Monday, November 05, 2018

The Daily, Part 1 of 3, 11-5-18

* * * *
11/5/2018 Investment House Daily
* * * *

Investment House Daily Subscribers:


Targets hit: None issued
Entry alerts: AMZN; KR; M; ROST
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 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.




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.


- After a down Friday, a split ticket on the stock indices.
- DJ30 and the same stocks rallying of late lead higher on the day.
- NASDAQ and SOX leave themselves in decent patterns.
- Election day will answer some questions but we have to see how the markets react.

A little up, a little down, but not bad action all around. A poet laureate I am not, but that somewhat sums up the session: DJ30 led with a solid 0.76% gain as names such as MCD, WMT, JNJ, and even IBM posted gains, while NASDAQ lost 0.38% but does not look bad at all as tech stocks test last week's move higher and hold some pretty good patterns.

SP500 15.25, 0.56%
NASDAQ -28.14, -0.38%
DJ30 190.87, 0.76%
SP400 0.43%
RUTX -0.03%
SOX -0.85%
NASDAQ 100 -0.40%

VOLUME: NYSE -6%, NASDAQ -26%. NYSE trade held mostly steady just above average. Solid trade as the NYSE indices scored some upside. NASDAQ trade fell off sharply below average, good action for a test of the move to perhaps set up the next upside.


A really quiet news day so the market could work on its own, right? Well, kind of. Election day is Tuesday, and that is out there still to be cleared up. Blue wave? Red wave? Change of control in Congress or part of Congress? Questions to be answered, and the market's reaction is yet to be known. If the GOP loses part of Congress then any further economic work is likely scuttled, and you would think that would not necessarily be great for stocks. On the other hand, the Fed is out there and still running loose so that changes the dynamics.

I will say the market did a decent job of positioning ahead of the results. NYSE just rallied. NASDAQ, however, was off, but it was a lower volume fade, a consolidation of the solid three days upside. That leaves NASDAQ in good position to move higher on news, continuing this second bounce off the current downtrend.

There are some really interesting patterns out there, e.g. DATA, CRM, FEYE. XLNX and SQ are getting set up as is AUDC. V and MA might just come back from the forgotten. VZ started back upside, following MCD, WMT back upside. Yes, DATA -- we just traded it for a nice gain, and this short pullback leaves a good stock in a new good position.

This suggests that with a bit more testing Tuesday, NASDAQ stocks and others could be ready to move higher again and continue the second leg upside. The market appears to be cheating that way for a post-election move.

At the same time, Monday produced good moves in stocks already moving well, e.g. WMT, MCD, ULTA.

If tech bounces, there could actually be a synergistic effect that jumpstarts a year end move. If the market views the election outcome as a positive -- whichever way it comes out -- stocks have put themselves in a decent position to move upside for seasonal move.


NASDAQ: Sold off farther after the Friday losses, moving to the Wednesday low. Then a 73 point recovery to close 28 points lower. Not a bad shakeout, testing the early October low; can potentially form a right shoulder to an inverted head and shoulders. The action, outside of some of the big names that still look garbage-like, has us looking at some very interesting upside patterns.

SP500: No huge move, just a modest recovery from the Friday selling. Held the 10 day EMA on the low and rebounded. Not bad, just appears to need a bit more time to do a bit more work. If the other indices make a move, however, SP500 won't wait to finish its business.

DJ30: Right back up after the Friday loss, up four of five sessions. Similar-ish pattern to NASDAQ, and of course, over the 200 day SMA as of last week. If it takes a couple more days, that would be perfect, but the election may not give it that time -- or . . . it gives it exactly that time as Tuesday is another test-like move, Wednesday is digesting the news, then the real direction comes after that. In short, DJ30 looks decent enough to continue higher, and if it does we let our current positions work and see if we can get into some new ones when they break higher from good patterns.

SOX: This action is more as NASDAQ than the other indices -- or NASDAQ is more like SOX -- either way. Nice reach lower intraday, then a rebound to hold the early October leg lower lows. Nice setup for stocks such as INTC to move higher along with stocks such as XLNX after it completes a little test of its surge upside.

RUTX, SP400: Second doji just below the 20 day EMA. Jury is still out, they likely follow the other indices.


SCAANN: Like how SQ is forming a handle to a short double bottom. CRM is interesting with this 200 day SMA test, but that is all. AAPL and AMZN are weak. NFLX did recover off early selling to show a doji; still not great. NVDA remains weak.

FB, GOOG: FB faded but still in position to bounce. GOOG still weak.

Software: DATA is setting up again. FEYE is putting in a nice test of its earnings break higher. ADBE showing a big doji with tail at the 200 day SMA -- as it did early last week.

Retail: Still solid. WMT, ROST, ULTA with good moves. DG at a higher closing high. PLCE was breaking higher Friday then gapped lower to test the 50 day EMA Monday.

Drugs: JNJ tested lower, closed higher, testing the September peak, trying to break through. MRK tested the 50 day EMA on the low, rebounded to a gain. PFE is not bad at the 50 day MA, but it has to show it can break higher. IMMU was flat -- a test here might put it in a good entry position. FATE tested after a strong volume move Friday; seeing how it reacts to that move.

Telecom: VZ up modestly as it bounces off the 20 day MA. QCOM still at the 200 day SMA awaiting earnings. SWIR has an interesting pattern, but it often does and doesn't move.

Semiconductors: INTC sure looks ready to move higher. XLNX is testing its surge nicely. MLNX paused after a strong surge; would like a couple of days to test. QRVO tanked after is rally pre-AAPL earnings. AVGO is struggling.


Stats: +190.87 points (+0.76%) to close at 25461.70

Stats: -28.14 points (-0.38%) to close at 7328.85
Volume: 2.16B (-25.52%)

Up Volume: 1.06B (-350M)
Down Volume: 1.06B (-360M)

A/D and Hi/Lo: Decliners led 1.13 to 1
Previous Session: Advancers led 1.06 to 1

New Highs: 39 (-5)
New Lows: 60 (-17)

Stats: +15.25 points (+0.56%) to close at 2738.31
NYSE Volume: 929.777M (-5.70%)

Up Volume: 276.145M (-146.176M)
Down Volume: 276.145M (-275.51M)

A/D and Hi/Lo: Advancers led 1.81 to 1
Previous Session: Decliners led 1.33 to 1

New Highs: 30 (+3)
New Lows: 53 (-32)


VIX: 19.96; +0.45
VXN: 27.26; +0.61
VXO: 21.55; -1.01

Put/Call Ratio (CBOE): 1.02; +0.09

Bulls and Bears:

This now gets at least interesting. Bulls tumbled 6.2 points, now well below 50. Perhaps that is the dam breaking and negative sentiment will ramp. It is noteworthy that the market rebounded in the aftermath. Bears mad a significant move, at least for the bears.

Bulls: 44.3 versus 50.5

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: 44.3 versus 50.5
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 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: 3.201% versus 3.22%. Trying to hold near the early October low after undercutting it Friday.

Historical: the last sub-2% rate was in November 2016 (1.867%). 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: 1.14090 versus 1.13881

Historical: 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 vs 1.16833 versus 1.16692 versus 1.16858 versus 1.16226 versus 1.16900 versus 1.15863 versus 1.16016 versus 1.15946 versus 1.15534 versus 1.16243 versus 1.16341 versus 1.15832 versus 1.16029 versus 1.1664 versus 1.17035 versus 1.1691 versus 1.16802 versus 1.16216 versus 1.15390 versus 1.15709 versus 1.158 versus 1.1487

USD/JPY: 113.244 versus 113.204. Setting up to break higher form a double bottom with handle base.

Historical: Last below 109 in June 2018: 113.204 versus 112.81 versus 112.877 versus 112.876 versus 112.58 versus 111.89 versus 112.391 versus 112.091 versus 112.427 versus 112.680 versus 112.527 versus 112.385 versus 112.553 versus 112.558 versus 111.848 versus 112.222 versus 112.076 versus 112.158 versus 113.01 versus 113.12 versus 113.706 versus 113.894 versus 114.383 versus 113.642 versus 113.690 versus 112.734 versus 112.981 versus 112.811 versus 112.575 versus 112.448 versus 112.247 versus 112.369 versus 111.849 versus 112.06 versus 111.81 versus 111.491 versus 111.608 versus 111.192 versus 111.064 versus 110.680

Oil: 63.10, -0.04. Doji after last week's selloff has some calling for a bottom.

Gold: 1232.30, -1.00. Similar to gold, setting up for a break higher.


Election day and with the opportunity for more tax and other reforms on the table based upon who wins, I think there is a mot more riding on this as far as the market is concerned than many believe. You have a Fed on the hike until something breaks warpath, the economy looking shakier in terms of the more forward indicators, and democrats who appear to want to stop everything in its tracks if they get the chance. I am not passing judgment, just concluding that based upon what the leaders are saying and taking them at their word. To the market, that has consequences as prices depend upon earnings that ultimately depends upon sales. We saw what happens to the economy when sales/revenues go into a bear market, and without QE to prop it up, the market follows those sales.

With this situation, stocks may idle ahead of the results though they may also make a break one way or the other based upon expectations. Ah, but we saw what happens to those expectations back in 2016 as you recall. Thus, whether the market breaks one way or the other Tuesday, it may take the results to show the true direction.

As noted earlier, there are good setups forming, and if there are good moves off those setups that indicates at least a continuation of the current bounce. Also, watch out for a dip postelection that acts as a shakeout, one that fills that upside gap from last Wednesday, then leads to a rebound. That would be a pretty decent entry point to start picking up some recovering NASDAQ stocks for a year end rally.

We will see what plays out, have plays ready to go, and see which if any bite on election day and the day after.

Have a great evening!

End part 1
Customer Support:
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439

No comments: