Thursday, March 14, 2019

The Daily, Part 1 of 2, 3-14-19

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3/14/2019 Investment House Daily
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- Expiration volatility plays out on Thursday, but just modest losses after the back and forth.
- SP500, NASDAQ testing the top of the range. Again.
- Some leaders testing back after good moves but no rollovers.
- Afterhours earnings still being bought, indicating buyers are here at the top of the range.
- As unlikely as it seemed in February, the indices can test near support and try a breakout from the range.

The night before quad expiration and not much was stirring during the session, but there is some movement -- both ways -- on earnings after the close.

The session was muddled from the get go. Pre-market action was up and down. Stocks opened lower, rallied to midmorning just to fade up to the last hour. Then a bounce. Then a drop to the close. Zig, zag, positive to negative, closing flat.

SP500 -2.44, -0.09%
NASDAQ -12.50, -0.16%
DJ30 7.05, 0.03%
SP400 -0.16%
RUTX -0.40%
SOX -0.57%
NASDAQ 100 -0.19%

VOLUME: NYSE -5%, NASDAQ -8%. Trade backed off as the indices hit resistance. Lower volume means no churn, no sellers.

ADVANCE/DECLINE: NYSE -1.2:1, NASDAQ -1.3:1. More indication of a soft session, still with an upside bias.

With leaders such as GOOG sliding back on low volume after really solid gains through Tuesday, the market lost some of its mojo. Not its drive, just its near term bid. Stocks have moved well the past week. A bit of easing back into expiration is not bad action.

Of course, the indices are problematic versus say a GOOG. They are bumping their resistance -- still. GOOG broke out and rallied and is now in a test. Ah, but GOOG is a good signal for the market overall. As is V, MSFT, INTC. To a lesser extent AAPL and NVDA: both coming off dormancy with good moves. Can they continue after this little test that started Thursday? Likely. Oh, and stocks such as V are NOT testing a little or any; V added another 1+% today on volume. Some of the banks actually showed a pulse again Thursday after a slow, almost hidden move higher the prior week.

That the leaders surged and drove the indices to the top of the range, to the key resistance. Now as the leaders test their move upside, the indices likely slid a bit as well.

THAT could prove to be a head fake. It would be easy to say 'well, the rally has failed at resistance, prepare for the worst.' Very easy -- I have seen this each day for the past three weeks after the indices stalled at resistance in late February, then sold back. Now they are there again and faltered Thursday. Fodder for fear, and they are using it.

Certainly the indices can plunge farther. I would like a test of the bottom of the trading range as that would set up great upside patterns. Thing is, the market doesn't give a flippin' damn about what I think. Right now the market is showing a bit of an easy test, at least the start of one, by the leaders that rallied well. Gee, THAT is unusual: nice rally higher, testing the rally. The end of the world must be near.

The point: yes the indices are again bumping resistance, but the action is so far not resulting in a surge in sellers to slap down the move from the December low. For now things look pretty obviously normal. So, accept it unless and until the market shows otherwise.

Afterhours the action is somewhat mixed. AVGO and ULTA are up very nicely on earnings. ORCL is down 2.5 clicks (5%ish). ADBE is off 6+ clicks, still over support and not really a hammering. Sure they may be down but the afterhours action does not suggest they will be thrown out, just sold some after good moves. That they are still being purchased on their results that are pleasing is also a very good indication that money remains and is not about to flood out of the market.

Status: The indices are again bumping the resistance. The indices may again fade away from resistance. Makes sense given a lot of the leaders of the move are fading back as well. That is not the same as rolling over. It makes some intuitive sense that they WOULD roll over here and test deeper than a few days or week, but at this juncture the sellers are just not showing up. Therefore, for now, we are watching for a test again to measure the resistance once more and then, as improbable as it seemed in February, an attempt at a breakout. The power of a compliant Fed, eh?


To view, click on the following links:

NASDAQ bumped the top of the October/December range Wednesday on good volume, putting in a higher recovery high. Faded Thursday, but so modestly. NASDAQ could very easily test to the 200 day SMA, put in a higher low, then make the move to the breakout over the range.

SP500 also bumped the top of the range and indeed through it on the high, unable to hold the higher high. Faded so modestly Thursday -- the financials actually helped out some. Some.

DJ30, DJ20, SP400, RUTX basically did nothing, still well below the top of the range. If the leading NASDAQ and SP500 test back, they can hold in the same range and be in position to move higher after the leading indices test back.

SOX tested the 10 day EMA after a 4-session move off the 200 day SMA and ABCD pattern. Nice easy test. Afterhours AVGO beat handily and shot up off the 50 day MA to 282 (+14). Big names such as AVGO will help buck it up with its afterhours gains.


Stats: +7.05 points (+0.03%) to close at 25709.94

Stats: -12.50 points (-0.16%) to close at 7630.91
Volume: 2.18B (-8.4%)

Up Volume: 1.02B (-470M)
Down Volume: 1.13B (+276.54M)

A/D and Hi/Lo: Decliners led 1.33 to 1
Previous Session: Advancers led 1.62 to 1

New Highs: 83 (-3)
New Lows: 42 (+3)

Stats: -2.44 points (-0.09%) to close at 2808.48
NYSE Volume: 909.239M (-4.71%)

Up Volume: 379.907M (-358.636M)
Down Volume: 499.338M (+295.144M)

A/D and Hi/Lo: Decliners led 1.13 to 1
Previous Session: Advancers led 2.16 to 1

New Highs: 103 (-66)
New Lows: 21 (+6)


VIX: 13.50; +0.09
VXN: 15.65; +0.27
VXO: 13.40; +0.25

Put/Call Ratio (CBOE): 0.91; +0.06

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: 2.628% versus 2.625%. After the break higher Tuesday and pause Wednesday, bonds sold back Thursday to the 50 day SMA. Failed at the top of the range at 122.50 and trading still inside the 2.5 month lateral move.

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

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: 1.13070 versus 1.13271. The euro rallied back to test the 50 day MA on the Wednesday high then faded some Friday. Trending lower still.

Historical: 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: 111.715 versus 111.351

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

Oil: 58.61, +0.35. Oil edges higher after the solid Wednesday upside break from the lateral range.

Gold: 1295.10, -14.20. Broke over the 50 day SMA Wednesday then reversed sharply Thursday through both 50 day MA's. Hmmm, a lesson for the index patterns; just cannot assume all will remain groovy.


Quad witching and that used to raise such worries/fears/concerns. Volume is up and positions are adjusted, but it is typically not a big back and forth session anymore.

The leading indices are at the top of the resistance range. The others are holding back but not in bad position. Still plenty of leaders, and even as they fall back form the last move they are not rolling over. Therefore, after a fade back to some support (possibly the 200 day SMA for NASDAQ and SP500) you have to watch for a higher low and a breakout attempt.

Have a great evening!

End part 1 of 2
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