Monday, March 11, 2019

The Daily, Part 1, 3-11-19

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3/11/2019 Investment House Daily
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Investment House Daily Subscribers:


Targets hit: None issued
Entry alerts: GOOG; INTC; ISRG; MSFT; V; VZ
Trailing stops: None issued
Stop alerts: None issued

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- Chinese stimulus overpowers Chinese trade worries.
- 50 day EMA bounces post solid gains.
- US data better after a weak December. Doesn't hurt.
- Dow overcomes BA drag to close positive.
- A good start to the 50 day EMA bounce, picked up some good positions, and now see how far the move can run.

That was a pretty good 50 day EMA bounce. The Dow lagged with a 0.79% gain, but it had BA to deal with, a stock that at one point exerted -350 points on the index. The rest of the market told the tale: 1.34% gains to 2+% gains.

SP500 40.23, 1.47%
NASDAQ 149.92, 2.02%
DJ30 200.64, 0.79%
SP400 1.34%
RUTX 1.77%
SOX 2.40%
NASDAQ 100 2.11%

VOLUME: NYSE +12%, NASDAQ flat. Volume moved back up to average on NYSE on some solid gains. Not blowout volume, but solidly higher on the upside. NASDAQ trade remained flat, remained below average for a second session. Some very strong NASDAQ moves for stocks such as GOOG, but overall volume was less than impressive for such a strong move.

Note that NYSE buyside volume was much stronger (772M to 142M); a lot more buying.

ADVANCE/DECLINE: NYSE +3.8:1, NASDAQ +3.3:1. Very strong buying across the board.

At this juncture the 50 day EMA bounce was anticipated, but you don't know how strong it will be. Solid-ish NYSE trade, still low NASDAQ trade, but great breadth and good leadership moves. Definitely good enough to enter some strong moves, e.g. GOOG, V, MSFT, among others. Then we see how well they run. That is pretty much the situation.

The stock indices broke higher from the open and rallied the entire session. Trade issues appeared to fade or at least take a back seat to Chinese stimulus, or at least talks of it. Chinese markets jumped 2% after the -4.2% showing Friday. The rest of the world preferred to focus on that news over China balking at additional US/China talks and China demanding its own verification process for any deal. Verifying what remains to be seen, but verification it wants. No trust, but verify, right?

Economic Data

Retail Sales, January: 0.2 vs -0.1% versus -1.6% (from -1.2%) December

Ex-autos: 0.9% versus 0.1% expected versus -2.1% December (from -1.8%)

Ex-autos, gas: 1.1% versus -2.3% December (from -1.7%).

The revisions are ugly. Hopefully January's will be even better upside.

Control Group: 1.1% versus -2.3% prior (from -1.7%)

On balance the news was good enough, but frankly, after a 5-session pullback to the 50 day EMA, stocks were ready to bounce. They did so with some strength to start the week.

FB, AAPL, FEYE received upgrades. All jumped on solid volume. Good to see a good reaction to this kind of news as it shows ready buyers.


As we anticipated as the indices sold back and as Friday suggested as the indices tested the 50 day EMA intraday and rebounded, the 50 day EMA test produced some solid bounces, some with volume.

DJ20: The transports bounced -- not surprising given the orderly 2-week pullback discussed over the weekend. Solid volume as well.

DJ30: Fought off a gap lower back to the 50 day EMA and the 200 day SMA, rallying back to the 20 day EMA on rising, average trade. Not bad, doing what it needed to do, beating back the BA losses.

SP500: Gapped lower to the 50 day EMA Friday, gapped up off the 50 day EMA and through the 200 day SMA Friday. A gap lower followed with an immediate gap higher is good action and typically means more upside follows. Better volume, though just average. Solid, but with just average trade, not blowout. As with the Dow, making the move it needed to make, but not much more. The top of the range is overhead at 2816 and we will see how SP500 handles it.

NASDAQ: Gapped off the Friday 50 day EMA test, moving up through the 200 day SMA as well. Volume remained lower so it was not a really powerful move. Some powerful NASDAQ stocks moved -- NASDAQ 100 edged overall NASDAQ -- and they moved the needle. Good gain, good action with the gap lower/gap up, now we need to see how much power the move has.

SP400: Bounced off the 50 day EMA decently though relatively lagging the rest of the market. Still below the 200 day SMA, still below the top of the range. Likely runs back to there, then we see how it holds.

RUTX: Very solid jump off the Friday 50 day EMA doji. Up to the 20 day EMA, still well below the 200 day SMA and the tops of the range. Good start.

SOX: Gapped off the 200 day/50 day EMA test, moving up through the 10 day EMA. Impressive action, spurred as NVDA won the bidding for MLNX; NVDA up almost 7%, MLNX up 7.8%. It would appear the market loves the deal. Many other chips bounced, big names, but the moves were not backed by a ton of volume.


FAANG: AAPL upgraded, gapped out of its 5 week range on average volume. FB upgraded, gapped higher but could not hold a move past last week's high. GOOG blasted higher on above average volume; new recovery high. NFLX gapped up off the 200 day SMA but no volume. AMZN moved higher, quite low volume. No real change to AMZN.

Software: TEAM posted an impressive move. Others were not bad, e.g. NOW up on better volume but not huge. ADBE moving up well. OKTA up but not impressive, WDAY, DATA ditto. Good, moving up, but overall lagging in volume.

Manufacturing/Machinery: CMI breaking higher well. UTX jumped off the 50 day EMA on a solid volume shot. CAT, TEX not much action. EMR good volume not a ton of upside. MMM was strong, gapping and rallying 3+% on strong volume. Some really good moves, others lukewarm, but not bad overall.

Consumer products: PG, CL, CLX up but not much. As it should be on more bullish market action.

Semiconductors: NVDA, MLNX up of course, INTC not bad at all though volume so-so. AMBA exploded higher, bouncing off that earnings fade. AMKR up but nothing major. BRKS decent, nothing great. MU, AMD, AMAT up but not much volume. XLNX gapped upside to the 10 day EMA, we will see if it can continue.

Misc: CMG was rather flat on the day, not participating; of course, it has been strong already. ROKU broke higher yet again, another 4%. ISRG gapped upside but volume remained lower.

Home related: DHI, TOL posted good moves, not much trade. TREX, LPX bounced on pretty good volume; may prove buyable.


Stats: +200.64 points (+0.79%) to close at 25650.88

Stats: +149.92 points (+2.02%) to close at 7558.06
Volume: 2.24B (-0.88%)

Up Volume: 1.85B (+830M)
Down Volume: 375.18M (-824.82M)

A/D and Hi/Lo: Advancers led 3.3 to 1
Previous Session: Decliners led 1.21 to 1

New Highs: 66 (+27)
New Lows: 41 (-16)

Stats: +40.23 points (+1.47%) to close at 2783.30
NYSE Volume: 917.11M (+12.61%)

Up Volume: 772.089M (+434.696M)
Down Volume: 141.845M (-319.442M)

A/D and Hi/Lo: Advancers led 3.81 to 1
Previous Session: Decliners led 1.22 to 1

New Highs: 108 (+63)
New Lows: 24 (-27)


VIX: 14.33; -1.72
VXN: 16.36; -2.76
VXO: 14.21; -1.91

Put/Call Ratio (CBOE): 0.82; -0.15

Bulls and Bears:

Bulls higher again, moving up into a selloff. Surely they will be lower the following week. The issue, however, is the surge after crossing the bears in late 2018. Confidence is pretty high despite the reported lack of confidence. Advisors remain bullish, talking their book, even as money is pulled from equities.

Bulls: 52.9 versus 52.4

Bears: 20.6 versus 20.4

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: 52.9 versus 52.4
52.4 versus 51.9 versus 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: 20.6 versus 20.4
20.4 versus 20.7 versus 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: 2.641% versus 2.632%. Bonds sold back some after a strong move up off the 200 day SMA. Back near the top of the range formed since January.

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

2.632% versus 2.641% versus 2.693% versus 2.715% versus 2.724% versus 2.759% versus 2.717% versus 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: 1.12592 versus 1.12344. Euro continued moving higher off the big dump lower the prior Wednesday.

Historical: 1.12344 versus 1.1191 versus 1.13123 versus 1.13050 versus 1.13344 versus 1.13650 versus 1.13725 versus 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

USD/JPY: 111.428 versus 111.165.

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

111.165 versus 111.482 versus 111.624 versus 111.845 versus 111.856 versus 111.921 versus 111.433 versus 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: 56.79, +0.79. Still in the three week tight lateral range over the 50 day EMA.

Gold: 1291.10, -8.20. Faded after bouncing back to the 50 day MA Friday.


A good shot higher off the 50 day EMA as expected. Some good volume on individual stocks, a lot of smaller volume on the market overall. BA skewed the data a bit with its 34.5M shares, not quite 10x the average trade.

Okay, making the move, we picked up some stocks that made good moves. There are more out there than can still move higher, particularly if this is more than a bounce: NVDA, CMI, MMM.

As is also somewhat expected, many of the moves -- and there were a lot of them -- not a lot of volume. Thus, not totally convinced the move has long legs. Some solid moves and we bought them, particularly all big names. Now we see if they can continue the move.

Buy more on a continued move? Well, NVDA looks interesting; didn't want to enter on the day it surged on an acquisition announcement, but on a bit of a pullback would be normal and an entry possibility. CMI surging well. ADBE working decently. There are possibilities we will look at.

We will play some more moves, but with the uncertainty of how far this bounce can go, you don't want to buy too deep in -- there will be a test or tests if the move is for real, and those will provide opportunity. We picked up some really good moves today, and perhaps a few more we can add, then see how it works.

Have a great evening!

End part 1
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