Thursday, February 28, 2019

The Daily, Part 1 of 2, 2-28-19

* * * *
2/28/2019 Investment House Daily
* * * *

Investment House Daily Subscribers:

MARKET ALERTS:

Targets hit: MU; ULTA; V
Entry alerts: None issued
Trailing stops: TREX
Stop alerts: DHI; HAL

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

- More testing of near support continues overall constructive action.
- Volume spikes on the end of the month.
- Q4 GDP lower but better than expected. Internals are very solid.
- China exports and imports tank but its stock market surging
- Some very good stocks testing nicely as well. Will new money come in for a new month?

Something of a flip again in leadership with the semiconductors positive (-1.22% Wednesday), the large caps modestly lower, the small and midcaps bringing up the rear -- though not taking any major hit.

SP500 -7.89, -0.28%
NASDAQ -21.98, -0.29%
DJ30 -69.16, -0.29%
SP400 -0.42%
RUTX -0.35%
SOX 0.02%
NASDAQ 100 -0.27%

VOLUME: NYSE +52%, NASDAQ +10%. A bit of end of the month volume not seen since . . . the end of January.

ADVANCE/DECLINE: NYSE -1.2:1, NASDAQ -1.4:1.

The action was more of the same as Wednesday, and that is not bad action. Going nowhere fast, but after bumping serious resistance, a test of support is constructive. What about the volume ratcheting up a bit Wednesday and more Thursday? Testing support in a tight range on big volume is not a bad thing. Of course, not much of a drop to the test, so some selling some buying, some churn -- and the indices still have to show they can make the next move through resistance. Or in SP400's case, hold the break over resistance.

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

SP500 tests the 10 day EMA for a second session, now a very nice, tight 1-2-3 pullback. Big end of the month volume spike holding support: as many buyers as sellers. Or if you are a glass half empty, as many sellers as buyers. On a pullback to support, however, that tends to be more positive than negative.

DJ30 shows the same action, holding the 10 day EMA with a volume bounce as well with trade moving up to average.

NASDAQ a doji at the 200 day SMA in a lateral move over that potential support with volume ramping higher as well.

SP400 holding the 200 day SMA and testing the break over the range on that same jump in volume.

RUTX in a nice 10 day EMA test as well, it too testing back to near support after tapping at the resistance Monday.

SOX gapped lower, recovered to hold the 10 day EMA. Not as neat and clean as the other indices, but it works as many name brand chips are testing near support.

NASDAQ 100 works laterally over the 200 day SMA in a tight range as well, very similar to NASDAQ.


The lack of sellers at this point remains a positive. Bumping highs and running out of gas can be a bad situation. The sellers, however, have not flooded in to take a shot. Still no sellers with the nerve to move in, and that allows stocks to test, set back up, and, if the bids return, move back upside to take on the resistance and indeed make the breakout.

The pullback is allowing some good movers to test near support and perhaps establish new upside. TECD, INTC, YETI, TEAM, COHR are examples.


Economic data continued to erode but was also better than expected.

GDP, Q4 Advanced: 2.6% vs 2.3% expected vs 3.5% Q3.

+3.1% year/year, the first time since 2005. Recall the 10 year period with no annual growth at 3% or better? The drought is broken. Jobs that were never coming back did so and job quality improved dramatically. Just with some regulation reduction and tax relief. Just think what could have occurred -- and what can occur -- if we continue to get the government out of business in the form of regulation and taxes. These were rather modest moves and growth jumped back up to levels they said it would not hit again. The ACA is still there along with tens upon tens of thousands of regulations promulgated during Bush and Obama. Plenty of work to be done to free the economy as Bernie and his allies want us to go the opposite way. History is clear. The American populace's understanding of it is not.

Private R&D spending: +13.5% in the quarter and +9.9% year/year. R&D added 2.3% to GDP, an all-time record. This is very good news. It was strong R&D investment that helped fuel the 1980's technology boom that laid the ground work for the 1990's. Private investment in the US is a must for improving the standard of living.

Current Dollar Personal Income: +$225.1B versus +190.6B in Q3.

Disposable Income: +5.7% versus 4.2% Q3.

Real disposable income: 4.2% versus 2.6$ Q3.

The GDP report was strong in the right places even if the headline number was off from Q3.


China: The economic fade continues even as the Chinese markets rally, Shanghai up roughly 25% in 2019. The US up 19% off the lows that started in 2018, not 2019. Some are saying, 'well China is getting the better of it.' Seriously?

What is more likely the situation is China has more to gain from a trade deal with the US than vice versa. Communism does not work. History shows that. What the Chinese markets are telling you is that there IS INDEED the possibility of a trade deal, one that will require China to roll back the shift the past 10 years to more and more hardline communism. That is better for markets. It is better for the Chinese people. It is better for everyone in the world but the dictators who lead the communist party. No one should be crying over those tyrannical, liberty-hating murders. Hey, someone had to say it. Communism is bad. Period.


End of the Month

Did not buy anything Thursday. ADBE looked possible but it faded. GOOG moved over the 200 day SMA but it too faded. CGC tried to spark up, but the move lost some of its mojo and we held off for now. Not bad at all, just was not their day to hold the move.

Took some gain. Closed the rest of MU because it was struggling. ULTA hit the initial target and we banked some nice gain. V hit the initial target as well and we locked half the profit in there.

There were some struggles. Home related stocks struggled. TOL gapped lower to the 200 day SMA, DHI sold off on strong volume. Energy, the looks good but then undermines each attempted move, was still not bad but disappointing. Manufacturing was down a bit, e.g. UTX, MMM, after some decent tests.

Afterhours earnings are hitting. ZS is up 7 clicks or 14%. VMW up, SPLK +5. ADSK, WDAY up but not by much. TSLA lower on its 'big' announcement of cheaper, lower end autos.


Start of the new Month

Personal income and spending out in the morning, ISM later in the session. Important data given the back and forth in the recent data reported. Stocks are looking for some reason to make good on nice pullbacks to near support and the indices testing the bump against resistance.

If new money comes in, they can do that. There have been a few of these first day of the month on Friday of late, and that has not produced a lot of new money. That tends to move in through the first few sessions.

Thus, Friday may not produce any moves, but if so, we still like GOOG, ADBE to name a couple of big names. TECD, INTC in nice tests and if they bounce they represent entry possibilities as well. The market still has lots of good patterns waiting for a reason to make the next move.


MARKET STATS

DJ30
Stats: -69.16 points (-0.27%) to close at 25916.00

Nasdaq
Stats: -21.98 points (-0.29%) to close at 7532.53
Volume: 2.66B (+9.47%)

Up Volume: 1.28B (+230M)
Down Volume: 1.34B (+20M)

A/D and Hi/Lo: Decliners led 1.4 to 1
Previous Session: Advancers led 1.07 to 1

New Highs: 75 (+1)
New Lows: 35 (+1)

S&P
Stats: -7.89 points (-0.28%) to close at 2784.49
NYSE Volume: 1.262B (+52.16%)

Up Volume: 4.977B (+4.534B)
Down Volume: 743.882M (+369.013M)

A/D and Hi/Lo: Decliners led 1.19 to 1
Previous Session: Advancers led 1.1 to 1

New Highs: 129 (+35)
New Lows: 15 (-6)

SENTIMENT

VIX: 14.78; +0.08
VXN: 17.17; -0.43
VXO: 14.51; +0.19

Put/Call Ratio (CBOE): 0.96; +0.03

Bulls and Bears:

Getting a bit bullish with a move over 50 while bears dropped right back below 21 after the short break higher. Fear continues to subside.

Bulls up again, but bears moved up a bit as some discomfort with the long recovery rally.

Bulls: 51.9 versus 49.5

Bears: 20.7 versus 21.5

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: 51.9 versus 49.5
49.5 versus 48.6 versus 45.8 versus 45.4 versus 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: 20.7 versus 21.5
21.5 versus 20.6 versus 20.6 versus 21.3 versus 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: 2.717% versus 2.673%. Bonds dropping hard for a second session, falling through the 50 day MA.

Historical: the last sub-2% rate was in November 2016 (1.867%). Last trade over 3% was November 2018.

2.673% versus 2.636% versus 2.672% versus 2.654% versus 2.695% versus 2.641% versus 2.641% versus 2.664% versus 2.654% versus 2.706% versus 2.686% versus 2.672% versus 2.634% versus 2.657% versus 2.695% versus 2.702% versus 2.725% versus 2.684% versus 2.64% versus 2.679% versus 2.710.5


EUR/USD: 1.13725 versus 1.13790. Euro tried to surge for the third time then faded back to flat.

Historical: 1.13790 versus 1.1391 versus 1.13598 versus 1.13332 versus 1.13363 versus 1.14490 versus 1.13544 versus 1.12922 versus 1.12955 versus 1.12616 versus 1.3323 versus 1.12816 versus 1.13218 versus 1.13396 versus 1.13645 versus 1.1396 versus 1.14350 versus 1.14554 versus 1.14478 versus 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: 111.433 versus 110.873

Historical: Last below 109 in June 2018 then tumbled to 107 in early January 2019. 114.51 is the recent high from October 2018.

110.873 versus 110.53 versus 110.979 versus 110.670 versus 110.664 versus 110.786 versus 110.848 versus 110.469 versus 110.462 versus 110.945 versus 110.523 versus 110.488 versus 109.754 versus 109.793 versus 109.803 versus 109.777 versus 109.987 versus 109.53 versus 108.85 versus 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


Oil: 57.22, +0.28


Gold: 1316.10, -5.10.

End part 1 of 2
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Market Alert - Pre-Market

Futures vs FV: SP -3.13; DJ -5.16; NASDAQ -20.25

Futures lower all morning but, after gapping lower, on a steady climb into the last hour. A bit of cold feet ahead of the open, but not a bad low to high move even if still negative. This is a pattern seen overall in the market: still low to high action even on a 1-2-2.5 -- and today at least a bit more -- test. This after bumping the top of the OCT/DEC range. Very orderly thus far, and the continuation of the low to high action continues an upside bias.

Q4 GDP, first: 2.6 VS 2.3 exp vs 3.5 Q3. 3.1% year/year, best since 2005. Wow, a year over 3% on average. With SO LITTLE DONE. If the GOP had a spine and removed the ACA and worked on a market based plan as a started, things would really have roared.

Consumption: 2.8% vs 3% exp vs 3.5% Q3

Prices: 0.8 vs 0.8 prior

PCE: 1.7% vs 1.6% exp vs 1.6% Q3

R&D spending +13.5%, 9.9% year/year. 2.3% of total GDP, an all-time record. Private R&D is a good sign things will get better.

Current personal Income $225.1 B vs 190.6b q3 -- there are good indications here.


Earnings beats: JCP; BID; SQ; FIT

Misses: PRTY (TL,BL); SEAS (BL); HPE (TL); BOC (TL); BKNG (TL); LB (TL). Lots of top line misses.


China: Exports worst in 10 years; Impors worst in 3 years.

NKorea: Could not get over wanting sanctions removal for doing virtually nothing. So, Trump walked away. You have to be able to do that.

Futures lower but doing that low to high thing showing the continuing upside bias. Will see if that bounces stocks from this short pullback to near support and thus take on the top of the range.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Wednesday, February 27, 2019

The Daily, Part 1, 2-27-19

* * * *
2/27/2019 Investment House Daily
* * * *

Investment House Daily Subscribers:

MARKET ALERTS:

Targets hit: None issued
Entry alerts: NEWR; NOW; XLNX; SPY
Trailing stops: ISRG
Stop alerts: IMGN; LASR; ON

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

********************************************************************

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

- Indices mixed, growth leads, and the test then recovery is not bad action.
- Somewhat constructive test leaves indices and many stocks in decent position.
- Powell testimony over, earnings winding down, but a lot more economic data as the market looks for the next catalyst.

Growth moved back into the lead Wednesday, though there was not much leadership however you sliced it. The small caps scored +0.23% on the upside while SOX dropped 1.22% as semiconductors were boxed around a bit.

SP500 -1.52, -0.05%
NASDAQ 5.21, 0.07%
DJ30 -72.82, -0.28%
SP400 0.12%
RUTX 0.23%
SOX -1.22%
NASDAQ 100 -0.09%

VOLUME: NYSE -4%, NASDAQ +8%. NASDAQ trade remained above average as the index tests the 200 day SMA. NYSE trade faded a bit farther off average.

ADVANCE/DECLINE: NYSE +1.1:1, NASDAQ +1.1:1

The indices again tested resistance and did not do that bad a job of it as they started low, sold more, then recovered the rest of the session into the close. We picked up some SPY puts to have at least some downside exposure -- then SP500 promptly recovered to a doji over the 10 day EMA.

CHARTS

Indeed, while mostly lower or at least mixed, the action was not bad; yea verily, it could be labeled constructive.

As noted, SP500 sold back, but it tapped the 10 day EMA on the low and rebounded to basically flat with a nice doji test. Pretty decent 2-day pullback after bumping the November/October range peaks.

DJ30 was similar, testing near the 10 day EMA on the low, recovering to a not so terrible 0.28% loss -- continued light trade as well shows no real sellers, just the buyers pulling bids for now. To recap, DJ30 tapped the top of the range at the Monday high (the November peak at 26,278) then faded that session. This is thus something of a 0.5-2-3 pullback to near support.

NASDAQ similarly tapped the 200 day SMA on the low, then rebounded to a gain just below the November middle peak at the top of the range. Nice test, shakeout, then rebound.

RUTX was the same, tapping the 10 day EMA on the low, recovering to that market-leading gain, but the most important aspect was the similar good action. Tapped the top of the range Monday then started to fade that session into Wednesday, but as noted, it recovered off the low to close positive, right at the 200 day SMA.

SP400 midcaps -- the first to clear the range and testing the same as the others, closing right at the top of the range after a 2.5 session pullback.

SOX: A bit wilder, gapping lower and testing near the 20 day EMA and the mid-February upper gap point. Chips were the anchor chain on the day, but they are not garbage -- some very good pullbacks underway.

Summary: Each index touched up near or to resistance and is backpedaling. The moves thus far, however, are rather orderly, and as noted, the Wednesday low open, lower early action through the first hour, then steady recovery to the close -- is quite constructive.


LEADERSHIP

Semiconductors: Definitely lagging, but not tanking. SMTC, SIMO not bad; COHR in a great test. MU, AMD, AVGO are struggling a bit more. ON, LASR sold harder. INTC still solid, LRCX making a doji test of the 20 day EMA. Some good, some decent, some in trouble.

Energy: Some interesting moves. NBR gapped lower, sold, then shot up 7%. DVN still looking good, TELL started upside nicely. APA looks very solid. COP interesting and XOM just broke above the 200 day SMA on pretty solid rising volume.

Software: Some really good action. Bought NOW as it broke higher. NEWR started upside on solid volume. TEAM still solid, WDAY edging higher. PANW gapped past the September high on big earnings.

FAANG: Didn't do much. FB faded to a doji at the 20 day EMA and still looks good. AMZN in a lateral move -- still. AAPL edged higher but is very similar to AMZN. NFLX pausing after a creep higher. GOOG holding just below the 200 day SMA in a not bad pattern.

Manufacturing: UTX in a very nice 2 week test over the 200 day SMA. MMM in a short pullback as well.

Machinery: CAT jumped off the 20 day EMA and back over the 200 day SMA. DE in a good test of the 20 day EMA after that good upside surge off support. CMI testing the 10 day EMA in its continued move higher.

Financial: V flat after a decent Tuesday move. Banks are still so-so, going nowhere, except BAC does look pretty good. The regionals continue to look good, but they need to make a good move.

Retail: WMT looks very interesting with a doji at the 20 day EMA. Nifty little ABCD pattern the past 3.5 weeks. BBY beat and gapped to the 200 day SMA. TJX posted some good numbers and rallied on big volume.

MISC: CMG in a nice tight lateral range.


MARKET STATS

DJ30
Stats: -72.82 points (-0.28%) to close at 25985.16

Nasdaq
Stats: +5.21 points (+0.07%) to close at 7554.51
Volume: 2.43B (+7.52%)

Up Volume: 1.05B (+52.14M)
Down Volume: 1.32B (+120M)

A/D and Hi/Lo: Advancers led 1.07 to 1
Previous Session: Decliners led 1.56 to 1

New Highs: 74 (+12)
New Lows: 34 (+14)

S&P
Stats: -1.52 points (-0.05%) to close at 2792.38
NYSE Volume: 829.162M (-4.02%)

Up Volume: 442.969M (+86.831M)
Down Volume: 374.869M (-118.461M)

A/D and Hi/Lo: Advancers led 1.1 to 1
Previous Session: Decliners led 1.42 to 1

New Highs: 94 (+15)
New Lows: 21 (+11)

SENTIMENT

VIX: 14.70; -0.47
VXN: 17.60; -0.51
VXO: 14.32; -0.02

Put/Call Ratio (CBOE): 0.93; +0.08

Bulls and Bears:

Getting a bit bullish with a move over 50 while bears dropped right back below 21 after the short break higher. Fear continues to subside.

Bulls up again, but bears moved up a bit as some discomfort with the long recovery rally.

Bulls: 51.9 versus 49.5

Bears: 20.7 versus 21.5

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: 51.9 versus 49.5
49.5 versus 48.6 versus 45.8 versus 45.4 versus 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: 20.7 versus 21.5
21.5 versus 20.6 versus 20.6 versus 21.3 versus 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: 2.673% versus 2.636%. Sharp drop to the 50 day EMA. Serious drop.

Historical: the last sub-2% rate was in November 2016 (1.867%). Last trade over 3% was November 2018.

2.636% versus 2.672% versus 2.654% versus 2.695% versus 2.641% versus 2.641% versus 2.664% versus 2.654% versus 2.706% versus 2.686% versus 2.672% versus 2.634% versus 2.657% versus 2.695% versus 2.702% versus 2.725% versus 2.684% versus 2.64% versus 2.679% versus 2.710.5


EUR/USD: 1.13790 versus 1.1391

Historical: 1.1391 versus 1.13598 versus 1.13332 versus 1.13363 versus 1.14490 versus 1.13544 versus 1.12922 versus 1.12955 versus 1.12616 versus 1.3323 versus 1.12816 versus 1.13218 versus 1.13396 versus 1.13645 versus 1.1396 versus 1.14350 versus 1.14554 versus 1.14478 versus 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: 110.873 versus 110.53

Historical: Last below 109 in June 2018 then tumbled to 107 in early January 2019. 114.51 is the recent high from October 2018.

110.53 versus 110.979 versus 110.670 versus 110.664 versus 110.786 versus 110.848 versus 110.469 versus 110.462 versus 110.945 versus 110.523 versus 110.488 versus 109.754 versus 109.793 versus 109.803 versus 109.777 versus 109.987 versus 109.53 versus 108.85 versus 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


Oil: 56.94, +1.44. Solid bounce form the 50 day EMA but that just gets oil back to last week's highs -- nearly. Still building upside toward a showdown with the 200 day SMA at 62.50.


Gold: 1321.20, -7.30. Gold dropped like -- gold -- to the 20 day EMA after a nice lateral move.


THURSDAY

Powell is done, Lighthizer said there was still a long way to go on a trade deal. But, consumer confidence moved up to 131.4 (from 120.2) as seen Tuesday. On the other hand, Factory Orders December rose just 0.1% versus the 1.0% expected; at least that was better than the -0.5% in November.

Thursday Q4 GDP advanced (2.3% expected versus 3.4% Q3) and Chicago PMI. Friday Personal income and spending, ISM, Michigan Sentiment.

Perhaps the market will find something to catalyze a move: the indices are in a pretty decent pullback testing the move up to resistance. No sellers have emerged in any numbers thus far and then we see if there is a catalyst to bring the bids in and break the resistance.

While the probabilities still appear to favor a bigger test before a new move that can take them out, plenty of good patterns are there. VC is making a great test of its move. YETI can make another move. WMT nice, GOOG is still interesting, TJX starting upside, LRCX is in position to move. NOW making a good move. Plenty of stocks can move off this short test. Again, we have to see if the bids return.

Have a great evening!

End part 1
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Market Alert - Pre-Market

Futures vs FV: SP -6.95; DJ -57.98; NASDAQ -26.72

Futures traded lower early and have slowly recovered lost ground, but are still trading underwater toward the bell. Not bad high to low, again, in the face of some uncertainty.

Uncertainty 1: Pakistan/India potential to flare up into a hot war as Pakistan shoots down 2 Indian jets after India bombed suspected terrorist camps in Pakistan.


Powell: Second day of testimony and he hopefully will receive questions for Ocasio-Cortez. That should be interesting sidebar on the day as the colossally ignorant questions the colossally arrogant (though Powell himself is not arrogant -- the Fed is).


Trump/Kim chumming it up in Hanoi.


Mortgages: +5.3% vs +3.6%. Two weeks of gains as rates are a bit lower.


Earnings beats: BBY (5 quarters beating); CPB; PANW

Misses: LOW (TL); ODP (TL); DF (BL); WWW (TL, BL); PZZA (TL, BL); MYL (BL); GWRE (TL)

Downgrades: HD


Volatility: very low once again as stocks bump resistance. Treasury volatility levels are at all-time lows.


OTHER MARKETS
Bonds: 2.655% versus 2.636% 10 year

EUR/USD: 1.138 vs 1.1391. Dollar a bit up

USD/JPY: 110.71 vs 110.53. Dollar a bit down

Oil: 56.71, +1.21

Gold: 1337.70, -0.80


Futures off, but that is not a bad thing in a rising market. As noted with the Tuesday market weakness, it was lower but nothing horrid. Of course the selling can start small as Egg Shen noted in 'Big Trouble in Little China.'

Indices are at resistance, having to deal with some headline headwinds, but nothing that is causing major selling. The resistance question mark is still a question as the indices fade some from bumping it. Sellers are still not jumping on stocks with a perceived opening so it could be the market just posts a modest fade, resets, then takes on the resistance anew.

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Tuesday, February 26, 2019

The Daily, Part 1 of 3, 2-26-19

* * * *
2/26/2019 Investment House Daily
* * * *

Investment House Daily Subscribers:

MARKET ALERTS:

Targets hit: None issued
Entry alerts: RACE
Trailing stops: None issued
Stop alerts: NBL

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

- Powell affirms he remains dovish whether he wants to or not. With the monetary policy swamp, he has no choice.
- Low start gives way to positive but the return of last hour drops sends the indices negative.
- SOX, SP400, RUTX relative laggards all session.
- Another day of resistance bumping yields nothing.
- Still good patterns but what will be the next catalyst upside?

Powell spoke to Congress in day one of his testimony and maintained the overall dovish stance. Did not say there were no hikes to come this year, but the Fed is going to be 'patient, watch and wait and see' how the economy performs.

It would appear Powell has learned the lesson of the Monetary Policy Swamp. Greenspan started the 'save the markets whatever the cost' mindset in the Fed, and since it has dug itself a deep hole as the fiscal policy in the US mined deeper as well in terms of deficit spending. Bernanke fully lived up to his nickname Helicopter Ben with full frontal prostration to the markets. Yellen made one small attempt to alter the course and was beat down immediately. She gave up and became Bernanke II.

Powell, a non-economist with some common sense, came in to get rates back to a more normalized level and reduce a Fed balance chocked full of garbage. It was time to do so he figured, given the tax cuts and the resurgence in the economy after the first 10 year period without a year of 3% economic growth since the Great Depression. Made eminent sense, but the market pitched a fit. More than that, the timing was a bit off as the economy was already slowing naturally in a normal slow period. The rate hikes and balance sheet reduction had an amplified effect in that environment. After a market plunge in December, presidential berating, television financial evangelist scolding and scorning, Powell relented. The markets recovered. Everyone is happy -- with still historically low rates, a Fed holding a bunch of crap assets, and incredibly high debt levels. Everything back to normal I suppose.

It may be, and likely will be, that the Fed will never be able to seriously hike rates again. I hate saying never, but the word conveys the Kobayashi Maru predicament -- the no-win scenario -- that all Fed chairmen face today. After decades of massive rate manipulation the Fed's hands are tied. The only thing that would free up the Fed would be a gut-wrenching, economic bombing collapse: the Fed would lose control of rates regardless and the downturn would be so severe that it would work as a reset of rates to natural levels.

Of course, the Fed brought this on itself with its mandate and power creep. It expanded its dual mandate to control everything to the point of micromanagement. Think of the government: it wants to control healthcare so it can tacitly control everything you do right down to what and where you eat. Heck, it could even control WHAT places are allowed to serve what it deems healthy food lest we spend too much money. Now that is a laugh; a government now $22T in debt (but in reality more like $70T+) says it has to watch its spending. That is like a morbidly obese person eating bags of chips, sweets, etc. but drinking poco chico mineral water because it is 'healthy.'

Okay, I digress. Suffice it to say Powell has given up and is going to take a long vacation, keeping rates low, the balance sheet flat or even growing, for the balance of his tenure. I bet he will voluntarily exit when his first term is up. Then bring on the new fresh meat.

The market was not impressed, not really moved at all by Powell's acquiescence. It knows Powell is no longer a factor and is more interested in the trade talks outcome and indeed the economic situation which is not that good.

Thus, stocks started soft, toyed with the upside, but then faded to negative again at the close.

SP500 -2.21, -0.08%
NASDAQ -5.16, -0.07%
DJ30 -33.97, -0.13%
SP400 -0.88%
RUTX -0.71%
SOX -0.68%
NASDAQ 100 +0.11%

VOLUME: NYSE -3%, NASDAQ -6%. No real selling or churn.

ADVANCE/DECLINE: NYSE -1.4:1; NASDAQ -1.6:1.

The small and midcaps, the recent leaders, took a breather early on. Chips as well. The large cap indices, however, hung in with gains, showing a bit of relative strength. Right at the close they flipped negative as well. Still relative strength leaders, but in a market of red that is not even a very good moral victory.

Nonetheless, mostly modest losses for the large cap indices. The small and midcaps, however, perhaps awoke a bit to the issues with the US economy after Housing starts fell 11.2% month/month and -10.9% year/year, the worst performance since March 2011.


CHARTS

All of the indices again bumped at resistance and again failed to take it out. The test at the top of the October/December range continues. While the indices did fade back from bumping that key level, it was not the case where stocks were turned on their heads in strong selling. For now it was more a cessation of bids after a good move to next resistance.

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

SP400 midcaps faded back to the 200 day SMA and the top of the Oct/Dec range. That test had to come sooner or later, and it is occurring now. Thus far, holding the break higher.

RUTX faded after touching the top of the range on the Monday high, then backing off. Looks as if it will test the 10 day EMA that is not far away at all and then make a decision about trying the resistance again. As noted Monday and over the weekend, that kind of test is pretty normal after the kind of run exhibited.

SOX touched close to the top of its summertime range as of the Monday high but reversed that session. It continued lower Tuesday, testing the last rally from early February. Big move, led the market with the smaller caps, now testing the last strong surge.

SP500 bumped the top of the range on the Monday high, faded, and after trying higher Tuesday, faded a bit more. Gave up a decent low to high recovery from the open, but it was no major rollover, just fading to test after a good run to the top of the range.

DJ30 showed the same action, bumping at the top of the range on the Monday high, fading that move and then fading Tuesday after a low to high move earlier in the session. Still over 26,000, testing the prior move. Note that DJ20 transports are in a nice weeklong lateral move over the 200 day SMA. That looks pretty interesting to the upside.

NASDAQ held out to the upside very late but also gave up the green. Even with the chips down harder on the day, NASDAQ held the line fairly well. It bumped the November peak Monday, faded, faded a bit more Tuesday after an early low to high move.


LEADERSHIP

Some interesting back and forth in leaders. HD announced earnings and missed on the top and bottom lines. It gapped lower but did a decent recovery job. CAT was double downgraded by UBS; it gapped lower but did recover the 200 day SMA, holding near the top of its 4 month range.

Semiconductors sold back as a group after a decent move higher. AMD, AVGO (nice test in progress), RMBS tested back. MU actually was positive, but overall it was a test session.

Energy mostly continued its lateral move though NBL struggled more than we wanted. COG, DVN, TELL, APA, CVX holding up well.

Software is still decently though it was not a great day. TEAM, NOW making very good tests, WDAY as well. Afterhours PANW is rocketing higher on results.

FAANG: Some life with GOOG, AMZN, NFLX, AAPL coming back from lower intraday trade. Dormant as a group, perhaps they are starting to perk up and of course that helps NASDAQ.

Manufacturing: UTX, MMM still holding up and setting up.

Financial: V gapped lower but reversed to positive. Banks gapped lower, recovered some, but still in the same range.

MISC: WMT looks interesting after the flop lower a week back. CMG still testing its earnings gap; could be getting close.



MARKET STATS

DJ30
Stats: -33.97 points (-0.13%) to close at 26057.98

Nasdaq
Stats: -5.16 points (-0.07%) to close at 7549.30
Volume: 2.26B (-5.44%)

Up Volume: 997.86M (-392.14M)
Down Volume: 1.2B (+246.55M)

A/D and Hi/Lo: Decliners led 1.56 to 1
Previous Session: Advancers led 1.05 to 1

New Highs: 62 (-84)
New Lows: 20 (+4)

S&P
Stats: -2.21 points (-0.08%) to close at 2793.90
NYSE Volume: 863.914M (-3.12%)

Up Volume: 356.139M (-106.135M)
Down Volume: 493.33M (+81.52M)

A/D and Hi/Lo: Decliners led 1.42 to 1
Previous Session: Decliners led 1.02 to 1

New Highs: 79 (-70)
New Lows: 10 (0)

SENTIMENT

VIX: 15.17; +0.32
VXN: 18.11; +0.30
VXO: 14.34; +0.16

Put/Call Ratio (CBOE): 0.85; +0.07

Bulls and Bears:

Getting a bit bullish with a move over 50 while bears dropped right back below 21 after the short break higher. Fear continues to subside.

Bulls up again, but bears moved up a bit as some discomfort with the long recovery rally.

Bulls: 51.9 versus 49.5

Bears: 20.7 versus 21.5

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: 51.9 versus 49.5
49.5 versus 48.6 versus 45.8 versus 45.4 versus 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: 20.7 versus 21.5
21.5 versus 20.6 versus 20.6 versus 21.3 versus 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: 2.636% versus 2.672%. Still in the 5 week lateral range.

Historical: the last sub-2% rate was in November 2016 (1.867%). Last trade over 3% was November 2018.

2.672% versus 2.654% versus 2.695% versus 2.641% versus 2.641% versus 2.664% versus 2.654% versus 2.706% versus 2.686% versus 2.672% versus 2.634% versus 2.657% versus 2.695% versus 2.702% versus 2.725% versus 2.684% versus 2.64% versus 2.679% versus 2.710.5


EUR/USD: 1.1391 versus 1.13598

Historical: 1.13598 versus 1.13332 versus 1.13363 versus 1.14490 versus 1.13544 versus 1.12922 versus 1.12955 versus 1.12616 versus 1.3323 versus 1.12816 versus 1.13218 versus 1.13396 versus 1.13645 versus 1.1396 versus 1.14350 versus 1.14554 versus 1.14478 versus 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: 110.53 versus 110.979

Historical: Last below 109 in June 2018 then tumbled to 107 in early January 2019. 114.51 is the recent high from October 2018.

110.979 versus 110.670 versus 110.664 versus 110.786 versus 110.848 versus 110.469 versus 110.462 versus 110.945 versus 110.523 versus 110.488 versus 109.754 versus 109.793 versus 109.803 versus 109.777 versus 109.987 versus 109.53 versus 108.85 versus 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


Oil: 55.50, +0.02. Holding at the 50 day EMA but up afterhours on a surprise draw.


Gold: 1328.50, -1.00.


WEDNESDAY

Second day of Powell's talk with Congress but not sure if it yields any further insight in terms of the market. Trump meets with Kim whoever; expect about as much progress as with Chinese trade talks.

What it boils down to is the indices at resistance, still taking measure, still sizing it up. After a run to that resistance they are retracing a bit. Not a reversal as noted, more of a pause. Whether it turns into a deeper test as discussed over the weekend and Monday is problematic. For now, resistance is holding and the indices are taking a break after a rally to that resistance. That is not the horror of a 'quadruple top' as some gloomer websites warned this morning.

Still some good setups; lots of good setups. At the same time the resistance. We bought RACE today -- good pattern, good move, rich getting richer . . . Thus far the market is not acting as if rollover is imminent, but with economic data so-so and catalysts becoming a bit thinner, even if there is no big story to sink stocks the question is what catalyst is there for further upside?

For now the patterns remain good and we are picking some up, but not a ton of sustained movement given the ongoing resistance bump. For now we are letting them work as the action is good.

Have a great evening!

End part 1
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Market Alert - To the Close

Powell did not have a lot to add. He still doesn't believe governments can just keep printing money and survive, but he is trapped in the monetary policy swamp created by former federal reserve boards that lost sight of the real purpose of a Fed and instead did what all government entities (I know, it is supposedly not, but it plays that role) do: mandate creep and power creep. Now the Fed cannot take action. Yellen tried and was spanked. Powell tried and was slapped. Hard.

Chips and techs are off, small and midcaps as well. Only the large caps are higher and even those have to overcome CAT and HD, but even those stocks are off their lows and will likely recover just fine.

The indices are still not through resistance -- this is an ongoing process of trying to get through but finding headway a bit harder given everyone is looking at it.

Outside of the obvious with the indices, there are some interesting stock moves. Like ADBE, RACE and even ZGNX -- now that is an eclectic mix. Looking at those but remember the resistance for the overall market could push them right back.

SP500 flat
NASDAQ flat
DJ30 -4.95, -0.02%
SP400 -0.67%
RUTX -0.39%
SOX -0.65%
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Market Alert - Pre-Market

Futures vs FV: SP -5.06; DJ -98.00; NASDAQ -22.12

Futures opened lower and have mostly range-traded since with an ever so slight trend higher toward the open. Most of that 'trend' is the in the past 20 minutes.

Things were off to a bad start with downgrades, weak economic data and just nothing much else as the market awaits Powell's testimony to Congress. Testimony perhaps, but it is also a major political dog and pony show as the democrats try to get the Fed chair to support how tax cuts caused the deficit (ignoring the $16T increase under the most recent democratic President with higher taxes) while republicans try to say deficits don't matter now that a republican is in office. The chameleons of politics.


Housing starts: -11.2% versus -1.3% expected. -10.9% year/year, the worst showing since 3/2011.

Permits: +0.3% vs -2.9% expected. Oh wow, a beat. Much rejoicing. Yea.

Case/Schiller: Slowest housing price increase since 8/2015


Earnings Beats: M (cut 100 management jobs); Smucker; SHAK; ETSY; THC

Misses: HD (TL, BL, lowered guidance); HTZ (BL); Discovery Comm (TL)

Downgrades: CAT (UBS)


TSLA: SEC wants Musk held in contempt of court for his tweets.


Fed: Powell to speak to Congress.


Trump: In Viet Nam to meet with NKorea leader. Funny story. NK leader took the train to Hanoi, had to stop in China for a mega smoking break. Okay, not that funny. Amusing.


OTHER MARKETS
Bonds: 3.636% vs 2.677% 10 year

EUR/USD: 1.1357 vs 1.1363

USD/JPY: 110.74 vs 111.32

Oil: 55.55, +0.07

Gold: 1328.30, -1.20


Futures waffly ahead of the open, not that bad of weakness. Bids have returned each time this has unfolded, so we will see if they return again. Of course there are the 'end is here' websites saying this is a 'quadruple top.' At some point they will be right, likely when they least expect it. Anyway, everyone is watching SP500 2800, and that makes it suspect right off as any resistance. Watched pot syndrome.

______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Monday, February 25, 2019

The Daily, Part 1, 2-25-19

* * * *
2/25/2019 Investment House Daily
* * * *

Investment House Daily Subscribers:

MARKET ALERTS:

Targets hit: CRON
Entry alerts: CAT; TEAM
Trailing stops: None issued
Stop alerts: NTNX

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:
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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

- More positive trade news as tariff deadline extended
- Stocks gap higher, then struggle to hold, losing in many cases more than they closed with.
- Wholesale inventories rise, sales fall and fall for the third month.
- M&A picking up, another indication of a serious stock move already made.
- Indices still have not broken the resistance. Doesn't mean a rollover.
- Still some good groups, but the probabilities are less.

The Monday action was more of the same, more or less. The late Sunday announcement that the March 1 tariff deadline was extended boosted futures across the globe, confirming the prior comments from the US and China that the trade talks were progressing well.

Stocks dutifully gapped upside on the news, rallying higher off the gap into the first 1.5 hours. That was all the move was giving. The indices bumped next resistance on a gap, then they faded. Not a cataclysmic reversal, just could not keep the early excitement going.

The recently leading SP400 and RUTX showed the same action, but they could not hold the gains, closing just modestly negative. The other indices, outside SOX, closed better, but still rather modestly positive.

SP500 3.44, 0.12%
NASDAQ 26.92, 0.36%
DJ30 60.14, 0.23%
SP400 -0.03%
RUTX -0.08%
SOX 0.82%
NASDAQ 100 0.35%

VOLUME: NYSE +12%, NASDAQ -1%. NYSE trade kicked higher to near average, but that may not be such a great thing given SP500 gave up 17 points from the high over 2800. NASDAQ trade faded back to average as it gapped to resistance at the November peak and backtracked 48 points to close. Not all buying for certain, but intraday volume shows more trade early then trade backing off as the session progressed.

ADVANCE/DECLINE: NYSE slightly negative, NASDAQ slightly positive.

Stocks and the indices showed the same action. That seems axiomatic, but not always of course given that some groups often receive money even as the overall market struggles. It was not really a struggle Monday, the action simply did not end as solid as it appeared early on.

Perhaps the trade news is significantly priced into US stocks -- 19% off the selloff lows (measured by SP500) is a significant move, and bumping key resistance without hardly a pause makes it harder to move the needle upside.

Obviously speculation continues about a tipping point, inflection point -- pick your name. IBD tonight asks 'is the market at a tipping point?' You know I have discussed this as the indices moved to and are now moving into the Oct/Dec range (SP400 has moved out of it to the upside). They have not broken through yet, and Monday was solid but again the indices balked at the next level. For sure, thus far bumps at resistance have not stopped the move. Inflection point for sure, and still an open ended outcome.


CHARTS

SP500 rallied to the top of its Oct/Dec range at the November peak and October recovery peak. Gapped higher, rallied higher, touched those levels -- over 2800 for the first time since December -- then reversed most of the move. Started strong, reached up to touch the resistance, then had nothing left, at least on the session. Closed below 2800, still unable to move past that level everyone is watching.

NASDAQ also gapped upside then moved through the November high. As with SP500, could not hold the move. Managed to close higher after taking out the 200 day SMA so it was not a washout session. NASDAQ has hit resistance before, faded, then recovered to hold it. Still in the game, but still has not made the break.

DJ30 gapped over the December peak then rallied to the November peak, the top of its October/December range. Faded but still held the move over the December high. Over 26K, touched next resistance near 26,250. Taking them out one at a time and still has stocks in position to move higher.

SOX also gapped higher, rallied higher, then faded a good portion of the move. Still very solid, touching near the late September peak before fading. Very solid leadership group. Still.

SP400 showed the gap, rally, fade to negative, but still holding the move over resistance.

RUTX rallied to the October range top then dropped to basically flat with a tombstone doji. Last time it did this after a run it came back to test the 10 day EMA and then resumed higher. Normal action, didn't kill it. So far still showing strength.

Summary: The takeaway. Some will say 'failure at resistance.' And for the day, yes it was for most indices. That does not necessarily translate into a rollover and dive lower. As noted with RUTX, it certainly can sell from here but that also does not mean the move higher is necessarily over. The decision is not made on this move. The probabilities suggest a test of some sort. Perhaps RUTX tests the 10 day EMA again and resets for a new move higher. Perhaps the indices test back more toward the Oct/Dec range lows and form right shoulders to inverted head and shoulders patterns. Perhaps they are done and it is fork time, i.e. a deeper drop toward the prior lows.

Again, that is not decided at this point. After a 19% move (measured by SP500) to resistance the probabilities of upside from here are significantly less. The trade deal looks to be factored in for the most part -- just what can the US really expect from China, at least anything verifiable -- earnings are come and gone, the Fed is compliant. The outrider is the economy, and that has been so-so of late.

Oh yes, the economy.

Ah, the economy. Monday the news was not so great. Wholesale inventories for December rose 1.1% versus 0.4% expected and 0.4% November.

Sales, however, fell 1.0%, now down for the third straight month. That tells you inventories are higher because there are fewer goods being sold, the more 'glass half empty' scenario for inventories.

Take out autos from inventories and they drop to -0.8%. Ah, auto sales are super weak, pushing inventories high when sales are low. Looks as if the auto dealers will have to resort, and many already are, to more gimmicks and fancy financing to get inventory out the door.

Retail sales in December were less than expected. Inventory sales are lower. Existing home sales very disappointing.

M&A: more acquisitions are showing up, Monday DHR buying GE's pharma unit, Gold making a hostile for NEM (gold), and Roche buying Spark. Companies always use stock deals to buy when their stock prices are high. That is also a sign that markets have run a long way and often a peak is nearer at hand. Just human -- er, corporate -- nature.


LEADERSHIP

Semiconductors led the market and were still quite solid, e.g. SIMO, SMTC, INTC. Even so, those and more so in others, sold back at least parts of good moves.

Energy remained interesting with smaller still looking good, e.g. DVN, PTEN, TELL, COG.

Software not bad with moves higher but a lot of doji as well. TEAM gapped upside and managed to hold a decent part of the gain. NOW gapped to a doji as did WDAY, NEWR. Not bad, but not major new breaks in most instances.

Manufacturing held the line with UTX, MMM still looking solid.

Financial: Still a big blah, just holding position.



MARKET STATS

DJ30
Stats: +60.14 points (+0.23%) to close at 26091.95

Nasdaq
Stats: +26.92 points (+0.36%) to close at 7554.46
Volume: 2.39B (-1.24%)

Up Volume: 1.39B (-280M)
Down Volume: 953.45M (+235.31M)

A/D and Hi/Lo: Advancers led 1.05 to 1
Previous Session: Advancers led 2.45 to 1

New Highs: 146 (+20)
New Lows: 16 (-4)

S&P
Stats: +3.44 points (+0.12%) to close at 2796.11
NYSE Volume: 891.742M (+12.02%)

Up Volume: 462.274M (-54.222M)
Down Volume: 411.81M (+159.647M)

A/D and Hi/Lo: Decliners led 1.02 to 1
Previous Session: Advancers led 2.66 to 1

New Highs: 149 (-13)
New Lows: 10 (+1)

SENTIMENT

VIX: 14.85; +1.34
VXN: 17.81; +0.86
VXO: 14.18; +0.31

Put/Call Ratio (CBOE): 0.78; -0.01

Bulls and Bears:

Getting a bit bullish with a move over 50 while bears dropped right back below 21 after the short break higher. Fear continues to subside.

Bulls up again, but bears moved up a bit as some discomfort with the long recovery rally.

Bulls: 51.9 versus 49.5

Bears: 20.7 versus 21.5

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: 51.9 versus 49.5
49.5 versus 48.6 versus 45.8 versus 45.4 versus 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: 20.7 versus 21.5
21.5 versus 20.6 versus 20.6 versus 21.3 versus 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: 2.672% versus 2.654%. Bonds continue bouncing up and down in the range of the past month. Two auctions, a 2 year and a 5 year, and their selling prices were actually inversions.

Historical: the last sub-2% rate was in November 2016 (1.867%). Last trade over 3% was November 2018.

2.654% versus 2.695% versus 2.641% versus 2.641% versus 2.664% versus 2.654% versus 2.706% versus 2.686% versus 2.672% versus 2.634% versus 2.657% versus 2.695% versus 2.702% versus 2.725% versus 2.684% versus 2.64% versus 2.679% versus 2.710.5 versus


EUR/USD: 1.13598 versus 1.13332. Euro recovered from the mid-February selling, now still working laterally below the 50 day MA.

Historical: 1.13332 versus 1.13363 versus 1.14490 versus 1.13544 versus 1.12922 versus 1.12955 versus 1.12616 versus 1.3323 versus 1.12816 versus 1.13218 versus 1.13396 versus 1.13645 versus 1.1396 versus 1.14350 versus 1.14554 versus 1.14478 versus 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: 110.979 versus 110.670. Dollar enjoyed a solid session but after breaking past the February high, faded to close below it.

Historical: Last below 109 in June 2018 then tumbled to 107 in early January 2019. 114.51 is the recent high from October 2018.

110.670 versus 110.664 versus 110.786 versus 110.848 versus 110.469 versus 110.462 versus 110.945 versus 110.523 versus 110.488 versus 109.754 versus 109.793 versus 109.803 versus 109.777 versus 109.987 versus 109.53 versus 108.85 versus 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


Oil: 55.48, -1.78. Oil flubbed it, helped by Trump telling OPEC to 'relax,' that the world "cannot take a price hike." Oil faded over half of the gain accumulated the prior five sessions.


Gold: 1329.50, -3.30. Gold traded mostly flat at the 10 day EMA, attempting to regroup after surging a week back only to sell back down Thursday and giving up that gain.

TUESDAY

Not a lot of data -- Housing starts and consumer confidence. The real data starts Wednesday with Factory orders, Powell's testimony to Congress, Pending home sales. Thursday GDP Q4, then Friday Personal Income and spending, ISM.

While earnings are over and trade appears to be priced in (at least for a deal; a 'no deal' is not priced in), the logical area of concern is the economy. The data is not great, but it is not rolling off a cliff. The yield curve is flat at the short end but still upward sloping for the longer term instruments. Thus, no major market peak as of yet, but that does not rule out tests back from this resistance before other moves are made, and as noted, those could simply set up a new upside attempt.

The upside from here is less probable. We are riding some positions we have held for the move's duration. We even picked up some today (CAT, TEAM) that have set up well and look to have more upside. Others are out there, but while many plays were hitting entry points early, they were fading as the session continued. The trade deal is not going to be a huge upside impetus given all the positive leaks. 19% SP500 move. The action was not what we wanted to enter a bunch of new plays.

At this juncture we can still pick up select areas, e.g. energy still looks good as does some software, manufacturing, industrial metals and the like, but we are cautious given this 'good news' less than great move Monday.

Have a great evening!

End part 1
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Market Alert - Afternoon Session

Stocks are mostly holding the gap gains. Many gapped higher but have since stalled and faded modestly into the afternoon. Some are showing indications they are wanting to bounce back up again. We picked up some IMGN as it started to bounce off a 2 hour test; we will see if it and others such as TEAM, CAT, XLNX can hold and move upside.

The indices are taking up a notch in the ranges.

SP500 is just over 2800 -- just over. It bumped the November high on the high and has backed off some.

DJ30 is touching the November peak.

NASDAQ gapped to and through the November peak then faded back to just below.

SP500 continues upside after clearing the range though it too is off the intraday highs.

SOX gapped higher and nears the August-October range peaks.

RUTX touched the top of its range at the October recovery high and backed off to a more modest gain.

The bids obviously remain as stocks hold the gap higher and the indices move higher. Resistance is still there -- not futile, but still there. We are watching many stocks that have gapped higher to or near entry points, e.g. TEAM, CAT, XLNX.

SP500 9.43, 0.34%
NASDAQ 40.45, 0.54%
DJ30 117.61, 0.45%
SP400 0.17%
RUTX 0.27%
SOX 1.18%
NASDAQ 100 0.47%

______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Market Alert - Pre-Market

Futures vs FV: SP +15.13; DJ +174.19; NASDAQ +53.37

Futures jumped Sunday as the Trump administration announced, just 20 minutes before futures opened, that the March 1 tariff deadline with China was extended. Those gains have obviously held and indeed have built into today's open. There was much speculation a deal would be reached after the 'more likely than not' comments late week, and the extension is, well, an extension of that belief. Trump and Xi still have to meet in March so this is as good as it gets for now, and of course, the market loves it.

It is Buffett morning on CNBC so that network is worthless in terms of news as they all slobber over Buffett.


M&A: DHR buying GE's pharma business. GOLD makes a hostile offer for NEM as gold wars heat up.


Oil: Trump says oil is too high, telling OPEC to 'relax' as the world ''cannot take a price hike.' Oil is down.


TGT: Inviting retailers to its website a la WMT in order to compete with WMT. And AMZN.


Week: Tons of data including Powell making his address to Congress on the state of monetary affairs. Loads of other data with Personal Income and Spending late week, always important, particularly after those retail sales.


OTHER MARKETS
Bonds: 2.682% versus 2.654%

EUR/USD: 1.1356 vs 1.1341

USD/JPY: 110.81 vs 110.68

Oil: 55.87, -1.39

Gold: 1332.40, -0.40


Futures continue to hit new session highs as the trade deal dam has burst. No cracks in the morning rise, just a steady move higher after the upside gap. Thus, the move may have some staying power and we will watch to see what kind of entries we can get after an upside gap open.

______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

Alert Key
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Sunday, February 24, 2019

Trade Deal 'More Likely Than Not' (Weekend Newsletter)

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Weekend Newsletter for
February 24, 2019


Table Of Contents

1) MARKET SUMMARY from THE DAILY

2) STOCK SPLIT REPORT

3) IH ALERTS

4) SUCCESS TRADING GROUP

5) COVERED CALL SERVICE

      

Jon Johnson
1) MARKET SUMMARY
         > >From "The Daily" by Jon Johnson at InvestmentHouse.com


No trade deal announced, but the President and top Chinese negotiator in DC concurred there would likely be one.

- Stocks start stronger, fade after no trade deal, recover after President, China say trade deal likely.
- Indices moving up to test the top of the range, SP400 is through the range, others trying to follow.
- Plenty of different groups vying for investment dollars, using some decent patterns as lures.
- Chips start higher again, software setting up again.
- Indices are certainly at resistance, but this far showing no signs of rolling over. As more solid stock patterns appear, they only reinforce an attempt to break through resistance.


Market Summary (continued)
No trade deal announced, but the President and top Chinese negotiator in DC concurred there would likely be one. The President stated a deal was 'more likely than not,' while the top Chinese negotiator opined an agreement would occur. Trump further said he and Xi would meet a Mar-A-Lago in March, again stating that only they could hammer out the final details of a deal.

Stock futures were higher and stocks opened higher, rallying into midday. After that, a slump into mid-afternoon took the indices back to the early session lows; still positive but well off the highs.

Then the announcements regarding trade. The word leaked that no deal was firmed up and that helped the selling. The President held a press conference and as the news percolated out, the comments from Trump and the Chinese lead negotiator hit. That news helped turn a midmorning to midafternoon slump into a rally back upside in the last 1.5 hours. The indices closed at or near session highs with the indices putting more moves on the October/December resistance.

Read "The Daily" Entire Weekend Summary
Watch Market Overview Video
Watch Technical Summary Video


Here's a trade from "The Daily" and insights into our trading strategy:


Chart by StockCharts.com
Please turn on your ability to receive graphics. We are providing you with a detailed chart of this stock. If you are unable to turn on graphics, please CLICK HERE or on the *Read Our Weekend Report Online* link above.


FIVN (Five9 Inc.)
Company Profile
Entered FIVN on 1/30 as it broke higher from a 5 month cup with handle base. We picked up the stock for $49.25 and April $50.00 strike call options for $4.3. Good breakout continued over the next several sessions, taking FIVN to over $53. Then it tested laterally as stocks do after a breakout, rallying again into this past week. Tuesday it announced earnings afterhours, and Wednesday gapped upside. That gap higher took FIVN past the target and we sold stock for $57.25, banking 16%. We sold the options at $8.50, banking close to 100%. Ironically, FIVN reversed the gap that session.

ROKU (Roku, Inc.)
Company Profile
Bought into ROKU on 2/6 as it looked as if it was ready to resume a break higher over the 200 day SMA. Picked up the stock for $48.28 and April $48.00 strike calls for $6.00. ROKU then faded below the 200 day SMA, but just for a session as it bounced around that level. It found footing and on 2/12 started a move higher. Rallied into this week, testing a bit on Thursday before its afterhours earnings release. Beat the street, and Friday ROKU gapped upside. Big. It surged 25% on the session, of course hitting our target along the way. The move was good for a 30+% gain on the stock. The call options are selling for almost $17.00 -- a gain over 175%. We will see how far this breakout run takes it and then bank some solid gain.

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2) STOCK SPLIT REPORT

Here's a pre-announcement play and our current analysis.

Chart by StockCharts.com
Please turn on your ability to receive graphics. We are providing you with a detailed chart of this stock. If you are unable to turn on graphics, please CLICK HERE or on the *Read Our Weekend Report Online* link above.
NOW (ServiceNow--$235.00; +4.99; optionable): Cloud software
Company Profile
EARNINGS: 05/01/2019
STATUS: Similar to TEAM, similar to WDAY, NOW hit a new high two weeks back and has worked laterally in a tight consolidation. You like to see a stock hold its gains as it consolidates a new move as that shows no one wants to sell it. It is simply idling while the bids rest and reset, preparing to drive it higher once more. NOW posted a tremendous gap in late January on its earnings, gapping the stock out of a 5 month base. What a gap. It rallied, and this lateral move is the test. Friday a good break higher on rising volume looked promising. Thus, we see if NOW can deliver a break higher once more, and if so, we like the potential to catch the next leg higher following this first test of the gap breakout. A move to the initial target gains 50% on the options.
CHART VIDEO
Volume: 1.981M Avg Volume: 2.22M
BUY POINT: $237.51 Volume=2.6M Target=$250.94 Stop=$233.18
POSITION: NOW MAY 17 2019 240.00 C - (49 delta)

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3) IH ALERTS

DVN (Devon Energy--$29.65; -0.20; optionable): Oil and gas
Company Profile
EARNINGS: 05/21/2019
STATUS: Most oil and gas stocks declined into December with other stocks, but the energy group has lagged in the recovery. Nonetheless, they are setting up good patterns and have not become overextended at all. DVN sold off into December and in doing so formed the head of a 3+ month inverted head and shoulders. Gapped upside Wednesday after edging up through the 50 day MA just before. Tested Thursday and Friday and likely tests a bit more to start the week. Nice solid breakout higher, however, and as it starts back up after completing this test we want to move in for a rally to the 35-36 range near the 200 day SMA. 17.5% on the stock to that target, over 100% on the options.
CHART VIDEO
Volume: 11.957M Avg Volume: 8.679M
BUY POINT: $30.24 Volume=12M Target=$35.54 Stop=$28.48
POSITION: DVN MAY 17 2019 30.00 C - (53 delta) &/or Stock

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Chart by StockCharts.com
Please turn on your ability to receive graphics. We are providing you with a detailed chart of this stock. If you are unable to turn on graphics, please CLICK HERE or on the *Read Our Weekend Report Online* link above.
4) SUCCESS TRADING GROUP
--by the MarketFN STG Team

HON (Honeywell International Inc.)
Company Profile
Our Success Trading Group will be watching closely for entry points next week. We currently like Honeywell International Inc. (Ticker: HON) at its current price for new positions.

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.

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Chart by StockCharts.com
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5) COVERED CALL PLAY

LEN - Lennar Corp. is currently trading at $50.25. The April $50.00 Calls (LEN20190420C00050000) are trading at $2.51. That provides a return of about 5% if LEN is above $50.00 on expiration Friday in April.
Company Profile



Learn more about our Covered Call Tables


PREMIUM SERVICES
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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.
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Saturday, February 23, 2019

The Daily, Part 1 of 3, 2-23-19

* * * *
2/23/2019 Investment House Daily
* * * *

Investment House Daily Subscribers:

MARKET ALERTS:

Targets hit: ROKU
Entry alerts: COHR; VSH
Trailing stops: MC; UCTT
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

TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/ts/ts.mp4

********************************************************************

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

- Stocks start stronger, fade after no trade deal, recover after President, China say trade deal likely.
- Indices moving up to test the top of the range, SP400 is through the range, others trying to follow.
- Plenty of different groups vying for investment dollars, using some decent patterns as lures.
- Chips start higher again, software setting up again.
- Indices are certainly at resistance, but this far showing no signs of rolling over. As more solid stock patterns appear, they only reinforce an attempt to break through resistance.

No trade deal announced, but the President and top Chinese negotiator in DC concurred there would likely be one. The President stated a deal was 'more likely than not,' while the top Chinese negotiator opined an agreement would occur. Trump further said he and Xi would meet a Mar-A-Lago in March, again stating that only they could hammer out the final details of a deal.

Stock futures were higher and stocks opened higher, rallying into midday. After that, a slump into mid-afternoon took the indices back to the early session lows; still positive but well off the highs.

Then the announcements regarding trade. The word leaked that no deal was firmed up and that helped the selling. The President held a press conference and as the news percolated out, the comments from Trump and the Chinese lead negotiator hit. That news helped turn a midmorning to midafternoon slump into a rally back upside in the last 1.5 hours. The indices closed at or near session highs with the indices putting more moves on the October/December resistance.

SP500 17.79, 0.64%
NASDAQ 67.83, 0.91%
DJ30 191.18, 0.70%
SP400 0.80%
RUTX 0.92%
SOX 1.08%
NASDAQ 100 0.79%

VOLUME: NYSE -7%, NASDAQ +14%. NYSE trade languished below average again while NASDAQ trade moved above average for the first time in three weeks as some key stocks started higher again.

ADVANCE/DECLINE: NYSE 2.7:1, NASDAQ 2.5:1. Small and midcaps helping push higher.

SP400 moved on through as the midcaps continue leading. The others are moving up through the that range as well. After slowing the move Tuesday to Thursday, the indices bounced nicely to end the week.

The 'old guard' was moving, i.e. many of the initial leaders in the entire recovery: software, tech, drugs, chips as well. Then there are others stepping up, e.g. some Chinese stocks such as BABA, JD, TME.

Some of the recent movers took a pause as the older leaders bounced -- energy was off on the session and machinery and manufacturing still look good, but still looking for a new solid upside break.

With the resurgence of the initial leaders -- sans FAANG for the most part -- there are plenty of stocks to support a move higher. Friday that is what they were doing. Very pleased to let the move upside continue, let some positions continue working higher, pick up a few more good movers, and bank a bit more gain.

That does not mean we are now convinced the indices will break through the range and move on to new highs. After all, SP500 is still below 2800 and DJ30 is still dancing at 26,000, the first rungs of the October/December range. Some serious resistance from the top of this range, and even then the old highs after that.

The run from the December low is now 9 weeks old and in some cases has topped the December high and even the November high where the selloff started. A long time with no significant test, moving into key resistance. At some point the indices are going to test this move either with an ordinary pullback to test resistance broken, a deeper test to perhaps the trading range lows, and in the extreme, back toward the December low.

Of course that means the upside probabilities are less and less, but the indices and stocks are not showing any signs of running out of steam at this point. Indeed, more stocks are joining in and the initial leaders, after a rest, are coming back around. Sure does not look and act as a rollover.

Thus, looks as if there is more upside for now, and we will continue to play that until breakouts and breaks upside start reversing in numbers.


THE CHARTS

SP400: You have to lead with the SP400 midcaps again as late week they broke higher through the 200 day SMA as well as the top of the October/December range. With that move they are making good on the inverted head and shoulders pattern from early November to early February. Not a massive new move upside, but as has been the case for four weeks now, a solid, steady move. Domestic implications are the economy is not as frail and fraught with potential recession as many fear.

RUTX: Cleared the 200 day SMA Friday as well as the November peak. Now just the October recovery peak remains in its range. RUTX has already recovered 100% of the December and November selloffs but is a long way from the 2018 peak. As with midcaps, the success and relative strength from small caps of late shows confidence in the US economy.

DJ30: Over the 26K level on the week, but hardly impressively so. The Dow rallied well two Fridays back then slid laterally this week just below resistance from the Oct/Dec range. Thus far not trying to break through the top of the range, but if stocks such as CAT, MMM continue higher and AAPL breaks higher once more, the Dow will have some potential to break through. As of yet, a low volume bumping at the top of the range.

SP500: Over the 200 day SMA on the week but still below the peaks of the trading range. 2800 was tested but remained unbroken. As noted last week, everyone and his brother is watching the 2800 - 2830 level as resistance.

NASDAQ: NASDAQ moved through the 200 day SMA as well with a more definitive Friday move, showing a solid price gain and a shot of very solid above average volume. Cleared the December peak on the move but is still below November and October at the top of the range. It is working and some big name techs that are not FAANG are working, e.g. MSFT, INTC, ORCL, CSCO.

SOX: Steady week, continuing to trend higher over the 10 day EMA. Several groups of chips started back upside Friday. Not a bad move at all.

LEADERSHIP

Software: Setting up well as noted previously. TEAM, NOW, NEWR, WDAY are all leaders that tested, held gains, and look strong once more.

FAANG: Still a laggard group. FB, GOOG, AMZN, AAPL all in lateral moves. NFLX is not bad at all.

Energy: Back and forth on the week but finished the week still holding good patterns. DVN, TELL, PTEN, CVX, COP -- many have promising patterns.

Machinery: CAT in a nice test of the move over the 200 day SMA. CMI worked mostly laterally on the week but still trended up the 10 day EMA. DE recovered very well off a 50 day MA drop on earnings.

Manufacturing: MMM, UTX still setting up quite nicely.

Home-related: HD is in a great flat flag test. LOW has enjoyed a super 2 weeks. DHI moved to a higher recovery high Friday. TOL working. TREX faded on the week but still a solid pattern.

Financials: V broke nicely higher Friday. Regional banks decent, e.g. STT, TCBI. C was upgraded but that didn't do anything for it or any of the other bank stocks for that matter.

Chips: Came back to life on the week. RMBS, SIMO, SMTC, INTC. Still like how NVDA is setting up.

Metals: Industrial metals still look decent, e.g. CLF, MUX. Steel making some good moves, e.g. SID.



MARKET STATS

DJ30
Stats: +181.18 points (+0.70%) to close at 26031.81

Nasdaq
Stats: +67.84 points (+0.91%) to close at 7527.54
Volume: 2.42B (+14.15%)

Up Volume: 1.67B (+829.88M)
Down Volume: 718.14M (-531.86M)

A/D and Hi/Lo: Advancers led 2.45 to 1
Previous Session: Decliners led 1.39 to 1

New Highs: 126 (+51)
New Lows: 20 (+3)

S&P
Stats: +17.79 points (+0.64%) to close at 2792.67
NYSE Volume: 796.076M (-6.56%)

Up Volume: 516.496M (+246.563M)
Down Volume: 252.163M (-320.713M)

A/D and Hi/Lo: Advancers led 2.66 to 1
Previous Session: Decliners led 1.57 to 1

New Highs: 162 (+72)
New Lows: 9 (+1)

SENTIMENT

VIX: 13.51; -0.95
VXN: 16.95; -1.24
VXO: 13.87; -0.99

Put/Call Ratio (CBOE): 0.79; -0.14

Bulls and Bears:

Getting a bit bullish with a move over 50 while bears dropped right back below 21 after the short break higher. Fear continues to subside.

Bulls up again, but bears moved up a bit as some discomfort with the long recovery rally.

Bulls: 51.9 versus 49.5

Bears: 20.7 versus 21.5

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: 51.9 versus 49.5
49.5 versus 48.6 versus 45.8 versus 45.4 versus 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: 20.7 versus 21.5
21.5 versus 20.6 versus 20.6 versus 21.3 versus 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: 2.654% versus 2.695%. TLT is working up and down in a four week range from 120.50 to 122.50.

Historical: the last sub-2% rate was in November 2016 (1.867%). Last trade over 3% was November 2018.

2.695% versus 2.641% versus 2.641% versus 2.664% versus 2.654% versus 2.706% versus 2.686% versus 2.672% versus 2.634% versus 2.657% versus 2.695% versus 2.702% versus 2.725% versus 2.684% versus 2.64% versus 2.679% versus 2.710.5 versus


EUR/USD: 1.13332 versus 1.13363. Euro rebounded to the 20 day EMA on the week, stalled there for now.

Historical: 1.13363 versus 1.14490 versus 1.13544 versus 1.12922 versus 1.12955 versus 1.12616 versus 1.3323 versus 1.12816 versus 1.13218 versus 1.13396 versus 1.13645 versus 1.1396 versus 1.14350 versus 1.14554 versus 1.14478 versus 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: 110.670 versus 110.664

Historical: Last below 109 in June 2018 then tumbled to 107 in early January 2019. 114.51 is the recent high from October 2018.

110.664 versus 110.786 versus 110.848 versus 110.469 versus 110.462 versus 110.945 versus 110.523 versus 110.488 versus 109.754 versus 109.793 versus 109.803 versus 109.777 versus 109.987 versus 109.53 versus 108.85 versus 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


Oil: 57.26, +0.30. Oil moved up well the past two weeks from a 50 day SMA test. Moved past the late January recovery high and to the mid-November consolidation price -- where it failed.


Gold: 1332.80, +5.00. Gold broke to a higher high Tuesday then gave it up. Held at the 10 day and rebounded from there. Still looks in position to continue higher.

End part 1
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