Tuesday, March 26, 2019

The Daily, Part 1 of 2, 3-25-19

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3/26/2019 Investment House Daily
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Targets hit: AAPL; YETI
Entry alerts: AVGO; HTHT; NVDA
Trailing stops: None issued
Stop alerts: None issued

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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.

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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.


- Solid early bounce looked very promising, then the indices fritter away really good gains.
- Gains were not bad, but compared to what was lost, they look bad.
- Technical action not great though many leaders moved nicely higher while others still put in good tests.
- Either the leaders lead higher or the market takes a deeper test.

Well, THAT certainly was not convincing. The stock indices all finished higher, sporting some solid closing gains. Problem is, they gave up nearly as many points from the high as they showed as gains on the close. NASDAQ burned 47 points from the high (closed up 53.98), DJ30 139 (closed up 140), SOX 12 (closed 14 pts higher). Gains, but from one doji to another, albeit a bit higher off near support.

SP500 20.10, 0.72%
NASDAQ 53.08, 0.71%
DJ30 140.90, 0.55%
SP400 0.99%
RUTX 1.01%
SOX 1.01%
NASDAQ 100 0.47%

VOLUME: NYSE flat; NASDAQ -2%. Oh great, upside moves with some over 1% (giving up much larger intraday moves) and volume shrinks. Not many buyers, easy for the sellers to push them back.

ADVANCE/DECLINE: NYSE 2.8:1, NASDAQ 2.1:1. Decent, but not anything blowout.

The internals were so-so to less than mediocre. Volume was the key, but at least it did not surge as stocks gave up the chunks of upside.

What happens when you gain almost 1% and still look weak?

Again, if you scan the closing percentage gains you are favorably impressed. If you look at the intraday action and the charts, you are not. About all the indices did was bounce where they had to. It was not, as noted earlier, convincing.

To view, click on the following links:


SP500 gave back less from the high than other indices -- thank goodness because it still closed mid-level of the indices. NASDAQ 100 lagged as the recently leading big names that were testing modestly tested farther. AMZN managed to hold a gain on the session, but it was well off the high, dropping 22 points from that high closing up 9.50.

RUTX looks like a classic selloff and weaker rebound, bouncing up to the 50 day MA's, moving through it, then fading to close below them. Again, 1475-1470 looks like a natural support level.

SP400 is not bad, gapping back over the 50 day MA's and holding the move. That keeps alive the possibility of a double bottom at the 61% Fibonacci retracement or just a lateral move for a right shoulder to a possible inverted head and shoulders starting in October.

Ditto DJ30 as it holds over the 50 day MA's and 200 day SMA in a similar pattern to SP400.

SOX gapped off the doji at the 20 day EMA to another doji at the bottom of the resistance range. Iffy.

Sellers still taking shots, testing the waters, though not much volume at all.

While not a meltdown, the fact that many big names reversed early gains and the indices and most stocks closed off the session highs -- well off the those highs -- shows the sellers are still there, selling into strength.

The futures showed a slow steady build higher, the kind of action that suggests more staying power than those days where they gap higher and hang in the same narrow range to the open. Thus, the move had a pretty good pedigree. The fact that so much was given back after the midmorning high shows the sellers were again pushing back against the upside here at the top of the resistance range.

Thus, the upside move in the charts Tuesday shows the indices did what they had to, but they did the very minimum. Frankly, it just does not look to be any kind of serious rebound, certainly it does not wipe away that Friday reversal of the solid Thursday price gains. The sellers are present, blunting the upside attempts by stocks that Monday were in very good position to recover. They did -- through midmorning -- then the return of the sellers took all of the luster off the session.

The gains notwithstanding, the action suggests no stomach for much further upside at this juncture. The indices can still pull it off as they did not hurt themselves, but the buyers have to be stronger and/or the sellers weaker. The second failure makes it look as if the market wants to test deeper than just a casual brush with the top of the range. SP500 and NASDAQ moved back over the top of the range and perhaps that will rejuvenate the buyers watching SP500 2800-2815 (closed at 2818), but they will have to show it.

If not, then a deeper test. 2800 is holding for now, but the sellers are taking shots at it. Frankly, it is not showing enough pop to convince us. Today's upside looked solid but the lion's share of the upside did not hold. On the heels of Friday, if there is not a serious upside session -- that holds the gains -- soon, then there is more of a test near term versus a move upside.

The proof will be in the 'names,' the stocks in good patterns that everyone knows. Some recent leaders include GOOG, AMZN, NVDA, AVGO, ULTA, AAPL, V, MSFT, LRCX, CMG.

CMG, V, ULTA, AVGO posted some solid moves on the session. Solid.

GOOG, AAPL, LRCX, CRM, AMD tested a bit more, still holding support, still solid, but at the point they need to make a move.

AMZN, NVDA, MSFT were up but closed well off the high, enough to make the action problematic. Very good tests for AMZN and NVDA, started upside, added more early Tuesday, but then melted back.

The indices will be led by leaders such as these. Still overall in good position but not making as crisp a bounce as in the past. If they cannot do it and hold the move, the indices surely will not either.

A final thought on the technical aspects: Jim Cramer was talking M&A and what deals make sense. You KNOW the market is not performing well when Cramer starts looking for deals to give the market life. You also know that the market is not showing very good action when he turns to technical analysis. He mostly pays it no heed until things don't work as he thinks they should. Then suddenly TA becomes important. What to take from that: the stocks he likes and views as bellwethers are not just powering higher off a test. Hey, that would concern anyone who was watching with a close eye as the indices continue to struggle to get through the penultimate resistance below the prior highs.


Fed Funds Futures: The contracts for September through January ALL now show greater than a 50% probability of a rate cut at those meetings. Before this week only January was pricing in a 50%+ chance of a rate cut.

Housing Starts, Feb: -8.7% vs -1.6% expected vs +11.7% prior (revised lower from 18.6%)

Building Permits, Feb: -1.6%

Single family homes take it on the chin, -17% for the month, -10% year/year.


Stats: +140.90 points (+0.55%) to close at 25657.73

Stats: +53.98 points (+0.71%) to close at 7691.52
Volume: 2.08B (-2.35%)

Up Volume: 1.26B (+264.98M)
Down Volume: 783.04M (-296.96M)

A/D and Hi/Lo: Advancers led 2.05 to 1
Previous Session: Advancers led 1.1 to 1

New Highs: 66 (+9)
New Lows: 48 (-47)

Stats: +20.10 points (+0.72%) to close at 2818.46
NYSE Volume: 815.594M (+0.69%)

Up Volume: 145.378M (-1.435B)
Down Volume: 145.378M (-1.525B)

A/D and Hi/Lo: Advancers led 2.81 to 1
Previous Session: Advancers led 1.08 to 1

New Highs: 147 (+75)
New Lows: 23 (-39)


VIX: 14.68; -1.65
VXN: 18.63; -0.81
VXO: 15.81; -2.00

Put/Call Ratio (CBOE): 0.88; +0.02

Bulls and Bears:

Knew there would be a bounce in bullish sentiment. Interestingly, more of a relative decline in bears then the rise in bulls. Did its jobs on the crossover though that was quite some time back.

Bulls: 53.9 versus 52.4

Bears: 20.6 versus 21.4

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: 53.9 versus 52.4
52.4 versus 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: 20.6 versus 21.4
21.4 versus 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: 2.421% versus 2.443%. Bonds rallied, yields fell some. Bonds holding the gap higher from Friday as TLT cleared the January high on that move. Lower rates overall is okay -- just want the curve to stay normal.

3 month: 2.47% versus 2.465%. Spread narrows here as well.
2 year: 2.268% versus 2.26%. Spread narrows a bit with the 10 year.

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

2.443% versus 2.437% versus 2.538% versus 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: 1.12754 versus 1.13145. Euro fall renewed after crashing below the 50 day MA Thursday.

Historical: 1.13145 versus 1.13009 versus 1.13713 versus 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: 110.537 versus 110.113

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

110.113 versus 109.92 versus 110.72 versus 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: 59.94, +1.12.

Gold: 1315.00, -7.69


An upside session with overall solid index gains that was still technically blah or even worse. Volume still below average so no real upside push. Gave back large chunks off the session high. Breadth was okay, but for the gains, not that strong.

It was simply a golden opportunity for NASDAQ and SP500 and even SOX to really move up off the recent test, and it slipped away. That leaves the indices totally problematic right now as sellers have come in twice and stopped advances and more, pushed them back.

On the other side you have those leaders discussed earlier that are moving well, in position to bounce (and need to), and those problematic, i.e. moved upside off support but unlike say CMG and ULTA, could not hold most of the move. These will have to produce upside if the near term gains are to be held and the indices are to move higher from here.

There is an awful lot riding on NASDAQ, SP500 and SOX as well. May be too much for them to hold the market higher, but we will see. It could be the market used up the upside attempt today with the early rally, but those well-positioned stocks will have a chance to show if they can do it.

If so, we have some great upside setups. If not, we have some downside plays ready to give it a try, and we will be closing the upside that is anywhere close to problematic. Wednesday is another day the indices and leaders show if they still have it.

Have a great evening!

End part 1 of 2
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