Thursday, January 17, 2019

The Daily, Part 1 of 2, 1-17-19

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1/17/2019 Investment House Daily
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Investment House Daily Subscribers:


Targets hit: NFLX
Entry alerts: CENX; CRM
Trailing stops: None issued
Stop alerts: None issued

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Market Summary Video, Plays and Play Videos, and Play Table with play annotations will issue Wednesday, Weekend.

Monday a Market Summary video, new plays, play table annotations.

Tuesday and Thursday reports will contain the market summary, chart links to view the index charts, and updated play table.

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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.


- Upside continues after a slow start as bids come back.
- Stories that the US would lighten the China tariffs surged stocks in the afternoon, then a 'denial' took away that surge.
- Indices are moving up through some resistance but have not cleared it all.
- Some of the data indicates the economic slowdown has been priced in and is starting to price in a recovery.

Low to high move off a weaker pre-market with a feint of a big break higher mid-afternoon. The afternoon move was triggered on a WSJ report that Mnuchin wanted to go back some on the China tariffs. Ah, some trade war thawing. The administration blew up that report, however, noting the story was 'strange.' Mid-afternoon break higher terminated; stocks fell back about to where they were pre-WSJ, but did manage to move higher into the bell, getting closer to that session high.

SP500 19.86, 0.76%
NASDAQ 49.77, 0.71%
DJ30 162.94, 0.67%
SP400 0.92%
RUTX 0.86%
SOX 1.14%
NASDAQ 100 0.75%

VOLUME: NYSE +6%, NASDAQ -1%. Trade remained below average. Still no big surge of new buying.



To view, click on the following links:

The action obviously had every index positive, and the percentage moves were not bad at all.

NASDAQ and NASDAQ 100 continued the move higher over the 50 day MA. RUTX and SP400 ramped up their breaks over the 50 day MA as well, SP400 looking quite solid. Along with topping the 50 day these indices moved past the near Fibonacci retracement levels (78% for NASDAQ, NASDAQ 100; 61% for RUTX, SP400).

Very solid action, but what about that October/December trading range? NASDAQ is already into the lower half of that range, and clearing 7,000 and the 50 day MA's was the next necessary move. It is over those levels, but no done deal; never is until it is too late to buy, right?

As for RUTX and SP400, they are through the 50 day MA and the 61% Fibonacci retracement, BUT . . . they are just now bumping the bottom of that October/December range. They are through the next Fibonacci and key moving average, but now another fight -- as I always say, it is tough digging out of a hole.

What does this mean for these indices? While they are still dealing with resistance, they have cleared two key levels, and that opens the door to the next Fibonacci level. That won't break them out of the range, but they still have more upside on this move.

SP500? It is just through the 50 day MA's today, and the Wednesday move pushed SP500 over the 78% Fibonacci retracement. As for the October/December range, SP500 is j-u-s-t moving above some late November, early December closing prices. Just nosing above those lows. With the banks and big pharma working to the upside, that opens the door for SP500 to trade higher into the range, toward a 100% retracement of the move from the second week of December.

DJ30 is going about the process a bit differently. It is cracking into the October/December range but has yet to clear the 50 day SMA or the 61% Fibonacci retracement of the selloff. Obviously the upside wants DJ30 to move on through both those levels to walk up to the next Fibonacci level.

SOX looks darn good actually. Gapped lower below the 50 day EMA then reversed upside. Perhaps it has just about completed this test of the break over the 50 day MA.


FAANG: AAPL, despite all the negatives about iPhone production, may pull off a bottom. FB is testing a good move. AMZN is bumping the 200 day SMA after a good new break higher. GOOG added more upside, moving over the early January high. NFLX -- you know the story.

Software: TEAM surging on earnings afterhours. CRM up again though very light trade. DATA bounced up off the drop to the 50 day. NOW still looks interesting. COUP surged almost 7% for us.

Financial: Despite MS missing earnings, GS added more upside as did banks (BAC especially).

Semiconductors: TSM warnings about sales thanks to AAPL, but after gapping lower it closed up 1.82%. AVGO bounced off a 10 day EMA test. AMD still looks as if it could break higher. AMAT ditto.

Pot: Took another puff upside, but it was not a big session. Gains for CRON, CGC.

Metals: CENX scored a nice gain and FCX continued upside. SID and HMY still in nice tests.

Machinery: Some names starting to move. CAT surged upside out of a lateral consolidation on strong volume. TEX looks ready to break through the 50 day MA. CMI exploded through the 200 day SMA.

Misc: NBEV looks ready to break higher once more. TEN is moving upside. ULTA is another one we are looking at. NTNX as well.


Stats: +162.94 points (+0.67%) to close at 24370.10

Stats: +49.77 points (+0.71%) to close at 7084.46
Volume: 2.13B (-0.93%)

Up Volume: 1.52B (+440M)
Down Volume: 493.99M (-556.01M)

A/D and Hi/Lo: Advancers led 1.68 to 1
Previous Session: Advancers led 1.62 to 1

New Highs: 30 (0)
New Lows: 26 (+10)

Stats: +19.86 points (+0.76%) to close at 2635.96
NYSE Volume: 911.483M (+5.95%)

Up Volume: 659.257M (+144.287M)
Down Volume: 246.427M (-71.115M)

A/D and Hi/Lo: Advancers led 2.44 to 1
Previous Session: Advancers led 1.63 to 1

New Highs: 19 (-3)
New Lows: 11 (+2)


VIX: 18.06; -0.98
VXN: 23.34; -0.73
VXO: 17.65; -0.68

Put/Call Ratio (CBOE): 0.80; -0.28

Bulls and Bears:

After a quick crossover, a quick trist, bulls rebounded, bears fell a bit, and there is some separation. Still, the deed is done; they crossed over, typically a very good indication sentiment was extreme to the negative and sets up a move higher. We are seeing a move and now the indices are near the next key levels of resistance.

Bulls: 34.8 versus 29.9

Bears: 29.4 versus 34.6

Theory: When everyone is bullish and has put all their capital to work, where does the ammunition to drive the market come from? There is always new money to start a new year. After that is used will more money be coming? That is the question.

Bulls: 34.8 versus 29.9
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: 29.4 versus 34.6
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


Bonds: 2.752% versus 2.727%. TLT basically held steady below the 20 day EMA. Still a pullback off the rally for now, a very strong 2-month rally.

Historical: the last sub-2% rate was in November 2016 (1.867%). 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: 1.13919 versus 1.13993

Historical: 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: 109.133 versus 108.912. Dollar continues creeping higher, but it is also at the 20 day EMA with a doji.

Historical: Last below 109 in June 2018: 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: 52.36, +0.05. Still bumping against the 50 day MA's in a 6 session lateral move. Again, may be setting up a right handle to an inverted head and shoulders after a selloff. Very bullish pattern, and stronger oil suggests what? That the global economic slowdown is being priced out. Look at EEM (emerging markets ETF): it is trying to turn off the bottom of a long, long downtrend.

Gold: 1292.30, -1.50. As with oil, gold is also working laterally below resistance, gold at the upper trendline of a large triangle.


Expiration for January. Earnings starting to come faster with NFLX afterhours. Initially reported as a revenue and subscriber miss, that apparently was not the case. The issue, however, is the guidance. Looks as if NFLX sandbagged a bit. It is trading around 340 afterhours (closed at 353.19). A lot of upside heading into earnings, and indeed we banked more gain, a nice 107% return. Trading at 340 still keeps NFLX over the 200 day SMA, filling much of the Tuesday upside gap.

TEAM announced results and is trading at 101.50ish (closed at 92.92). That will give us around a 20% gain on our stock positions (January options already banked). Quality stocks with quality earnings. Banks and others may work to offset NFLX; after all, NFLX is up huge into its earnings.

3-day weekend. It is also a 3-day weekend with Monday being MLK day. Those always make things a bit more interesting if for no other reason the time and what can occur while the markets are closed.

As for Friday, there may be some opportunity, but Fridays are not often great days to buy, ate least overall. There are always individual stocks that present opportunity. Today we did not enter CGC because it faded off its high. YETI faded off its high as well. MC held a move, but watching the action today we would not be surprised to see it fade to test just a bit after clearing the 50 day MA's. Still opportunity -- heck, NFLX may provide opportunity if it holds the 200 day SMA, fills the gap, and bids return. Friday just may not be the day for a ton of buys, but there are some we would buy as noted.

Have a great evening!

End part 1 of 2
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