Tuesday, January 08, 2019

The Daily, Part 1 of 3, 1-8-19

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1/8/2019 Investment House Daily
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Market Summary Video, Plays and Play Videos, and Play Table with play annotations will issue Wednesday, Weekend.

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

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- The rally continues with the smaller caps again outperforming.
- Trade tweet helps spur stocks to more gains, then the meetings adjourn with progress but no deal.
- After 3 days of upside on the second leg stocks and indices show some doji. We banked some gain.
- Still room to run but for now letting current positions work higher as the resistance is now a session or so away.

Unlike prior sessions in the bounce there was really no question the upside was in charge. Futures were up early on and continued to build gains into the open. The President tweeted the trade talks were proceeding "very well." Stocks started higher and rallied higher. Ah, the rally continued.

Then 15 or so minutes into the session the WSJ reported that the US/China trade talks concluded, the sides were closer on items, there were still issues to work out (no kidding), but cabinet level representatives would meet in late January. Stocks tailed off and sold back the gains for the next hour and 15 minutes.

Just before midmorning, however, they found bottom and put in a steady recovery into 3:30ET. The large cap indices almost made it back to session highs while the small and midcaps just kept on rising to close at session highs, again leading the market higher. SOX was the laggard as it acted like the old SOX once again after showing some signs of life.

SP500 24.72, 0.97%
NASDAQ 73.53, 1.08%
DJ30 256.10, 1.09%
SP400 1.69%
RUTX 1.51%
SOX -0.49%
NASDAQ 100 0.98%

VOLUME: NYSE flat, NASDAQ -5%. Average-ish again on NYSE, fading to below average on NASDAQ. Can't rise every session and volume was not horrid.

ADVANCE/DECLINE: NYSE +3.7:1, NASDAQ +3:1. Not bad, thanks to the small and midcaps of course.


To view, click on the following links:


SP500, NASDAQ: Both moved closer to next resistance (2600, 7000, respectively), gapping higher, selling back, then recovering to close with doji. Three days upside in the second leg of the rebound rally. Both have some more room upside, SP500 25 points to 2600, NASDAQ roughly 100 points. At that point, that is the key test of the move.

DJ30: Gapped over the 20 day EMA after the Monday doji. DJ30 still has room upside as well. 24,000 to 24,250 is where to watch.

SP400, RUTX: Both gapped higher, rallied to close at session highs. Very solid 3-day moves in the second leg. SP400 still has about 25 points to resistance, RUTX the same. Looking very solid with plenty of bids, but 4 upside sessions, particularly to resistance, is likely where this leg at least starts to take a breather.

SOX: Gapped upside, came close to the 50 day MA as it just crossed 1175, then faded to a loss. Not a rollover, just not the strength we wanted to see hold up after the prior moves and after an upside gap.


Many quality stocks gapped higher to doji: AMZN, NFLX, SPLK, TEAM, GOOG. After a solid 3 sessions we banked gain on many of those. May just be continuation doji, but again, 3 sessions higher, showing doij, a Trump national address tonight. Worth banking some gain and then see what the indices and leaders do with that.

Software: Still looks solid with some showing doji as noted (SPLK, TEAM, WDAY). Others making breaks upside, e.g. TTWO with a gap, COUP still trying to take off but looking good. ADBE a doji just below the 50 day MA, MSFT a doji just below the 200 day SMA.

FAANG: Some that were dormant bouncing, e.g. FB moving through the 50 day MA. AAPL still dull, just below the 10 day EMA. AMZN a doji just below the 200 day SMA. NFLX gapping to a doji just below the November high, 200 day SMA. GOOG gapped to a doji so we held off moving in.

Chips: Started strong, did not finish that way. AMD held onto a very modest gain. AMAT gapped upside then reversed below the 50 day MA. NVDA gapped and reversed to the 10 day support. Even XLNX gapped higher but reversed on the close. Just did not have any pop, at least pop it could hold.

Retail: Showing much better life. ROST continued its solid Monday move. TJX moved up to the 50 day EMA. WMT a doji below the 50 day SMA, TGT gapped up near the 50 day, faded to flat. All in all, looking much better.

Drugs: Biotechs continue to be acquired, e.g. AMGN, ARRY. IMGN moved up, but stalled at the 50 day EMA.

Transports: Not bad, getting some money. JBHT in trucking, rails gapping upside, airlines not as DAL gapped upside then reversed.

Financial: Banks mostly took a pause after a good move upside, e.g. C, JPM, BAC. GS same. MS opened at the 50 day EMA then sold off for a modest loss.


Stats: +256.10 points (+1.09%) to close at 23787.45

Stats: +73.53 points (+1.08%) to close at 6897.00
Volume: 2.4B (-4.76%)

Up Volume: 1.7B (-280M)
Down Volume: 681.11M (+173.96M)

A/D and Hi/Lo: Advancers led 2.16 to 1
Previous Session: Advancers led 3.05 to 1

New Highs: 33 (+4)
New Lows: 18 (-1)

Stats: +24.72 points (+0.97%) to close at 2574.41
NYSE Volume: 1.011B (-0.20%)

Up Volume: 724.533M (-70.319M)
Down Volume: 277.435M (+65.328M)

A/D and Hi/Lo: Advancers led 3.41 to 1
Previous Session: Advancers led 3.65 to 1

New Highs: 14 (+6)
New Lows: 10 (-1)


VIX: 20.47; -0.93
VXN: 27.66; -0.87
VXO: 22.30; -0.78

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

Bulls and Bears:

Now THAT is a move. Both bulls and bears. Yes, a crossover in just about record time. Is this now indicating a bottom in stocks? Yes and no. It is an indicator that takes time for the rally to occur. That said, stocks have bounced -- modestly -- paused, and arguably in position to continue the bounce. This indicator, however, is more of a longer term indicator. As such, it suggests more than a bounce. Interesting, but need more good patterns to support a bounce; that can happen over time, and as indicated this is not an immediate, Pavlovian market response. Regardless, this was an impressive move.

Bulls: 29.9 versus 39.3

Bears: 34.6 versus 21.4

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: 29.9 versus 39.3
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: 34.6 versus 21.4
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: 2.731% versus 2.694%. Bonds faded for a third session after the Thursday massive gap and rally upside. Gave it all back, sitting on the 10 day EMA.

Historical: the last sub-2% rate was in November 2016 (1.867%). 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% versus 3.059% versus 3.048% versus 3.065% versus 3.074% versus 3.056% versus 3.065% versus 3.116% versus 3.127% versus 3.147% versus 3.186% versus 3.239% versus 3.228% versus 3.222% versus 3.201% versus 3.22% versus 3.146%

EUR/USD: 1.14547 versus 1.14834. Euro edging higher.

Historical: 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: 108.802 versus 108.705. Dollar moved up to the 10 day EMA showing a doji.

Historical: Last below 109 in June 2018: 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: 49.78, +1.26. Oil continued higher, now at resistance at 50.

Gold: 1285.90, -4.00. Gold still testing the surge higher, tapping at the 10 day EMA on the low.


Still on the move upside as the second leg of the rally continues. Still some room to run for the indices and stocks. The doji are something to be aware of; perhaps stocks are slowing the move a bit, perhaps they are just pausing. As noted before we opted to bank some gain on plays that gapped upside and showed doji. If they continue, great. We will make more money on them.

At this juncture, it is a bit tight to move into new upside, particularly if stocks open higher Wednesday -- that would be four upside sessions straight and not the best time to move in with the indices approaching what could be next resistance.

Thus, letting current positions work, watching the next resistance, starting to think about downside plays for a new move lower. SP500, SP400, NASDAQ are all showing potential ABCD downside patterns. QID comes to mind off the doji today. CLX, currently on the report, sold on high volume today; if it continues we will look to move in. CMI is a candidate as it shows a tombstone doji at the 50 day EMA in its own potential ABCD downside pattern.

Not saying stocks will necessarily roll over, just that the big top, the initial selloff, this test of the break down from the year long top all suggest the selling could happen as easily or more so than upside. We have upside we will let work but recognize that they could top out as the indices hit resistance and need to be ready downside.

Have a great evening!

End part 1 of 3
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