Tuesday, March 12, 2019

The Daily, Part 1 of 3, 3-12-19

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3/12/2019 Investment House Daily
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Targets hit: GOOG; COUP
Entry alerts: NVDA
Trailing stops: ULTA
Stop alerts: CAT

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- After a solid Monday off the 50 day EMA, market flat.
- CPI still tame enough, Brexit deal still no deal, both enough to keep the Fed on leave.
- Some very good stocks moving higher for us, still good patterns, but the bounce has to show it is more than just an interim relief bounce to do much more upside buying.

Well, that was not that inspiring a session. Futures were muddled as more countries closed their airspace to BA with the EU joining the growing group later in the morning. No doubt BA is the Dow's albatross around its neck -- its 6.15% loss piled on a downside bias the rest of the Dow stocks could not shake.

Not that the other indices exhibited powerhouse characteristics. Gapped a bit higher, rose a bit from there, but then closed at the open at best, below the open at the worst. Basically a bit of a sluggish hangover session after the Monday solid break higher.

SP500 8.22, 0.30%
NASDAQ 32.97, 0.44%
DJ30 -96.22, -0.38%
SP400 0.16%
RUTX 0.06%
SOX 0.39%
NASDAQ 100 0.52%

VOLUME: NYSE -10%, NASDAQ -4%. DJ30 volume rose as BA continued to sell, but NYSE, NASDAQ trade backed off on a pause day. That works as it shows no distribution or churn.

ADVANCE/DECLINE: NYSE +1.5:1, NASDAQ +1.1:1. Matched the ho-hum action.

Not a rollover, just not much strength exhibited following a quite solid Monday session. The doji on the indices could simply be continuation doji, a pause after a solid break higher from support, giving the indices a rest before moving upside once more.

Okay, that sounds great, very plausible. Likely the case exactly. That said, the indices are suspect because this is just a 50 day EMA bounce, not the truly solid support the indices could test and set up a much better upside pattern.

Inflation is not that much of an issue, not enough to prompt the Fed to act.

CPI, February: 0.2 vs 0.2 expected vs 0.0 prior. 1.5% year/year

Core: 0.1 vs 0.2 expected vs 0.2 prior. 2.1% year/year

Airlines were up. Downside; prescription drugs, autos lower.

This is enough, or not enough I guess, to keep the Fed from feeling the pinch to get back into the hiking, QT game. For now.

Brexit: Moreover, May's next Brexit deal was rejected, this after the EU made a bit of a concession. Even more reason the Fed will stay off the brakes as Brexit was an issue specifically cited warranting caution.


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Not much movement, trading in very narrow ranges. Perhaps the action is a result of the Monday solid gains, perhaps the indices needed a breather after that jump. In any event, the indices did not change their relative position: good bounce from the 50 day EMA Monday, flat Tuesday. A pause in the bounce or an indication the bounce had a day's worth of upside and no more?

DJ20 transports, the index that has the best shot -- thanks to its weakness -- to form the inverted head and shoulders pattern that could be the setup for a new solid rally by all the indices (except SOX -- it has its own pattern), sold back to the 50 day EMA on a considerable volume jump, the strongest since late January. Has not broken lower, just testing, to it is definitely still in the upside hunt. Just have to let the move work its way through and see if it can hold and add more upside.

That applies to most of the indices though they were all higher excluding DJ30 and its BA failure to fly: nothing nefarious in the day's move, but to happen so quickly after a solid bounce from the 50 day EMA definitely has you wanting to see if the move has the legs to continue.

DJ30: Doji that lost a bit of ground closing just below the 20 day EMA. No selloff, just tough going as it has to drag BA with it wherever it tries to go. Doji, higher trade -- likely continues higher but needs to show it can do so.

SP500: Gapped upside to a tight doji, closing lower than the open and giving up as much as it gained off the session high. Volume dropped on the session so no churn, just no further bids after the stronger Monday.

NASDAQ: Same action as SP500, gapping upside, fading a bit to close with a decent though somewhat modest gain. Doji, still below last week's high and the top of the trading range. You would not think it was done moving up, but the indices are still below the top of the range and have to prove they can do more in terms of a breakout.

SP400: Tight doji at the 20 day EMA that basically did nothing but give the midcaps a day off.

RUTX: Tight doji at the 20 day EMA as well.

SOX: Gapped to a modest gain and a tight doji. From the Friday low, it and the other indices moved quite far to the Monday close. Thus a pause is not a screaming warning, just watching to see if the day was a pause in a bounce or if it has shot its ammo so soon.


FAANG: GOOG solid again on strong volume. First position hit the initial target and we banked half. AAPL up again though a bit off the high; not a bad breakout. AMZN flat, still wending its way laterally in the 9 week lateral range. FB held the Monday gap to a doji with a doji again. Holding the gap higher at least. NFLX faded modestly, holding at the 20 day EMA.

Software: ADBE added some more upside on lower trade; very much like the FAANG -- not bad, not necessarily convincing. CRM gapped to a doji below the 20 day EMA, light trade. Up but does not look like a new strong run just yet. TEAM showing a gain with a doji as well at the early March higher high. MSFT added some upside with some very good action. DATA up a bit, NOW down a bit. Still a good group but has struggled to hold on.

Manufacturing/Machinery: CMI gapped to a tight doji; we held off and will see if it can continue from here and give an entry. UTX tried higher, failed at the 200 day SMA and lost some ground. MMM similar action after a good Monday move. CAT stalled at the 50 day MA. Not that lively after a decent Monday.

Consumer products: PG, CL, CLX mixed, basically holding some decent patterns.

Semiconductors: NVDA moved just a bit higher. INTC added some more upside though struggled at last week's high. AMKR tried the move but faded most of it. MU flat with a second doji. AMD solid at 2+%. AMAT working on a pattern. XLNX moved up a bit but showed a tight doji.

Misc: CMG ripped higher 2+%. ROKU sold back part of that Monday move. ISRG continued higher 1.3%.

Home related: The homebuilders held their ground but LPX sold back form the 200 day SMA, TREX testing on low volume.

Financial: V added 0.7% but was up more before giving up over half the move. Banks were flat, still going nowhere.


Stats: -96.22 points (-0.38%) to close at 25554.66

Stats: +32.97 points (+0.44%) to close at 7591.03
Volume: 2.16B (-3.57%)

Up Volume: 1.43B (-420M)
Down Volume: 699.56M (+324.38M)

A/D and Hi/Lo: Advancers led 1.09 to 1
Previous Session: Advancers led 3.3 to 1

New Highs: 86 (+20)
New Lows: 31 (-10)

Stats: +8.22 points (+0.30%) to close at 2791.52
NYSE Volume: 823.012M (-10.26%)

Up Volume: 488.167M (-283.922M)
Down Volume: 307.464M (+165.619M)

A/D and Hi/Lo: Advancers led 1.43 to 1
Previous Session: Advancers led 3.81 to 1

New Highs: 143 (+35)
New Lows: 14 (-10)


VIX: 13.77; -0.56
VXN: 15.76; -0.60
VXO: 13.42; -0.79

Put/Call Ratio (CBOE): 1.01; +0.19. An interesting jump in put action as the market paused.

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: 2.60% versus 2.641%

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

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: 1.12895 versus 1.12592. Euro continues the rebound from the sharp drop the prior Wednesday, rallying to tap the 20 day EMA on the high.

Historical: 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: 111.314 versus 111.428

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

111.428 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: 56.87, +0.08. Still moving in the very flat lateral 4 week range.

Gold: 1298.10, +7.00. Still bumping the 50 day SMA from below. Near term bearish head and shoulders has formed since the last January interim high.


Solid bounce Monday, a pause Tuesday. Likely just a pause in a continued 50 day EMA, but even so, this bounce still has to show it has some legs. A pause sets up the perfect opportunity for it to do so. Will the bounce make good on that opportunity?

Still good patterns out there that are ready to lend upside support. If this move is a new upside move then of course we can buy more. At this juncture this is still just a 50 day EMA bounce and we have some good position to ride it. There are other upside possibilities such as PANW, CGC, AMKR. MCD is in a triangle, WING is still working on a base. But then again, we have CMG and it is rallying. We have GOOG rallying, V, ISRG, INTC all moving upside. Today added NVDA.

At this stage we will let them work higher and watch if the 50 day EMA runs out of gas or the Tuesday pause refreshes. During that time we look at LRCX as a possible downside, CRM (already on as a downside/upside depending upon the break). XLNX is up a bit but not surging. SPY could be stalling at last week's highs. QID is at the prior week lows. We will be watching how these perform and if we get a new break back downside if the bounce runs out of bounce and needs to test lower.

End part 1
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