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2/28/2019 Investment House Daily
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Investment House Daily Subscribers:
Targets hit: MU; ULTA; V
Entry alerts: None issued
Trailing stops: TREX
Stop alerts: DHI; HAL
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Market Summary Video, Plays and Play Videos, and Play Table with play annotations will issue Wednesday, Weekend.
Monday a Market Summary video, new plays, play table annotations.
Tuesday and Thursday reports will contain the market summary, chart links to view the index charts, and updated play table.
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.
- 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%
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.
To view, click on the following links:
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.
Stats: -69.16 points (-0.27%) to close at 25916.00
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)
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)
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
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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