Tuesday, December 11, 2018

The Daily, Part 1 of 3, 12-11-18

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12/11/2018 Investment House Daily
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Investment House Daily Subscribers:


Targets hit: None issued
Entry alerts: NBEV; TEAM; TWTR
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.


- Trade talk progress news starts stocks higher.
- After a solid rise, stocks struggle, fail to hold most of the move.
- Indices holding at the bottom of the range -- lick log time for the bounce attempts . . . and the selling attempts as well.

A familiar story played out Tuesday with stocks strong pre-market, opened higher, then struggled to hold the gains, eventually losing most of the upside by the close. Monday's leadership by large cap growth (NASDAQ, NASDAQ 100, SOX) held over into Tuesday as those indices are the only that held positive, but they also gave up large chunks of gains. In the end, while tech and chip indices closed positive, some of the better action was in the more stoic Dow-type stocks such as PG, CLX, VZ, PEP. Back to the basics from the look of it, but even those were not blowouts.

SP500 -0.94, -0.04%
NASDAQ 11.31, 0.16%
DJ30 -53.02, -0.22%
SP400 -0.34%
RUTX -0.21%
SOX 0.62%
NASDAQ 100 0.32%



Some gains, some areas that were decent enough, but the big picture saw the indices gap higher and fail to hold a rally. The end result left SP500, DJ30, NASDAQ at or near the range lows. RUTX and SP400 faded a bit lower below those lows. SOX held onto its modest move higher thanks to upside from AVGO, INTC and some other chip large caps posting very modest gains.

Again, lots of intraday movement, again not much change in relative position. The indices hold at support, some stocks post decent upside moves off support, but most cannot find traction. In other words, leadership remains thin overall, focused in the same stocks that have trended higher but even those are not surging upside. The overall market is pensive at best. Locked and loaded at support, but shooting blanks thus far.


There was news, fairly important news, but not enough because . . . it was more of the same and thus was unable to move the needle. Market is still waiting for that definitive news. Nothing big. Yield curve safe from inversion, trade deal that is a real trade deal signed. Not yet.

Trade: Sure there was news. Monday night there was a telephone conference between the US and China. Bloomberg reported that the Chinese were reducing US auto tariffs from 40% to 15%. GM jumped . . . to close up 0.27. Cents. Trump tweeted there were 'important announcements' to come regarding the trade conference. But when? And what? There was reporting that the Chinese were going to actually discuss IP theft. Wow, step one. After all this time. Shocking the market did not surge to new highs in a single bound. And hold them as well.

Bonds and the curve: The actual curve was not the story. Janet Yellen was the story. She opined this morning that corporate indebtedness is "quite high" and "is dangerous," and could lead to . . . another financial crisis.

Wow, less than a year after she left the chair there is the possibility of another financial crisis, something she said she would never see again in her life.

And the cause? Corporate indebtedness. Now how could that have arisen? Perhaps the Fed, since March 2009, pushing every person, company, or entity into risky assets? Through the Fed's efforts, there has been no other game in the world. Risk was promoted. Risk was the desired outcome. Risk is what they got.

And now she opines that the risk she so fervently pushed upon everyone to take on is so bad it could lead to another financial crisis. Hypocrite. Pharisee. Most loathsome type of pundit.

But, as the Fed loves tradition, such as causing recessions and inflation when it vows its work prolongs expansions and defeats inflation. Another time-tested tradition is Fed chairs speaking post-chair and completely ignoring the facts regarding what they did. Greenspan had nothing to do with the financial crisis after keeping rates at 0% for over a decade. Nope, wasn't the rates, wasn't me. Yellen and Bernanke force investment in risk assets then complain about high levels of risk asset ownership. Not us, no way.

It was good to see most on the financial stations slamming these comments. Won't change anything the Fed does, but it was at least good to see.


To view, click on the following links:


More intraday movement, same lack of movement overall.

SP500: Gapped nicely higher, touched near the 10 day EMA, faded to no gain. Volume faded back to average. Sitting at the bottom of the range. Not finding traction thus far.

DJ30: Gapped higher, tapped near the 10 day EMA, fell back to a modest loss. Lower volume, fading back to average. As with SP500, not finding enough stocks able to hold moves.

NASDAQ: Gapped to the 10 day EMA and faded to a modest gain. Volume was up but below average. Holding near 7000, the October significant support.

SOX: Same story, a gap higher, tested the 20 day EMA, sold back much of the gain. Some big names such as AVGO were higher, but most were not.

SP400: Midcaps gapped higher to the prior bottom of the range then sold off to close at a lower low.

RUTX: Small caps rallied, faded to close at a lower closing low.


As with the indices, lots of gaps higher followed by fades.

Transports: CSX gapped upside then reversed to flat. Airlines showed similar action. DJ20 remains at the bottom of its range.

Retail/Apparel: No relieve here as most moved lower though modestly whether M or ULTA or LULU or WSM. But the positioning is not good.

Utilities: AEP continued higher. Safe harbor remains.

Personal products: Showing life, of course. CLX jumped over 2% off the 20 day EMA. PG gapped upside but was less than surging. CL solid, up 1.6% with a gap and rally.

Food: Held on decently though gave up some upside moves, e.g. YUM gapping higher, fading to a modest loss. KDP holding its pattern well. CMG is working laterally over the 50 day EMA on light trade. PEP up decently as with KO, but nothing spectacular. MCD gapped and flipped negative.

Software: Gaps higher, fades. VRSN, TEAM, SPLK, CRM. GLUU posted a very nice gain, however. VMW was surging but gave much of that back. For the most part, this group of leaders that is trying to assert itself makes moves just to struggle.

Drugs: Very modest moves for the most part. Big names such as LLY, PFE, MRK were up early, then faded. Still holding their trends. Smaller still good patterns, still looking for moves, e.g. ZGNX, BCRX, CRMD.

FAANG: Gaps higher then reversing the moves.

Chips: AVGO gapped upside 3+%, moving out of the triangle. INTC gapped, rallied, then faded to near flat. Lots of chips look weak, e.g. NVDA, AMAT, AMD.


Stats: -53.02 points (-0.22%) to close at 24370.24

Stats: +11.31 points (+0.16%) to close at 7031.83
Volume: 2.27B (-4.22%)

Up Volume: 1.15B (-90M)
Down Volume: 1.1B (+10M)

A/D and Hi/Lo: Decliners led 1.21 to 1
Previous Session: Decliners led 1.47 to 1

New Highs: 21 (+6)
New Lows: 287 (-230)

Stats: -0.94 points (-0.04%) to close at 2636.78
NYSE Volume: 885.8M (-11.89%)

Up Volume: 363.227M (+103.062M)
Down Volume: 502.369M (-231.96M)

A/D and Hi/Lo: Decliners led 1.23 to 1
Previous Session: Decliners led 2.08 to 1

New Highs: 37 (+25)
New Lows: 289 (-272)


VIX: 21.76; -0.88
VXN: 26.77; -0.43
VXO: 24.38; -0.12

Put/Call Ratio (CBOE): 0.97; -0.10

Bulls and Bears:

Seriously? Bulls surge over 8 points past the mid-forties. The trend, however, is lower. Bears continued higher, taking out the prior 2018 high. That is a positive longer term. Bears have been absent for over 2 years.

Bulls: 46.7 versus 38.3

Bears: 21.5 versus 20.6

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: 46.7 versus 38.3
38.3 versus 39.6 versus 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: 21.50 versus 20.6
20.6 versus 19.8 versus 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: 2.884% versus 2.863%. Holding the move over the 200 day SMA.

Historical: the last sub-2% rate was in November 2016 (1.867%). 2.863% versus 2.854% versus 2.892% versus 2.915% versus 2.979% versus 2.993% versus 3.032% versus 3.061% versus 3.058% versus 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%

EUR/USD: 1.13244 versus 1.13657. Euro diving lower below the 50 day MA's.

Historical: 1.13657 versus 1.1404 versus 1.1376 versus 1.13970 versus 1.13360 versus 1.13199 versus 1.13934 versus 1.13682 versus 1.12973 versus 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

USD/JPY: 113.385 versus 113.022. Dollar breaking up through the 50 day MA again.

Historical: Last below 109 in June 2018: 113.022 versus 112.66 versus 112.71 versus 112.813 versus 113.581 versus 113.474 versus 113.402 versus 113.559 versus 113.781 versus 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: 51.65, +0.65.

Gold: 1247.20, -2.20. Still struggling just a bit after surging to near the 200 day SMA to end last week.


Tuesday was another day of possible upside that could not hang on. The indices are again at the bottom of the range, again looking for a bounce. Oh, they had a bounce and lost it. Looking for a bounce that holds. Again.

If the bounce that failed gives up the range, we have plays on CRM, NVDA, SLAB ready. Stocks such as LULU, ADBE still have some big gaps to fill down below.

The upside is fighting to hold on and no doubt can rebound as seen in October and November, the prior bounces from the bottom of the range. Thus far bids cannot hold moves higher on this attempt, but there was a bit of back and forth volatility in October and in November before those moves stuck. It is lick log time for that.

If it works we play it with more positions. If the bottom of the range gives way, we play that move for the next leg lower. Again, with the attempts higher, the attempts lower, both thus far stalemates the past week, it is the lick log for the move at this range.

Have a great evening!

End part 1
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