Tuesday, April 02, 2019

The Daily, Part 1, 4-2-19

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4/2/2019 Investment House Daily
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Investment House Daily Subscribers:


Targets hit: None issued
Entry alerts: COHR; DO; RMBS; SFIX; STX
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.


- Second day sag: after a good surge Monday, stocks pause.
- US data continues to struggle even post-FOMC pause. Those rate hikes are still there.
- NASDAQ moves to a new recovery high as some big FAANG names come back to life.
- Half empty or half full at this juncture? If no sellers, it is half full.

Monday was big upside to start the new quarter, Tuesday was a pause with all the indicia of a pause. Breadth flat. Volume down large. Thus, the mixed close was a pause after a stronger upside break. No selling, just a lull in the action.

Not all lulled. AAPL bounced to a 1.45% gain. FB 3.26%. GOOG 0.5%. CSCO 0.56%. Some really good moves, they were simply more limited Tuesday.

SP500 0.05, 0.001%
NASDAQ 19.78, 0.25%
DJ30 -79.29, -0.30%
SP400 -0.38%
RUTX -0.18%
SOX 0.10%
NASDAQ 100 0.28%

VOLUME: NYSE -11%, NASDAQ -5%. Lower below average trade on both exchanges. A bit disappointing for NASDAQ given its move higher, but just a few stocks were leading that index higher so light volume is nothing to put knots in your rope. NYSE trade even farther below average on flat to lower action; definitely passable action given the pause after the Monday move.

ADVANCE/DECLINE: NYSE -1.2:1, NASDAQ +1.1:1. That tells the story.

The news feed today was nowhere near the positives of Monday even if those positives were truly fake news.

US durables orders for February flopped: -1.6% vs -1.8% exp vs 0.1 prior (from 0.3)

Ex-Transport: 0.1% vs 0.2% expected vs +0.1 (from -0.1).

Business investment: -0.1% vs -0.0 January (from -0.8). That makes 3 of 4 months negative. Businesses not investing as much after that dramatic market plunge in December.

Real Estate: Manhattan prices are lower for the sixth consecutive quarter, the longest losing streak in 30 years.

London real estate is at its lowest in 10 years.

Hard to get too happy with another dose of weaker economic data. The data definitely provided no impetus to buy. Those Fed rate hikes are still out there. Sure the Fed paused, but it hiked into a slowdown and those rate hikes are hitting the economy. THAT IS THE PROBLEM. Pausing is not enough, but Kudlow and company poisoned the well by going public with the 50 BP rate cut opinion.


To view, click on the following links:


NASDAQ: Pushed to a higher recovery high, moving past the high two Thursdays prior. Much rejoicing though no volume. Hardly inspirational in itself but NASDAQ still sports leaders with good patterns, most of course from tech.

SP500: Doji going nowhere after the new quarter gap and rally to a higher recovery high. No volume, no breadth, just a pause day.

DJ30: WBA gapped down 12+% and that stymied any DJ30 move. For today, that is no big deal. DJ30 faded modestly after a solid break higher, low trade. Nice pause.

SOX: Doji as well, fading then coming back off the low.

SP400: Faded from the Monday close, no doji, but light trade, still in the consolidation, but also back below the top of the resistance range.

RUTX: Faded to test near support, recovered to flat, continuing its consolidation, now in its seventh week, as well.


Transports: DAL gapped up big time and some other airlines posted modest gains. Rails took a day off as did truckers after a good move. FDX faded modestly after a solid break higher Monday. LYFT gapped lower then rebounded to flat. Perhaps it is ready to bounce -- a bit.

FAANG: GOOG up another 0.5%. FB gapped and rallied, just eclipsing the top of the 2 month range. AAPL broke over the 200 day SMA. NFLX added just a fraction after a good Monday move. AMZN flat, but that was not bad for the day.

Manufacturing/Machinery: CAT, CMA tested just modestly though CMI gave back a nice second move higher. UTX, EMR modest tests after good moves. This is not bad action taking a rest after some good upside.

Semiconductors: Some recent leaders took a day off, e.g. AVGO, TSM, LRCX, AMAT. AMD added some upside but no volume. RMBS, COHR, MCHP added some more to the Monday gain. Still a very good group.

China: With no new Chinese news, some faded. HUYA, HTHT, JD. BIDU looks pretty solid.

Software: Overbought but moving up after their consolidations. VMW continues upside as does TEAM. FFIV surged over 2%. OKTA not bad, HUBS jumped more than we wanted though on low volume.

Financial: V a bit higher along with MA. Banks still up though slower. WFC still struggling.

Energy: Paused after some good moves, e.g. XOM, CVX. Picked up some DO as it continued its move but it did some backsliding on us.

MISC: CMG shows a doji as it tests a strong surge up the 10 day EMA. ISRG gapped to a higher high, faded to flat. Earnings 4/18; not a great entry but not bad for a spread ahead of results. SQ continues forming a four week handle.


Stats: -79.29 points (-0.30%) to close at 26179.13

Stats: +19.78 points (+0.25%) to close at 7848.69
Volume: 2.12B (-4.5%)

Up Volume: 1.2B (-420M)
Down Volume: 897.62M (+320.02M)

A/D and Hi/Lo: Advancers led 1.04 to 1
Previous Session: Advancers led 2.1 to 1

New Highs: 71 (-37)
New Lows: 48 (+14)

Stats: +0.05 points (0.00%) to close at 2867.24
NYSE Volume: 740.65M (-11.18%)

Up Volume: 331.568M (-313.889M)
Down Volume: 392.497M (+213.666M)

A/D and Hi/Lo: Decliners led 1.21 to 1
Previous Session: Advancers led 3.16 to 1

New Highs: 140 (-37)
New Lows: 14 (+2)


VIX: 13.36; -0.04
VXN: 16.33; +0.02
VXO: 13.11; -0.29

Put/Call Ratio (CBOE): 0.83; -0.01

Bulls and Bears:

Very status quo after the big recovery. Both bulls, bears holding position.

Bulls: 52.0 versus 53.9

Bears: 20.6 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: 52.0 versus 53.9
53.9 versus 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 20.6
20.6 versus 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



Shortest moved higher with the 3 month yield rising while the 2 and 10 faded. Thus the 3 mo/10 year spread narrowed but the 10 year remains above he 3 month.

The 3 month yield still back below the 10 year: 3.2 basis points.

The 2 year is still below 10 year: 17BP spread again

10 year: 2.469% versus 2.496%

3 month: 2.437% versus 2.424% versus 2.403%
2 year: 2.298% versus 2.325% versus 2.266%

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

2.469% versus 2.381% versus 2.281% versus 2.421% versus 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: 1.12034 versus 1.12058

Historical: 1.12058 versus 1.12178 versus 1.12310 versus 1.12452 versus 1.12754 versus 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: 111.309 versus 111.43

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

111.43 versus 110.867 versus 110.816 versus 110.132 versus 110.537 versus 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: 62.58, +0.99. Broke over the 200 day SMA.

Gold: 1295.40, +1.20


You can look at Tuesday any way you want. A pause that continues the move or a failure to continue the start of the quarter advance on new money.

With no sellers yet showing in the market, we look at it, near term, as a pause before continuing upside. Still massive resistance overhead from the 2018 range, but that does not mean the indices won't run toward it more and indeed even move past them. With no sellers the market is rising. As long as it does that -- led by quality leaders in good patterns -- we will participate.

Have a great evening!

End part 1
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