Monday, March 18, 2019

The Daily, Part 1, 3-18-19

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3/18/2019 Investment House Daily
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Investment House Daily Subscribers:


Targets hit: None issued
Entry alerts: CMI; GOGO; HUYA; WMT
Trailing stops: None issued
Stop alerts: OSTK

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- SP500, NASDAQ add a bit more over resistance as small and midcaps receive a better bid.
- Some leaders are resting, some are surging -- the market is finding upside even as some key stocks test.
- Sellers remain away, so the upside continues its play.
- FOMC Wednesday could lead to some volatility, but thus far volatility has given rise to entries.

SP500 and NASDAQ did not blush after moving through the top of the October/December range Friday. Both added more upside; modest, but the sellers certainly did not enter and try to sell off the initial move through resistance.

Indeed, other indices joined in on the upside with RUTX and SP400 gaining renewed life. Both of those indices emerged from a four-session dormancy with the SP400 moving back through the 200 day SMA and in position to again challenge the top of the range.

DJ30 was up modestly but well off resistance while SOX, after its Friday rally to a new recovery high, paused with a doji.

SP500 10.46, 0.37%
NASDAQ 25.95,0.34%
DJ30 65.23, 0.25%
SP400 0.69%
RUTX 0.67%
SOX -0.26%
NASDAQ 100 0.26%

VOLUME: NYSE -65%, NASDAQ -34%. Volume of course dropped post-expiration. NYSE trade fell back to near average. NASDAQ trade was also off but remained solidly above average as it added some more upside to its break over the top of the resistance range.

ADVANCE/DECLINE: NYSE +2.1:1, NASDAQ +1.7:1. Small and midcaps helping out.

Obviously after good moves last week the large caps rested while the small and midcaps perked up for some fairly solid gains. As the large caps rested there was a bit of buying again in the smaller issues.

That action continues to work. The market is engaging in the 'just new money' rotation where money is not pulled from one sector to buy another. Instead, when a sector makes a run, money just stops moving to it while new money moves in to other areas. The new areas rise, the prior movers don't sell, they just work laterally, more or less, holding the gains while they rest and consolidate.

Not all large caps were snoozing on the day. AMZN rose 30 clicks. MSFT continued its run. CMG broke higher again for over 2.5%. HON broke to a higher recovery high while EMR rallied 2+%. GS, C, BAC all moved well. V, one of the leaders in the financial area, actually took a day off.

In sum, no letdown post-quad expiration and pre-FOMC when the latter announces its latest rate decision Wednesday afternoon. The economic data flipped back to a bit weaker last week while prices remained tame. That keeps the Fed from moving, but it certainly does not get the Fed cutting, at least not now, not at this meeting.

That leaves the indices clustered more or less around the last resistance point below the all-time highs. There is some rotation that helps hold the gains as new areas rise. There are very solid leaders from large and small cap names. Thus, even as the indices trade around the key resistance, sellers are not showing up. If sellers are not willing to step in, there is nothing to really stop the advance.

Indeed, with leaders such as GOOG taking a breather and setting up for the next leg even as others (CMG, HON) break higher, when GOOG and company rally again the market gets more upside impetus. Sure they will trade up, they will trade down, but the bias remains upside and the bids continue their return. For instance, today stocks were flattish, but rallied at the open only to then fall into midmorning, giving up the entire move. The bids returned, however, and stocks climbed steadily right into the close. Again, no sellers showing up right now.

Of course this cannot last forever, the old 'every fade met with buying' form of 'investing.' While it does, however, we play the names providing the real strength and I will say that GOOG, MSFT, INTC, CMG, HON, AAPL are solid and NFLX, NVDA and company are not bad at all and could provide some very good entries when they test just a bit. My goodness, if the financials contribute as the started to do so today and energy really shows it can hold a move, things get really interesting in terms of new highs. Man.



SP500, NASDAQ: Stretched the Friday break over resistance but not really powerful moves. Some powerful components (AMZN, CMG, HON, financials), but others were testing after good moves. A solid move of over a week to this point, still very possible these two take a breather, particularly with the Fed on Wednesday.

NASDAQ 100: Cracked through the top of the range and hold onto enough upside to close just over that level. Hello? Bob Pisani? Now NASDAQ 100 is over the resistance. Must be nothing but upside ahead. In reality, over a week higher off the 50 day EMA test, at resistance. They can go higher, but they likely test some before too long. That is okay, healthy, etc., but of course, if GOOG flies higher again after its 1-2-3 test, it and some others can provide continued upside support for a continuing rally.

DJ30: A second modest gain, still below the bottom of the resistance range. Some Dow components are starting to offset the weaker types such as BA and its heavy weighting. Financials are showing life as is energy. Manufacturing in the form of HON continues strong. Not chopped liver, just a victim of its weighting schema.

SOX: Took a breather after the Friday gap and run higher to new recovery highs. Doji pause, likely just a continuation doji that leads to more upside.

SP400: After four pancake flat sessions the midcaps broke back upside and cleared the 200 day SMA on the close. Still just below the top of the resistance range, but it has been here before, broken the ice, and is trying to recover lost ground and indeed put in higher recovery highs.

RUTX: Same action for the small caps though they are farther below the 200 day SMA and the prior recovery highs that matched the top of the Oct/Dec trading range. Lagging, but at least showing a solid new move.


FAANG: FB gapped lower and closed at the 50 day EMA as more top execs left and more and more pressure is applied about its usage of customer data. Gee, are not they all DF's as Zuckerberg said? GOOG looks super to break higher after a doji over the 10 day EMA in a 1-2-3 pullback. AMZN is over the 200 day SMA on the close for the first time since early December. AAPL continues its quiet but so steady rally off the 50 day EMA. NFLX surged but then purged, still in its lateral range.

Energy: Showing life. XOM to a higher recovery high after two weeks of slow time post-breaking the 200 day. CVX still higher.

Financial: Finally life -- but they have done this before. C over the 200 day SMA -- barely. JPM up to kiss the 200 day SMA on the high. BAC at a higher high over its 2.5 month range. GS trying to break higher from its 2.5 month flat range. V taking a breather after a torrid move.

Chips: A day off. AMAT, AMD, NVDA, INTC moved up, faded the move. AVGO continued higher post-earnings. TSM trying to keep it going but gapped to a doji. Overall still solid, just some good moves heading into the session. That is okay, a bit of a pause here after the good breaks higher is quite solid.

Retail: WMT posted a solid upside break off the 50 day MA. CMG still running higher with a 2+% move. YUM paused after a surge. BBY trying to now extend a move over the 200 day SMA after gapping upside in late February.

Manufacturing/Machinery: CMI broke nicely higher as did HON. DE, CAT kind of blas . EMR solid. UTX still looks as if it could break higher -- as it looked 3 weeks ago .


Stats: +65.23 points (+0.25%) to close at 25914.10

Stats: +25.95 points (+0.34%) to close at 7714.48
Volume: 2.27B (-34.2%)

Up Volume: 1.44B (-760M)
Down Volume: 818.58M (-381.42M)

A/D and Hi/Lo: Advancers led 1.64 to 1
Previous Session: Advancers led 1.54 to 1

New Highs: 107 (-9)
New Lows: 30 (-14)

Stats: +10.46 points (+0.37%) to close at 2832.94
NYSE Volume: 947.494M (-65.17%)

Up Volume: 667.884M (-905.998M)
Down Volume: 270.974M (-833.254M)

A/D and Hi/Lo: Advancers led 2.09 to 1
Previous Session: Advancers led 1.41 to 1

New Highs: 108 (-29)
New Lows: 19 (-5)


VIX: 13.10; +0.22
VXN: 16.18; +1.06
VXO: 13.02; +0.88

Put/Call Ratio (CBOE): 0.81; -0.04

Bulls and Bears:

The pullback from the prior week stalled the bulls' advance a bit while bears moved back over 21 after a 2 week hiatus below that level. Not major change in the trends: bulls are moving back up, bears sliding again, and this past week's action will further those trends.

Bulls: 52.4 versus 52.9

Bears: 21.4 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: 52.4 versus 52.9
52.9 versus 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

Bears: 21.4 versus 20.6
20.6 versus 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


Bonds: 2.601% versus 2.591%. Continuing to work laterally in the same range after that surge into early January. Holding over the 50 day SMA for now.

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

2.591% versus 2.628% versus 2.625% versus 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%

EUR/USD: 1.13359 versus 1.13248. Bumping at the 50 day MA's from below for the fifth session.

Historical: 1.13248 versus 1.13070 versus 1.13271 versus 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

USD/JPY: 111.432 versus 111.470. Flat at the 200 day SMA as it has been for over two weeks.

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

111.470 versus 111.715 versus 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

Oil: 59.38, +0.86. Continues last week's break higher from the three week tight range.

Gold: 1301.50, -1.40. Bumping at the 50 day MA's from below after the sharp drop to end February.


Another day closer to the FOMC decision Wednesday, indeed the meeting starting tomorrow. Some stocks have run well for a week or more, pushing SP500 and NASDAQ to and through the top of the October/December resistance range. Likely they will need some rest before too long, but there are key stocks that are not extended, that have just taken a breather. It could be that those stocks help maintain the upward pressure even if some of these stocks up for a week or more without rest finally do take some rest.

There definitely could be some volatility Wednesday as some have unrealistic expectations of what the Fed may say or do. As those expectations are worked out post-FOMC decision, you can get some volatility. That means some could finally test, others could make a break higher after already testing.

Definitely watching GOOG off this nice flag test and will put on a new play. Several good name chips also remain in good position to move higher. Hey, we picked up some CMI today as well; with it and HON moving you cannot forget about the possibility those groups could provide more opportunity along with -- perhaps, maybe, possibly -- financials and energy.

Still, there are great names performing very well, and if they keep setting up buy possibilities, we are interested in putting more money their way.

Have a great evening!

End part 1
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