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1/31/2019 Investment House Daily
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Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: CLX; DATA; FB
Entry alerts: ZS; TREX
Trailing stops: None issued
Stop alerts: MSFT; USCR
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:
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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.
MARKET SUMMARY
- Market a bit punchy after the DJ30 big Fed upside session. DJ30 pauses, the others play catch up.
- FB keeps the earnings story solid, or does it?
- Trade deal progress (??) has positives and not. Gee, what a surprise.
- End of the month sees volume spike. Will money enter to start a new month?
- Friday again and new money could continue the upside, but don't forget Monday.
FOMC done, earnings not so done, trade . . . not done.
The aftermath of the Wednesday FOMC announcement and press conference still left questions as to whether the Fed is done or just waiting in the shadows, ready to jump out and regulate markets when it sees the need. Kind of creepy -- purportedly free markets, but not too free lest they create imbalances. What kind of imbalances, too much wealth? Can't have that; those the central banks work for would not be pleased if all the world made money, grew wealth, and thus grew individual power and independence. No government wants that, the ultrawealthy don't want that, so they become the sad bedfellows they are, creating central banks to tamp down spontaneous outbreaks of wealth.
But, of course, I digress.
The market for now only cares if the Fed is standing in the way or has stepped aside, even if it is data-dependent and could stick a leg out of the shadows at any time and trip stocks.
Thus, stocks, while not surging in most cases, put in a credible session given the outsized gains Wednesday.
SP500 23.05, 0.86%
NASDAQ 98.66, 1.37%
DJ30 -15.19, -0.06%
SP400 0.45%
RUTX 0.84%
SOX 0.03%
NASDAQ 100 1.45%
VOLUME: NYSE +65%, NASDAQ +15%. Finally above average trade on NYSE though mostly like it was end of month trade. Still, it was upside prices on upside volume. NASDAQ put in a second session of above average volume on the upside, showing power for the move.
ADVANCE/DECLINE: NYSE 2.2:1, NASDAQ 1.8:1. Say 'large caps.' Say 'Facebook.'
FB soared on its earnings, GOOG and AMZN were strong as well. TEAM, ZS, CRM, COUP -- and we own these -- and other software stocks surged (HUBS, OKTA, NEWR). Oh, we also own FB and GOOG; at least we kept those when we sold the rest of our AMZN earlier in the week. Semiconductors remained solid enough. Some retail remained strong, e.g. FIVN, AMZN (until afterhours earnings). Still enough to keep the upside in decent shape, but still in need for more stocks to rally outside these groups.
But, again, I somewhat digressed.
Earnings.
Earnings, the first or the second of the triumvirate of issues this week, were really good in a subset of stocks, not so good for many. FB great, beating and rewarded. V, PYPL beat but were beaten instead of rewarded. Many missed with the top line again being a problem: UPS, MSFT, QCOM, DDP HSY (bottom line too) all missed top line while BLK and TSLA missed bottom line. There are others for sure, but they all pretty much fall in line with the so-so results.
That leaves earnings good enough in the high visibility names that everyone watches, but overall disappointing for most stocks as the sales revenue contracted in Q4.
Trade.
Ah, trade. The US and China met today. Initial reports, indeed the first ones heard, talked of the need for Trump and Xi to meet one on one to personally hammer out the stickier areas, e.g. IP transfers (aka theft), wanton hacking to steal business trade and US military and other secrets. Not too promising, the old 'here we go again' scenario.
But . . . Reuters reported late day that the top Chinese trade negotiator stated he hoped to accelerate the 90 day deadline. Most took that to mean the talks went well enough that they were much closer to reaching a deal. Body language experts, or those claiming to know something of it, said the body language was 'positive.' What does that mean? They weren't throwing punches? That is like saying something would be pretty if it wasn't so ugly.
Perhaps he meant that he hoped it would not take 90 days because China's economy is so bad it may not last the full 90 days. China's PMI dropped again we learned Tuesday. Maybe it is just a case that China is as desperate as it should be. I don't know if you have seen the graphic, but in the last 10 years the Chinese domestic loans have shifted from being well in favor of 'private' (and just how private are any companies in China?) companies to massively skewed to government-owned entities. China is heading more and more into hard-core communist control structures, and in so doing it is destroying its economy. Frankly, I don't think those in charge get that. They are clamping down harder and harder as things get worse and worse. That may result in collapse; awful for the average Chinese citizen -- near term, but quite a positive for the rest of the world.
THE MARKET
For the stock market, the catalysts/obstacles/questions about the triumvirate of Fed/earnings/trade did not stymie the advance. Indeed, NASDAQ rallied as the big names were flush with FB's earnings; after AAPL, FB's crush of earnings had hopes high for AMZN and GOOG and they both showed it on the session, up 2.9% and 2.5%, respectively. DJ30 was flat on the day, but goodness, it was up huge Wednesday. Not bad for the day after a rush higher.
CHARTS
To view, click on the following links:
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
http://investmenthouse1.com/ihmedia/f/charts/nasdaq100.jpg
As noted, DJ30 was flat, trying to move over the 200 day SMA again, failing to make any headway after that 400+ point AAPL/BA earnings boost. That is okay, it is midway into the October/December trading range, taking a pause at 25,000 (closed at 24,999.67), the next resistance it faced. Didn't reverse immediately after getting there, always a positive, or at least a lack of a negative.
SP500 continued its advance, rising to the key 2700 level, now also pretty much in the middle of the October/December trading range. The 200 day SMA is near 2750, the top of the range at 2800. Those are the levels you look for SP500 to shoot at before it needs to rest on this move.
NASDAQ rode FAANG higher, also continuing the move off the 50 day MA, cracking into the upper half of its October/December range. The top of the range is 7485 to 7575 with the 200 day SMA at 7453 thrown in there as well. Logical resistance, though AMZN is not going to help NASDAQ at all in the morning as afterhours it gave up the 48 point move on the session and is down another 45 to 50 points from the Wednesday close. And still falling for now.
SOX reached at the prior Friday rally high then faded to basically flat. Some resistance at 1280, and the 200 day SMA and October upper gap point is just below 1300 (closed at 1272). Feeling some pressure from those levels.
SP400 and RUTX were both very SP500-like. RUTX was better, extending its move up to the 78% Fibonacci retracement of the December selloff. SP400 midcaps took more of a back seat Thursday as it approaches the midpoint of its October/December range. They let the big names have their day. Would not be surprised to see something come back their way as AMZN sells Friday.
FRIDAY
Ah, Friday. January is in the books. Big recovery, one of the best in a few decades, but of course on the heels of one of the worst Decembers in more decades. Newton's laws at work: reaction, equal and opposite reaction, something is left behind (in the market, usually the retail investor).
Now the January Jobs Report. Yes, it will be released on schedule. ADP was much stronger than expected. Will the shut down have an impact? IF IT DOES, it is more empirical evidence the federal government and its '800,000' employees is too damn big, just as New York rents are too damn high. Why on earth should the federal government shutting down for 3 to 4 weeks be a cause for jobs to fall? They should surge in celebration. Oh, Cramer has Senator Warren on; my TV just went blank as a result because I have it programmed to cloud up whenever an idiot speaks. Socialists and communists as well. Can't watch CSPAN or so-called news stations anymore. Of course, I am kidding. Don't send the thought police or try to have my Twitter account (which I don't have) revoked.
Jobs are so anticlimactic after this week. Perhaps they can play around the edges, but the big news is the Fed, earnings are important but becoming a known quantity, and trade is still the same question mark. Jobs? We will see what they are, but I don't think they have much impact.
That leaves DJ30 at the 200 day SMA and having to deal with AMZN's earnings retracement. SP500, NASDAQ and the others still have room to move higher to next resistance. Would not be surprised, after the large caps led recently on some big earnings (AAPL, FB) to see some interest return to the small and midcaps.
That kind of back and forth, that kind of rotation as it were, is good for the market overall. It keeps money in the market and attracts more.
Ah, more money. It is the start of a month and in an uptrend, on the biggest January in decades, likely more money is pushed into the market Friday. Thus, it could be we get the third upside Friday in a row.
Do you buy it? Remember the last two starts of the last two weeks: they ended the prior week with a Friday surge followed by an opening week purge. Thus, we are inclined to bank some more gain if it is there as we did today on CLX (downside right before it reversed), DATA, FB. New buys? Tough call. Not too enamored with the idea; the leaders, e.g. software, surged Thursday. The others that did not move, well if the break higher Friday, I am not sure just how trustworthy that may be. Thus, it will have to be quite tasty to buy into, but we will see -- we are always open to very good patterns making very good moves.
Have a great evening!
MARKET STATS
DJ30
Stats: -15.19 points (-0.06%) to close at 24999.67
Nasdaq
Stats: +98.66 points (+1.37%) to close at 7281.74
Volume: 2.93B (+14.45%)
Up Volume: 1.81B (-140M)
Down Volume: 1.1B (+504.45M)
A/D and Hi/Lo: Advancers led 1.79 to 1
Previous Session: Advancers led 2.3 to 1
New Highs: 75 (+44)
New Lows: 27 (-1)
S&P
Stats: +23.05 points (+0.86%) to close at 2704.10
NYSE Volume: 1.384B (+64.77%)
Up Volume: 882.905M (+209.204M)
Down Volume: 492.572M (+329.759M)
A/D and Hi/Lo: Advancers led 2.16 to 1
Previous Session: Advancers led 3.85 to 1
New Highs: 132 (+62)
New Lows: 7 (-7)
SENTIMENT
VIX: 16.57; -1.09
VXN: 20.24; -0.94
VXO: 17.10; -1.37
Put/Call Ratio (CBOE): 0.84; -0.05
Bulls and Bears:
Bulls continued a bounce back in the forties with bears dropping back near 20. Then the market sold back this week. Still, the crossover occurred and that is a bullish indication. The market has made a move up, is testing, and then the question is if it can continue from there.
Bulls: 45.4 versus 42.1 versus 34.8
Bears: 21.3 versus 25.2 versus 29.4
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: 45.4 versus 42.1
34.8 versus 29.9 versus 39.3 versus 45.4 versus 46.7 versus 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: 21.3 versus 25.2
29.4 versus 34.6 versus 21.4 versus 20.4 versus 21.50 versus 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
OTHER MARKETS
Bonds: 2.64% versus 2.679%. Bonds gap upside off the 4 week test.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.679% versus 2.710.5 versus 2.738% versus 2.748% versus 2.734% versus 2.741% versus 2.75% versus 2.788% versus 2.752% versus 2.727% versus 2.718% versus 2.706% versus 2.699% versus 2.733% versus 2.712% versus 2.731% versus 2.694% versus 2.668% versus 2.552% versus 2.643% versus 2.686% versus 2.716% versus 2.774% versus 2.811% versus 2.736% versus 2.788% versus 2.803%. versus 2.762% versus 2.821% versus 2.855% versus 2.895% versus 2.913% versus 2.908% versus 2.884% versus 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%
EUR/USD: 1.14478 versus 1.14924. Euro flopped right back, giving up the Wednesday surge against the dollar. Another 200 day SMA failure?
Historical: 1.14924 versus 1.14351 versus 1.14285 versus 1.1407 versus 1.13134 versus 1.13830 versus 1.13652 versus 1.13636 versus 1.13919 versus 1.13993 versus 1.14802 versus 1.14734 versus 1.14699 versus 1.15075 versus 1.15532 versus 1.14547 versus 1.14834 versus 1.13980 versus 1.13957 versus 1.13343 versus 1.14450 versus 1.14425 versus 1.1432 versus 1.13588 versus 1.14015 versus 1.13708 versus 1.13828 versus 1.13755 versus 1.13533 versus 1.13049
USD/JPY: 108.85 versus 108.96. Dollar showing a doji after the Wednesday selloff.
Historical: Last below 109 in June 2018: 108.96 versus 109.364 versus 109.180 versus 109.545 versus 109.757 versus 109.58 versus 109.651 versus 109.773 versus 109.133 versus 108.912 versus 108.551 versus 108.340 versus 108.563 versus 108.332 versus 107.959 versus 108.802 versus 108.705 versus 108.517 versus 107.173 versus 107.515 versus 109.687 versus 110.273 versus 110.845 versus 111.190 versus 110.337 versus 111.223 versus 111.21 versus 112.521 versus 112.477 versus 112.653 versus 113.382
Oil: 53.79, -0.44. Rallied to a higher recovery high but then stalled.
Gold: 1325.20, +9.70. Gapped to a second straight doji with another good gain as well.
End part 1 of 2
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Thursday, January 31, 2019
Market Alert - Pre-Market
Futures vs FV: SP +-2.70; DJ -121.86; NASDQ +30.59
Futures are mixed in the aftermath of the FOMC decision and more earnings.
Earnings: The market is looking at its best January since 1989 in the rebound from the December selloff. For the most part, however, earnings do not support the move. More stocks are missing than beating, and they are missing on the top line as sales contract in the economic slowing. A few big names are making tons of money: big banks (saved in the financial crisis), big tech (FB, GOOG), big retail (read AMZN), BA. Even MSFT, INTC are sputtering some.
Beats: FB, V, PYPL (but lower guidance)
Misses: DDP (TL); HSY (TL, BL); UPS (TL); MSFT (TL); QCOM (TL); TSLA (BL); WYNN (BL); GE (BL); BLK (BL)
The misses are a who's who of big time US companies.
Fed: There are two main questions. First, is the Fed on pause or is it done? Second, what does this mean for markets? A Fed that is now working on a case by case, day to day basis keeps a cloud over the markets. What about markets finding prices based upon markets? You know, capitalism, free enterprise? Our system now has 12 unelected people setting the parameters of our capitalism. I call that another -ism, i.e. communism. Why would a free system that rewards a person's skill, intellect, timing and guts then turn the keys over to a group of ivory tower 'never done that' self-proclaimed experts?
Sure, the markets are placated near term, but there will be more showdowns ahead, not based on what the economics are markets are doing, but what the Fed believes. As it utilizes economic theories disproved by actual history, that is a certainty. At least, as Art Cashin commented today, it is "pretty obvious" the Fed is moving to the market's whims.
Trade: Trump tweets there is no final deal until he meets in person with Xi on the stickier issues. Surprise! That meeting is said to be sometime in February after Trump meets with NKorea. A trade deal deferred . . .
EU: Italy falls into an official recession. Brexit still a mess, but if the UK is smart it will pass a good deal for the UK then tell the EU 'this is this.' The EU will capitulate on the eve of Brexit.
Jobless claims: Of course they jumped over the shutdown.
253K vs 220K exp vs 200K prior (from 199K)
Question: should federal employees receive unemployment? Just asking before the hate mail floods in.
OTHER MARKETS
Bonds: 2.67% vs 2.679%
EUR/USD: 1.149 vs 1.4927
USD/JPY: 108.55 vs 108.96
Oil: 54.36, _0.13
Gold: 1329.10, +3.60
Futures are off the highs the past hour as the trade news filtered out. Nothing major to the downside, and quite frankly normal after the gorge upside WED. A bit of a pullback after such a move is not a bad thing at all as it lets the froth dissipate and then some bids to return.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
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Futures are mixed in the aftermath of the FOMC decision and more earnings.
Earnings: The market is looking at its best January since 1989 in the rebound from the December selloff. For the most part, however, earnings do not support the move. More stocks are missing than beating, and they are missing on the top line as sales contract in the economic slowing. A few big names are making tons of money: big banks (saved in the financial crisis), big tech (FB, GOOG), big retail (read AMZN), BA. Even MSFT, INTC are sputtering some.
Beats: FB, V, PYPL (but lower guidance)
Misses: DDP (TL); HSY (TL, BL); UPS (TL); MSFT (TL); QCOM (TL); TSLA (BL); WYNN (BL); GE (BL); BLK (BL)
The misses are a who's who of big time US companies.
Fed: There are two main questions. First, is the Fed on pause or is it done? Second, what does this mean for markets? A Fed that is now working on a case by case, day to day basis keeps a cloud over the markets. What about markets finding prices based upon markets? You know, capitalism, free enterprise? Our system now has 12 unelected people setting the parameters of our capitalism. I call that another -ism, i.e. communism. Why would a free system that rewards a person's skill, intellect, timing and guts then turn the keys over to a group of ivory tower 'never done that' self-proclaimed experts?
Sure, the markets are placated near term, but there will be more showdowns ahead, not based on what the economics are markets are doing, but what the Fed believes. As it utilizes economic theories disproved by actual history, that is a certainty. At least, as Art Cashin commented today, it is "pretty obvious" the Fed is moving to the market's whims.
Trade: Trump tweets there is no final deal until he meets in person with Xi on the stickier issues. Surprise! That meeting is said to be sometime in February after Trump meets with NKorea. A trade deal deferred . . .
EU: Italy falls into an official recession. Brexit still a mess, but if the UK is smart it will pass a good deal for the UK then tell the EU 'this is this.' The EU will capitulate on the eve of Brexit.
Jobless claims: Of course they jumped over the shutdown.
253K vs 220K exp vs 200K prior (from 199K)
Question: should federal employees receive unemployment? Just asking before the hate mail floods in.
OTHER MARKETS
Bonds: 2.67% vs 2.679%
EUR/USD: 1.149 vs 1.4927
USD/JPY: 108.55 vs 108.96
Oil: 54.36, _0.13
Gold: 1329.10, +3.60
Futures are off the highs the past hour as the trade news filtered out. Nothing major to the downside, and quite frankly normal after the gorge upside WED. A bit of a pullback after such a move is not a bad thing at all as it lets the froth dissipate and then some bids to return.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
http://www.investmenthouse.com/alertkey.htm
PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
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Wednesday, January 30, 2019
The Daily, Part 1, 1-30-19
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1/30/2019 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: UCTT
Entry alerts: FIVN; NFLX
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:
https://www.investmenthouse.com/alertdaily.html
********************************************************************
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.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/mo/mo.mp4
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TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
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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.
MARKET SUMMARY
- BA, AAPL fuel a strong early move, FOMC/Powell toss gas on the fire.
- Earnings? The right stocks are announcing big. Fed? Exits stage right for now. Trade? We will see.
- DJ30 surges, already at the 200 day SMA. The other indices are just cracking out of the top of the range or still inside the range.
- FB trying to keep the earnings surge going even as other afterhours names are down afterhours.
Two down, one to go.
Stocks started the session higher thanks to AAPL earnings the night before (where Tim Cook sang 'all our troubles are behind us') and BA blowing away grossly mispriced expectations. Earnings: check.
Then it was Chairman Powell's time, the second major hurdle of the week. The FOMC wrapped the second day of its rate hike/balance sheet meeting. It left rates steady (2.25% to 2.50%) and altered much of its statement. The Fed reiterated it would be patient concerning its next move whether a rate hike or further balance sheet reduction. This is warranted because of the global economic issues, the trade situation, and overall mild inflation. FOMC: check.
The already positive markets exploded higher, adding another third to half on top of the session gains. The move peaked with one hour left, faded some, but held onto fairly impressive moves, particularly for the large cap indices.
SP500 41.05, 1.55%
NASDAQ 154.79, 2.20%
DJ30 434.90, 1.77%
SP400 0.62%
RUTX 1.05%
SOX 2.87%
NASDAQ 100 2.64%
VOLUME: NYSE +9.5%, NASDAQ +22%. NYSE trade was still, despite all the excitement, below average. NASDAQ trade moved back above average, but even so it was lower than the Monday selling volume.
ADVANCE/DECLINE: NYSE +3.9:1, NASDAQ +2.3:1. Good but overall still more of a large cap day.
Fed specifics
The Fed made no reference to gradual increases in rates; that line was removed. The Fed also removed a reference to 'risks are balanced.'
There was no change to the Fed's economic outlook (slower than 2018 but still solid). Instead, the change was in how the Fed described its policy at this juncture.
Stocks shot higher. The question was whether they could hold the gains once Powell started answering questions.
It did. Powell successfully tap danced for the markets. In a nutshell the Fed feels the economy remains expansionary and in good shape, but there are 'crosscurrents' that warrant caution and patience. Ah yes, patience. Those that word count claim Powell uttered 'patience' -- or some derivation thereof -- eight times during his comments.
Back to crosscurrents. Trade, global economics, Brexit, shutdown lingering effects were all thrown into the 'crosscurrents' category. These are not short term issues, something Powell noted in saying they will remain for an extended period of time. As the Fed views these as serious issues impacting its policy actions, and as they are to be impacting the US economy (and thus price stability and growth as per the Fed's mandate) for an extended period of time, by extension the Fed will be out of the picture for an extended period of time.
What about the balance sheet? Well, Powell still wants to get the Fed balance sheet back to zero, but he also realizes it is not a cold turkey event. He hit the market in October with a jolt of reality and the market, addicted to FOMC crack, went into hysterical withdrawal. So, Powell is working on a stair-step approach, exposing the market to reality briefly, adjusting attitudes and conditioning it, but then pulling back to let the market recover. Or in this case, explode higher. Powell remains committed to getting the Fed back to the mundane role of adjusting rates as its method of affecting its policy mandate, but he is also being pragmatic and realizes it is a process, not just an event of doing it.
Does that mean Powell is now a Yellnanke (Yellen fused with Bernanke)? One could conclude he is bowing to the markets, but he has not gone full frontal Fed cowering. At least not yet. Thus, at some point, the market will have to deal with the Fed once again. Not today, however, or tomorrow, or the next few months. Free at last. Again, Fed: check.
Trade: Will it be checked off as well?
Now the issue is trade with the US/China latest round starting Wednesday. Okay, earnings are also still big: FB beat afterhours, AMZN still to come. But the trend in the big names is thus far good enough to more than keep the market moving higher.
The trade issue is one of the Fed issues. Are expectations of a meaningful deal too high? Not sure if they are, but I do think that a meaningful deal is not that likely in terms of IP theft, etc. If that view is the common one, then perhaps the lack of a serious deal this week does not hurt. It is the one element, however, that leaves the possibility for market upset, and thus should not be ignored -- as it was Wednesday.
THE MARKET
CHARTS
Wow. It wasn't Friday and stocks posted strong gains. Perhaps that routine change will work to keep this gain. It was a large cap day given large cap earnings drove the car. The midcaps are leaders but took a back seat.
DJ30: BA and AAPL earnings gapped DJ30 higher and it rallied over 25K and through the 200 day SMA intraday. A bit of a fade closed the Dow right on the 200 day. In one move DJ30 is at next resistance, pretty much right in the middle of the October/December trading range. They broke out the Dow 25K hats on CNBC, always a great move. 25K was the next resistance and this news took the Dow right to it. After a 1.5 week lateral consolidation, however, typically a strong move would continue for more than just one session, even if it was a big one.
SP500: Up nicely as well but not skewed as much as DJ30 with its AAPL and BA heavyweights. Broke to a new recovery high over the prior two Friday peaks. Volume rallied 10% but it was still below average. Seriously? The buying was not totally unleashed in a rush into stocks. No sellers of course, but it was not a buy across the board.
NASDAQ: NASDAQ moved up to the intraday high on the recovery, but did not move past those highs. At the top of the two week range, no breakout, however. Volume stronger, back over average, but still less than the selling volume from Monday. Okay, broke higher off the 50 day MA, a good initial move -- again. Now it actually needs to move through and toward the 200 day SMA up at 7452.
SOX: After the prior week's strong move, a 2-day test this week and on the third session SOX moved up to near the Friday rebound high. Still below the 200 day SMA and will have to face that as next resistance at 1300 (closed at 1272)
SP400: Midcaps edged over the two week lateral consolidation. Held up very well in the lateral move, decent upside break though the domestic tied stocks lagged on the session. Still solid and its time likely comes again.
RUTX: Same action as SP400, moving just over the top of the lateral range.
LEADERSHIP
FAANG: AAPL of course gapped on earnings, gapping right into resistance. AMZN jumped off the 50 day MA back to the upper half of its 4 week range. FB did the same and surged afterhours to 167.50 (closed at 150ish). NFLX moved up through the 200 day SMA. GOOG was similar, gapping off the 50 day SMA and moving into the upper portion of its January range.
Chips: AMD surged on results, following the XLNX, LRCX earlier earnings moves; those two continued higher as well. MU held steady but RMBS gapped higher, rallying to a new recovery high. SIMO trying to launch off the bottom of the pattern. Overall the group remains very good.
Software: Still a good group, just not as strong top to bottom. NOW broke higher and afterhours on earnings is up another 10 points. DATA continues working back up off the 10 day EMA test. CRM bounced off the 20 day EMA close. SPLK surged off its 10 day EMA test. NTNX, ZS still in good position to break higher. MSFT gapped and rallied back through the 200 day MA intraday, then afterhours gapped back below the 200 day SMA to the Tuesday closing level on that day's selloff.
Manufacturing/Machinery: BA the standout of course. The others, so-so. UTX, MMM, CAT, CMI -- decent but nothing great. EMR was up big. Strong gap and run, strong volume.
Financial: Blah. JPM nothing, WFC the same. BAC down, C up. GS edging higher. V jumped on earnings originally, sold off after the initial surge. Fed day, Fed is dovish, not great for financials.
Retail: FIVN jumped higher on volume and we picked up some. DDS still a decent pattern. COST holding steady below the 200 day SMA. MIK, a downside play, gapped fairly sharply lower and we didn't chase it to our chagrin. Very mixed group.
Materials: Edged higher but nothing near great. LPX sliding higher on no volume. CX, TREX, USCR -- nice patterns, just not breaking higher.
Gold: HMY testing a breakout move. SA a nice cup with handle.
MARKET STATS
DJ30
Stats: +434.90 points (+1.77%) to close at 25014.86
Nasdaq
Stats: +154.79 points (+2.20%) to close at 7183.08
Volume: 2.56B (+22.49%)
Up Volume: 1.95B (+1.303B)
Down Volume: 595.55M (-834.45M)
A/D and Hi/Lo: Advancers led 2.3 to 1
Previous Session: Decliners led 1.23 to 1
New Highs: 31 (-3)
New Lows: 28 (+2)
S&P
Stats: +41.05 points (+1.55%) to close at 2681.05
NYSE Volume: 839.863M (+9.42%)
Up Volume: 673.701M (+219.131M)
Down Volume: 162.813M (-134.67M)
A/D and Hi/Lo: Advancers led 3.85 to 1
Previous Session: Advancers led 1.28 to 1
New Highs: 70 (+18)
New Lows: 14 (-3)
SENTIMENT
VIX: 17.66; -1.47
VXN: 21.18; -2.68
VXO: 18.47; -1.63
Put/Call Ratio (CBOE): 0.89; 0.00
Bulls and Bears:
Bulls continued a bounce back in the forties with bears dropping back near 20. Then the market sold back this week. Still, the crossover occurred and that is a bullish indication. The market has made a move up, is testing, and then the question is if it can continue from there.
Bulls: 45.4 versus 42.1 versus 34.8
Bears: 21.3 versus 25.2 versus 29.4
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: 45.4 versus 42.1
34.8 versus 29.9 versus 39.3 versus 45.4 versus 46.7 versus 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: 21.3 versus 25.2
29.4 versus 34.6 versus 21.4 versus 20.4 versus 21.50 versus 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
OTHER MARKETS
Bonds: 2.679% versus 2.710%. The 10 year rallied, bonds overall held steady-ish.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.710.5 versus 2.738% versus 2.748% versus 2.734% versus 2.741% versus 2.75% versus 2.788% versus 2.752% versus 2.727% versus 2.718% versus 2.706% versus 2.699% versus 2.733% versus 2.712% versus 2.731% versus 2.694% versus 2.668% versus 2.552% versus 2.643% versus 2.686% versus 2.716% versus 2.774% versus 2.811% versus 2.736% versus 2.788% versus 2.803%. versus 2.762% versus 2.821% versus 2.855% versus 2.895% versus 2.913% versus 2.908% versus 2.884% versus 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%
EUR/USD: 1.14924 versus 1.14351. Euro surged back up near the 200 day SMA where it failed the second week of January.
Historical: 1.14351 versus 1.14285 versus 1.1407 versus 1.13134 versus 1.13830 versus 1.13652 versus 1.13636 versus 1.13919 versus 1.13993 versus 1.14802 versus 1.14734 versus 1.14699 versus 1.15075 versus 1.15532 versus 1.14547 versus 1.14834 versus 1.13980 versus 1.13957 versus 1.13343 versus 1.14450 versus 1.14425 versus 1.1432 versus 1.13588 versus 1.14015 versus 1.13708 versus 1.13828 versus 1.13755 versus 1.13533 versus 1.13049
USD/JPY: 108.96 versus 109.364. Dollar looks as if it is rolling over after 2 weeks laterally after the rebound bounce.
Historical: Last below 109 in June 2018: 109.364 versus 109.180 versus 109.545 versus 109.757 versus 109.58 versus 109.651 versus 109.773 versus 109.133 versus 108.912 versus 108.551 versus 108.340 versus 108.563 versus 108.332 versus 107.959 versus 108.802 versus 108.705 versus 108.517 versus 107.173 versus 107.515 versus 109.687 versus 110.273 versus 110.845 versus 111.190 versus 110.337 versus 111.223 versus 111.21 versus 112.521 versus 112.477 versus 112.653 versus 113.382
Oil: 54.23, +0.92. Breaking higher over the 2 week trading range formed around 52.50.
Gold: 1315.50, +6.60. Gold continued the 4-session breakout move. It did, however, gap to a doji. Perhaps all the good news near term is priced in. Still, a dovish Fed set up the move and it broke higher anticipating the Fed's move. Or lack thereof.
THURSDAY
Again, earnings in the right stocks are good enough for the market. The beats are stellar enough that they receive the focus even if there are still an uncomfortable number of top line misses still being reported. If the big names beat impressively, they others just do not count.
That continues afterhours Wednesday. FB beat big and is up 17 points over the close. The rest of the reports? Not so blowout. MSFT missed the top line and is lower. TSLA a bottom line miss; lower. V Beat but is lower. PYPL ditto. Can FB carry the load on its own? Going to find out.
Big move on earnings and then the Fed tossed gasoline on the upside fire. DJ30 posted a clear breakout, the other indices are toying with it but no super powerful moves. After this kind of move on specific Fed news the market often shows some retracement.
That works. We didn't buy much because the reverberations post-big news such as the Fed can work counter to the initial move. That is okay. If this is truly a good new move, a new break higher in a move that will push the indices to new highs given the Fed is flying south as a dove, there will be good opportunities to enter.
Have a great evening!
End part 1
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1/30/2019 Investment House Daily
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Targets hit: UCTT
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Trailing stops: None issued
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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.
MARKET SUMMARY
- BA, AAPL fuel a strong early move, FOMC/Powell toss gas on the fire.
- Earnings? The right stocks are announcing big. Fed? Exits stage right for now. Trade? We will see.
- DJ30 surges, already at the 200 day SMA. The other indices are just cracking out of the top of the range or still inside the range.
- FB trying to keep the earnings surge going even as other afterhours names are down afterhours.
Two down, one to go.
Stocks started the session higher thanks to AAPL earnings the night before (where Tim Cook sang 'all our troubles are behind us') and BA blowing away grossly mispriced expectations. Earnings: check.
Then it was Chairman Powell's time, the second major hurdle of the week. The FOMC wrapped the second day of its rate hike/balance sheet meeting. It left rates steady (2.25% to 2.50%) and altered much of its statement. The Fed reiterated it would be patient concerning its next move whether a rate hike or further balance sheet reduction. This is warranted because of the global economic issues, the trade situation, and overall mild inflation. FOMC: check.
The already positive markets exploded higher, adding another third to half on top of the session gains. The move peaked with one hour left, faded some, but held onto fairly impressive moves, particularly for the large cap indices.
SP500 41.05, 1.55%
NASDAQ 154.79, 2.20%
DJ30 434.90, 1.77%
SP400 0.62%
RUTX 1.05%
SOX 2.87%
NASDAQ 100 2.64%
VOLUME: NYSE +9.5%, NASDAQ +22%. NYSE trade was still, despite all the excitement, below average. NASDAQ trade moved back above average, but even so it was lower than the Monday selling volume.
ADVANCE/DECLINE: NYSE +3.9:1, NASDAQ +2.3:1. Good but overall still more of a large cap day.
Fed specifics
The Fed made no reference to gradual increases in rates; that line was removed. The Fed also removed a reference to 'risks are balanced.'
There was no change to the Fed's economic outlook (slower than 2018 but still solid). Instead, the change was in how the Fed described its policy at this juncture.
Stocks shot higher. The question was whether they could hold the gains once Powell started answering questions.
It did. Powell successfully tap danced for the markets. In a nutshell the Fed feels the economy remains expansionary and in good shape, but there are 'crosscurrents' that warrant caution and patience. Ah yes, patience. Those that word count claim Powell uttered 'patience' -- or some derivation thereof -- eight times during his comments.
Back to crosscurrents. Trade, global economics, Brexit, shutdown lingering effects were all thrown into the 'crosscurrents' category. These are not short term issues, something Powell noted in saying they will remain for an extended period of time. As the Fed views these as serious issues impacting its policy actions, and as they are to be impacting the US economy (and thus price stability and growth as per the Fed's mandate) for an extended period of time, by extension the Fed will be out of the picture for an extended period of time.
What about the balance sheet? Well, Powell still wants to get the Fed balance sheet back to zero, but he also realizes it is not a cold turkey event. He hit the market in October with a jolt of reality and the market, addicted to FOMC crack, went into hysterical withdrawal. So, Powell is working on a stair-step approach, exposing the market to reality briefly, adjusting attitudes and conditioning it, but then pulling back to let the market recover. Or in this case, explode higher. Powell remains committed to getting the Fed back to the mundane role of adjusting rates as its method of affecting its policy mandate, but he is also being pragmatic and realizes it is a process, not just an event of doing it.
Does that mean Powell is now a Yellnanke (Yellen fused with Bernanke)? One could conclude he is bowing to the markets, but he has not gone full frontal Fed cowering. At least not yet. Thus, at some point, the market will have to deal with the Fed once again. Not today, however, or tomorrow, or the next few months. Free at last. Again, Fed: check.
Trade: Will it be checked off as well?
Now the issue is trade with the US/China latest round starting Wednesday. Okay, earnings are also still big: FB beat afterhours, AMZN still to come. But the trend in the big names is thus far good enough to more than keep the market moving higher.
The trade issue is one of the Fed issues. Are expectations of a meaningful deal too high? Not sure if they are, but I do think that a meaningful deal is not that likely in terms of IP theft, etc. If that view is the common one, then perhaps the lack of a serious deal this week does not hurt. It is the one element, however, that leaves the possibility for market upset, and thus should not be ignored -- as it was Wednesday.
THE MARKET
CHARTS
Wow. It wasn't Friday and stocks posted strong gains. Perhaps that routine change will work to keep this gain. It was a large cap day given large cap earnings drove the car. The midcaps are leaders but took a back seat.
DJ30: BA and AAPL earnings gapped DJ30 higher and it rallied over 25K and through the 200 day SMA intraday. A bit of a fade closed the Dow right on the 200 day. In one move DJ30 is at next resistance, pretty much right in the middle of the October/December trading range. They broke out the Dow 25K hats on CNBC, always a great move. 25K was the next resistance and this news took the Dow right to it. After a 1.5 week lateral consolidation, however, typically a strong move would continue for more than just one session, even if it was a big one.
SP500: Up nicely as well but not skewed as much as DJ30 with its AAPL and BA heavyweights. Broke to a new recovery high over the prior two Friday peaks. Volume rallied 10% but it was still below average. Seriously? The buying was not totally unleashed in a rush into stocks. No sellers of course, but it was not a buy across the board.
NASDAQ: NASDAQ moved up to the intraday high on the recovery, but did not move past those highs. At the top of the two week range, no breakout, however. Volume stronger, back over average, but still less than the selling volume from Monday. Okay, broke higher off the 50 day MA, a good initial move -- again. Now it actually needs to move through and toward the 200 day SMA up at 7452.
SOX: After the prior week's strong move, a 2-day test this week and on the third session SOX moved up to near the Friday rebound high. Still below the 200 day SMA and will have to face that as next resistance at 1300 (closed at 1272)
SP400: Midcaps edged over the two week lateral consolidation. Held up very well in the lateral move, decent upside break though the domestic tied stocks lagged on the session. Still solid and its time likely comes again.
RUTX: Same action as SP400, moving just over the top of the lateral range.
LEADERSHIP
FAANG: AAPL of course gapped on earnings, gapping right into resistance. AMZN jumped off the 50 day MA back to the upper half of its 4 week range. FB did the same and surged afterhours to 167.50 (closed at 150ish). NFLX moved up through the 200 day SMA. GOOG was similar, gapping off the 50 day SMA and moving into the upper portion of its January range.
Chips: AMD surged on results, following the XLNX, LRCX earlier earnings moves; those two continued higher as well. MU held steady but RMBS gapped higher, rallying to a new recovery high. SIMO trying to launch off the bottom of the pattern. Overall the group remains very good.
Software: Still a good group, just not as strong top to bottom. NOW broke higher and afterhours on earnings is up another 10 points. DATA continues working back up off the 10 day EMA test. CRM bounced off the 20 day EMA close. SPLK surged off its 10 day EMA test. NTNX, ZS still in good position to break higher. MSFT gapped and rallied back through the 200 day MA intraday, then afterhours gapped back below the 200 day SMA to the Tuesday closing level on that day's selloff.
Manufacturing/Machinery: BA the standout of course. The others, so-so. UTX, MMM, CAT, CMI -- decent but nothing great. EMR was up big. Strong gap and run, strong volume.
Financial: Blah. JPM nothing, WFC the same. BAC down, C up. GS edging higher. V jumped on earnings originally, sold off after the initial surge. Fed day, Fed is dovish, not great for financials.
Retail: FIVN jumped higher on volume and we picked up some. DDS still a decent pattern. COST holding steady below the 200 day SMA. MIK, a downside play, gapped fairly sharply lower and we didn't chase it to our chagrin. Very mixed group.
Materials: Edged higher but nothing near great. LPX sliding higher on no volume. CX, TREX, USCR -- nice patterns, just not breaking higher.
Gold: HMY testing a breakout move. SA a nice cup with handle.
MARKET STATS
DJ30
Stats: +434.90 points (+1.77%) to close at 25014.86
Nasdaq
Stats: +154.79 points (+2.20%) to close at 7183.08
Volume: 2.56B (+22.49%)
Up Volume: 1.95B (+1.303B)
Down Volume: 595.55M (-834.45M)
A/D and Hi/Lo: Advancers led 2.3 to 1
Previous Session: Decliners led 1.23 to 1
New Highs: 31 (-3)
New Lows: 28 (+2)
S&P
Stats: +41.05 points (+1.55%) to close at 2681.05
NYSE Volume: 839.863M (+9.42%)
Up Volume: 673.701M (+219.131M)
Down Volume: 162.813M (-134.67M)
A/D and Hi/Lo: Advancers led 3.85 to 1
Previous Session: Advancers led 1.28 to 1
New Highs: 70 (+18)
New Lows: 14 (-3)
SENTIMENT
VIX: 17.66; -1.47
VXN: 21.18; -2.68
VXO: 18.47; -1.63
Put/Call Ratio (CBOE): 0.89; 0.00
Bulls and Bears:
Bulls continued a bounce back in the forties with bears dropping back near 20. Then the market sold back this week. Still, the crossover occurred and that is a bullish indication. The market has made a move up, is testing, and then the question is if it can continue from there.
Bulls: 45.4 versus 42.1 versus 34.8
Bears: 21.3 versus 25.2 versus 29.4
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: 45.4 versus 42.1
34.8 versus 29.9 versus 39.3 versus 45.4 versus 46.7 versus 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: 21.3 versus 25.2
29.4 versus 34.6 versus 21.4 versus 20.4 versus 21.50 versus 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
OTHER MARKETS
Bonds: 2.679% versus 2.710%. The 10 year rallied, bonds overall held steady-ish.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.710.5 versus 2.738% versus 2.748% versus 2.734% versus 2.741% versus 2.75% versus 2.788% versus 2.752% versus 2.727% versus 2.718% versus 2.706% versus 2.699% versus 2.733% versus 2.712% versus 2.731% versus 2.694% versus 2.668% versus 2.552% versus 2.643% versus 2.686% versus 2.716% versus 2.774% versus 2.811% versus 2.736% versus 2.788% versus 2.803%. versus 2.762% versus 2.821% versus 2.855% versus 2.895% versus 2.913% versus 2.908% versus 2.884% versus 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%
EUR/USD: 1.14924 versus 1.14351. Euro surged back up near the 200 day SMA where it failed the second week of January.
Historical: 1.14351 versus 1.14285 versus 1.1407 versus 1.13134 versus 1.13830 versus 1.13652 versus 1.13636 versus 1.13919 versus 1.13993 versus 1.14802 versus 1.14734 versus 1.14699 versus 1.15075 versus 1.15532 versus 1.14547 versus 1.14834 versus 1.13980 versus 1.13957 versus 1.13343 versus 1.14450 versus 1.14425 versus 1.1432 versus 1.13588 versus 1.14015 versus 1.13708 versus 1.13828 versus 1.13755 versus 1.13533 versus 1.13049
USD/JPY: 108.96 versus 109.364. Dollar looks as if it is rolling over after 2 weeks laterally after the rebound bounce.
Historical: Last below 109 in June 2018: 109.364 versus 109.180 versus 109.545 versus 109.757 versus 109.58 versus 109.651 versus 109.773 versus 109.133 versus 108.912 versus 108.551 versus 108.340 versus 108.563 versus 108.332 versus 107.959 versus 108.802 versus 108.705 versus 108.517 versus 107.173 versus 107.515 versus 109.687 versus 110.273 versus 110.845 versus 111.190 versus 110.337 versus 111.223 versus 111.21 versus 112.521 versus 112.477 versus 112.653 versus 113.382
Oil: 54.23, +0.92. Breaking higher over the 2 week trading range formed around 52.50.
Gold: 1315.50, +6.60. Gold continued the 4-session breakout move. It did, however, gap to a doji. Perhaps all the good news near term is priced in. Still, a dovish Fed set up the move and it broke higher anticipating the Fed's move. Or lack thereof.
THURSDAY
Again, earnings in the right stocks are good enough for the market. The beats are stellar enough that they receive the focus even if there are still an uncomfortable number of top line misses still being reported. If the big names beat impressively, they others just do not count.
That continues afterhours Wednesday. FB beat big and is up 17 points over the close. The rest of the reports? Not so blowout. MSFT missed the top line and is lower. TSLA a bottom line miss; lower. V Beat but is lower. PYPL ditto. Can FB carry the load on its own? Going to find out.
Big move on earnings and then the Fed tossed gasoline on the upside fire. DJ30 posted a clear breakout, the other indices are toying with it but no super powerful moves. After this kind of move on specific Fed news the market often shows some retracement.
That works. We didn't buy much because the reverberations post-big news such as the Fed can work counter to the initial move. That is okay. If this is truly a good new move, a new break higher in a move that will push the indices to new highs given the Fed is flying south as a dove, there will be good opportunities to enter.
Have a great evening!
End part 1
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Market Alert - To the Close
Powell is still trying to wean the market off the Bernanke, Yellen puts, but it is a process not a cold turkey move. The main point to take from his presser: there are crosscurrents (trade, world economics, shutdown) and while they exist the Fed has to step back and reassess. That includes rates as well as the balance sheet, even though he wants to get that balance sheet written down. Cannot do it all at once to financial markets addicted to Fed crack. So, you see what I consider a stair-step approach, now backing off after starting to get the market used to it. Those crosscurrents are going to be here for awhile, however, so the Fed is implicitly a non-issue for the time being.
We are not buying too much. Things can get overheated on these days and there is still the China/US trade meeting that will likely not yield any serious breakthroughs on IP theft and the like. Thus there is the possibility of upset a bit after such a big upside, Fed push rally. That will, however, provide opportunities to enter in an environment where the Fed is off the front burner, again, for now.
More after the close. I note DJ30 is at the 200 day MA, backing off from it. Solid gains in large caps, small and midcaps lagging but not garbage.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
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We are not buying too much. Things can get overheated on these days and there is still the China/US trade meeting that will likely not yield any serious breakthroughs on IP theft and the like. Thus there is the possibility of upset a bit after such a big upside, Fed push rally. That will, however, provide opportunities to enter in an environment where the Fed is off the front burner, again, for now.
More after the close. I note DJ30 is at the 200 day MA, backing off from it. Solid gains in large caps, small and midcaps lagging but not garbage.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Market Alert - FOMC Decision
Statement leaves rates at 2.25 to 2.50% No change on the economic outlook, but it has changed its statement considerably.
No longer in the statement:
"some gradual increases"
"risks are balanced"
The Fed's 3 paragraph statement was somewhat vague on the balance sheet roll off -- more would have to come from Powell at the press conference, but the market is reading this as the balance sheet roll off could be stopped for now.
Stocks are surging upside on the news in the initial reaction.
SP500 34.52, 1.31%
NASDAQ 122.88, 1.75%
DJ30 384.24, +1.56%
SP400 0.52%
RUTX 0.33%
SOX 2.43%
NASDAQ 100 2.17%
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
http://www.investmenthouse.com/alertkey.htm
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No longer in the statement:
"some gradual increases"
"risks are balanced"
The Fed's 3 paragraph statement was somewhat vague on the balance sheet roll off -- more would have to come from Powell at the press conference, but the market is reading this as the balance sheet roll off could be stopped for now.
Stocks are surging upside on the news in the initial reaction.
SP500 34.52, 1.31%
NASDAQ 122.88, 1.75%
DJ30 384.24, +1.56%
SP400 0.52%
RUTX 0.33%
SOX 2.43%
NASDAQ 100 2.17%
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
http://www.investmenthouse.com/alertkey.htm
PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
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Market Alert - Pre-Market
Futures vs FV: SP +14.45, DJ +259.04, NASDAQ +67.71
FOMC Day, Trade talks start. Futures are up but more on earnings than anticipation of the Fed or trade. The latter two may come home to roost, but the morning is dominated by earnings. Futures trending higher all morning with a spurt to new morning highs the past half hour.
Earnings Beats: BA; AAPL; ADP; AMGN; EBAY (BL); SYK; MCD (same store sales miss)
Misses: T (TL); BABA (TL, weakest growth in 3 years); ATHM (TL)
Matched: AMD, increased guidance
ADP: 213K vs 170K expected vs 263K prior (from 271K).
Manufacturing jobs the highest in 3 years, the same jobs that were never coming back to the US.
M&A: INTC wants to buy MLNX
OTHER MARKETS
Bonds: 2.722% versus 2.710%
EUR/USD: 1.1419 vs 1.14351
USD/JPY: 109.64, +0.26
Oil: 53.84, +0.53
Gold: 1315.90, +0.70
All news is good news this morning. After a weak session for NASDAQ and big growth, the all clear signal is on for the open and the morning. Then Powell speaks this afternoon. He has succeeded in tap dancing for the markets his past two public appearances and he had best have his shoes all tightened up and ready to go. The market tends to expect more and more and at this point it is highly unlikely the Fed will bend more than it has already.
It would be great if earnings win out. That is the fundamental basis of the stock market, not the FOMC. Still, we have to see how the market fares with the FOMC decision and Powell's comments.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
http://www.investmenthouse.com/alertkey.htm
PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
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FOMC Day, Trade talks start. Futures are up but more on earnings than anticipation of the Fed or trade. The latter two may come home to roost, but the morning is dominated by earnings. Futures trending higher all morning with a spurt to new morning highs the past half hour.
Earnings Beats: BA; AAPL; ADP; AMGN; EBAY (BL); SYK; MCD (same store sales miss)
Misses: T (TL); BABA (TL, weakest growth in 3 years); ATHM (TL)
Matched: AMD, increased guidance
ADP: 213K vs 170K expected vs 263K prior (from 271K).
Manufacturing jobs the highest in 3 years, the same jobs that were never coming back to the US.
M&A: INTC wants to buy MLNX
OTHER MARKETS
Bonds: 2.722% versus 2.710%
EUR/USD: 1.1419 vs 1.14351
USD/JPY: 109.64, +0.26
Oil: 53.84, +0.53
Gold: 1315.90, +0.70
All news is good news this morning. After a weak session for NASDAQ and big growth, the all clear signal is on for the open and the morning. Then Powell speaks this afternoon. He has succeeded in tap dancing for the markets his past two public appearances and he had best have his shoes all tightened up and ready to go. The market tends to expect more and more and at this point it is highly unlikely the Fed will bend more than it has already.
It would be great if earnings win out. That is the fundamental basis of the stock market, not the FOMC. Still, we have to see how the market fares with the FOMC decision and Powell's comments.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
http://www.investmenthouse.com/alertkey.htm
PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
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Tuesday, January 29, 2019
The Daily, Part 1, 1-29-19
* * * *
1/29/2019 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: BILI; AMZN; WDAY
Entry alerts: ADBE; MSFT; USCR
Trailing stops: BLUE
Stop alerts: AMZN; EA
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:
https://www.investmenthouse.com/alertdaily.html
********************************************************************
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.
MARKET SUMMARY
- NASDAQ, big tech nervous ahead of AAPL earnings, midcaps, small caps and DJ30 appear not to care that much.
- Some indices are in the upper half of the 'third leg' range, others are at the bottom, but all are holding as they wait.
- Waiting on? FAANG earnings, Fed, trade talks. No, not jobs.
- Lots of top line misses, some leader groups starting to struggle, but other groups are trying to step up.
- AAPL results beat lowered expectations, stock rises into the 50 day MA afterhours.
- Market may take a pass on AAPL, but still has Powell Wednesday, the start of trade talks, and Thursday more FAANG.
After another start of the week drop, Tuesday attempted to make amends. With the Fed starting its 2-day meeting, trade talks set to begin Wednesday (and China carping about conceding structural changes), and AAPL starting off FAANG earnings after the close, early bids did not hold up that well.
Futures showed gains and stocks jumped higher the first half hour of trade. After that initial burst was out of the system, however, the bids stalled. Stocks plunged into midmorning. From there a recovery to midday, but the large cap indices never made it back to session highs with NASDAQ and SOX the biggest laggards. SP400 and RUTX did indeed put in higher highs mid-afternoon, fading back some into the close but definitely looking the stronger of the indices.
SP500 -3.85, -0.15%
NASDAQ -57.39, -0.81%
DJ30 51.74, 0.21%
SP400 flat
RUTX -0.14%
SOX -1.45%
NASDAQ 100 -0.96%
VOLUME: NYSE -6%, NASDAQ -15%. NASDAQ sported some hefty declines, but volume was not blowout. That means no dumping, just a lot of nervous feet ahead of the start of FAANG earnings, the Fed, and trade.
ADVANCE/DECLINE: NYSE +1.3:1, NASDAQ -1.2:1.
CHARTS
To view, click on the following links:
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
http://investmenthouse1.com/ihmedia/f/charts/nasdaq100.jpg
It was not any kind of rollover for the indices. Some obviously performed better (SP400, DJ30, RUTX) than others, but none broke back through the resistance they moved above 1.5 to 2 weeks back.
RUTX and SP400 tested just modestly, holding near the top of their range formed on the initial break higher through the 50 day MA resistance.
DJ30 is in the middle of its range post-break through resistance.
SP500 is showing another doji over the 50 day MA and in a rather orderly move laterally.
NASDAQ fell to the 50 day EMA and sitting on that support in the bottom half of its 'leg 3' break higher.
SOX faded to the Tuesday low, this time not bouncing, closing nearer the 10 day EMA. Its breakout is still holding but it is dealing with NVDA dropping as well as struggles for AMD as that stock falls back through support. AMD, however, is up afterhours near 21 (closed at 19.25).
No break lower, but also no new move higher. More lateral attempts to consolidate the break over resistance. Definitely no continued move higher on a third leg. At best -- and that is the best case scenario discussed Monday -- the indices are working in a lateral consolidation, trying to hold on while they consolidate enough and get some triggers to get buyers interested in the upside again.
The most obvious trigger is earnings. Tuesday saw a wide range of stocks miss. Those that did not miss warned of a weaker 2019.
VZ, HOG, XRX, WHR, PII all missed on the top line with HOG missing bottom line as well. That nemesis is returning again after showing up in Q3 results. That is the most obvious indication of slowing economics when a broad range of companies miss on expected sales. MMM and PFE both beat, but they also both lowered 2019 expectations. Even if they win they are not that convincing.
AAPL: Perhaps AAPL's afterhours results will provide a catalyst. It beat expectations but remember, these expectations were lowered on AAPL's own warning. Thus the $94.3B versus $93.97B expected is not that great of a beat. Services up 19% to $10.9B with margins stated at 62.8%. Initially up 4 clicks, then 6. During the call it moved up almost 11 clicks but backed off to less than 9. Some pretty decent siren songs given the anticipation after the warning. It was obviously not a wow quarter as AAPL just barely edged lowered revenue expectations, but it is being painted much better than when the warning was issued. Still, the afterhours move puts AAPL just below the 50 day MA's on a Wednesday gap higher. Gapping into resistance.
Not sure AAPL's results will do it though the conference call tells all, or at least more. Still AMZN and FB to come, still the FOMC and trade as well. The market is not selling through support in anticipation of these events, but it also is definitely not moving higher into the news, thus demonstrating there is not a lot of confidence for positive outcomes. That of course, leaves the market vulnerable to breaching support if the news does not satisfy investor expectations that have thus far at least kept the indices working laterally over that support.
Thus, the indices head into Wednesday and the FOMC decision and Powell press conference with some decent enough AAPL results (more of a bounce in a sigh of relief given fears it would be worse than AAPL warned) but also facing AMZN and FB results and potential trade bombs.
Technically, they are also hanging in at support, not negative enough to sell off, not confident enough to rally.
That said, there are still good looking groups emerging such as financial, semiconductors, metals. Truckers, industrial manufacturing, some machinery, some retail have possibilities.
On the other hand, leadership is still rather thin. There are possibilities in many groups, but those have to turn into good patterns.
Some leadership groups are in a fight. Software, a longer lived market leader, is starting to struggle. FAANG is at the moment of truth with earnings at hand, and some big tech names are just really in a struggle (INTC, MSFT, NVDA).
In sum, that leaves the indices hoping for a catalyst from earnings, the Fed, and trade. Frankly, the Fed is a prerequisite to a move higher, perhaps a catalyst as well. In other words, the market has to have the Fed maintain its rediscovered love of rising markets and convey that in the Powell press conference. The fact that gold broke higher again this week with a strong Friday through Tuesday move (clearing the prior January high) speaks to the markets anticipating a continued market-compliant Fed Wednesday.
After the Fed, then earnings and trade come in to act as upside drivers -- or not. The indices are hanging over support looking for a reason to move upside or a reason to give up and break back down through potential support for a move toward the December low.
We closed some upside positions, taking some nice gain on some, taking lumps on others, and picked up a couple of downside positions, all in a positioning ahead of the results to come -- earnings, FOMC, and trade. AAPL, because of its weight, has S&P futures up as well, moving over the intraday session high. Step one is passing the test as investors breath a 'whew,' now waiting for Mr. Powell.
MARKET STATS
DJ30
Stats: +51.74 points (+0.21%) to close at 24579.96
Nasdaq
Stats: -57.39 points (-0.81%) to close at 7028.29
Volume: 2.09B (-14.69%)
Up Volume: 646.52M (-326.46M)
Down Volume: 1.43B (+20M)
A/D and Hi/Lo: Decliners led 1.23 to 1
Previous Session: Decliners led 1.79 to 1
New Highs: 34 (-6)
New Lows: 26 (-9)
S&P
Stats: -3.85 points (-0.15%) to close at 2640.00
NYSE Volume: 767.565M (-6.19%)
Up Volume: 454.569M (+133.637M)
Down Volume: 297.483M (-185.211M)
A/D and Hi/Lo: Advancers led 1.28 to 1
Previous Session: Decliners led 1.21 to 1
New Highs: 52 (+12)
New Lows: 17 (-5)
SENTIMENT
VIX: 19.13; +0.26
VXN: 23.86; +0.43
VXO: 20.10; +0.36
Put/Call Ratio (CBOE): 0.89; -0.10
Bulls and Bears:
Bulls continued a bounce back in the forties with bears dropping back near 20. Then the market sold back this week. Still, the crossover occurred and that is a bullish indication. The market has made a move up, is testing, and then the question is if it can continue from there.
Bulls: 45.4 versus 42.1 versus 34.8
Bears: 21.3 versus 25.2 versus 29.4
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: 45.4 versus 42.1
34.8 versus 29.9 versus 39.3 versus 45.4 versus 46.7 versus 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: 21.3 versus 25.2
29.4 versus 34.6 versus 21.4 versus 20.4 versus 21.50 versus 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
OTHER MARKETS
Bonds: 2.710% versus 2.738%. Bonds break higher off support, anticipating a still dovish Fed.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.738% versus 2.748% versus 2.734% versus 2.741% versus 2.75% versus 2.788% versus 2.752% versus 2.727% versus 2.718% versus 2.706% versus 2.699% versus 2.733% versus 2.712% versus 2.731% versus 2.694% versus 2.668% versus 2.552% versus 2.643% versus 2.686% versus 2.716% versus 2.774% versus 2.811% versus 2.736% versus 2.788% versus 2.803%. versus 2.762% versus 2.821% versus 2.855% versus 2.895% versus 2.913% versus 2.908% versus 2.884% versus 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%
EUR/USD: 1.14351 versus 1.14285
Historical: 1.14285 versus 1.1407 versus 1.13134 versus 1.13830 versus 1.13652 versus 1.13636 versus 1.13919 versus 1.13993 versus 1.14802 versus 1.14734 versus 1.14699 versus 1.15075 versus 1.15532 versus 1.14547 versus 1.14834 versus 1.13980 versus 1.13957 versus 1.13343 versus 1.14450 versus 1.14425 versus 1.1432 versus 1.13588 versus 1.14015 versus 1.13708 versus 1.13828 versus 1.13755 versus 1.13533 versus 1.13049
USD/JPY: 109.364 versus 109.180
Historical: Last below 109 in June 2018: 109.180 versus 109.545 versus 109.757 versus 109.58 versus 109.651 versus 109.773 versus 109.133 versus 108.912 versus 108.551 versus 108.340 versus 108.563 versus 108.332 versus 107.959 versus 108.802 versus 108.705 versus 108.517 versus 107.173 versus 107.515 versus 109.687 versus 110.273 versus 110.845 versus 111.190 versus 110.337 versus 111.223 versus 111.21 versus 112.521 versus 112.477 versus 112.653 versus 113.382
Oil: 53.31, +1.32. Bouncing off the 52.50 level, still working in a rather tight lateral range over the 50 day MA.
Gold: 1308.90, +5.80. Continuing the Friday break higher, adding to the move over the prior January high.
Have a great evening!
End part 1
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1/29/2019 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: BILI; AMZN; WDAY
Entry alerts: ADBE; MSFT; USCR
Trailing stops: BLUE
Stop alerts: AMZN; EA
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:
https://www.investmenthouse.com/alertdaily.html
********************************************************************
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.
MARKET SUMMARY
- NASDAQ, big tech nervous ahead of AAPL earnings, midcaps, small caps and DJ30 appear not to care that much.
- Some indices are in the upper half of the 'third leg' range, others are at the bottom, but all are holding as they wait.
- Waiting on? FAANG earnings, Fed, trade talks. No, not jobs.
- Lots of top line misses, some leader groups starting to struggle, but other groups are trying to step up.
- AAPL results beat lowered expectations, stock rises into the 50 day MA afterhours.
- Market may take a pass on AAPL, but still has Powell Wednesday, the start of trade talks, and Thursday more FAANG.
After another start of the week drop, Tuesday attempted to make amends. With the Fed starting its 2-day meeting, trade talks set to begin Wednesday (and China carping about conceding structural changes), and AAPL starting off FAANG earnings after the close, early bids did not hold up that well.
Futures showed gains and stocks jumped higher the first half hour of trade. After that initial burst was out of the system, however, the bids stalled. Stocks plunged into midmorning. From there a recovery to midday, but the large cap indices never made it back to session highs with NASDAQ and SOX the biggest laggards. SP400 and RUTX did indeed put in higher highs mid-afternoon, fading back some into the close but definitely looking the stronger of the indices.
SP500 -3.85, -0.15%
NASDAQ -57.39, -0.81%
DJ30 51.74, 0.21%
SP400 flat
RUTX -0.14%
SOX -1.45%
NASDAQ 100 -0.96%
VOLUME: NYSE -6%, NASDAQ -15%. NASDAQ sported some hefty declines, but volume was not blowout. That means no dumping, just a lot of nervous feet ahead of the start of FAANG earnings, the Fed, and trade.
ADVANCE/DECLINE: NYSE +1.3:1, NASDAQ -1.2:1.
CHARTS
To view, click on the following links:
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
http://investmenthouse1.com/ihmedia/f/charts/nasdaq100.jpg
It was not any kind of rollover for the indices. Some obviously performed better (SP400, DJ30, RUTX) than others, but none broke back through the resistance they moved above 1.5 to 2 weeks back.
RUTX and SP400 tested just modestly, holding near the top of their range formed on the initial break higher through the 50 day MA resistance.
DJ30 is in the middle of its range post-break through resistance.
SP500 is showing another doji over the 50 day MA and in a rather orderly move laterally.
NASDAQ fell to the 50 day EMA and sitting on that support in the bottom half of its 'leg 3' break higher.
SOX faded to the Tuesday low, this time not bouncing, closing nearer the 10 day EMA. Its breakout is still holding but it is dealing with NVDA dropping as well as struggles for AMD as that stock falls back through support. AMD, however, is up afterhours near 21 (closed at 19.25).
No break lower, but also no new move higher. More lateral attempts to consolidate the break over resistance. Definitely no continued move higher on a third leg. At best -- and that is the best case scenario discussed Monday -- the indices are working in a lateral consolidation, trying to hold on while they consolidate enough and get some triggers to get buyers interested in the upside again.
The most obvious trigger is earnings. Tuesday saw a wide range of stocks miss. Those that did not miss warned of a weaker 2019.
VZ, HOG, XRX, WHR, PII all missed on the top line with HOG missing bottom line as well. That nemesis is returning again after showing up in Q3 results. That is the most obvious indication of slowing economics when a broad range of companies miss on expected sales. MMM and PFE both beat, but they also both lowered 2019 expectations. Even if they win they are not that convincing.
AAPL: Perhaps AAPL's afterhours results will provide a catalyst. It beat expectations but remember, these expectations were lowered on AAPL's own warning. Thus the $94.3B versus $93.97B expected is not that great of a beat. Services up 19% to $10.9B with margins stated at 62.8%. Initially up 4 clicks, then 6. During the call it moved up almost 11 clicks but backed off to less than 9. Some pretty decent siren songs given the anticipation after the warning. It was obviously not a wow quarter as AAPL just barely edged lowered revenue expectations, but it is being painted much better than when the warning was issued. Still, the afterhours move puts AAPL just below the 50 day MA's on a Wednesday gap higher. Gapping into resistance.
Not sure AAPL's results will do it though the conference call tells all, or at least more. Still AMZN and FB to come, still the FOMC and trade as well. The market is not selling through support in anticipation of these events, but it also is definitely not moving higher into the news, thus demonstrating there is not a lot of confidence for positive outcomes. That of course, leaves the market vulnerable to breaching support if the news does not satisfy investor expectations that have thus far at least kept the indices working laterally over that support.
Thus, the indices head into Wednesday and the FOMC decision and Powell press conference with some decent enough AAPL results (more of a bounce in a sigh of relief given fears it would be worse than AAPL warned) but also facing AMZN and FB results and potential trade bombs.
Technically, they are also hanging in at support, not negative enough to sell off, not confident enough to rally.
That said, there are still good looking groups emerging such as financial, semiconductors, metals. Truckers, industrial manufacturing, some machinery, some retail have possibilities.
On the other hand, leadership is still rather thin. There are possibilities in many groups, but those have to turn into good patterns.
Some leadership groups are in a fight. Software, a longer lived market leader, is starting to struggle. FAANG is at the moment of truth with earnings at hand, and some big tech names are just really in a struggle (INTC, MSFT, NVDA).
In sum, that leaves the indices hoping for a catalyst from earnings, the Fed, and trade. Frankly, the Fed is a prerequisite to a move higher, perhaps a catalyst as well. In other words, the market has to have the Fed maintain its rediscovered love of rising markets and convey that in the Powell press conference. The fact that gold broke higher again this week with a strong Friday through Tuesday move (clearing the prior January high) speaks to the markets anticipating a continued market-compliant Fed Wednesday.
After the Fed, then earnings and trade come in to act as upside drivers -- or not. The indices are hanging over support looking for a reason to move upside or a reason to give up and break back down through potential support for a move toward the December low.
We closed some upside positions, taking some nice gain on some, taking lumps on others, and picked up a couple of downside positions, all in a positioning ahead of the results to come -- earnings, FOMC, and trade. AAPL, because of its weight, has S&P futures up as well, moving over the intraday session high. Step one is passing the test as investors breath a 'whew,' now waiting for Mr. Powell.
MARKET STATS
DJ30
Stats: +51.74 points (+0.21%) to close at 24579.96
Nasdaq
Stats: -57.39 points (-0.81%) to close at 7028.29
Volume: 2.09B (-14.69%)
Up Volume: 646.52M (-326.46M)
Down Volume: 1.43B (+20M)
A/D and Hi/Lo: Decliners led 1.23 to 1
Previous Session: Decliners led 1.79 to 1
New Highs: 34 (-6)
New Lows: 26 (-9)
S&P
Stats: -3.85 points (-0.15%) to close at 2640.00
NYSE Volume: 767.565M (-6.19%)
Up Volume: 454.569M (+133.637M)
Down Volume: 297.483M (-185.211M)
A/D and Hi/Lo: Advancers led 1.28 to 1
Previous Session: Decliners led 1.21 to 1
New Highs: 52 (+12)
New Lows: 17 (-5)
SENTIMENT
VIX: 19.13; +0.26
VXN: 23.86; +0.43
VXO: 20.10; +0.36
Put/Call Ratio (CBOE): 0.89; -0.10
Bulls and Bears:
Bulls continued a bounce back in the forties with bears dropping back near 20. Then the market sold back this week. Still, the crossover occurred and that is a bullish indication. The market has made a move up, is testing, and then the question is if it can continue from there.
Bulls: 45.4 versus 42.1 versus 34.8
Bears: 21.3 versus 25.2 versus 29.4
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: 45.4 versus 42.1
34.8 versus 29.9 versus 39.3 versus 45.4 versus 46.7 versus 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: 21.3 versus 25.2
29.4 versus 34.6 versus 21.4 versus 20.4 versus 21.50 versus 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
OTHER MARKETS
Bonds: 2.710% versus 2.738%. Bonds break higher off support, anticipating a still dovish Fed.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.738% versus 2.748% versus 2.734% versus 2.741% versus 2.75% versus 2.788% versus 2.752% versus 2.727% versus 2.718% versus 2.706% versus 2.699% versus 2.733% versus 2.712% versus 2.731% versus 2.694% versus 2.668% versus 2.552% versus 2.643% versus 2.686% versus 2.716% versus 2.774% versus 2.811% versus 2.736% versus 2.788% versus 2.803%. versus 2.762% versus 2.821% versus 2.855% versus 2.895% versus 2.913% versus 2.908% versus 2.884% versus 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%
EUR/USD: 1.14351 versus 1.14285
Historical: 1.14285 versus 1.1407 versus 1.13134 versus 1.13830 versus 1.13652 versus 1.13636 versus 1.13919 versus 1.13993 versus 1.14802 versus 1.14734 versus 1.14699 versus 1.15075 versus 1.15532 versus 1.14547 versus 1.14834 versus 1.13980 versus 1.13957 versus 1.13343 versus 1.14450 versus 1.14425 versus 1.1432 versus 1.13588 versus 1.14015 versus 1.13708 versus 1.13828 versus 1.13755 versus 1.13533 versus 1.13049
USD/JPY: 109.364 versus 109.180
Historical: Last below 109 in June 2018: 109.180 versus 109.545 versus 109.757 versus 109.58 versus 109.651 versus 109.773 versus 109.133 versus 108.912 versus 108.551 versus 108.340 versus 108.563 versus 108.332 versus 107.959 versus 108.802 versus 108.705 versus 108.517 versus 107.173 versus 107.515 versus 109.687 versus 110.273 versus 110.845 versus 111.190 versus 110.337 versus 111.223 versus 111.21 versus 112.521 versus 112.477 versus 112.653 versus 113.382
Oil: 53.31, +1.32. Bouncing off the 52.50 level, still working in a rather tight lateral range over the 50 day MA.
Gold: 1308.90, +5.80. Continuing the Friday break higher, adding to the move over the prior January high.
Have a great evening!
End part 1
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Market Alert - Last Hour
Very lethargic trade, not really able to mount a solid bounce. DJ30, SP400, RUTX are positive, but not by much. NASDAQ and SOX are downside leaders, particularly NASD 100. Most indices are doing fine holding support yet again in a lateral move while NASD, NASD 100 are down a bit harder. All still hold support.
Some groups are actually decent, e.g. steel (AKS beat), homebuilders, industrials (thanks to MMM results), truckers. Big name techs struggling and we picked up some puts on MSFT and ADBE. Bought some USCR but it faded an early move that continued Monday's gains.
Taking some off the table on laggards and some good moves that are struggling today, e.g. WDAY, BILI, AMZN. Others just disappointing, e.g. EA.
The indices are holding that resistance broken a couple of weeks back, but that is about all they are doing as they await AAPL's results. AAPL is off slightly; it is an earnings play given it is so beaten down. The idea is after its warning its results are not as bad as feared. With the action on the big tech stocks and FAANG, not too sure we want to pick any up. If so, it would be a small position.
SP500 -6.82, 0.26%
NASDAQ -64.89, -0.92%
DJ30 23.84, 0.10%
SP400 0.01%
RUTX -0.01%
SOX -1.50%
NASD 100 -1.11%
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Some groups are actually decent, e.g. steel (AKS beat), homebuilders, industrials (thanks to MMM results), truckers. Big name techs struggling and we picked up some puts on MSFT and ADBE. Bought some USCR but it faded an early move that continued Monday's gains.
Taking some off the table on laggards and some good moves that are struggling today, e.g. WDAY, BILI, AMZN. Others just disappointing, e.g. EA.
The indices are holding that resistance broken a couple of weeks back, but that is about all they are doing as they await AAPL's results. AAPL is off slightly; it is an earnings play given it is so beaten down. The idea is after its warning its results are not as bad as feared. With the action on the big tech stocks and FAANG, not too sure we want to pick any up. If so, it would be a small position.
SP500 -6.82, 0.26%
NASDAQ -64.89, -0.92%
DJ30 23.84, 0.10%
SP400 0.01%
RUTX -0.01%
SOX -1.50%
NASD 100 -1.11%
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
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Market Alert - Pre-Market
Futures vs FV: SP +2.00; DJ +22.28; NASD +11.67
Futures bounce after the Monday flop, but the bounce is rather weak and struggling some coming into the open. After the close Monday stock futures faded sharply on trade news, but that has subsided some overnight. Still, this bounce at the open looks rather hollow.
Trade: Mnuchin says he anticipates "significant progress" at these trade talks starting Wednesday. So, there you have it.
At the same time, China is livid over the indictment of the Huawei CEO and move for extradition. Shock.
FOMC: Starts its 2-day meeting today
Earnings: AAPL after the close.
Beats: MMM (lower outlook); PFE (lower outlook); AKS (steel)
Misses: VZ (TL); HOG (TL, BL); XRX (TL, increased outlook); WHR (TL); PII (TL).
See the pattern: Top line misses have returned as the economy slowed in Q4 and sales were not as strong as hoped.
Downgrades: SQ
Housing: Case/Shiller up but rose at the slowest pace in 4 years. Some slowing here as well even if it is ancient history.
2020: Charles Schultz heckled at a CNBC interview about being a billionaire, etc. He says America does not want the O-O 70% income tax, etc. A social liberal and supposed conservative on economics. Is America ready for that?
OTHER MARKETS
Bonds: 2.742% vs 2.748%
EUR/USD: 1.1424 vs 1.1436
USD/JPY: 109.42 vs 109.32
Oil: 52.51, +0.52. Trying to hold at that 52.50 level.
Gold: 1307.10, +4.00
Futures are up as noted, but fading into the open. A steady climb on the morning but a lot of ground to overcome after the selloff Monday afterhours. Not very convincing morning. AAPL to start the 'big' earnings for the week after the close. It definitely has not run up ahead of the results in the quarter where AAPL warned. Okay, it warned, it won't be huge. The question is whether it is worse than expected or not.
We are watching the bounce and of course watching how support holds. SOX and midcaps, the real leaders of late, are also the ones to watch.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
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Futures bounce after the Monday flop, but the bounce is rather weak and struggling some coming into the open. After the close Monday stock futures faded sharply on trade news, but that has subsided some overnight. Still, this bounce at the open looks rather hollow.
Trade: Mnuchin says he anticipates "significant progress" at these trade talks starting Wednesday. So, there you have it.
At the same time, China is livid over the indictment of the Huawei CEO and move for extradition. Shock.
FOMC: Starts its 2-day meeting today
Earnings: AAPL after the close.
Beats: MMM (lower outlook); PFE (lower outlook); AKS (steel)
Misses: VZ (TL); HOG (TL, BL); XRX (TL, increased outlook); WHR (TL); PII (TL).
See the pattern: Top line misses have returned as the economy slowed in Q4 and sales were not as strong as hoped.
Downgrades: SQ
Housing: Case/Shiller up but rose at the slowest pace in 4 years. Some slowing here as well even if it is ancient history.
2020: Charles Schultz heckled at a CNBC interview about being a billionaire, etc. He says America does not want the O-O 70% income tax, etc. A social liberal and supposed conservative on economics. Is America ready for that?
OTHER MARKETS
Bonds: 2.742% vs 2.748%
EUR/USD: 1.1424 vs 1.1436
USD/JPY: 109.42 vs 109.32
Oil: 52.51, +0.52. Trying to hold at that 52.50 level.
Gold: 1307.10, +4.00
Futures are up as noted, but fading into the open. A steady climb on the morning but a lot of ground to overcome after the selloff Monday afterhours. Not very convincing morning. AAPL to start the 'big' earnings for the week after the close. It definitely has not run up ahead of the results in the quarter where AAPL warned. Okay, it warned, it won't be huge. The question is whether it is worse than expected or not.
We are watching the bounce and of course watching how support holds. SOX and midcaps, the real leaders of late, are also the ones to watch.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
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Monday, January 28, 2019
The Daily, Part 1, 1-28-19
* * * *
1/28/2019 Investment House Daily
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MARKET ALERTS:
Targets hit: None issued
Entry alerts: NBEV
Trailing stops: None issued
Stop alerts: PG; VZ
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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.
MARKET SUMMARY
- Once again the large cap indices cannot hold a break higher.
- CAT, NVDA weak outlooks drop the large caps while midcaps and chips hold the line.
- Big earnings, FOMC, trade negotiations all loom over the market, and afterhours China's comments send futures lower.
- Large cap indices set to start back at testing the prior resistance after testing it and bouncing Monday.
For the second week following an upside Friday, the stock market started downside and rather hard downside. CAT missed on earnings and warned for 2019, pointing East to China as the issue. Futures were already lower then at 9:00ET NVDA warned about the quarter, lowering its revenue guidance as a result of slowing in . . . just about every business unit. There was nothing even close to a silver lining in the release.
CAT telling the tale of global slowing, something not surprising really, but the slap of reality always stings even if it should have been expected. NVDA was the shock -- after LRCX and XLNX pretty much said it was the bottom for the semiconductors. The market was definitely not ready for this and it showed it.
Stocks gapped lower, found a lower low midday, then crawled back upside. Never made positive though DJ30, SP500 and RUTX cut the losses in half while NASDAQ trimmed 50 points from a 120 point loss. Not massive reversals from the gaps lower, but held the support levels and did manage to work back up after that test.
SP500 -20.91, -0.78%
NASDAQ -79.18, -1.11%
DJ30 -208.98, -0.84%
SP400 -0.14%
RUTX -0.63%
SOX -2.09% (big ups, big downs)
NASDAQ 100 -1.33%
Definitely not ready to surge higher, and after the CAT earnings and NVDA warning, waiting on some of the other heavy hitting earnings for the week as well as the FOMC rate decision and Powell's press conference, the trade talks starting Wednesday, and tons of economic data culminating with the January jobs report Friday.
VOLUME: NYSE -5%, NASDAQ flat. After volume moved higher on the Friday gains it backed off on the selling and some pretty bad news.
ADVANCE/DECLINE: NYSE -1.2:1, NASDAQ -1.8:1. Yawn. Not any serious selling.
Basically, a flashback to the prior Friday and first day of the following week: a rally followed by a sharp drop back to support the next session. As noted, support held, but the failure to extend Friday's break higher after testing the initial rally through resistance at best keeps the indices in a consolidation phase over support.
Something will act as the catalyst for the next move, and of course there are enough potential catalysts this week to fill a barn. If earnings from the big names AAPL, AMZN, FB are good, if the Fed's Powell tap dances to the markets' liking again, if the trade talks go well -- perhaps the market can hold support and rally higher.
Perhaps. The failure to hold the Friday move yet again, the truly bad news from CAT and NVDA in our book tilts the risk negative. Another bad piece of news and the support that was the prior resistance could snap, leading to the test of the December low.
We really contemplated closing out upside positions and waiting, at least for most, keeping some upside exposure but really pulling it back in. If the moves are not good tomorrow -- and they may not be as no answer to the big 3 issues (earnings, trade, Fed) will come Tuesday -- it is likely the prudent thing to limit exposure. Indeed, even if the indices and stocks do move higher off the Monday gap lower, depending upon the leadership and the strength, it likely is still prudent to use the move to take some upside off the table. If things work out, then we make some gain and we will have opportunity to buy in again. If things deteriorate, well, then money is preserved.
Is there another piece of bad news? Afterhours that may have come from the trade area. China reportedly says it will 'resist' structural changes, including eliminating subsidies paid to its domestic industries. SPY fell from 263.55 to 262.50.
THE CHARTS
The large cap indices were disappointing, at least holding the October/December range and 50 day MA's they broke through 6 to 9 days prior.
SP500, NASDAQ, DJ30: All gapped lower, tested one of the 50 day MA on the low, rebounded to at least cut some losses. A test of support and rebound, not a bad thing other than it just finished a test, made a gap higher, then gave it all up. As noted earlier, the probability is at best they continue consolidating and try to set up a new move.
SOX: The recent leader, SOX gapped sharply lower, held well over the 10 day EMA, then rebounded to cut the losses. Overall, not a bd pattern, testing the outsized moves Thursday and Friday that took SOX over the early December high. Again, not bad.
SP400: The strongest of the indices, the midcaps tested lower as well but recovered most of the losses. Still quite solid, and solid performance in the midcaps is not a bad economic indication.
RUTX: Similar to SP400, reaching lower toward the 10 day EMA and the 50 day MA as well, recovering much of the loss. Not as strong as the midcaps, but quite solid enough action.
LEADERSHIP
FAANG: Not bad, not great. FB tested the 10 day EMA on the low, showing a doji and modest loss. Not bad. AAPL ahead of Tuesday after the close earnings showed a doji with tail at the 10 and 20 day EMA. Not bad. AMZN gapped back to the 50 day MA, where it held, showing a doji with tail similar to last Wednesday. Not great. NFLX Gapped lower, rallied to hold the 200 day SMA. Not bad. GOOG gapped and sold to the 50 day MA, barely rebounding. Not great.
Materials: Not bad. USCR (concrete ) breaking higher in an 8 week base formed off the lows. LPX trying to break higher in a 5 month double bottom with handle base. TREX in a 5 month double bottom with handle base as well. This is quite interesting.
Software: Held up pretty darn well all things considered. ZS, NTNX, COUP, NOW unflustered. DATA took a 2.3% hit after a 6% Friday gain. SPLK good enough, even CRM holding up well.
Financial: Held up very well. BAC held steady, C as well. JPM solid. GS looks quite good to break higher.
Semiconductors: NVDA was hammered and some sold with it but not many cratered. AMD off 8% but held the 50 day. MU gapped lower but recovered decently as did AMAT. UCTT rallied. ENPH rallied. RMBS gave up a gain but is still solid. LRCX gapped lower but recovered to a modest gain. Still showing lots of strength.
Pot: Getting nicely high for us. CRON 15+%. CGC +4.7%. Pot stocks helping blunt the rest of the market pain, right?
Drugs: No relief for big pharma. PFE -2.73%, dumpster diving below the 200 day SMA. LLY, MRK hung on at support, barely. AMGN dove lower in biotechs while BIIB tested the 20 day EMA. Smaller decent enough, e.g. EXEL.
Energy: Service stocks still solid. SLB working laterally after the gap through the 50 day MA. HAL doing the same.
Metals: Gold still moving up, e.g. SA. HMY broke sharply higher, AU gapping on top of a good move. Steel not bad, e.g. AKS, RS, but aluminum struggling.
Machinery/Manufacturing: CAT burned up several of its 9 lives. CMI managed to hold near the 200 day SMA after gapping and selling off. TEX, EMR, MMM not bad but have to show they can move.
Retail: FIVN tried to extend the break higher, faded a bit, still solid. COST sold lower but recovered positive. DDS tested over the 50 day MA after a solid Friday break through that level. EBAY moved over the 200 day SMA on the close for the first time in a long time. DLTR in a nice 3 week pennant. WMT testing the 50 day MA after a 4.5 week recovery.
MARKET STATS
DJ30
Stats: -208.98 points (-0.84%) to close at 24528.22
Nasdaq
Stats: -79.18 points (-1.11%) to close at 7085.68
Volume: 2.45B (+0.41%)
Up Volume: 972.98M (-937.02M)
Down Volume: 1.41B (+888.2M)
A/D and Hi/Lo: Decliners led 1.79 to 1
Previous Session: Advancers led 2.57 to 1
New Highs: 40 (-1)
New Lows: 35 (+14)
S&P
Stats: -20.91 points (-0.78%) to close at 2643.85
NYSE Volume: 818.241M (-4.95%)
Up Volume: 320.932M (-346.733M)
Down Volume: 482.695M (+293.702M)
A/D and Hi/Lo: Decliners led 1.21 to 1
Previous Session: Advancers led 3.3 to 1
New Highs: 40 (-10)
New Lows: 22 (+17)
SENTIMENT
VIX: 18.87; +1.45
VXN: 23.43; +1.65
VXO: 19.74; +1.49
Put/Call Ratio (CBOE): 0.99; +0.24
Bulls and Bears:
Bulls continued a bounce back in the forties with bears dropping back near 20. Then the market sold back this week. Still, the crossover occurred and that is a bullish indication. The market has made a move up, is testing, and then the question is if it can continue from there.
Bulls: 45.4 versus 42.1 versus 34.8
Bears: 21.3 versus 25.2 versus 29.4
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: 45.4 versus 42.1
34.8 versus 29.9 versus 39.3 versus 45.4 versus 46.7 versus 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: 21.3 versus 25.2
29.4 versus 34.6 versus 21.4 versus 20.4 versus 21.50 versus 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
OTHER MARKETS
Bonds: 2.738% versus 2.748%. Holding at the 20 day EMA in a continued test of the run to early January.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.748% versus 2.734% versus 2.741% versus 2.75% versus 2.788% versus 2.752% versus 2.727% versus 2.718% versus 2.706% versus 2.699% versus 2.733% versus 2.712% versus 2.731% versus 2.694% versus 2.668% versus 2.552% versus 2.643% versus 2.686% versus 2.716% versus 2.774% versus 2.811% versus 2.736% versus 2.788% versus 2.803%. versus 2.762% versus 2.821% versus 2.855% versus 2.895% versus 2.913% versus 2.908% versus 2.884% versus 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%
EUR/USD: 1.14285 versus 1.1407. Slow move up through the 50 day MA awaiting the Wednesday FOMC decision.
Historical: 1.1407 versus 1.13134 versus 1.13830 versus 1.13652 versus 1.13636 versus 1.13919 versus 1.13993 versus 1.14802 versus 1.14734 versus 1.14699 versus 1.15075 versus 1.15532 versus 1.14547 versus 1.14834 versus 1.13980 versus 1.13957 versus 1.13343 versus 1.14450 versus 1.14425 versus 1.1432 versus 1.13588 versus 1.14015 versus 1.13708 versus 1.13828 versus 1.13755 versus 1.13533 versus 1.13049
USD/JPY: 109.180 versus 109.545. Dollar nosing over after 2 weeks of a lateral move.
Historical: Last below 109 in June 2018: 109.545 versus 109.757 versus 109.58 versus 109.651 versus 109.773 versus 109.133 versus 108.912 versus 108.551 versus 108.340 versus 108.563 versus 108.332 versus 107.959 versus 108.802 versus 108.705 versus 108.517 versus 107.173 versus 107.515 versus 109.687 versus 110.273 versus 110.845 versus 111.190 versus 110.337 versus 111.223 versus 111.21 versus 112.521 versus 112.477 versus 112.653 versus 113.382
Oil: 51.99, -1.70. Struggling, slipping below 52.50 and at the 50 day SMA. Still in the lateral move but at the point it needs to hold.
Gold: 1303.10, +5.00. Added a bit more to the Friday breakout over the January consolidation.
MONDAY
A disappointing move for the upside, starting another week with a significant loss. Once again the indices held support, but instead of extending a break higher following a breakout test, they are back to holding support and trying to consolidate for another move. Not enough confidence in the outcome of earnings, the FOMC, trade talks, and economic data. Thus, the slide back to test support.
SOX, SP400 are much better off; leaders. But there are lots of other stocks outside of these groups. Again, can SOX pull the rest of the market with it? Thus far it is a heavy load.
Afterhours stocks are not getting any upside help as noted earlier. China's commentary regarding what it will and won't agree to in the trade talks is undercutting futures with S&P 500 futures off 12.5 points from the close. The trade issue already impacting the market even before the trade talks. Likely China is just trying to beat Trump to the punch. Trump typically makes some bombastic comments just ahead of any negotiations so China is taking the initiative. Still, it hurts a fragile market.
Thus, the large cap indices could find themselves back at support awaiting AAPL's earnings afterhours. SOX, SP400 not bad at all and several sectors looking solid (e.g. chips, financials, gold, materials). That holds out promise, but the market appears fragile with all the potential negative catalysts and the inability of the large cap indices to hold moves off support. Perhaps they are just trade vulnerable and the midcaps will lead given their more domestic orientation. Perhaps, but if the large caps are not in the game, the market outside of some pockets will struggle. In that event we will be wary and if the action in the big names does not improve, close positions that are vulnerable.
Have a great evening!
End part 1
_______________________________________________________
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1/28/2019 Investment House Daily
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Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: None issued
Entry alerts: NBEV
Trailing stops: None issued
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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.
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MARKET SUMMARY
- Once again the large cap indices cannot hold a break higher.
- CAT, NVDA weak outlooks drop the large caps while midcaps and chips hold the line.
- Big earnings, FOMC, trade negotiations all loom over the market, and afterhours China's comments send futures lower.
- Large cap indices set to start back at testing the prior resistance after testing it and bouncing Monday.
For the second week following an upside Friday, the stock market started downside and rather hard downside. CAT missed on earnings and warned for 2019, pointing East to China as the issue. Futures were already lower then at 9:00ET NVDA warned about the quarter, lowering its revenue guidance as a result of slowing in . . . just about every business unit. There was nothing even close to a silver lining in the release.
CAT telling the tale of global slowing, something not surprising really, but the slap of reality always stings even if it should have been expected. NVDA was the shock -- after LRCX and XLNX pretty much said it was the bottom for the semiconductors. The market was definitely not ready for this and it showed it.
Stocks gapped lower, found a lower low midday, then crawled back upside. Never made positive though DJ30, SP500 and RUTX cut the losses in half while NASDAQ trimmed 50 points from a 120 point loss. Not massive reversals from the gaps lower, but held the support levels and did manage to work back up after that test.
SP500 -20.91, -0.78%
NASDAQ -79.18, -1.11%
DJ30 -208.98, -0.84%
SP400 -0.14%
RUTX -0.63%
SOX -2.09% (big ups, big downs)
NASDAQ 100 -1.33%
Definitely not ready to surge higher, and after the CAT earnings and NVDA warning, waiting on some of the other heavy hitting earnings for the week as well as the FOMC rate decision and Powell's press conference, the trade talks starting Wednesday, and tons of economic data culminating with the January jobs report Friday.
VOLUME: NYSE -5%, NASDAQ flat. After volume moved higher on the Friday gains it backed off on the selling and some pretty bad news.
ADVANCE/DECLINE: NYSE -1.2:1, NASDAQ -1.8:1. Yawn. Not any serious selling.
Basically, a flashback to the prior Friday and first day of the following week: a rally followed by a sharp drop back to support the next session. As noted, support held, but the failure to extend Friday's break higher after testing the initial rally through resistance at best keeps the indices in a consolidation phase over support.
Something will act as the catalyst for the next move, and of course there are enough potential catalysts this week to fill a barn. If earnings from the big names AAPL, AMZN, FB are good, if the Fed's Powell tap dances to the markets' liking again, if the trade talks go well -- perhaps the market can hold support and rally higher.
Perhaps. The failure to hold the Friday move yet again, the truly bad news from CAT and NVDA in our book tilts the risk negative. Another bad piece of news and the support that was the prior resistance could snap, leading to the test of the December low.
We really contemplated closing out upside positions and waiting, at least for most, keeping some upside exposure but really pulling it back in. If the moves are not good tomorrow -- and they may not be as no answer to the big 3 issues (earnings, trade, Fed) will come Tuesday -- it is likely the prudent thing to limit exposure. Indeed, even if the indices and stocks do move higher off the Monday gap lower, depending upon the leadership and the strength, it likely is still prudent to use the move to take some upside off the table. If things work out, then we make some gain and we will have opportunity to buy in again. If things deteriorate, well, then money is preserved.
Is there another piece of bad news? Afterhours that may have come from the trade area. China reportedly says it will 'resist' structural changes, including eliminating subsidies paid to its domestic industries. SPY fell from 263.55 to 262.50.
THE CHARTS
The large cap indices were disappointing, at least holding the October/December range and 50 day MA's they broke through 6 to 9 days prior.
SP500, NASDAQ, DJ30: All gapped lower, tested one of the 50 day MA on the low, rebounded to at least cut some losses. A test of support and rebound, not a bad thing other than it just finished a test, made a gap higher, then gave it all up. As noted earlier, the probability is at best they continue consolidating and try to set up a new move.
SOX: The recent leader, SOX gapped sharply lower, held well over the 10 day EMA, then rebounded to cut the losses. Overall, not a bd pattern, testing the outsized moves Thursday and Friday that took SOX over the early December high. Again, not bad.
SP400: The strongest of the indices, the midcaps tested lower as well but recovered most of the losses. Still quite solid, and solid performance in the midcaps is not a bad economic indication.
RUTX: Similar to SP400, reaching lower toward the 10 day EMA and the 50 day MA as well, recovering much of the loss. Not as strong as the midcaps, but quite solid enough action.
LEADERSHIP
FAANG: Not bad, not great. FB tested the 10 day EMA on the low, showing a doji and modest loss. Not bad. AAPL ahead of Tuesday after the close earnings showed a doji with tail at the 10 and 20 day EMA. Not bad. AMZN gapped back to the 50 day MA, where it held, showing a doji with tail similar to last Wednesday. Not great. NFLX Gapped lower, rallied to hold the 200 day SMA. Not bad. GOOG gapped and sold to the 50 day MA, barely rebounding. Not great.
Materials: Not bad. USCR (concrete ) breaking higher in an 8 week base formed off the lows. LPX trying to break higher in a 5 month double bottom with handle base. TREX in a 5 month double bottom with handle base as well. This is quite interesting.
Software: Held up pretty darn well all things considered. ZS, NTNX, COUP, NOW unflustered. DATA took a 2.3% hit after a 6% Friday gain. SPLK good enough, even CRM holding up well.
Financial: Held up very well. BAC held steady, C as well. JPM solid. GS looks quite good to break higher.
Semiconductors: NVDA was hammered and some sold with it but not many cratered. AMD off 8% but held the 50 day. MU gapped lower but recovered decently as did AMAT. UCTT rallied. ENPH rallied. RMBS gave up a gain but is still solid. LRCX gapped lower but recovered to a modest gain. Still showing lots of strength.
Pot: Getting nicely high for us. CRON 15+%. CGC +4.7%. Pot stocks helping blunt the rest of the market pain, right?
Drugs: No relief for big pharma. PFE -2.73%, dumpster diving below the 200 day SMA. LLY, MRK hung on at support, barely. AMGN dove lower in biotechs while BIIB tested the 20 day EMA. Smaller decent enough, e.g. EXEL.
Energy: Service stocks still solid. SLB working laterally after the gap through the 50 day MA. HAL doing the same.
Metals: Gold still moving up, e.g. SA. HMY broke sharply higher, AU gapping on top of a good move. Steel not bad, e.g. AKS, RS, but aluminum struggling.
Machinery/Manufacturing: CAT burned up several of its 9 lives. CMI managed to hold near the 200 day SMA after gapping and selling off. TEX, EMR, MMM not bad but have to show they can move.
Retail: FIVN tried to extend the break higher, faded a bit, still solid. COST sold lower but recovered positive. DDS tested over the 50 day MA after a solid Friday break through that level. EBAY moved over the 200 day SMA on the close for the first time in a long time. DLTR in a nice 3 week pennant. WMT testing the 50 day MA after a 4.5 week recovery.
MARKET STATS
DJ30
Stats: -208.98 points (-0.84%) to close at 24528.22
Nasdaq
Stats: -79.18 points (-1.11%) to close at 7085.68
Volume: 2.45B (+0.41%)
Up Volume: 972.98M (-937.02M)
Down Volume: 1.41B (+888.2M)
A/D and Hi/Lo: Decliners led 1.79 to 1
Previous Session: Advancers led 2.57 to 1
New Highs: 40 (-1)
New Lows: 35 (+14)
S&P
Stats: -20.91 points (-0.78%) to close at 2643.85
NYSE Volume: 818.241M (-4.95%)
Up Volume: 320.932M (-346.733M)
Down Volume: 482.695M (+293.702M)
A/D and Hi/Lo: Decliners led 1.21 to 1
Previous Session: Advancers led 3.3 to 1
New Highs: 40 (-10)
New Lows: 22 (+17)
SENTIMENT
VIX: 18.87; +1.45
VXN: 23.43; +1.65
VXO: 19.74; +1.49
Put/Call Ratio (CBOE): 0.99; +0.24
Bulls and Bears:
Bulls continued a bounce back in the forties with bears dropping back near 20. Then the market sold back this week. Still, the crossover occurred and that is a bullish indication. The market has made a move up, is testing, and then the question is if it can continue from there.
Bulls: 45.4 versus 42.1 versus 34.8
Bears: 21.3 versus 25.2 versus 29.4
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: 45.4 versus 42.1
34.8 versus 29.9 versus 39.3 versus 45.4 versus 46.7 versus 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: 21.3 versus 25.2
29.4 versus 34.6 versus 21.4 versus 20.4 versus 21.50 versus 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
OTHER MARKETS
Bonds: 2.738% versus 2.748%. Holding at the 20 day EMA in a continued test of the run to early January.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.748% versus 2.734% versus 2.741% versus 2.75% versus 2.788% versus 2.752% versus 2.727% versus 2.718% versus 2.706% versus 2.699% versus 2.733% versus 2.712% versus 2.731% versus 2.694% versus 2.668% versus 2.552% versus 2.643% versus 2.686% versus 2.716% versus 2.774% versus 2.811% versus 2.736% versus 2.788% versus 2.803%. versus 2.762% versus 2.821% versus 2.855% versus 2.895% versus 2.913% versus 2.908% versus 2.884% versus 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%
EUR/USD: 1.14285 versus 1.1407. Slow move up through the 50 day MA awaiting the Wednesday FOMC decision.
Historical: 1.1407 versus 1.13134 versus 1.13830 versus 1.13652 versus 1.13636 versus 1.13919 versus 1.13993 versus 1.14802 versus 1.14734 versus 1.14699 versus 1.15075 versus 1.15532 versus 1.14547 versus 1.14834 versus 1.13980 versus 1.13957 versus 1.13343 versus 1.14450 versus 1.14425 versus 1.1432 versus 1.13588 versus 1.14015 versus 1.13708 versus 1.13828 versus 1.13755 versus 1.13533 versus 1.13049
USD/JPY: 109.180 versus 109.545. Dollar nosing over after 2 weeks of a lateral move.
Historical: Last below 109 in June 2018: 109.545 versus 109.757 versus 109.58 versus 109.651 versus 109.773 versus 109.133 versus 108.912 versus 108.551 versus 108.340 versus 108.563 versus 108.332 versus 107.959 versus 108.802 versus 108.705 versus 108.517 versus 107.173 versus 107.515 versus 109.687 versus 110.273 versus 110.845 versus 111.190 versus 110.337 versus 111.223 versus 111.21 versus 112.521 versus 112.477 versus 112.653 versus 113.382
Oil: 51.99, -1.70. Struggling, slipping below 52.50 and at the 50 day SMA. Still in the lateral move but at the point it needs to hold.
Gold: 1303.10, +5.00. Added a bit more to the Friday breakout over the January consolidation.
MONDAY
A disappointing move for the upside, starting another week with a significant loss. Once again the indices held support, but instead of extending a break higher following a breakout test, they are back to holding support and trying to consolidate for another move. Not enough confidence in the outcome of earnings, the FOMC, trade talks, and economic data. Thus, the slide back to test support.
SOX, SP400 are much better off; leaders. But there are lots of other stocks outside of these groups. Again, can SOX pull the rest of the market with it? Thus far it is a heavy load.
Afterhours stocks are not getting any upside help as noted earlier. China's commentary regarding what it will and won't agree to in the trade talks is undercutting futures with S&P 500 futures off 12.5 points from the close. The trade issue already impacting the market even before the trade talks. Likely China is just trying to beat Trump to the punch. Trump typically makes some bombastic comments just ahead of any negotiations so China is taking the initiative. Still, it hurts a fragile market.
Thus, the large cap indices could find themselves back at support awaiting AAPL's earnings afterhours. SOX, SP400 not bad at all and several sectors looking solid (e.g. chips, financials, gold, materials). That holds out promise, but the market appears fragile with all the potential negative catalysts and the inability of the large cap indices to hold moves off support. Perhaps they are just trade vulnerable and the midcaps will lead given their more domestic orientation. Perhaps, but if the large caps are not in the game, the market outside of some pockets will struggle. In that event we will be wary and if the action in the big names does not improve, close positions that are vulnerable.
Have a great evening!
End part 1
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Market Alert - To the Close
Stocks gapped lower and sold off into midday. The afternoon has shown a slow, steady recovery with a lot of lost ground recovered. Still, the indices are sporting some hefty losses outside SP400 and its quarter percent drop.
The administration just held a presser on Venezuela sanctions, and now Kudlow is at the microphone cheerleading -- 'the guys who took the over are going to be right.' Rah, rah!
Stocks mostly holding support to start a week loaded with news and started with a couple of real clinkers (CAT, NVDA). Again, many have recovered including a lot of chips, the strongest recent leader. Materials are not bad either.
Not a great session, but the indices are holding the support in another effort to consolidate, work through the news, and we will see if they break higher again.
SP5400 -23.56, -0.88%
NASDAQ -1.17%
DJ30 -0.96%
SP400 -0.19%
RUTX -0.59%
SOX -2.02%
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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The administration just held a presser on Venezuela sanctions, and now Kudlow is at the microphone cheerleading -- 'the guys who took the over are going to be right.' Rah, rah!
Stocks mostly holding support to start a week loaded with news and started with a couple of real clinkers (CAT, NVDA). Again, many have recovered including a lot of chips, the strongest recent leader. Materials are not bad either.
Not a great session, but the indices are holding the support in another effort to consolidate, work through the news, and we will see if they break higher again.
SP5400 -23.56, -0.88%
NASDAQ -1.17%
DJ30 -0.96%
SP400 -0.19%
RUTX -0.59%
SOX -2.02%
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
Alert Key
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Market Alert - Pre-Market
Futures vs FV: SP -23.68; -248.20, -89.62
Earnings are at the forefront to start a week that is loaded with data: earnings, economic, trade, Fed.
Earnings: CAT misses bottom line, blaming China. That has cast a pall on the overall market as a bellwether misses.
NVDA just warned re revenues. Significant warning across all its business sectors. It is not a good release.
Futures gapped lower and things have eroded further the past 2 hours with NVDA's news thumping stocks to new session lows ahead of the bell. The session is turning from just a soft open after a rebound late week to a bloody open. It has the look that another late week move higher is going to get sold and sold aggressively to start a week.
The other 'big' story of the morning is the dissection of Howard Schultz' stating he was considering an independent run for President. There will be 30 or more people vying for the head of the democratic ticket.
This week the Fed (2 day meeting with Wed Powell presser), earnings (AAPL, AMZN, FB will be key), trade (talks begin Wednesday with China), tons of economic data culminating with the Jobs Report.
OTHER MARKETS
Bonds: 2.753% vs 2.748%. Bonds not surging back upside as yields rise. Not many seeking bond safety today.
EUR/USD: 1.1417 vs 1.411
USD/JPY: 109.37 vs 109.49
Oil: 52.66, -1.03. Back to that key level.
Gold: 1298.70, +0.10
Futures are still trying to find the pre-market low. The NVDA news has hammered an already defensive tape thanks to CAT. The points to watch are the prior resistance levels the indices took out 2 Fridays back, e.g. 50 day MA, bottom of October/December range. The question is whether they can hold that support and keep leg 3 alive.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Earnings are at the forefront to start a week that is loaded with data: earnings, economic, trade, Fed.
Earnings: CAT misses bottom line, blaming China. That has cast a pall on the overall market as a bellwether misses.
NVDA just warned re revenues. Significant warning across all its business sectors. It is not a good release.
Futures gapped lower and things have eroded further the past 2 hours with NVDA's news thumping stocks to new session lows ahead of the bell. The session is turning from just a soft open after a rebound late week to a bloody open. It has the look that another late week move higher is going to get sold and sold aggressively to start a week.
The other 'big' story of the morning is the dissection of Howard Schultz' stating he was considering an independent run for President. There will be 30 or more people vying for the head of the democratic ticket.
This week the Fed (2 day meeting with Wed Powell presser), earnings (AAPL, AMZN, FB will be key), trade (talks begin Wednesday with China), tons of economic data culminating with the Jobs Report.
OTHER MARKETS
Bonds: 2.753% vs 2.748%. Bonds not surging back upside as yields rise. Not many seeking bond safety today.
EUR/USD: 1.1417 vs 1.411
USD/JPY: 109.37 vs 109.49
Oil: 52.66, -1.03. Back to that key level.
Gold: 1298.70, +0.10
Futures are still trying to find the pre-market low. The NVDA news has hammered an already defensive tape thanks to CAT. The points to watch are the prior resistance levels the indices took out 2 Fridays back, e.g. 50 day MA, bottom of October/December range. The question is whether they can hold that support and keep leg 3 alive.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Sunday, January 27, 2019
Drama, Drama, Drama (Weekend Newsletter)
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| Market Summary (continued) Drama, drama, drama. Futures were higher Friday as some of the drama remained, some lifted. Trade news was upbeat as the meeting between Chinese and US trade people that never existed but was cancelled Tuesday was said to be back on. A preliminary protocol-type meeting for the end of January meeting -- but are we not at the end of January now? Ah, such is the state of what is considered news today. The shutdown over the border wall -- among other things -- still continued as of Friday morning. Who would blink first? The reporting of carnage continued, though the metrics show that even with a government shutdown, government spending was down by just 7% per day. Even with the shutdown still ongoing, stocks were ready to try a rally. Late day, word came that a deal was struck, a 3-week reopening of the government, no money for a border wall. It is hoped the respite will allow the sides to agree. Hmmm. Both sides are entrenched, at least the ones calling the shots. Several GOP senators pleaded to reopen the government -- had to get their spending fixes I suppose -- and that put pressure on the GOP. Many democrats were doing the same. Their voices were loud enough for a truce, but of course both sides have spent the ensuing 24 hours claiming victory. A 3-week window of funding is victory for anyone? Questionable. GOP pundits claim the President broke a promise. No wall, no b*lls appeared to be the response from the GOP-ish side. Democratic leaders claim the President blinked. The White House shot back, stating if no deal is reached with border funding, then get ready for some kind of executive action on the wall. Hardly reported early Friday was the White House drafting a 'national emergency proclamation' including $7B for wall construction. It would appear that if there is no deal with wall funding, something reiterated by top democrats this weekend, there will be some form of executive action. Oh THAT will be well-received. Read "The Daily" Entire Weekend Summary Watch Market Overview Video Watch Technical Summary Video Watch Next Session Video
COUP (Coupa Software Incorporated) Company Profile One of the strongest sectors in the market is software and we love playing the likes of DATA, CRM, SPLK, WDAY, FIVN. And COUP. After a peak in September, COUP fell into a jagged cup with handle base through early January. We saw it forming a nice handle, coming back to test the 50 day EMA. We put it on the report 1/9. It finished the handle then broke higher 1/15. Strong move and we bought some stock at $68.39 and some March $65.00 strike calls at $8.25. COUP barely slowed the following the break higher. It did rest Tuesday and Wednesday this week but then rallied again Thursday and Friday. Touched the initial target Friday, right at the September highs. That was the point we took half the gain. Sold half the stock at $79.22, banking 15+%. Sold half the options for $16, banking over 90%. Solid and will let the rest of the position continue to work. Receive a 2 week trial and if you stay on receive a $30 per month discount! | ||
| 2) STOCK SPLIT REPORT Here's a leader play and our current analysis.
Company Profile EARNINGS: 01/29/2019 STATUS: Earnings are Tuesday after the close so it is tight to earnings, but that is not what we are really working on regarding this play. Perhaps AAPL's earnings will be poor given all the talk of slowing iPhone sales and production cuts. That makes this an aggressive play, BUT the risk/reward is not bad. AAPL peaked in early October 2018 and fell to a lower low in early January as AAPL gapped lower. MACD put in a higher low and over the past three weeks, AAPL has tried to turn the corner. Since the peak AAPL has 4 serious gap events lower, the last being that early January gap that immediately recovered the next session. If you see 3 gaps lower you start watching for a turn. Four gaps and you get ready. Friday AAPL cleared the prior week's recovery high on rising trade. We are interested in playing a continued move higher through earnings. A move to the target lands a 65%ish gain on the options though the stock can move past there if the play is right. CHART VIDEO Volume: 33.548M Avg Volume: 44.003M BUY POINT: $158.19 Volume=50M Target=$170.64 Stop=$154.19 POSITION: AAPL APR 18 2019 160.00 C - (49 delta) Learn more about our Stock Split Report and how we have made gains of 321% with our powerful stock split plays! Save $360 per year on the Stock Split Report! Plus 2 week trial! | ||
FIVN (Five9--$48.45; +2.14; optionable): Cloud software in many areas Company Profile EARNINGS: 02/20/2019 STATUS: FIVN broke out from an August to early January triangle and made us some money on the break higher. It has since formed a 3 week consolidation just below the late August highs that started the triangle. Friday, a strong break higher on rising, above average volume has FIVN at a new closing high. Nice action, ready to enter as FIVN continues upside. A move to the initial target lands 15% on the stock, 80%ish on the options. CHART VIDEO Volume: 750.445K Avg Volume: 673.142K BUY POINT: $48.86 Volume=875K Target=$56.19 Stop=$46.43 POSITION: FIVN APR 18 2019 50.00 C - (47 delta) &/or Stock Save $600 per year and enjoy a 2 week trial of our IH Alerts Service! | ||
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--by the MarketFN STG Team DRE (Duke Realty Corporation) Company Profile Our Success Trading Group will be watching closely for entry points next week on some of our favorite stocks such as Duke Realty Corporation (Ticker: DRE) and American Express Company (Ticker: AXP). Our Success Trading Group closed 7 years with 0 losses on our Main Trade Table. In fact, we closed 100% winning trades for the calendar years 2016, 2015, 2013, 2012, 2011, 2010 and 2009 (we still have 1 open position from 2017 (all others were winners) and 1 trade that we opened in 2014 was closed as a losing trade). All of these trades are posted on our Main Trade Table for your review during your free membership trial period. Get Our Next Trade Free - Save $50 per month! Details Here. | ||
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NWL - Newell Brands Inc. is currently trading at $21.32. The March $21.00 Calls (NWL20190316C00021000) are trading at $1.40. That provides a return of about 6% if NWL is above $21.00 on expiration Friday in March. Company Profile Learn more about our Covered Call Tables | ||
Stock Split Report: Forbes.com Best of the Web Covered Calls: Allowed in your IRA - Energize your portfolio! The Daily: "The Daily" is a must read for all investors! Success Trading Group: 7 years without a trading loss! | ||
| The foregoing is commentary for informational purposes only. All statements and expressions are the opinions of Online Investment Services, LP., or Split Ventures, Ltd. This information is not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on the related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolios of writers for this issue may, in some instances, include securities mentioned herein and on the related web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors. No one associated herewith receives compensation in any manner from any of the companies that are discussed in this newsletter or on the related websites. This email was sent to tweet@investbilling.com. | ||
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