Wednesday, April 03, 2019

The Daily, Part 1, 4-3-19

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4/3/2019 Investment House Daily
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Investment House Daily Subscribers:


Targets hit: ISRG
Entry alerts: AAPL; YETI
Trailing stops: None issued
Stop alerts: HUBS

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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.


- Semiconductors show how to rally, the first index to crack new highs.
- Treasury leaks some trade negotiation positives that only underscore the same old issues, but the market loves it.
- Stocks surge, give back a good chunk, but that is the MO of late. And they still rise.
- After a week of upside throttling back on entries, letting positions work. If there is a test off the Wednesday doji, that likely just recharges the bids.

Semiconductors, already looking solid heading into the session and having previously given us buy signals that we used to enter, led the charge upside Wednesday. A gap higher, a surge to a new all-time high. Impressive. Backed off 12 points from high to close, leaving it at the prior all-time high, but an impressive move nonetheless.

Chips are extremely important to the market overall, something noted over and over in the recent and more distant history of these reports. That they are the first index to break to a new all-time high bodes well for the other indices to follow.

Indeed they did follow Wednesday, but none, and I mean none, had the power of SOX. There were some very good moves, but there were some very serious declines from session highs as well, leaving the gains solid but once again just not that convincing as a lot of upside was frittered away. NASDAQ dropped 43 points from the high to close (+47 on the close). SP500 faded 12 points from high to close, double the price gain on the close. Pretty serious fade from the early surge higher that took a really strong session and made it kind of an okay session.

SP500 6.16, 0.21%
NASDAQ 46.86, 0.60% (+90 points on the high)
DJ30 39.00, +0.15%
SP400 0.49%
RUTX 0.49%
SOX 2.27%
NASDAQ 100 0.60%

VOLUME: NYSE +17%, NASDAQ +18%. NASDAQ trade jumped back above average in a nice showing of some buying. NYSE trade rallied as well but was still just average with a large percentage increase.

ADVANCE/DECLINE: NYSE 1.4:1, NASDAQ 1.4:1. Again, rather puny breadth given the dynamic of the gains.

The catalyst? Another positive view of China, this time involving trade. Monday it was China's internal -- and thus wholly believable -- PMI moving back above 50. Praise Mao, the economy is expanding again -- according to the communist party that, of course, never made up a story to get its way.

Wednesday it was a story likely leaked by the Treasury Department (Mr. Mnuchin) that a US/China trade deal was 90% done -- that was the first half of the headline. The second half said, but of course, the 10% remaining dealt with the hardest issues, e.g. IP transfer, enforcement provisions, dumping goods onto US markets -- the same issues that started the dispute are still the most disputed, meaning the sides are really no closer than where they were 4 months ago.

But, but, but, the market paid no heed to the second half of the leak, choosing to ignore the man behind the curtain (in this case the iron or bamboo curtain or whatever they call it) and focus on the likely fiction that China's economy is expanding even with the US tariffs still wholly in effect.

Futures gapped upside, held the move into the open, added more upside into midday, that followed by the afternoon selloff that burned off a lot of good gains. Even more would have been lost off the highs but for a last hour rebound.

Bad action? No. Not overwhelming, crushing buying, but better volume backing the upside gains. Even so, the bids have a hard time sustaining through the session as again stocks were pushed back from the session highs. Holding gains, but not the big gains. Seen this before in this move, but it has not stopped the move.

What this all means at this juncture.

The point: while the fades from the highs intraday are frustrating, they are not stopping the advance. Thus, don't get too wrapped up in the fades from the highs, etc. There are still no sellers wanting to push the market lower, or at least not in any numbers, and thus they are unsuccessful in their attempts. Indeed, that simply results in the bids recharging and pushing stocks higher again.

The current status: That action has resulted in a solid week-plus move to higher highs for the leading indices. Perhaps that is the extent of this current bounce: solid move of a week, new highs, showing doji on the Wednesday session. Perhaps. The late January/early February move was a week and it was a similar sharp move higher. February and March were two weeks. There is still room to move on this leg, but it has put in a good first move, we have good positions, they are mostly working very well. This far into the move, we let them work, cut back on entries, watch to see if any new groups emerge.


Stats: +39.00 points (+0.15%) to close at 26218.13

Stats: +46.86 points (+0.60%) to close at 7895.55
Volume: 2.5B (+17.92%)

Up Volume: 1.7B (+500M)
Down Volume: 771.41M (-126.21M)

A/D and Hi/Lo: Advancers led 1.43 to 1
Previous Session: Advancers led 1.04 to 1

New Highs: 105 (+34)
New Lows: 40 (-8)

Stats: +6.16 points (+0.21%) to close at 2873.40
NYSE Volume: 866.423M (+16.98%)

Up Volume: 435.468M (+103.899M)
Down Volume: 413.466M (+20.969M)

A/D and Hi/Lo: Advancers led 1.42 to 1
Previous Session: Decliners led 1.21 to 1

New Highs: 166 (+26)
New Lows: 16 (+2)


VIX: 13.74; +0.38
VXN: 16.62; +0.29
VXO: 13.66; +0.55

Put/Call Ratio (CBOE): 0.86; +0.03

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: Increased to 9.4BP from 3.2BP.

The 2 year is still below 10 year: Spread increases to 19BP from 17BP

10 year: 2.528% versus 2.469% versus 2.496%

3 month: 2.434% versus 2.437%
2 year: 2.341% versus 2.298%

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

2.469% versus 2.496% 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: 1.12444 versus 1.12034. Bouncing off the range low to the 10 day EMA.

Historical: 1.12034 versus 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: 111.483 versus 111.309. Still bumping the 200 day MA from below.

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

111.309 versus 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: 62.46, -0.12. Holding over the 200 day SMA with a doji after breaking above it Tuesday.

Gold: 1295.30, -0.10. Still below the 50 day EMA in a 4-day lateral move after falling below both 50 day MA the prior Thursday.

End part 1
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