Tuesday, February 12, 2019

The Daily, Part 1 of 3, 2-12-19

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2/12/2019 Investment House Daily
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Investment House Daily Subscribers:


Targets hit: TREX
Entry alerts: CRM; DOCU; FTNT; LULU; ON
Trailing stops: None issued
Stop alerts: None issued

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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.


- A trio of positives gap stocks upside, keeps the move going.
- Fourth leg could be underway.
- Resistance still looms, but we said money could be made on the move.

A positive news confluence, a triumvirate of hopeful headlines helped trigger the next leg upside in stocks. A 'deal in principle' on the federal budget, a 'no collusion' finding by the Senate Intelligence Committee (somewhat an oxymoron), and a trade deal that "looks good," so much so it might be worth delaying the March 1 tariff deadline helped start stocks higher and added juice to the move as the session progressed.

Stocks gapped higher, stair-stepped higher into the afternoon session, then idled to the close the last 2.5 hours. The idle is okay: the indices did not give back any gains.

SP500 34.93, 1.29%
NASDAQ 106.72, 1.46%
DJ30 372.65, 1.49%
SP400 1.05%
RUTX 1.27%
SOX 2.13%
NASDAQ 100 1.53%

VOLUME: NYSE +7%, NASDAQ +12%. Still below average on both exchanges, but solidly higher as buyers were stronger Tuesday than the sellers on the 4-day fade. That fade was more of just not buying versus selling, and Tuesday more buyers showed up.

ADVANCE/DECLINE: NYSE +3:1, NASDAQ +2.8:1. Very solid, very decent upside breadth.

Monday I said there was plenty of room for the indices and stocks to run in a fourth leg before hitting the top of the trading ranges. Tuesday it sure looked as if that move started on DJ30, SOX, SP400, RUTX, while SP500 and NASDAQ made good moves if not new breakouts over the last of the third leg upside.

We picked up positions on some software (CRM, FTNT), LULU, ON, DOCU. Good patterns, good moves. Will we look for more? Yes. AAPL can still move. NFLX might prove a new buy. GOOG is showing life. NVDA, mostly despised and spat upon these days, has an inverted head and shoulders it is working on. There are still plays that can be made upside in this last move toward resistance.


To view, click on the following links:


SP400 gapped above the early February third leg high, closing near the session high. Still below the 200 day SMA and the top of the October/December trading range, but a very solid new break upside.

RUTX gapped upside as well, closing near the high and also the top of the range and the 200 day SMA that is just a bit higher. A twin to SP400.

DJ30 rallied off the 4-day test to the 200 day SMA. Closed above the leg three closing high, a bit better volume. just below 25,500, still room to 26,250ish.

SP500 gapped and rallied to close at the 200 day SMA. The close just eclipsed the early February high. Okay, cracking the 200 day but not breaking it. Working well but this is step one in a leg four move. 2800 - 2815 (closed at 2745) is the top of the range.

NASDAQ gapped and rallied to close 12 points above the early February closing high and still below the 200 day SMA. NASDAQ is working well, but it has not made any new powerful move just yet. It is definitely working on it but of all the indices, it is the closest to the prior resistance and may engage in some hand to hand combat soon.

SOX gapped smartly off the 200 day SMA test, closing just over the early February closing peak. Many chips were on the move and SOX continues to show leadership qualities.


Some very interesting strength shown in new areas.

Homebuilders: Very strong upside on volume. DHI +7.55% as it breaks through the 200 day SMA from a very nice setup. TOL jumps off a weeklong test of the 200 day SMA.

Some building materials stocks showed similar enthusiasm, e.g. TREX. A gap and run took TREX to our initial target. STLD, ZEUS in steel look solid.

Software looked tired in some instances, but in others such as CRM it was up again. TEAM, COUP, NOW, HUBS all added more upside as well though several are getting a bit extended on this move. That is okay; get more extended because we own several of these. Just not necessarily the best buy on the leaders.

Industrial/Manufacturing: Some impressive moves. MMM up 2.8% on a gap over the 200 day SMA. CAT, EMR, CMI up very nicely.

Food/eateries: A big soft in some cases as they ran when others did not, e.g. CMG. KO continues creeping higher, PEP trying to move. WING up again and on good volume. Not quite flying but moving fast; chickens are not great fliers but they can get around fast, especially their wings.

Retail: Some interesting setups showing some volume. In apparel, LULU jumped 5%, NKE +1.2%. BBY not breaking higher but showing volume. TJX is interesting, WMT possibly. Not enough here yet overall.

Transports: Rails jumped but not off the tracks, e.g. NSC, CSX. Airlines so-so. Truckers showing some bids, e.g. SAIA, WERN (big volume).

Chips: Still good moves. MCHP gapped and rallied on volume. ON up but volume faded. INTC over the 200 day SMA. TXN continued upside. None of those on very good trade. CY did break upside on volume. Others in good tests after early leadership, e.g. UCTT, RMBS.


Stats: +372.65 points (+1.49%) to close at 25425.76

Stats: +106.71 points (+1.46%) to close at 7414.62
Volume: 2.13B (+12.11%)

Up Volume: 1.56B (+579.72M)
Down Volume: 544.68M (-310.06M)

A/D and Hi/Lo: Advancers led 2.82 to 1
Previous Session: Advancers led 1.52 to 1

New Highs: 77 (+13)
New Lows: 13 (-20)

Stats: +34.93 points (+1.29%) to close at 2744.73
NYSE Volume: 870.303M (+7.30%)

Up Volume: 670.467M (+186.057M)
Down Volume: 186.207M (-128.157M)

A/D and Hi/Lo: Advancers led 3.02 to 1
Previous Session: Advancers led 1.9 to 1

New Highs: 94 (+8)
New Lows: 8 (-3)


VIX: 15.43; -0.54
VXN: 18.69; -1.38
VXO: 15.65; -0.87

Put/Call Ratio (CBOE): 0.78; -0.09

Bulls and Bears:

Bulls continue to recover, bears hold steady, both after really large moves during the late 2018 selling.

Bulls: 48.6 versus 45.8

Bears: 20.6 versus 20.6

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

Bulls: 48.6 versus 45.8
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: 20.6 versus 20.6
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: 2.686% versus 2.672%

Historical: the last sub-2% rate was in November 2016 (1.867%). 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 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: 1.13323 versus 1.12816. Euro broke back upside and back into the lows from late November to January at 1.130. Perhaps a false break lower leading to a rebound.

Historical: 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: 110.523 versus 110.488. Took a pause after the big Monday break upside.

Historical: Last below 109 in June 2018: 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 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: 53.10, +0.69. More of a build than expected has oil higher afterhours.

Gold: 1314.00, +2.10. Still a nice two week fade testing near support.

End part 1
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