Wednesday, March 13, 2019

The Daily, Part 1, 3-13-19

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3/13/2019 Investment House Daily
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Investment House Daily Subscribers:


Targets hit: GOOG; V; V
Entry alerts: YETI
Trailing stops: ROKU; SAVE
Stop alerts: SPY

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- Stocks break higher again as the market starts to split near the prior rally highs.
- Large caps lead as some big names perform well but show some fade after a strong move.
- Economic data improving after the slow patch.
- Still good setups but likely a bit of a test before a new try at a breakout.

The large caps managed to advance the rally another session as SP500, NASDAQ and NASDAQ 100 all bumped against the top of the October/December trading range. DJ30 with its BA issues is lagging those indices while SOX tapped at the early March peak and slid back to a more modest gain. The small and midcaps brought up the rear, flashing a second straight doji well below the late February recovery highs.

Indeed, the symmetry of the moves was somewhat notable:

SP500 19.40, 0.69%
NASDAQ 52.38, 0.69%
DJ30 148.23, 0.58%
SP400 0.39%
RUTX 0.39%
SOX 0.42%
NASDAQ 100 0.77%

VOLUME: NYSE +16%, NASDAQ +10%. NASDAQ trade jumped back above average at the highest level in over a week. NYSE trade popped back to average or just better. Not bad trade.

ADVANCE/DECLINE: NYSE 2.2:1, NASDAQ 1.6:1. More of a large cap move for the techs.

NASDAQ and SP500 posted identical percentage gains as did SP400 and RUTX. Symmetry indeed, showing fairly evenly spread buying. That is better than just a few leading.

NASDAQ 100 was the most impressive as its same leaders posted more solid gains: MSFT (0.77%), INTC (1.49%), CSCO (0.84%). AAPL and AMZN (1.06%), NFLX (1.4%) continued their move off the recent test. NVDA jumped 3.75%, continuing its new breakout off the bottom of its base.

Not bad action as the move upside continues with decent internals.

As noted, the move has SP500, NASDAQ and NASDAQ 100 bumping the top of the pre-selloff trading range. SOX tapped the early March recovery high and showed a doji. The rest of the indices are significantly lower below those highs.

Yes, despite a 3-session rally (3.5 if you count the Friday reversal off the selloff low), the indices are not yet boasting breakouts from that prior range. DJ20, arguably with the 'best' pattern setup as it formed more of a right shoulder to the inverted head and shoulders attempt, is well below the 200 day SMA. That is not necessarily bad -- if the other indices fail and test, they can all set the stage together.

I don't want to dismiss the move to this point. There is leadership from some very select names: V, GOOG, FB, INTC, CMG. Even AAPL, NVDA, AMZN are moving higher and adding upside strength. They simply may be ahead of the upside move curve as GOOG and V, early leaders, are showing a bit of fade into the close after a solid 3+ days upside. Strong move, a bit of a pullback is quite boringly normal.

So, we banked a bit more gain today, taking some on the new GOOG position, the newer V position, the older V position. If the market stalls around Thursday, CMG and FB are candidates to take some gain as well.

We also did not enter a lot given the surge. We closed the rest of the SPY puts just in case as it broke over the recent highs -- ready to enter again if the market breaks lower. We picked up positions on YETI as it broke to a new high on strong volume. As for the others, while WMT, TXN, TSLA don't look bad, as we said earlier this week, we were not going to add a lot more upside into this 50 day EMA after the good positions taken earlier and already paying us back.

Thus Thursday we may get some equivocal action ahead of Friday's quadruple 'witching' expiration. Again, perhaps take some more gain and then see how it tests. Right now nothing is saying any kind of rollover, just a good break higher, testing resistance -- albeit a second time for SP500, NASDAQ, SOX -- perhaps making another test to set up a new run at breaking out.

So far, so good despite BA's woes and the planes ordered grounded here in the US as well. BA looks to be bottoming at the 200 day SMA after filling the late January upside gap. A pullback off this surge that sets up new buys is good action, and per the action playing out as we anticipated, we will see how any pullback behaves -- a short term test setting up a new break higher and move over the trading range, or a break lower that tests some lower lows in the base.


Brexit remains the albatross around PM May's neck as the EU's compromise was voted down in parliament. Now all May can do is ask for an extension.

PPI remains tame-ish with the core rising 2.5% year/year (down from 2.6%). Thus far the CPI is showing no pass through of price increases to consumers. After December's ultra weak retail sales, not surprising.

Durable Goods, January rose 0.4%, down from December's 1.3% but easily topping expectations.

Ex-Transports -- hmm. -0.1% versus 0.1 expected versus 0.3 December (from 0.1)

Capital goods investment: 0.8%. After two months negative, very good to see this.

Construction, January: 1.3% versus 0.5% expected and -0.8% December (from -0.6%).

Summary: The data is better. After a slowdown to end Q4, the data is moving back upside. A slow patch in the economy turned into a near recession tipping point with the Fed hiking and its QT. The Fed pulled back, the data is a BIT better. I still question if the pause alone is enough, but encouraged by the economic data.



SP500, NASDAQ, NASDAQ 100 are testing the pre-selloff trading range highs.

SP400, DJ30, RUTX are still well below those highs and recent highs, lagging the rebound.

SOX, a very important leader, threw a tombstone doji at the early March high, its second straight. It too looks as if it wants to test the rebound.

Thus far the indices have made the anticipated bounce off the 50 day EMA and now we see if they test a bit and make a new upside break or if this bounce is just part of a bigger test.


Stats: +148.23 points (+0.58%) to close at 25702.89

Stats: +52.37 points (+0.69%) to close at 7643.41
Volume: 2.38B (+10.19%)

Up Volume: 1.49B (+60M)
Down Volume: 853.46M (+153.9M)

A/D and Hi/Lo: Advancers led 1.62 to 1
Previous Session: Advancers led 1.09 to 1

New Highs: 86 (0)
New Lows: 39 (+8)

Stats: +19.40 points (+0.69%) to close at 2810.92
NYSE Volume: 954.159M (+15.93%)

Up Volume: 738.542M (+250.376M)
Down Volume: 204.194M (-103.269M)

A/D and Hi/Lo: Advancers led 2.16 to 1
Previous Session: Advancers led 1.43 to 1

New Highs: 169 (+26)
New Lows: 15 (+1)


VIX: 13.41; -0.36
VXN: 15.38; -0.38
VXO: 13.15; -0.27

Put/Call Ratio (CBOE): 0.85; -0.16

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: 2.625% versus 2.60%. Despite some volatility, the yield curve is 'normal,' slowing higher from left to right as rate yields increase. Bonds today a day off after a 1.5 week move higher to the top of the recent range.

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

2.60% versus 2.641% versus 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: 1.13271 versus 1.12895. Euro continued its weeklong surge off the lower low, now reaching the 50 day MA.

Historical: 1.12895 versus 1.12592 versus 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: 111.351 versus 111.314

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

111.314 versus 111.428 versus 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: 58.26, +1.39. Breaking higher out of the 3 week tight lateral range.

Gold: 1309.30, +11.20. Gold breaking upside through the 50 day MA's in an impressive recovery after that two week selloff from the February high. Appears confident inflation continues.

End part 1
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