Powell]") stymied the post-CRM upside move.


To view, click on the following links:


DJ30 started lower, giving up at least half of the Monday move back. It then reversed and rallied to a very respectable gain given all the distance travelled. The double bottom effort off higher MACD is still in place.

SP500 showed almost identical action as it opened lower, sold, then reversed to a gain. Volume faded, so not that strong, but not that harsh of selling either. At the 10 day EMA, its first test.

NASDAQ gapped lower, reversed, closed flat, again just below the 10 day EMA. INTC, AMZN and company may help it break on through Wednesday.

SOX showed the same action as it sold, turned back up, tried a break through the 20 day EMA but could not make it stick. Chips do look better: INTC, AMD, AVGO, AMAT. Possibilities.

RUTX, SP400 sold back on the day, showing relatively a lot of weakness. Even so, their patterns are not wrecked, just not leading.


Stats: +108.49 points (+0.44%) to close at 24748.73

Stats: +0.85 points (+0.01%) to close at 7082.70
Volume: 2.07B (+1.97%)

Up Volume: 1.01B (-570M)
Down Volume: 1.04B (+615.59M)

A/D and Hi/Lo: Decliners led 1.94 to 1
Previous Session: Advancers led 1.49 to 1

New Highs: 14 (-5)
New Lows: 180 (+58)

Stats: +8.72 points (+0.33%) to close at 2682.17
NYSE Volume: 796.843M (-6.28%)

Up Volume: 355.589M (-261.542M)
Down Volume: 429.561M (+208.454M)

A/D and Hi/Lo: Decliners led 1.58 to 1
Previous Session: Advancers led 1.74 to 1

New Highs: 20 (+6)
New Lows: 233 (+87)


VIX: 19.02; +0.12
VXN: 24.73; -1.29
VXO: 21.12; +0.73

Put/Call Ratio (CBOE): 0.92; -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: 3.058% versus 3.059%. Still paused after the 3 week rally off the low.

Historical: the last sub-2% rate was in November 2016 (1.867%). 3.059% versus 3.048% versus 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: 1.12973 versus 1.13325. Euro broke lower again.

Historical: 1.13325 versus 1.13380 versus 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: 113.781 versus 113.510. Moving higher again.

Historical: Last below 109 in June 2018: 113.510 versus 112.972 versus 113.007 versus 113.077 versus 112.617 versus 112.831 versus 113.585 versus 113.576. Was at 110 three weeks back.

Oil: 51.56, -0.07%. Oil holds the long for a second session after a big drop. Still an ugly trend lower, just taking a pause for now.

Gold: 1213.40, -9.00. Gold breaks below the 50 day MA's after a weeklong lateral move.


A bit of resilience on the day, some afterhours upside moves suggest the relief move can continue. Same issues of Fed, trade, economic questions, market showing staying power. Perhaps for now enough bad news is built in for the indices to continue higher off the double bottom test of the October low. With the recent leaders resuming their moves, chips looking ready to move along with some big names after the CRM assist, China stocks in great patterns . . . it looks a bit better for that move.

Wednesday Q3 GDP second iteration is out, inventories, and New Home sales are scheduled, then Thursday Personal Spending and in the afternoon the FOMC November meeting minutes. More of the same.

Again, we will see if the move that started Monday continues after facing down, somewhat, a setback Tuesday.

Have a great evening!

End part 1
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