Thursday, March 21, 2019

The Daily, Part 1 of 2, 3-21-19

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3/21/2019 Investment House Daily
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Investment House Daily Subscribers:


Targets hit: NVDA
Entry alerts: AMAT; AMKR; NFLX; TSM; V; WDC
Trailing stops: None issued
Stop alerts: XLNX

The market alert service is a premium level service where we issue intraday alerts relating to the general market conditions, when stocks hit action points (buy, stop, target, etc.), and when we see other information impacting the market or our stocks. To subscribe to the alert service you can sign up at the following link:


The REPORT SCHEDULE is as follows:

Market Summary Video, Plays and Play Videos, and Play Table with play annotations will issue Wednesday, Weekend.

Monday a Market Summary video, new plays, play table annotations.

Tuesday and Thursday reports will contain the market summary, chart links to view the index charts, and updated play table.

Access to all current videos will remain assessable each day using the play links in the reports.

If any market circumstances arise where we see additional plays we want to prepare for the next session, we will of course issue those plays regardless of the day of the week.


- The bids are impressive: investors could not wait to buy a down open.
- No, the Fed decision was not priced in.
- Chips surge, big names continue to surge.
- Another upside day Friday may be time to bank a bit more gain ahead of Monday.

The test of break over the top of the resistance range looks pretty much over. SP500 and NASDAQ both tested a bit lower then shot higher, rallying all session long. Impressive moves by those leaders, even more impressive by SOX as it moved through not one, but two of the resistance levels in the spring and summer 2018 range.

SP500 30.65, 1.09%
NASDAQ 109.99, 1.42%
DJ30 216.84, 0.84%
SP400 1.34%
RUTX 1.25%
SOX 3.50%
NASDAQ 100 1.52%

VOLUME: NYSE -6%, NASDAQ +2%. As NASDAQ and tech were the leaders, it was good to see NASDAQ volume back up well above average as its stocks shot higher.

If anyone felt the market had already priced in the FOMC action -- and Wednesday afternoon and early Thursday you definitely heard that with futures down over 100 Dow points -- they were wrong.

We used the tech move to pick up some more tech-related positions -- AMAT, AMKR, TSM, WDC -- as well as some solid leaders such as NFLX and V.

Of course, not all the market benefitted evenly, but all the indices did move upside by at least 1% -- except DJ30. The Dow still has some financials, BA, and a few other holes in the boat keeping it from rising.

Was there some news catalyst? No, just a reaction to the FOMC, somewhat delayed. Does it matter what the cause was? Not really, though the overall climate of a totally docile Fed, one that could even turn to advocating stimulus, does create an environment where stocks will tend to rise when there is no real news.

Thus, central bank insanity has returned. Each new Fed chair tries to lay down the law and raise rates, reduce the balance sheet, and otherwise act responsible. Yellen tried it, the market shrieked, her hair turned another shade of grey, and she gave in. Powell talked tough, but did so at the wrong time, i.e. when the market was slow patching already, and turned a slowdown into a possible recession. The markets panicked, he panicked and backtracked. Wednesday they did more than that. At least the yield curve is still healthy enough for now.

It was also good to see the SP400 jump upside off the post-FOMC selling. RUTX rose some as well though not as impressive. The jury is still out on these economically sensitive indices.

As I wrote this morning in the premarket alert: They are lagging right now. First it was just some rotation into large caps after the smaller caps led. Wednesday it was worry that the Fed knows something more and worse and that is why they sold. Domestic economy ties are strong for those. Thus, if they can hold and rebound off of the Wednesday kneejerk worry selling, that is a good sign. As noted tonight, they did in fact rebound, though not terribly convincingly.

Above all, however, you cannot fight the Fed. It is full dovish, and if the economic data worsens we could see talk of stimulus. My goodness, another Fed chair bowing, quite totally, to the market.


To view, click on the following links:

SP500, NASDAQ: Still lumping these together because they are like Forest and Jenny, peas in a pod. Both broke resistance, tested, then surged Thursday. Both are eyeing the late summer 2018 highs now that they have cleared the range. Pretty solid initial move off the breakout test though NYSE trade was rather pathetic while NASDAQ trade was pretty impressive. Kind of a one-sided move.

SOX: Impressive upside gap and rally past two levels of resistance in the range formed in the March to September triangle that broke downside. About 23 points off the intraday high and less than 5 points off the closing high. Impressive.

DJ30: Gapped lower, recovered to a decent gain on rising, above average volume. Back to the bottom of the resistance range, still working on a not too shabby shoulder to an inverted head and shoulders.

SP400: Gapped lower, rebounded over the 50 day EMA, closing at the 200 day. As with the Dow, looks to be forming a decent right shoulder to an inverted head and shoulders pattern.

RUTX: Very similar to the prior two, though holding in the same range at the 20 day MA.


Some really solid names made good moves yet again.

FAANG stocks remained en fuego. AMZN, GOOG, AAPL, NFLX FB, meh.

Chip stocks surged and we bought more. AMKR, AMAT, TSM. NVDA added as did AMD. Very strong.

Software stocks received new bids. Not necessarily patterns you like to buy, but they were working nicely upside.

Definitely skewed to growth, but not all other areas were abandoned. Just more of that rotation moving through the market, favoring some areas versus others, but not hammering any particular sectors, just slowing them down.


Stats: +216.84 points (+0.84%) to close at 25962.51

Stats: +109.99 points (+1.42%) to close at 7838.96
Volume: 2.5B (+1.63%)

Up Volume: 1.72B (+823.64M)
Down Volume: 767.39M (-782.61M)

A/D and Hi/Lo: Advancers led 1.51 to 1
Previous Session: Decliners led 1.63 to 1

New Highs: 122 (+32)
New Lows: 41 (-2)

Stats: +30.65 points (+1.09%) to close at 2854.88
NYSE Volume: 868.418M (-5.83%)

Up Volume: 568.128M (+205.055M)
Down Volume: 288.203M (-253.235M)

A/D and Hi/Lo: Advancers led 2.52 to 1
Previous Session: Decliners led 1.24 to 1

New Highs: 167 (+81)
New Lows: 23 (-19)


VIX: 13.63; -0.28
VXN: 16.59; -0.05
VXO: 14.40; +0.09

Put/Call Ratio (CBOE): 0.77; -0.12

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: 2.538% versus 2.524%. After the surge upside Wednesday post-FOMC, TLT gapped to a doji, still just below the early January high.

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

2.524% versus 2.616% versus 2.601% versus 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: 1.13713 versus 1.14314. Euro dropped back to the 50 day MA after the surge to tap the 200 day SMA Wednesday.

Historical: 1.14314 versus 1.13526 versus 1.13359 versus 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: 110.720 versus 110.673. Held at the 50 day SMA and bounced modestly, recovering some after that big drop.

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

110.673 versus 111.374 versus 111.432 versus 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: 59.98, -0.25. Modest fade, still trending higher up the 10 day EMA and toward the 200 day SMA.

Gold: 1307.30, +5.60.


Some seriously good surges by some seriously big names. AMZN up for two weeks now from the low, breaking up through the 200 day SMA early week and continuing upside through Thursday. GOOG surging off a short test, nearing the prior highs. AAPL upgraded and surged through the 200 day SMA, part of a week-plus run.

The point: perhaps a bit extended. A good run Friday and Monday might be a time to test a bit for those stocks. At the same time, others are starting breaks higher -- perhaps some of that same rotation that is working well for the market is at work again.

Certainly was Thursday as we picked up several chip stocks.

Several plays are running well and quite far. Another strong surge Friday and we will look to bank some more gain just in the event these one and two week moves want to test some to start the new week. At this point we let positions work, perhaps pick up a few stragglers that are looking good but not extended.

Have a great evening!

End part 1 of 2
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