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2/20/2019 Investment House Daily
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Targets hit: FIVN
Entry alerts: CLF; HAL; NBL; NBR
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- Another low to high move, slow but effective.
- New groups continue to add to the move, e.g. energy.
- Prior leaders start higher in some cases, others are ready again.
- Stocks moving decently even as the indices start hitting resistance.
Stocks once again managed some upside with the small and midcaps again leading. The gains were not much -- as the indices approach or bump (as the case may be) the Oct/Dec trading range top, the gains are more muted. Serious level, harder to surge ahead, and indeed the indices still have yet to make the break.
SP500 4.94, 0.18%
NASDAQ 2.30, 0.03%
DJ30 63.12, 0.24%
NASDAQ 100 -0.06%
VOLUME: NYSE +11%, NASDAQ +3%. NYSE trade back up to near average. NASDAQ trade back up just over average. Good upside volume.
ADVANCE/DECLINE: NYSE 3:2, NASDAQ 1.2:1.
Not that there are no good moves. Stocks from energy performed very well along with metals of all kinds. The chips that had put in good tests and were ready to rebound (e.g. RMBS, UCTT). Drugs enjoyed some success. Machinery showed some good moves, e.g. CAT, BA and DE. Financials were better on the small end, e.g. STT and TCBI.
Not a lot of blowouts upside, but some steady, solid moves.
The action, of course, is setting up a showdown at the next resistance. The index moves are slower, the initial leaders are mostly testing, and the market is seeking more groups to really step up and lead if there is a shot of breaking past this next resistance. Indeed, SP500 was 10 points shy of 2800, the first point in the range most are watching.
Many of the stocks making the recent moves, however, are nowhere near the prior highs. While some high horsepower leader stocks shot the market back up off the lows (e.g. software, chips), many stocks, even after some good recoveries, are well off resistance.
That adds some spice for certain as the indices make their approach. There are plenty of stocks making moves that can make us money and we are definitely playing them -- we picked up energy stocks today on top of the financial, industrial and chips taken just before. The jury is still out on whether the indices can make the break higher with the aid of these new patterns that are moving well, but still have to overcome levels everyone, and I mean everyone, is watching.
Even the Fed. The FOMC minutes confirmed the flip to market support versus getting interest rates and the balance sheet to certain levels. Indeed, most said they wanted to agree to end the balance sheet reduction before year end. The Fed anticipates purchasing $20B to $30B in assets per month. Wow. Sure SOUNDS like QE all over again. The commentary was long and wide-ranging but the Fed is on the market's side.
SP400 is crossing the top of the range right now.
SP500 is bumping at 2800, the start of the Oct/Dec range.
NASDAQ is in the midst of it right now. NASDAQ 100 has spent the past week bumping at the 200 day SMA as FAANG struggles to move forward.
RUTX tapped the 200 day SMA on the high, and that also matches the November peak, the second highest peak in the Oct/Dec range.
DJ30 is at 26,000 and the early December peak; the November peak is the highest in the range (26,278; closed at 25,954.44).
It is clear the test is on. Thus far other stocks are stepping up to push higher while the horses that led the surge, e.g. software, are resting.
Many predict an end to the recovery here or not much higher. Some say a test of the December low is still to come, others are not as draconian. Others say the market pauses for a bit and then continues upside, or it just continues upside.
All are guessing more or less though one group will be correct. All I can say is the resistance is real and it is serious. A yearlong topping pattern spanned 2018. That has not been unseated yet. After this kind of run from the December low you would expect some kind of test; I am just not as omniscient as some others believe they are.
I see good patterns still setting up in stocks that are in no way overbought. They are starting to move higher. Not sprints, but moving higher. Most of these stocks are not sprinters anyway: energy, manufacturing, materials, metals, housing -- stodgier, but able to produce good returns. We will play them as long as they work.
It is interesting that stocks such as UCTT, RMBS started back upside. TEAM looks to be in position to resume its breakout move. COUP, LRCX. If they start moving again there is firepower to move the indices past expectations. Not betting on it, just playing good patterns that make the moves while watching index action and knowing the breakout odds are at best 50-50.
Stats: +63.12 points (+0.24%) to close at 25954.44
Stats: +2.30 points (+0.03%) to close at 7489.07
Volume: 2.18B (+2.83%)
Up Volume: 1.12B (-100M)
Down Volume: 933.01M (+71.15M)
A/D and Hi/Lo: Advancers led 1.18 to 1
Previous Session: Advancers led 1.62 to 1
New Highs: 103 (0)
New Lows: 22 (-5)
Stats: +4.94 points (+0.18%) to close at 2784.70
NYSE Volume: 930.376M (+11.19%)
Up Volume: 553.531M (+24.223M)
Down Volume: 363.545M (+76.338M)
A/D and Hi/Lo: Advancers led 1.54 to 1
Previous Session: Advancers led 1.76 to 1
New Highs: 99 (-23)
New Lows: 7 (-3)
VIX: 14.02; -0.86
VXN: 18.02; -0.08
VXO: 14.32; -0.76
Put/Call Ratio (CBOE): 0.79; -0.07
Bulls and Bears:
Bulls up again, but bears moved up a bit as some discomfort with the long recovery rally.
Bulls: 49.5 versus 48.6
Bears: 21.5 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: 49.5 versus 48.6
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: 21.5 versus 20.6
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: 2.641% versus 2.641%
Historical: the last sub-2% rate was in November 2016 (1.867%). Last trade over 3% was November 2018.
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: 1.13390 versus 1.13544. Moved higher to the 50 day EMA then faded to flat after that solid Tuesday surge.
Historical: 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: 110.786 versus 110.848
Historical: Last below 109 in June 2018 then tumbled to 107 in early January 2019. 114.51 is the recent high from October 2018.
110.848 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: 57.16, +0.71. Continues moving up after testing and holding the key 52.50 level.
Gold: 1347.90, +3.10. Adding a bit more upside after that big Tuesday upside move.
End part 1
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