Tuesday, February 05, 2019

The Daily, Part 1, 2-5-19

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2/5/2019 Investment House Daily
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Investment House Daily Subscribers:


Targets hit: CRON; DOCU
Entry alerts: ENPH; FB; HMY; SIMO; V
Trailing stops: None issued
Stop alerts: None issued

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

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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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- Low volatility upside logs another day in the third leg of the rally.
- GOOG epitomizes the mood, rallying for a nice gain on an earnings disappointment.
- NASDAQ moves up to the 200 day SMA and top of the range though SP500, DJ30 still have room to move.
- Some money to new leaders when the current leaders pause would be a very good sign.
- The next big test is going to be those trading range highs.

The bullish action continued Tuesday with SP500 rising up to the 200 day SMA, joining DJ30 and SOX as indices that have reached -- and with DJ30 and now SOX -- surpassed that key level. All indices closed higher, but it was more a NASDAQ 100 move as those stocks logged the best gains.

SP500 12.83, 0.47%
NASDAQ 54.54, 0.74%
DJ30 172.15, 0.68%
SP400 0.45%
RUTX 0.18%
SOX 0.48%
NASDAQ 100 0.91%

VOLUME: NYSE +6%, NASDAQ +8%. Just back above average on NASDAQ, still below average on NYSE. Definitely a NASDAQ large cap move.

ADVANCE/DECLINE: NYSE 1.7:1, NASDAQ 1.3:1. Yes, definitely a large cap session. Typically you like to see better breadth on a move. After more than a week of rallying, however, there is nothing wrong with narrower breadth as the last part of the move focuses on the big names.

Uh, oh. I said 'last part' of the move. That does not mean 'end.' Just that the indices have put on a good 8 or so days upside into or near next resistance, and typically a leg will run its course in that period.

Also, earnings have provided a solid catalyst -- even with the top line misses -- on the move, and it is almost to the point where investors say 'okay, great. What next?'

FOMC out and at bay, allowing stocks to rise. Even with many top line misses, enough 'name brand' stocks reported good enough results to keep the upside moving. Good enough economic data added to a 'just right' mix.

Voila, a nice third leg. Still going as of Tuesday, and rising on some decent volume. But, it was mostly the same stocks doing the moving, e.g. FAANG -- and particularly GOOG that overcame a lower open for a very solid gain, software, some chips such as INTC that finally came to life. Food looks somewhat tasty (PEP, CMG, KO, WING, GIS). Financials still look promising; promises, promises. Energy services and refining are trying to set up. There is potential out there, but it needs to turn from potential to good moves to give the same market leadership more support.

Some leaders are a little overdone and ready to test. Pot stocks (CRON), though CGC is already pausing. Software has led, but that leadership has many at a point to take a breather. Chips are similar with some topping, others still working.

So, for now, the upside rally continues and looks well. Don't be surprised, however, if some of the recent leaders start to test their recent very good moves. SP500, NASDAQ at resistance, good week+ moves, third leg running about the normal duration for one of these legs.

The key to a continued move higher is to see other groups contribute to the upside. Some of those food stocks, energy, and yes, financials (could it possibly be?). That tells the tale of the market rally, i.e. other leadership stepping up.

If not, then after perhaps another short test, the indices take on the tops of the October/December range, and that would mean taking on new highs. Looking at the large caps for that action as the small and midcaps are a long way out. Once at those highs, if no other leadership emerges, then we see if the sellers hit the market and try to drive it back down. Frankly, that often happens just before the prior highs, and that means the range tops formed after the October high. Thus, those will be key areas, but of course the indices have to get there first.


To view, click on the following links:


SP500 is within 4 points of the 200 day SMA. A nice solid move from the lateral consolidation at the 50 day MA. That also puts SP500 55 to 60 points from the trading range highs. Still plenty of room to move higher to get there and thus far the profit takers have not shown up.

DJ30 moved again higher above the 200 day SMA. 25,800 to 26,000 to 26,200 puts DJ30 at the top end of the trading range. Another 400 to 800 points upside from the Tuesday close.

NASDAQ is roughly 50 points from its 200 day SMA (7454). The top of the October/December range runs from 7485 to 7575 with a gap point from October around 7585. In short, NASDAQ (7402 close) is close to bumping that resistance, but it is moving well using the same group of leaders.

SOX rallied up through the 200 day SMA by a few points. It is now at the start of the July to October range formed before the October dive lower. It moved past the June low and to the mid-August low -- definitely in the range. A strong move indeed and it looks as if some stocks are ready to test but others such as INTC that were languishing are making new breakouts.

SP400 continued higher as well, looking quite good as it moves toward the 200 day SMA, still 45 points away. The tops of the October/December range are also just 45 to 50 points away. Looks like a point that will act as some resistance if SOX continues -- it has put in a very strong move.

RUTX gapped to a doji. Not bd, not much strength, however, and a long way from the top of the Q4 range and even farther from the 200 day SMA (1588). 1558 is the December lower high while the November high is 1578. For now it is following the rest of the indices.


The market continues showing strength out of weakness. GOOG disappoints, gaps lower, reverses to a nice gain. The mindset is to rally and that overcomes any obstacles thus far.

Even such moves, however, do run out of steam and need to test to reset for the next run. With NASDAQ so close to the top of the range and DJ30, SP500 closing in rapidly, it could be the move finishes out the move to resistance. That is a nice additional move, certainly one to let plays run. In addition, if the current leaders test after these good moves you can look at some new leaders . . . if they can make the break higher. Rotation to these while the current leaders take a breather would be a very good indication of market health.


Stats: +172.15 points (+0.68%) to close at 25411.52

Stats: +54.55 points (+0.74%) to close at 7402.08
Volume: 2.27B (+8.1%)

Up Volume: 1.3B (-80M)
Down Volume: 932.45M (+259M)

A/D and Hi/Lo: Advancers led 1.31 to 1
Previous Session: Advancers led 2.18 to 1

New Highs: 75 (+16)
New Lows: 18 (0)

Stats: +12.83 points (+0.47%) to close at 2737.70
NYSE Volume: 839.037M (+6.21%)

Up Volume: 512.517M (-33.005M)
Down Volume: 311.28M (+82.081M)

A/D and Hi/Lo: Advancers led 1.71 to 1
Previous Session: Advancers led 2.07 to 1

New Highs: 94 (+32)
New Lows: 4 (-2)


VIX: 15.57; -0.16
VXN: 19.47; -0.21
VXO: 15.30; +0.23

Put/Call Ratio (CBOE): 0.83; -0.01

Bulls and Bears:

Bulls rebounded farther but the move has slowed after that crash into the thirties during the December selloff. Bears are fading but bulls and bears crossed and did their 'thing' in terms of a contrary signal.

Bulls: 45.8 versus 45.4

Bears: 20.6 versus 21.3

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

Bulls: 45.8 versus 45.4
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: 20.6 versus 21.3
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


Bonds: 2.702% versus 2.725%. Bonds gapped off the Monday doji on the pullback.

Historical: the last sub-2% rate was in November 2016 (1.867%). 2.725% versus 2.684% versus 2.64% versus 2.679% versus 2.710.5 versus 2.738% versus 2.748% versus 2.734% versus 2.741% versus 2.75% versus 2.788% versus 2.752% versus 2.727% versus 2.718% versus 2.706% versus 2.699% versus 2.733% versus 2.712% versus 2.731% versus 2.694% versus 2.668% versus 2.552% versus 2.643% versus 2.686% versus 2.716% versus 2.774% versus 2.811% versus 2.736% versus 2.788% versus 2.803%. versus 2.762% versus 2.821% versus 2.855% versus 2.895% versus 2.913% versus 2.908% versus 2.884% versus 2.863% versus 2.854% versus 2.892% versus 2.915% versus 2.979% versus 2.993% versus 3.032% versus 3.061% versus 3.058%

EUR/USD: 1.1396 versus 1.14350. Dollar surges, dropping the euro through the 50 day EMA.

Historical: 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: 109.997 versus 109.987. Dollar has risen to the 50 day MA -- kind of a bear flag as noted before. Key point to watch.

Historical: Last below 109 in June 2018: 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 versus 108.802 versus 108.705 versus 108.517 versus 107.173 versus 107.515 versus 109.687 versus 110.273 versus 110.845 versus 111.190 versus 110.337 versus 111.223 versus 111.21 versus 112.521 versus 112.477 versus 112.653 versus 113.382

Oil: 53.66, -0.90. Faded back to the 50 day EMA and above 52.50 support.

Gold: 1319.20, -0.10. Nice 1-2-3 pullback is in place after that solid run to end January.

End part 1
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