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6/10/2019 Investment House Daily
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Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: DE
Entry alerts: CRON; MTCH
Trailing stops: None issued
Stop alerts: None issued
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:
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The Market Video is DIVIDED into component parts: Market Overview, Economy, Technical Summary, and the Next Session. Choose the segments you are interested in without having to search a longer video. Click on the link to the portion you wish to view.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/mo/mo.mp4
TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/ts/ts.mp4
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
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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.
SUMMARY
- Mexican tariffs officially put off, Fed still behind the market, stocks continue the rebound to start the week.
- NASDAQ and SOX lead the move as some software M&A gets investors excited.
- Stocks gap and rally, but give up a good part of the move, showing tombstone doji.
- Market ripe for a test of the move. The Fed has potentially shifted the bias so on a pullback you watch for a change in the patterns.
Stocks again found more upside as the stories leading to the selling continued to peel back. Tariffs against Mexico are off and the Fed said nothing to take back the notion the next move will be a cut, a cut in the near future.
On top of that, M&A was back on and that always gins up investors. UTX and RTN want to merge into the largest defense company. CRM is buying DATA, exciting a sector already leading the market.
Those two catalysts certainly did not get in the way of the bullish upside. Stocks were up premarket and rallied at the bell. Solid moves to midday as the stock indices put in the fifth or sixth session upside, depending upon the index.
SP500 13.39, 0.47%
NASDAQ 81.07, 1.05%
DJ30 78.74, 0.30%
SP400 0.54%
RUTX 0.61%
SOX 2.54%
NASDAQ 100 1.14%
VOLUME: NYSE +2%, NASDAQ 2%. Finally some upside volume on an upside session. Still below average, however, so no big move.
ADVANCE/DECLINE: NYSE 3:2, NASDAQ 1.8:1. Hardly inspiring.
An impressive string to the upside continues. After hitting the session highs, however, the indices peeled back the gains. SP500 and DJ30 gave up more off the high than what they held as gains as the close. NASDAQ, SP400, RUTX showed similar action. SOX managed to hold on decently enough, however, as it broke through the 50 day EMA. Always good for the market when the chips perform well.
It was another case of the indices moving to next resistance. Each move higher off the early June low seemed to put the indices at next resistance - that is what happens when you sell off, i.e. you have to move back up through that resistance. Thus far they are shooting them down.
Now you have the next level with the indices most all sporting doji.
CHARTS
Over the weekend I threw out the possibility the indices test this move higher with a higher low at the necklines of the head and shoulders patterns, thus morphing into inverted head and shoulders patterns, an upside setup. The big top is still in place, but if the Fed is going to support the markets then the potential to rally on top of this rally is there.
NASDAQ: Led he move outside SOX. It gapped upside, rallied through the 50 day SMA. Then it coughed up 72 points off the high in the afternoon session (closed up 81 points). It gave up the 50 day SMA on the high and is showing a gap higher to a tombstone doji. On the high NASDAQ found itself just over the mid-March high, the apex of the left shoulder to the head and shoulders pattern. Logical place for it to test back some perhaps, testing back near 7647 and perhaps setting up a right shoulder to an inverted head and shoulders as discussed over the weekend.
SP500: Similar action, gapping over the 50 day SMA then fading over half the move (18 points, closed 13 points higher) to close with a tombstone doji. Gapped off a doji 5 sessions back, could be a point to test. 2800, the support and neckline to the head and shoulders everyone is watching, may be a bit too much for it to test after this move, but it certainly would be a good test and set up a good pattern to play.
DJ30: Modest gap higher, a rally to the February peak near 26,250, then a fade to its own doji. Six sessions upside to resistance, a good place to test a bit and set up a new leg higher. Would it go to the neckline at 25,250? It could, but anything from 25,750 to that level is in play as potential support.
SOX: SOX also gave some back off the session high, but it posted an important move. It gapped through the gap created by the 5/20 downside gap. Always important when a stock or index gaps back through a prior gap as that shows it has power to wipe that gap off the books so to speak in an island reversal move. Closed 16 points off the high but closed up 35 - held onto most of the gain. This is good for the market overall. The other indices don't have to follow in lockstep, they can test and then follow as is often the case.
SP400: Gapped to some pretty serious resistance at 1920 and faded from there. Nothing major - it rallied six sessions including the gap, and a bit of a fade is normal. As with the other indices, a test to 1865ish would have the look of putting in the right shoulder to an inverted head and shoulders.
RUTX: Gapped upside, rallied to the 50 day SMA, then gave up 12 points (closed up 9 points). Lagging and tagging along.
LEADERSHIP
FAANG: AMZN was the power, rallying over 3%. GOOG was in that game, but then it stalled and gave up half its move to close just below the 10 day EMA. FB, APPLE moved modestly higher, showing their own tombstone doji. NFLX just out and out sold, dropping from an attempt to break through the 50 day MA. NASDAQ 100 was up more than NASDAQ overall, but these stocks were not the catalysts outside AMZN.
Software: Excited by the CRM/DATA deal. NOW gapped higher near the May peak, faded to close just modestly higher. COUP gapped, surged, then closed with a very pronounced tombstone doji. HUBS up but well off the high, still bearish near term. WDAY gapped to a tombstone right at the late May tombstone that was the high of that move. ZS gapped over the 50 day EMA and rallied to the 50 day SMA. VMW still putzing around at the 200 day SMA. MSFT gapped to a new high, but also closed with a tombstone; a pullback on this one provides an entry opportunity.
Personal Products: Held up well, EL added upside. PG recovered from a dip to close flat. CL stalled and started to fade so we banked some solid gain on the options. CLX hanging on in a test that started Friday.
Chips: AMD up again but gapped to a tombstone doji. AMAT solid with a gap over the 50 day SMA and a rally to the close. TXN moved over the 50 day SMA. XLNX broke over the 20 day MA. INTC continued upside on low volume. They are working upside.
Drugs/Biotech/Healthcare: Did their usual: After a good late week move they faded on Monday. Doesn't have to be Monday, just the day following a good move. Happened to PCRX, PTCT, ARNA, TNDM. Didn't break the patterns at all, just seems to be their on/off MO.
Social: SNAP was a bit lower on very low trade. MTCH jumped higher then gave it up for a modest loss holding the 10 day EMA. FB tombstone doji at the 6/3 lower gap point. TWTR gapped upside adding to the Friday surge but reversed to close lower. Not social's day.
Machinery: Moved upside then faded. CAT gapped and rallied, faded to a tombstone. DE gapped and ran to the 50 day EMA where it stalled and faded to a tombstone. We took some nice gain early. UTX gapped upside then reversed it all to close at the 200 day SMA. At first the market liked the deal then they punished UTX.
Financial: MA and V gapped higher then faded to modest gains after both put in solid moves last week. Banks were up then faded though some decent attempts upside from JPM, C.
MARKET STATS
DJ30
Stats: +78.74 points (+0.30%) to close at 26062.68
Nasdaq
Stats: +81.07 points (+1.05%) to close at 7823.17
Volume: 2.11B (+2.21%)
Up Volume: 1.47B (-160M)
Down Volume: 632.46M (+135.3M)
A/D and Hi/Lo: Advancers led 1.85 to 1
Previous Session: Advancers led 1.93 to 1
New Highs: 120 (-32)
New Lows: 52 (-59)
S&P
Stats: +13.39 points (+0.47%) to close at 2886.73
NYSE Volume: 740.456M (+1.71%)
Up Volume: 409.862M (-64.537M)
Down Volume: 320.656M (+93.334M)
A/D and Hi/Lo: Advancers led 1.53 to 1
Previous Session: Advancers led 2.83 to 1
New Highs: 208 (-84)
New Lows: 27 (-19)
SENTIMENT
VIX: 15.94; -0.36
VXN: 19.98; +0.05
VXO: 16.57; -0.82
Put/Call Ratio (CBOE): 0.78; -0.01. Recall the put/call ratio put in almost 20 sessions over 1.0 with just a few closed below that level. Lots of downside protecting and speculation and now a bit of a relief rally takes the pressure off.
Bulls and Bears:
One of the most spectacular moves in recent memory. Bulls dropped over 6 points while bears jumped 1.2 points. Of course, those more bearish moves pushed stocks the opposite direction
Indicator level: Fell from yellow to green, indicating the approach toward extremes did not make it and the pressure was released with the Friday rush higher in the stock indices.
Bulls: 42.7 versus 49.0 versus
Bears: 18.5 versus 17.3
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.
OTHER MARKETS
INTEREST RATES
Threat level: Red-ish. 3 month/10 year spread inverts a third time. 5 year, and 2 year are below the 3 month treasury. Third 10 year/3 month inversion this year. The positive: the 2 year/10 year is not inverted.
The 3 month yield versus the 10 year: Spread fell 6BP to -13BP. -26BP was the high water mark on this particular move. Healing.
The 2 year versus the 10 year: Spread held at 23BP. Still healing itself.
10 year: 2.15% versus 2.084%
3 month: 2.279% versus 2.277%
2 year: 1.917% versus 1.851%
Historical: the last sub-2% rate was in November 2016 (1.867%). Last trade over 3% was November 2018. 2.6% for quite some time, then yields started higher, first run from November to January, then mid-March.
The Dollar: There are two schools of thought. First, those who believe a strong dollar is in the interest of the US. Reagan (though not all of his advisors) and Clinton were strong dollar Presidents. Second, there are those who believe a strong dollar prevents the US from selling US goods abroad. The Bushes (1 and 2) and Obama were in this category. The thing is, the US is always its economic strength peak when its consumers are consuming, and that is when there is a strong economy and a strong dollar: they consume both US and foreign goods. History shows this again and again, and thus it is worth watching the dollar as a gauge of how the US economy is performing.
EUR/USD: 1.13134 versus 1.13326. After surging to the 200 day SMA Thursday, stalled Friday, doji Monday. Key level as is obvious in that it failed three prior attempts to take it out.
Historical: Back into the 6-month range formed after the euro sold off from the early 2018 peaks after a week below it.
USD/JPY: 108.425 versus 108.18. Bumping the 10 day EMA where it left off last week after a modest rally off the recent selling. Not looking as if it will take it out. Rate cut talk does that.
Historical: Last below 109 in June 2018 then tumbled to 107 in early January 2019. 114.51 is the recent high from October 2018.
Oil: 53.26, -0.73. Tapped the 10 day EMA on the high, faded to a loss. Oil does not have much strength.
Gold: 1329.30, -16.80. After the rally from 1274, a bit of a pullback is in order.
TUESDAY
The power of the Fed backing and some relief from the trade news took stocks higher another session, stretching the move to 5 or 6 sessions depending upon the index. A good bear market relief move that has the big asterisk next to it: Fed aided. Of course, with the Fed believed to be in the game, then upside can occur when it appears no upside can occur.
Thus, with the indices up that many sessions on overall lower volume and weak breadth, one would anticipate a pullback. Heck, even with the Fed there a pullback is still a normal part of the process. The doji at resistance, gaps to doji, further suggests a pullback is at hand.
That is good. If the Fed is going to push stocks higher, then a pullback provides great opportunity for more upside positions. A pullback to the old neckline - or close to it - morphs the near term outlook for a test of the old highs, and of course that is something we want to play.
Accordingly, given the action we didn't buy too much today - the gaps higher on top of the moves thus far did not provide many good entries. A test will. It also means we are on market pullback watch. Not for a crash - though you have remain open to the possibility - but a pullback to test the recent Fed-save move. Again, that is not a bad thing, just need to be aware of it for upside positions as well as downside as many of the latter have bounced with the market and are in position to retrace.
Have a great evening!
End part 1
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Monday, June 10, 2019
Sunday, June 09, 2019
No Need to Fear, the Fed is Here (Weekend Newsletter)
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| Market Summary (continued) Stocks stretched the post-Monday gains through Friday, aided by an even firmer conviction - thanks to a jobs report miss -- the Fed would cut rates, and the Administration indicating there would be no implementation of Mexican tariffs. Stock futures were higher ahead of jobs, fell on the paltry 75K gain in non-farm payrolls, but then reversed to pre-market highs as traders figured a weak number even further strengthened the odds for a near term rate cut. Stocks surged into midmorning then held the very solid gains through the close. SP500 29.85, 1.05% NASDAQ 126.55, 1.66% Dj30 263.28, 1.02% SP400 0.56% RUTX 0.72% SOX 1.15% NASDAQ 100 1.94% VOLUME: NYSE -8%, NASDAQ -3% ADVANCE/DECLINE: NYSE +2.8:1, NASDAQ +1.9:1 The action on the week managed to wipe away the late May selling, the second leg lower in the selling from the April peak and the move that broke the head and shoulders patterns through the necklines. Impressive recovery in price. THE question, of course, is whether this was a repudiation of the break lower. I often say a head and shoulders pattern sets up just to fool you. These appeared to be serious, however, given they made up the second top to the large double top patterns. Read "The Daily" Entire Weekend Summary Watch Market Overview Video Watch Technical Summary Video Watch Next Session Video
With the down and up week we had plays in both directions. QID (ProShares UltraShort QQQ) Company Profile With the downside dive Monday on the anti-trust worries on the FAANG stocks, we banked the QID gain. We picked up some July $34.00 strike calls on 5/24 for $2.67 as NASDAQ continued to sell after gapping downside the prior session. From there NASDAQ sold steadily with a crescendo Monday. We sold the calls for $5.10, banking 114%. HIIQ (Health Insurance Innovations Inc.) Company Profile Healthcare has shown some buying and we saw HIIQ break higher on 5/31, ready to break from an inverted head and shoulders pattern. We put it on the report, and the next session when HIIQ broke higher we bought the stock for $26.85 and some August $25.00 calls for $4.90. HIIQ moved higher each session then gapped upside and rallied early Thursday to our target. We banked half the stock for $32.70, a 21+% gain. We banked the options for $8.60, a 75% gain. AMD (Advanced Micro Devices Inc.) Company Profile AMD put in a very tight lateral consolidation from April to mid-May. We put it on the report, anticipating a break higher. It did so on 5/28 and we moved in with stock at $28.42 and some July $28.00 strike calls options at $2.38. A very strong break higher Thursday took AMD out of the 8 week consolidation. Friday AMD added a bit more, hitting the target. We banked half the stock for $32.44, a 14% gain. We also banked half the options for $5.10, a solid 114% gain. Receive a 2 week trial and if you stay on receive a $30 per month discount! | ||
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Company Profile EARNINGS: 08/08/2019 STATUS: ABCD. Looking for some more upside gain from AXSM as it has come back the past 2+ weeks to form an ABCD consolidation pattern. Tapping Thursday and Friday on the intraday lows at the 78% Fibonacci retracement of the early May upside gap and run, then posting a solid Friday advance. Looks as if the pattern in in place, and as AXSM continues upside we want to move in for a run to the prior high. That rally gains 18% on the stock, 55%ish on the options. CHART VIDEO Volume: 1.241M Avg Volume: 1.336M BUY POINT: $22.19 Volume=1.6M Target=$26.45 Stop=$20.64 POSITION: AXSM AUG 16 2019 22.50 C - (57 delta) &/or Stock Learn more about our Stock Split Report and how we have made gains of 321% with our powerful stock split plays! Save $360 per year on the Stock Split Report! Plus 2 week trial! | ||
FTNT (Fontinet, Inc.--$73.82; +0.22; optionable): Software Company Profile EARNINGS: 08/01/2019 STATUS: Bear flag. After a decent enough move to mid-April, FTNT started some selling. Gapped sharply lower early May, again on May 23. Sold hard on that gap to last Monday, then the rebound to test the 10 day EMA on the Friday high. Closed with a doji Friday, a short tombstone. Low volume rebound. If it continues lower we want to play, and we want to be in for a possible third cap lower. A move to the target gains 50%ish on the put options. CHART VIDEO Volume: 1.193M Avg Volume: 1.694M BUY POINT: $73.47 Volume=2M Target=$66.42 Stop=$75.80 POSITION: FTNT AUG 16 2019 75.00 P - (-50 delta) Save $600 per year and enjoy a 2 week trial of our IH Alerts Service! | ||
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TER - Teradyne Inc. is currently trading at $45.21. The July $45.00 Calls (TER20190720C00045000) are trading at $2.15. That provides a return of about 5% if TER is above $45.00 on expiration Friday in July. Company Profile Learn more about our Covered Call Tables | ||
Stock Split Report: Forbes.com Best of the Web Covered Calls: Allowed in your IRA - Energize your portfolio! The Daily: "The Daily" is a must read for all investors! Success Trading Group: 7 years without a trading loss! | ||
| The foregoing is commentary for informational purposes only. All statements and expressions are the opinions of Online Investment Services, LP., or Split Ventures, Ltd. This information is not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on the related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolios of writers for this issue may, in some instances, include securities mentioned herein and on the related web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors. No one associated herewith receives compensation in any manner from any of the companies that are discussed in this newsletter or on the related websites. This email was sent to tweet@investbilling.com. | ||
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The Daily, Part 1 of 3, 6-8-19
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6/8/2019 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: AMD
Entry alerts: None issued
Trailing stops: None issued
Stop alerts: None issued
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:
https://www.investmenthouse.com/alertdaily.html
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The Market Video is DIVIDED into component parts: Market Overview, Economy, Technical Summary, and the Next Session. Choose the segments you are interested in without having to search a longer video. Click on the link to the portion you wish to view.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/mo/mo.mp4
TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/ts/ts.mp4
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
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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.
SUMMARY
- Jobs report misses big headline and wages are slowing. No need to fear, the Fed is here.
- Mexico tariffs put off. It is sad it took a tariff threat to get action, but it was the one thing that got Mexico to act.
- Indices head higher another session in the rebound, again on less than solid internals.
- Market downside technical setup versus the Fed backstop.
- Fed may be behind the market again, but outside of some express talk about a rate cut, what more can the Fed do to drive stocks higher near term?
- After a big rebound week, watch for some downside. But also watch for key support to hold and suggest new upside.
Stocks stretched the post-Monday gains through Friday, aided by an even firmer conviction - thanks to a jobs report miss -- the Fed would cut rates, and the Administration indicating there would be no implementation of Mexican tariffs.
Stock futures were higher ahead of jobs, fell on the paltry 75K gain in non-farm payrolls, but then reversed to pre-market highs as traders figured a weak number even further strengthened the odds for a near term rate cut. Stocks surged into midmorning then held the very solid gains through the close.
SP500 29.85, 1.05%
NASDAQ 126.55, 1.66%
Dj30 263.28, 1.02%
SP400 0.56%
RUTX 0.72%
SOX 1.15%
NASDAQ 100 1.94%
VOLUME: NYSE -8%, NASDAQ -3%
ADVANCE/DECLINE: NYSE +2.8:1, NASDAQ +1.9:1
The action on the week managed to wipe away the late May selling, the second leg lower in the selling from the April peak and the move that broke the head and shoulders patterns through the necklines. Impressive recovery in price.
THE question, of course, is whether this was a repudiation of the break lower. I often say a head and shoulders pattern sets up just to fool you. These appeared to be serious, however, given they made up the second top to the large double top patterns.
The key fact to us is they did not break up the larger patterns formed since January 2018, the topping 'process' as I have called it. Lower volumes, weaker breadth, thinner leadership on the upside. Even the Friday breadth was not great with NASDAQ not even 2:1 and NYSE decent at 2.8:1.
That does not, however, keep you from playing upside moves as we did on this one. We took downside gain Monday, e.g. QID, then bought upside as the market rallied back Tuesday and on: HIIQ, DIS, TWLO, PEP, MCD - all provided good entries and HIIQ even gave us the gain on the week. These stocks were all in good patterns; in the kind of rebound move shown Friday, you get solid price moves even from stocks not in great patterns, e.g. AMZN, FB, GOOG. Of course we are already in other stocks that held decent patterns and started to move up again - as a good stock should: CL, PG, AMD, DE.
Thus, some very good moves from stocks in good position to move as well as stocks whose patterns were cracked. That happens even in overall downside markets, and despite the 4 sessions of gains (outside DJ30 that squeaked out a Monday gain), the bias is still lower.
No doubt the Fed and further rate cutting and other stimulus formerly known as 'extraordinary' that Powell now views as normal provides powerful upside stimulus - it did so for 9 years. If the Fed is truly in the game of playing market backstop - as the market appeared to believe to end the week, then even the 17 month topping action can give way to new highs.
That leaves the market at another proof point: will the top take over once more, or will the prospect of Fed intervention overcome the headline-led action and push stocks to new highs?
Stubborn bid refuses to quit.
Despite the negative overall look from the indices and many stock sectors, a few groups have steadily pointed higher. They are not typically viewed as related, but they are moving higher: personal products, software, food/eateries, social, credit services, drugs. We own some of these, bought into some on the week, and are looking at them more if they continue moving higher.
Why would you do so if the bias remains down? The groups have been tested but have not broken. There is a certain continued bid in the market, and even after some of these stocks were tagged Monday, they recovered and held their patterns. That says a lot for the strength: the sellers tried to take them out, but they hung on and popped back upside. Again, that demonstrates a strong bid.
Thus, even though we view the overall market pattern, internals, and leadership as downside, a stubborn bid remains. Moreover, that stubborn bid may be further augmented by the belief the Fed will help the markets sooner than later: bond yields are tanking, and no amount of Fed commentary otherwise, it fears deflation. Thus, I do believe the Fed will cut - not to join the crowd of 'I knew what was coming all along' pundits, but you recall I predicted a Fed cut in the making several months back. That, however, does not matter to the markets. What does matter is perceptions about the future, and with the Fed perceived as again having the market's back (okay, that is a growing perception, not a strong majority at the moment), the market could continue to find a bid. Has to prove it given the patterns, but the Fed is giving stocks a chance to move up when it looked as if they were in the process of rolling over.
THE MARKET
CHARTS
NASDAQ: Reversed off the Monday crash, rallying back up to the 50 day EMA by the Friday close. That puts NASDAQ back above the neckline in the head and shoulders pattern spanning early March to last week. Low volume, so-so breadth strongly suggest the move does not hold. As noted earlier, however, the Fed factor can thwart this downside technical setup - indeed, it helped thwart the break lower Monday.
SP500: Surged back from the head and shoulders breakdown as well, rallying to the 50 day SMA and January 2018 high at the close. As with NASDAQ, lower volume on the recovery, so-so breadth. Obviously a nice break upside price-wise but now at a seriously important resistance level to start the week. This week it shows if this rebound can test normally and hold on. What would be normal? A test back to 2800. Then a rebound. What is that? It would form a right shoulder to a short inverted head and shoulders - yes, from a head and shoulders to an inverted one. Have to acknowledge the changes when they occur. Of course, the operative word is 'when.' Not there yet.
DJ30: Up to the 50 day SMA as well, up all 5 sessions after showing a doji Monday just over the prior Friday low. Trying to break up that head and shoulders as well, back up to test the late February high in the left shoulder. Trying. Still has to prove it can do it.
SOX: Up on the week after holding a key low at 1300 the prior week. Many chip stocks making the same rebound move. Thus far it is truly just a rebound in a negative pattern, though there is more upside room to continue the rebound.
SP400: The midcaps posted an excellent week, up 5 sessions as was DJ30. Gapped lower two Fridays back then gapped upside Monday, a bit of an island reversal. Rallied through the 200 day SMA Friday with a gap, stalling at the 50 day EMA. That leaves SP400 smack in the middle of the range from February, and from our view, still downside bias unless the Fed has completely changed the game.
RUTX: The small caps lagged the move, making to the lows from March. Only two solid upside moves on the week, Tuesday and Friday. The small caps are still lagging and still sport the weakest pattern in the market.
LEADERSHIP
FAANG: The patterns are hashed for the most part, but Friday saw money move in with some of the best volume since the selling. AMZN jumped the 200 day SMA on strong trade. Even AAPL made it to the 200 day SMA on a gap and rally, showing above average volume as well. FB showed similar action, recovering to the 10 day EMA on above average trade. NFLX made it through the 50 day SMA on the high, just could not make it stick. GOOG finally awoke after its Monday DOJ anti-trust slam lower.
Personal products: Still solid, e.g. PG, CL, and EL.
Chips: Some names are performing as the group put in an interim bottom and is attempting a bounce. AMD up again on a big upside week. AMAT slowly climbing but on light trade. TXN to the 50 day MA. XLNX looks as if it wants to break higher, just has not done so. SWKS edging upside. INTC broke upward through the 20 day EMA; it can still be a buy this week after it tests that Friday move early week.
Software: After an ugly, ugly Monday, a very impressive recovery for this group. MSFT led the Friday breakouts. NOW is up to the old high. WDAY surged Thursday and Friday to near the old closing highs. COUP recovered to another new high. TWLO at a new closing high.
Drugs/Biotech/Healthcare: After a Thursday dip, a good recovery. PTCT, ARNA rebounded Friday off near support. PCRX surged Friday. TNDM still solid.
Social: SNAP enjoyed a strong week, testing a bit Friday. TWTR surged back through the 50 day MA's Friday on strong volume. MTCH still looks good for a new buy if it can hold one of these moves. FB finally got some snap Friday, making it to the bottom of the wedge after that sharp, anti-trust related Monday selloff.
MISC: MNST broke out Friday from a cup w/handle. We watched it, thought about putting it on Thursday night, didn't. Great. On a test Monday . . . V and MA surged upside to new highs. VRSN new highs again. TREX looks possible for a new buy. ZEN, SHOP both surged nicely; a dip early week could set up some new buys.
MARKET STATS
DJ30
Stats: +263.28 points (+1.02%) to close at 25983.04
Nasdaq
Stats: +126.55 points (+1.66%) to close at 7742.10
Volume: 2.064B (-3.05%)
Up Volume: 1.63B (+440M)
Down Volume: 497.16M (-480.52M)
A/D and Hi/Lo: Advancers led 1.93 to 1
Previous Session: Decliners led 1.26 to 1
New Highs: 152 (+71)
New Lows: 111 (-31)
S&P
Stats: +29.85 points (+1.05%) to close at 2873.44
NYSE Volume: 727.973M (-7.82%)
Up Volume: 474.4M (-15.68M)
Down Volume: 227.323M (-62.964M)
A/D and Hi/Lo: Advancers led 2.83 to 1
Previous Session: Advancers led 1.37 to 1
New Highs: 292 (+98)
New Lows: 46 (-56)
SENTIMENT
VIX: 16.30; +0.37
VXN: 19.93; -0.39
VXO: 17.39; +0.40
Put/Call Ratio (CBOE): 0.79; -0.06
Bulls and Bears:
One of the most spectacular moves in recent memory. Bulls dropped over 6 points while bears jumped 1.2 points. Of course, those more bearish moves pushed stocks the opposite direction
Indicator level: Fell from yellow to green, indicating the approach toward extremes did not make it and the pressure was released with the Friday rush higher in the stock indices.
Bulls: 42.7 versus 49.0 versus
Bears: 18.5 versus 17.3
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.
OTHER MARKETS
INTEREST RATES
Threat level: Red-ish. 3 month/10 year spread inverts a third time. 5 year, and 2 year are below the 3 month treasury. Third 10 year/3 month inversion this year. The positive: the 2 year/10 year is not inverted.
The 3 month yield versus the 10 year: Spread rose 1BP to -19BP. -26BP was the high water mark on this particular move.
The 2 year versus the 10 year: Spread fell 3BP to 23BP. Made it to 26BP. Still healing itself.
10 year: 2.084% versus 2.13%
3 month: 2.277% versus 2.316%
2 year: 1.851% versus 1.875%
Historical: the last sub-2% rate was in November 2016 (1.867%). Last trade over 3% was November 2018. 2.6% for quite some time, then yields started higher, first run from November to January, then mid-March.
The Dollar: There are two schools of thought. First, those who believe a strong dollar is in the interest of the US. Reagan (though not all of his advisors) and Clinton were strong dollar Presidents. Second, there are those who believe a strong dollar prevents the US from selling US goods abroad. The Bushes (1 and 2) and Obama were in this category. The thing is, the US is always its economic strength peak when its consumers are consuming, and that is when there is a strong economy and a strong dollar: they consume both US and foreign goods. History shows this again and again, and thus it is worth watching the dollar as a gauge of how the US economy is performing.
EUR/USD: 1.13326 versus 1.12776. Euro screamed upside Monday, Thursday, and Friday, breaking through the 200 day SMA on the Friday close. That is the first close over the 200 day MA since January, indeed, the first time it moved over that level since January.
Historical: Back into the 6-month range formed after the euro sold off from the early 2018 peaks after a week below it.
USD/JPY: 108.18 versus 108.372. The dollar moved higher to the 10 day EMA on the week, then reversed hard downside Friday. Looks as if it failed at the 10 day EMA again.
Historical: Last below 109 in June 2018 then tumbled to 107 in early January 2019. 114.51 is the recent high from October 2018.
Oil: 53.99, +2.31. After another week of selling, oil jumped higher Friday. Still in the selloff.
Gold: 1346.10, +12.50. Continued the surge up to the February high. If all is well, why is gold surging? Economic data weaker? Fed going to cut rates? Both are valid.
MONDAY
A sharp price rebound with weaker internals than the sharp selling into Monday. Friday the rebound accelerated, again in price terms, as the weaker jobs data (aka prompting a nearer Fed rate cut) and the Administration forgoing Mexican tariffs. After all, jobs are lagging indicators, and if they are slowing then the economy overall is already significantly slower.
As noted earlier, that means this week is another important one. The indices broke support, a break that hit a crescendo with the Monday reported anti-trust moves against FAANG stocks. From there a relief move after the sentiment was about as negative as it gets. The indices bounced on lower volume, mediocre internals, and just a handful of leaders. The indices moved back above the neckline in the head and shoulders patterns but closed the week at resistance. After a week of releasing the negative emotions we will see what is left in the tank, how much Fed-fuel as it were.
To us it certainly looks like a prime spot to roll back over. I know, that goes against the hope in the populace in general, but it is what the patterns suggest. Again, the Fed can change all of that, but it would have to come out with more: last week the move was ginned up with Powell's comments and the solidifying of the view a rate cut is coming next and coming relatively soon. Will more Fed speakers hit the microphones to drive home the point? Will the Fed convene and emergency meeting and cut rates? With the market surging last week? Not counting on it.
The point: the market surely surged back upside last week, but that was with the 'good' news of weaker economics and Fed-speak that convinced the markets the Fed was more than ready to cut rates if the economics indicated it was necessary. What more is going to drive stocks this week?
Well, we will see. If the bids return, we have some good positions working and will be ready with more to add. The market has not taken down all leadership groups and they could put up some more breakouts. Even if there is an early dip this week some leaders could be put into buy positions.
If there is reversal action at this resistance, however, we won't be slow to get out of upside that starts struggling and put on some more downside. Will be ready with those as well - the market is downside bias after all, even with the past week's surge.
Watch the reversal, however. Sure it appears the bias remains low and the direction of least resistance is down. But how far? SP500 at 2800, a key level? NASDAQ 7650, another key level? A drop to that level that holds suggests even more upside recovery from some inverted head and shoulders patterns. Thus, on an early drop this week, watch 2800 on SP500 and 7650 on NASDAQ. If they hold we will be ready to transition to the upside with more gusto. After all, the Fed is behind the market now, right?
Have a great weekend!
End part 1 of 3
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6/8/2019 Investment House Daily
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MARKET ALERTS:
Targets hit: AMD
Entry alerts: None issued
Trailing stops: None issued
Stop alerts: None issued
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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.
SUMMARY
- Jobs report misses big headline and wages are slowing. No need to fear, the Fed is here.
- Mexico tariffs put off. It is sad it took a tariff threat to get action, but it was the one thing that got Mexico to act.
- Indices head higher another session in the rebound, again on less than solid internals.
- Market downside technical setup versus the Fed backstop.
- Fed may be behind the market again, but outside of some express talk about a rate cut, what more can the Fed do to drive stocks higher near term?
- After a big rebound week, watch for some downside. But also watch for key support to hold and suggest new upside.
Stocks stretched the post-Monday gains through Friday, aided by an even firmer conviction - thanks to a jobs report miss -- the Fed would cut rates, and the Administration indicating there would be no implementation of Mexican tariffs.
Stock futures were higher ahead of jobs, fell on the paltry 75K gain in non-farm payrolls, but then reversed to pre-market highs as traders figured a weak number even further strengthened the odds for a near term rate cut. Stocks surged into midmorning then held the very solid gains through the close.
SP500 29.85, 1.05%
NASDAQ 126.55, 1.66%
Dj30 263.28, 1.02%
SP400 0.56%
RUTX 0.72%
SOX 1.15%
NASDAQ 100 1.94%
VOLUME: NYSE -8%, NASDAQ -3%
ADVANCE/DECLINE: NYSE +2.8:1, NASDAQ +1.9:1
The action on the week managed to wipe away the late May selling, the second leg lower in the selling from the April peak and the move that broke the head and shoulders patterns through the necklines. Impressive recovery in price.
THE question, of course, is whether this was a repudiation of the break lower. I often say a head and shoulders pattern sets up just to fool you. These appeared to be serious, however, given they made up the second top to the large double top patterns.
The key fact to us is they did not break up the larger patterns formed since January 2018, the topping 'process' as I have called it. Lower volumes, weaker breadth, thinner leadership on the upside. Even the Friday breadth was not great with NASDAQ not even 2:1 and NYSE decent at 2.8:1.
That does not, however, keep you from playing upside moves as we did on this one. We took downside gain Monday, e.g. QID, then bought upside as the market rallied back Tuesday and on: HIIQ, DIS, TWLO, PEP, MCD - all provided good entries and HIIQ even gave us the gain on the week. These stocks were all in good patterns; in the kind of rebound move shown Friday, you get solid price moves even from stocks not in great patterns, e.g. AMZN, FB, GOOG. Of course we are already in other stocks that held decent patterns and started to move up again - as a good stock should: CL, PG, AMD, DE.
Thus, some very good moves from stocks in good position to move as well as stocks whose patterns were cracked. That happens even in overall downside markets, and despite the 4 sessions of gains (outside DJ30 that squeaked out a Monday gain), the bias is still lower.
No doubt the Fed and further rate cutting and other stimulus formerly known as 'extraordinary' that Powell now views as normal provides powerful upside stimulus - it did so for 9 years. If the Fed is truly in the game of playing market backstop - as the market appeared to believe to end the week, then even the 17 month topping action can give way to new highs.
That leaves the market at another proof point: will the top take over once more, or will the prospect of Fed intervention overcome the headline-led action and push stocks to new highs?
Stubborn bid refuses to quit.
Despite the negative overall look from the indices and many stock sectors, a few groups have steadily pointed higher. They are not typically viewed as related, but they are moving higher: personal products, software, food/eateries, social, credit services, drugs. We own some of these, bought into some on the week, and are looking at them more if they continue moving higher.
Why would you do so if the bias remains down? The groups have been tested but have not broken. There is a certain continued bid in the market, and even after some of these stocks were tagged Monday, they recovered and held their patterns. That says a lot for the strength: the sellers tried to take them out, but they hung on and popped back upside. Again, that demonstrates a strong bid.
Thus, even though we view the overall market pattern, internals, and leadership as downside, a stubborn bid remains. Moreover, that stubborn bid may be further augmented by the belief the Fed will help the markets sooner than later: bond yields are tanking, and no amount of Fed commentary otherwise, it fears deflation. Thus, I do believe the Fed will cut - not to join the crowd of 'I knew what was coming all along' pundits, but you recall I predicted a Fed cut in the making several months back. That, however, does not matter to the markets. What does matter is perceptions about the future, and with the Fed perceived as again having the market's back (okay, that is a growing perception, not a strong majority at the moment), the market could continue to find a bid. Has to prove it given the patterns, but the Fed is giving stocks a chance to move up when it looked as if they were in the process of rolling over.
THE MARKET
CHARTS
NASDAQ: Reversed off the Monday crash, rallying back up to the 50 day EMA by the Friday close. That puts NASDAQ back above the neckline in the head and shoulders pattern spanning early March to last week. Low volume, so-so breadth strongly suggest the move does not hold. As noted earlier, however, the Fed factor can thwart this downside technical setup - indeed, it helped thwart the break lower Monday.
SP500: Surged back from the head and shoulders breakdown as well, rallying to the 50 day SMA and January 2018 high at the close. As with NASDAQ, lower volume on the recovery, so-so breadth. Obviously a nice break upside price-wise but now at a seriously important resistance level to start the week. This week it shows if this rebound can test normally and hold on. What would be normal? A test back to 2800. Then a rebound. What is that? It would form a right shoulder to a short inverted head and shoulders - yes, from a head and shoulders to an inverted one. Have to acknowledge the changes when they occur. Of course, the operative word is 'when.' Not there yet.
DJ30: Up to the 50 day SMA as well, up all 5 sessions after showing a doji Monday just over the prior Friday low. Trying to break up that head and shoulders as well, back up to test the late February high in the left shoulder. Trying. Still has to prove it can do it.
SOX: Up on the week after holding a key low at 1300 the prior week. Many chip stocks making the same rebound move. Thus far it is truly just a rebound in a negative pattern, though there is more upside room to continue the rebound.
SP400: The midcaps posted an excellent week, up 5 sessions as was DJ30. Gapped lower two Fridays back then gapped upside Monday, a bit of an island reversal. Rallied through the 200 day SMA Friday with a gap, stalling at the 50 day EMA. That leaves SP400 smack in the middle of the range from February, and from our view, still downside bias unless the Fed has completely changed the game.
RUTX: The small caps lagged the move, making to the lows from March. Only two solid upside moves on the week, Tuesday and Friday. The small caps are still lagging and still sport the weakest pattern in the market.
LEADERSHIP
FAANG: The patterns are hashed for the most part, but Friday saw money move in with some of the best volume since the selling. AMZN jumped the 200 day SMA on strong trade. Even AAPL made it to the 200 day SMA on a gap and rally, showing above average volume as well. FB showed similar action, recovering to the 10 day EMA on above average trade. NFLX made it through the 50 day SMA on the high, just could not make it stick. GOOG finally awoke after its Monday DOJ anti-trust slam lower.
Personal products: Still solid, e.g. PG, CL, and EL.
Chips: Some names are performing as the group put in an interim bottom and is attempting a bounce. AMD up again on a big upside week. AMAT slowly climbing but on light trade. TXN to the 50 day MA. XLNX looks as if it wants to break higher, just has not done so. SWKS edging upside. INTC broke upward through the 20 day EMA; it can still be a buy this week after it tests that Friday move early week.
Software: After an ugly, ugly Monday, a very impressive recovery for this group. MSFT led the Friday breakouts. NOW is up to the old high. WDAY surged Thursday and Friday to near the old closing highs. COUP recovered to another new high. TWLO at a new closing high.
Drugs/Biotech/Healthcare: After a Thursday dip, a good recovery. PTCT, ARNA rebounded Friday off near support. PCRX surged Friday. TNDM still solid.
Social: SNAP enjoyed a strong week, testing a bit Friday. TWTR surged back through the 50 day MA's Friday on strong volume. MTCH still looks good for a new buy if it can hold one of these moves. FB finally got some snap Friday, making it to the bottom of the wedge after that sharp, anti-trust related Monday selloff.
MISC: MNST broke out Friday from a cup w/handle. We watched it, thought about putting it on Thursday night, didn't. Great. On a test Monday . . . V and MA surged upside to new highs. VRSN new highs again. TREX looks possible for a new buy. ZEN, SHOP both surged nicely; a dip early week could set up some new buys.
MARKET STATS
DJ30
Stats: +263.28 points (+1.02%) to close at 25983.04
Nasdaq
Stats: +126.55 points (+1.66%) to close at 7742.10
Volume: 2.064B (-3.05%)
Up Volume: 1.63B (+440M)
Down Volume: 497.16M (-480.52M)
A/D and Hi/Lo: Advancers led 1.93 to 1
Previous Session: Decliners led 1.26 to 1
New Highs: 152 (+71)
New Lows: 111 (-31)
S&P
Stats: +29.85 points (+1.05%) to close at 2873.44
NYSE Volume: 727.973M (-7.82%)
Up Volume: 474.4M (-15.68M)
Down Volume: 227.323M (-62.964M)
A/D and Hi/Lo: Advancers led 2.83 to 1
Previous Session: Advancers led 1.37 to 1
New Highs: 292 (+98)
New Lows: 46 (-56)
SENTIMENT
VIX: 16.30; +0.37
VXN: 19.93; -0.39
VXO: 17.39; +0.40
Put/Call Ratio (CBOE): 0.79; -0.06
Bulls and Bears:
One of the most spectacular moves in recent memory. Bulls dropped over 6 points while bears jumped 1.2 points. Of course, those more bearish moves pushed stocks the opposite direction
Indicator level: Fell from yellow to green, indicating the approach toward extremes did not make it and the pressure was released with the Friday rush higher in the stock indices.
Bulls: 42.7 versus 49.0 versus
Bears: 18.5 versus 17.3
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.
OTHER MARKETS
INTEREST RATES
Threat level: Red-ish. 3 month/10 year spread inverts a third time. 5 year, and 2 year are below the 3 month treasury. Third 10 year/3 month inversion this year. The positive: the 2 year/10 year is not inverted.
The 3 month yield versus the 10 year: Spread rose 1BP to -19BP. -26BP was the high water mark on this particular move.
The 2 year versus the 10 year: Spread fell 3BP to 23BP. Made it to 26BP. Still healing itself.
10 year: 2.084% versus 2.13%
3 month: 2.277% versus 2.316%
2 year: 1.851% versus 1.875%
Historical: the last sub-2% rate was in November 2016 (1.867%). Last trade over 3% was November 2018. 2.6% for quite some time, then yields started higher, first run from November to January, then mid-March.
The Dollar: There are two schools of thought. First, those who believe a strong dollar is in the interest of the US. Reagan (though not all of his advisors) and Clinton were strong dollar Presidents. Second, there are those who believe a strong dollar prevents the US from selling US goods abroad. The Bushes (1 and 2) and Obama were in this category. The thing is, the US is always its economic strength peak when its consumers are consuming, and that is when there is a strong economy and a strong dollar: they consume both US and foreign goods. History shows this again and again, and thus it is worth watching the dollar as a gauge of how the US economy is performing.
EUR/USD: 1.13326 versus 1.12776. Euro screamed upside Monday, Thursday, and Friday, breaking through the 200 day SMA on the Friday close. That is the first close over the 200 day MA since January, indeed, the first time it moved over that level since January.
Historical: Back into the 6-month range formed after the euro sold off from the early 2018 peaks after a week below it.
USD/JPY: 108.18 versus 108.372. The dollar moved higher to the 10 day EMA on the week, then reversed hard downside Friday. Looks as if it failed at the 10 day EMA again.
Historical: Last below 109 in June 2018 then tumbled to 107 in early January 2019. 114.51 is the recent high from October 2018.
Oil: 53.99, +2.31. After another week of selling, oil jumped higher Friday. Still in the selloff.
Gold: 1346.10, +12.50. Continued the surge up to the February high. If all is well, why is gold surging? Economic data weaker? Fed going to cut rates? Both are valid.
MONDAY
A sharp price rebound with weaker internals than the sharp selling into Monday. Friday the rebound accelerated, again in price terms, as the weaker jobs data (aka prompting a nearer Fed rate cut) and the Administration forgoing Mexican tariffs. After all, jobs are lagging indicators, and if they are slowing then the economy overall is already significantly slower.
As noted earlier, that means this week is another important one. The indices broke support, a break that hit a crescendo with the Monday reported anti-trust moves against FAANG stocks. From there a relief move after the sentiment was about as negative as it gets. The indices bounced on lower volume, mediocre internals, and just a handful of leaders. The indices moved back above the neckline in the head and shoulders patterns but closed the week at resistance. After a week of releasing the negative emotions we will see what is left in the tank, how much Fed-fuel as it were.
To us it certainly looks like a prime spot to roll back over. I know, that goes against the hope in the populace in general, but it is what the patterns suggest. Again, the Fed can change all of that, but it would have to come out with more: last week the move was ginned up with Powell's comments and the solidifying of the view a rate cut is coming next and coming relatively soon. Will more Fed speakers hit the microphones to drive home the point? Will the Fed convene and emergency meeting and cut rates? With the market surging last week? Not counting on it.
The point: the market surely surged back upside last week, but that was with the 'good' news of weaker economics and Fed-speak that convinced the markets the Fed was more than ready to cut rates if the economics indicated it was necessary. What more is going to drive stocks this week?
Well, we will see. If the bids return, we have some good positions working and will be ready with more to add. The market has not taken down all leadership groups and they could put up some more breakouts. Even if there is an early dip this week some leaders could be put into buy positions.
If there is reversal action at this resistance, however, we won't be slow to get out of upside that starts struggling and put on some more downside. Will be ready with those as well - the market is downside bias after all, even with the past week's surge.
Watch the reversal, however. Sure it appears the bias remains low and the direction of least resistance is down. But how far? SP500 at 2800, a key level? NASDAQ 7650, another key level? A drop to that level that holds suggests even more upside recovery from some inverted head and shoulders patterns. Thus, on an early drop this week, watch 2800 on SP500 and 7650 on NASDAQ. If they hold we will be ready to transition to the upside with more gusto. After all, the Fed is behind the market now, right?
Have a great weekend!
End part 1 of 3
_______________________________________________________
Member: tweet@investbilling.com
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1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
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Thursday, June 06, 2019
The Daily, Part 1 of 3, 6-6-19
* * * *
6/6/2019 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: HIIQ
Entry alerts: MCD; PEP
Trailing stops: None issued
Stop alerts: ARQL
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:
https://www.investmenthouse.com/alertdaily.html
********************************************************************
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.
SUMMARY
- Fed speakers second Powell, reports Mexico tariffs may be delayed help stocks to another gain in the rebound.
- Internals still rather pathetic on the upside, making the next move worrisome.
- Jobs report Friday is likely the next decision point for the move.
- Still upside areas working but turning defensive again as the growth rebound looks iffy.
The market rebound stretched to another session, three on most indices, four on DJ30. A bevy of Fed speakers all more or less seconded Powell's prior comments on being ready to act if the economy slows, and that again gave investors some confidence. It is somewhat discouraging that the New York Fed president, when asked about the bond yield curve, stated that he did not view the curve as an 'oracle' to ask if there would be a recession. Of course not, because as history has shown, all Fed members are smarter than markets. That is why they have been wrong time after time after time after time.
But, I digress. The Fed-speak was good enough for the markets, and late session reports that the White House might push back the Mexico tariffs added to the upside fuel. The stories were reassuring enough to continue the rebound buying for another session, buying into the Friday May jobs report release.
SP500 17.34, 0.61%
NASDAQ 40.07, 0.53%
DJ30 181.09, 0.71%
SP400 0.36%
RUTX -0.22%
SOX 1.34%
NASDAQ 100 0.76%
VOLUME: NYSE -4%, NASDAQ -3%. More lower volume on the upside. Alas.
ADVANCE/DECLINE: NYSE 1.4:1, NASDAQ -1.3:1. Pathetic breadth again on the upside.
CHARTS
To view, click on the following links:
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
http://investmenthouse1.com/ihmedia/f/charts/nasdaq100.jpg
The stock indices outside of RUTX all advanced though the focus was on large caps whether NASDAQ or NYSE.
SP500 managed to close over the 50 day EMA in its efforts to break up the head and shoulders top that is the second top in a larger double top. The move upside is what the bulls had to do in response to keep the rally alive. The next key level is the 50 day SMA another 25 points higher.
NASDAQ continued higher as well and is running right into key resistance at the neckline of the head and shoulders top. It is basically there at the close and now we see how NASDAQ reacts. This looks very much like a bear flag rebound that is about at the limit of the bounce. At least it will show whether that is true or not rather quickly.
DJ30 continued upside for a fourth session, rallying to the 50 day EMA, or just below it, at the close. DJ30 is over the neckline if its head and shoulders, and that shows some upside strength. How it handles the 50 day EMA and then the 50 day SMA tells the story. It is trying to break up that H&S, doing what it has to do. Do we think it will? No. Does that matter to the market? No. So, we play stocks such as PEP, DE, CL (even though they are not necessarily DJ30 stocks) as they continue higher, making great moves out of solid patterns.
SOX posted a modest gain, closing just below the 20 day EMA after it tried that level Wednesday and faded to a loss. Not powerful action, but not bad, as it gives SOX a chance to catch its breath after the initial move off the lows at the 200 day SMA and then push ahead. With many big name chips posting gains - some strong such as AMD - SOX looks as if it can push higher.
SP400 continued higher as well, but it now faces the 200 day SMA, closing just below that resistance. Still a less than reassuring move higher as SP400 midcaps just follow along.
RUTX was lower but for a second session showed a nice doji with tail tapping the 10 day EMA on the low and bouncing. RUTX looks as if it is setting up by itself for a better bounce. That could prove very good for the stock market.
LEADERSHIP
FAANG: Hard to say much good here. AAPL scored a decent gain but the pattern is so-so. AMZN has set up a bear flag. NFXL soldiers on in its range. Just no excitement.
Personal products: PG, CL, CLX, EL are examples of powering higher.
Chips: Big names solid enough. AMD super. AMAT, TXN, XLNX decent enough. SWKS may bounce here (strong volume for two sessions) so we need to be ready to take the rest of the downside off the table.
Software: Very interesting. MSFT recovered. NOW looks good. WDAY trying to recover. TWLO jumped again. HUBS looks like it could fall. COUP rubbing it in our face as it jumped off the 50 day EMA and is still moving up. Still some very solid stocks in this group.
Drugs/Biotech/Healthcare: Disappointing as they all faded to test (PTCT, ARNA) while ARQL sold harder and we closed it. At least we were able to bank some solid gain on HIIQ before it reversed its upside surge. Most just testing but some money moved elsewhere today.
Social: SNAP snapped off another good upside move. MTCH took a day off after a solid Tuesday and Wednesday. TWTR is still trying to recover from the Monday drop with FB. FB bounced modestly off its selling but went nowhere today.
FRIDAY
Jobs report Friday with the indices sitting on a 3-4 session rebound off some seriously nasty selling. With the indices sporting a lower volume rebound, this is another test point for the stock market in its attempt to recover. ADP was horrid; the government report is likely not going to be that bad - the administration won't allow it.
Okay, the Fed is seen as a bit more dovish with a sack full of speakers today seconding Powell. That story has pretty much been milked dry. What else will drive stocks from here? Jobs? Is a good report good or is it considered bad? Powell said he would act if the data deteriorated. Thus, good would not seem good to a market convinced the Fed needs to act and will act. A former Fed official said it would cut so it must cut, right? Hmmm.
We will see how things break after this bounce and after the jobs report. We have some downside plays ready to go. We have some upside plays in play and others ready. They are winnowing themselves out to a select group of upside leaders. For Friday we have some more downside and another upside or two, and perhaps a surprise name as well.
Have a great evening!
MARKET STATS
DJ30
Stats: +181.09 points (+0.71%) to close at 25720.66
Nasdaq
Stats: +40.07 points (+0.53%) to close at 7615.55
Volume: 2.129B (-2.77%)
Up Volume: 1.19B (+170M)
Down Volume: 977.68M (-182.32M)
A/D and Hi/Lo: Decliners led 1.26 to 1
Previous Session: Decliners led 1.34 to 1
New Highs: 81 (-12)
New Lows: 142 (+23)
S&P
Stats: +17.34 points (+0.61%) to close at 2843.49
NYSE Volume: 789.772M (-3.57%)
Up Volume: 490.08M (+133.77M)
Down Volume: 290.287M (-153.181M)
A/D and Hi/Lo: Advancers led 1.37 to 1
Previous Session: Advancers led 1.02 to 1
New Highs: 194 (+19)
New Lows: 102 (+41)
SENTIMENT
VIX: 15.93; -0.16
VXN: 20.32; -0.55
VXO: 16.99; -0.63
Put/Call Ratio (CBOE): 0.85; -0.14
Bulls and Bears:
Bulls faded farther, falling below 50 with a pretty solid 6 point drop over 3 weeks. Bears fell yet again. Bears lower on selling, VIX not spiking on selling. Appears there are more issues to resolve that this range trading action at the head and shoulders neckline has not been able to rectify.
Bulls surprisingly resilient, falling but not much. Bears actually rose. Still no extremes though bulls were close to the 60's that has marked tops. Apparently this was close enough for stock market work.
It did its work in the late 2018 selling with a crossover of the bulls and bears, and when that occurs you expect a recovery. That has been the case. Now with the indices bumping resistance you look for extremes, but bulls are not hitting that 60ish level that has prompted selling/corrections in this long rally from 2009.
Indicator level: Shading to yellow for this week even as bulls backed off. Not in the 60's, but not much fear from the selling.
Bulls: 49.0 versus 49.5 versus
Bears: 17.3 versus 17.2
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.
OTHER MARKETS
INTEREST RATES
Threat level: Red-ish. 3 month/10 year spread inverts a third time. 5 year, and 2 year are below the 3 month treasury. Third 10 year/3 month inversion this year. The positive: the 2 year/10 year is not inverted.
The 3 month yield versus the 10 year: Spread fell 4BP to -18BP. -26BP was the high water mark on this particular move.
The 2 year versus the 10 year: Spread fell 1BP to 26BP. Still healing itself.
10 year: 2.13% versus 2.124%
3 month: 2.316% versus 2.342%
2 year: 1.875% versus 1.847%
Historical: the last sub-2% rate was in November 2016 (1.867%). Last trade over 3% was November 2018. 2.6% for quite some time, then yields started higher, first run from November to January, then mid-March.
The Dollar: There are two schools of thought. First, those who believe a strong dollar is in the interest of the US. Reagan (though not all of his advisors) and Clinton were strong dollar Presidents. Second, there are those who believe a strong dollar prevents the US from selling US goods abroad. The Bushes (1 and 2) and Obama were in this category. The thing is, the US is always its economic strength peak when its consumers are consuming, and that is when there is a strong economy and a strong dollar: they consume both US and foreign goods. History shows this again and again, and thus it is worth watching the dollar as a gauge of how the US economy is performing.
EUR/USD: 1.12776 versus 1.12269. Euro surged off the 50 day MA toward the 200 day MA.
Historical: Back into the 6-month range formed after the euro sold off from the early 2018 peaks after a week below it.
USD/JPY: 108.372 versus 108.289. Modest gain again, still unable to break back up through the 10 day EMA. Very much the look of a bear flag.
Historical: Last below 109 in June 2018 then tumbled to 107 in early January 2019. 114.51 is the recent high from October 2018.
Oil: 51.68, -1.80
Gold: 1333.60, +4.90.
End part 1
_______________________________________________________
Member: tweet@investbilling.com
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
6/6/2019 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: HIIQ
Entry alerts: MCD; PEP
Trailing stops: None issued
Stop alerts: ARQL
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:
https://www.investmenthouse.com/alertdaily.html
********************************************************************
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.
SUMMARY
- Fed speakers second Powell, reports Mexico tariffs may be delayed help stocks to another gain in the rebound.
- Internals still rather pathetic on the upside, making the next move worrisome.
- Jobs report Friday is likely the next decision point for the move.
- Still upside areas working but turning defensive again as the growth rebound looks iffy.
The market rebound stretched to another session, three on most indices, four on DJ30. A bevy of Fed speakers all more or less seconded Powell's prior comments on being ready to act if the economy slows, and that again gave investors some confidence. It is somewhat discouraging that the New York Fed president, when asked about the bond yield curve, stated that he did not view the curve as an 'oracle' to ask if there would be a recession. Of course not, because as history has shown, all Fed members are smarter than markets. That is why they have been wrong time after time after time after time.
But, I digress. The Fed-speak was good enough for the markets, and late session reports that the White House might push back the Mexico tariffs added to the upside fuel. The stories were reassuring enough to continue the rebound buying for another session, buying into the Friday May jobs report release.
SP500 17.34, 0.61%
NASDAQ 40.07, 0.53%
DJ30 181.09, 0.71%
SP400 0.36%
RUTX -0.22%
SOX 1.34%
NASDAQ 100 0.76%
VOLUME: NYSE -4%, NASDAQ -3%. More lower volume on the upside. Alas.
ADVANCE/DECLINE: NYSE 1.4:1, NASDAQ -1.3:1. Pathetic breadth again on the upside.
CHARTS
To view, click on the following links:
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
http://investmenthouse1.com/ihmedia/f/charts/nasdaq100.jpg
The stock indices outside of RUTX all advanced though the focus was on large caps whether NASDAQ or NYSE.
SP500 managed to close over the 50 day EMA in its efforts to break up the head and shoulders top that is the second top in a larger double top. The move upside is what the bulls had to do in response to keep the rally alive. The next key level is the 50 day SMA another 25 points higher.
NASDAQ continued higher as well and is running right into key resistance at the neckline of the head and shoulders top. It is basically there at the close and now we see how NASDAQ reacts. This looks very much like a bear flag rebound that is about at the limit of the bounce. At least it will show whether that is true or not rather quickly.
DJ30 continued upside for a fourth session, rallying to the 50 day EMA, or just below it, at the close. DJ30 is over the neckline if its head and shoulders, and that shows some upside strength. How it handles the 50 day EMA and then the 50 day SMA tells the story. It is trying to break up that H&S, doing what it has to do. Do we think it will? No. Does that matter to the market? No. So, we play stocks such as PEP, DE, CL (even though they are not necessarily DJ30 stocks) as they continue higher, making great moves out of solid patterns.
SOX posted a modest gain, closing just below the 20 day EMA after it tried that level Wednesday and faded to a loss. Not powerful action, but not bad, as it gives SOX a chance to catch its breath after the initial move off the lows at the 200 day SMA and then push ahead. With many big name chips posting gains - some strong such as AMD - SOX looks as if it can push higher.
SP400 continued higher as well, but it now faces the 200 day SMA, closing just below that resistance. Still a less than reassuring move higher as SP400 midcaps just follow along.
RUTX was lower but for a second session showed a nice doji with tail tapping the 10 day EMA on the low and bouncing. RUTX looks as if it is setting up by itself for a better bounce. That could prove very good for the stock market.
LEADERSHIP
FAANG: Hard to say much good here. AAPL scored a decent gain but the pattern is so-so. AMZN has set up a bear flag. NFXL soldiers on in its range. Just no excitement.
Personal products: PG, CL, CLX, EL are examples of powering higher.
Chips: Big names solid enough. AMD super. AMAT, TXN, XLNX decent enough. SWKS may bounce here (strong volume for two sessions) so we need to be ready to take the rest of the downside off the table.
Software: Very interesting. MSFT recovered. NOW looks good. WDAY trying to recover. TWLO jumped again. HUBS looks like it could fall. COUP rubbing it in our face as it jumped off the 50 day EMA and is still moving up. Still some very solid stocks in this group.
Drugs/Biotech/Healthcare: Disappointing as they all faded to test (PTCT, ARNA) while ARQL sold harder and we closed it. At least we were able to bank some solid gain on HIIQ before it reversed its upside surge. Most just testing but some money moved elsewhere today.
Social: SNAP snapped off another good upside move. MTCH took a day off after a solid Tuesday and Wednesday. TWTR is still trying to recover from the Monday drop with FB. FB bounced modestly off its selling but went nowhere today.
FRIDAY
Jobs report Friday with the indices sitting on a 3-4 session rebound off some seriously nasty selling. With the indices sporting a lower volume rebound, this is another test point for the stock market in its attempt to recover. ADP was horrid; the government report is likely not going to be that bad - the administration won't allow it.
Okay, the Fed is seen as a bit more dovish with a sack full of speakers today seconding Powell. That story has pretty much been milked dry. What else will drive stocks from here? Jobs? Is a good report good or is it considered bad? Powell said he would act if the data deteriorated. Thus, good would not seem good to a market convinced the Fed needs to act and will act. A former Fed official said it would cut so it must cut, right? Hmmm.
We will see how things break after this bounce and after the jobs report. We have some downside plays ready to go. We have some upside plays in play and others ready. They are winnowing themselves out to a select group of upside leaders. For Friday we have some more downside and another upside or two, and perhaps a surprise name as well.
Have a great evening!
MARKET STATS
DJ30
Stats: +181.09 points (+0.71%) to close at 25720.66
Nasdaq
Stats: +40.07 points (+0.53%) to close at 7615.55
Volume: 2.129B (-2.77%)
Up Volume: 1.19B (+170M)
Down Volume: 977.68M (-182.32M)
A/D and Hi/Lo: Decliners led 1.26 to 1
Previous Session: Decliners led 1.34 to 1
New Highs: 81 (-12)
New Lows: 142 (+23)
S&P
Stats: +17.34 points (+0.61%) to close at 2843.49
NYSE Volume: 789.772M (-3.57%)
Up Volume: 490.08M (+133.77M)
Down Volume: 290.287M (-153.181M)
A/D and Hi/Lo: Advancers led 1.37 to 1
Previous Session: Advancers led 1.02 to 1
New Highs: 194 (+19)
New Lows: 102 (+41)
SENTIMENT
VIX: 15.93; -0.16
VXN: 20.32; -0.55
VXO: 16.99; -0.63
Put/Call Ratio (CBOE): 0.85; -0.14
Bulls and Bears:
Bulls faded farther, falling below 50 with a pretty solid 6 point drop over 3 weeks. Bears fell yet again. Bears lower on selling, VIX not spiking on selling. Appears there are more issues to resolve that this range trading action at the head and shoulders neckline has not been able to rectify.
Bulls surprisingly resilient, falling but not much. Bears actually rose. Still no extremes though bulls were close to the 60's that has marked tops. Apparently this was close enough for stock market work.
It did its work in the late 2018 selling with a crossover of the bulls and bears, and when that occurs you expect a recovery. That has been the case. Now with the indices bumping resistance you look for extremes, but bulls are not hitting that 60ish level that has prompted selling/corrections in this long rally from 2009.
Indicator level: Shading to yellow for this week even as bulls backed off. Not in the 60's, but not much fear from the selling.
Bulls: 49.0 versus 49.5 versus
Bears: 17.3 versus 17.2
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.
OTHER MARKETS
INTEREST RATES
Threat level: Red-ish. 3 month/10 year spread inverts a third time. 5 year, and 2 year are below the 3 month treasury. Third 10 year/3 month inversion this year. The positive: the 2 year/10 year is not inverted.
The 3 month yield versus the 10 year: Spread fell 4BP to -18BP. -26BP was the high water mark on this particular move.
The 2 year versus the 10 year: Spread fell 1BP to 26BP. Still healing itself.
10 year: 2.13% versus 2.124%
3 month: 2.316% versus 2.342%
2 year: 1.875% versus 1.847%
Historical: the last sub-2% rate was in November 2016 (1.867%). Last trade over 3% was November 2018. 2.6% for quite some time, then yields started higher, first run from November to January, then mid-March.
The Dollar: There are two schools of thought. First, those who believe a strong dollar is in the interest of the US. Reagan (though not all of his advisors) and Clinton were strong dollar Presidents. Second, there are those who believe a strong dollar prevents the US from selling US goods abroad. The Bushes (1 and 2) and Obama were in this category. The thing is, the US is always its economic strength peak when its consumers are consuming, and that is when there is a strong economy and a strong dollar: they consume both US and foreign goods. History shows this again and again, and thus it is worth watching the dollar as a gauge of how the US economy is performing.
EUR/USD: 1.12776 versus 1.12269. Euro surged off the 50 day MA toward the 200 day MA.
Historical: Back into the 6-month range formed after the euro sold off from the early 2018 peaks after a week below it.
USD/JPY: 108.372 versus 108.289. Modest gain again, still unable to break back up through the 10 day EMA. Very much the look of a bear flag.
Historical: Last below 109 in June 2018 then tumbled to 107 in early January 2019. 114.51 is the recent high from October 2018.
Oil: 51.68, -1.80
Gold: 1333.60, +4.90.
End part 1
_______________________________________________________
Member: tweet@investbilling.com
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
Wednesday, June 05, 2019
The Daily, Part 1, 6-5-19
* * * *
6/5/2019 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: None issued
Entry alerts: PTCT; TWLO
Trailing stops: AXSM
Stop alerts: None issued
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:
https://www.investmenthouse.com/alertdaily.html
********************************************************************
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.
****NOTE: DUE TO TECHNICAL ISSUES THERE IS NO VIDEO THIS EVENING*****
SUMMARY
- Stocks continue higher for a second session as the Tuesday momentum continues.
- Weak ADP and the new belief the Fed is ready to cut if problems arise helps fuel the upside.
- The Fed can rescue the indices but it needs bad data to do it.
- Internals on this second day of upside are pathetic: another session of weaker volume, breadth flat at best.
- Still some great patterns upside, but the indices still look like relief bouncers.
Stocks continued the move higher with futures up early, building on the Tuesday second strongest day of 2019. ADP jobs rattled the early optimism as it missed and missed big (27K vs 170K exp vs 271K prior). The market swallowed that, reset, and moved back up to the open. After the higher open, stocks were sold into 10:30ET. Found a bid once more and rallied the rest of the session, closing out near the early morning highs.
SP500 2.288, 0.82%
NASDAQ 48.36, 0.64%
DJ30 207.39, 0.82%
SP400 0.32%
RUTX -0.12%
SOX -0.75%
NASDAQ 100 0.76%
VOLUME: NYSE -8%, NASDAQ -12%. Second session of declining volume as the big money is holding back on the bounce. That tends to limit the longevity of these oversold moves.
ADVANCE/DECLINE: NYSE was just a hair above flat; NASDAQ -1.4:1. Not the kind of breadth bull moves need.
So, another day upside is great news for the bulls. But, it is not dispositive at all.
SP500, NASDAQ and DJ30 all moved through the next resistance. Kudos. Volume was lower, however, and each of these indices showed doji after gapping higher. Breadth faded from strong levels Tuesday to out and out downside Wednesday.
This has VERY much the look of a relief bounce bear flag after the indices broke important support on volume. At 2826, SP500 is not far enough above the 2800 level to really mean anything, particularly with lower volume.
Sound negative? No, just addressing reality. Great to see a bounce, a good start if you can build on it. This pattern is problematic at best - standing alone.
What could help it? The Fed. The lowdown on the Powell and Evans comments from Tuesday is that they are dovish. A former Fed governor was on CNBC this morning saying that the Fed was signaling it was going to cut rates. With the Fed behind it, the market can do anything. Indeed, last week the chance of a June rate cut was 10% according to the FFF contract. Today that was up to 33%.
Thus, if the Fed steps in the market jumps. It always does.
For now, the charts are not that promising upside. So, we are going to update the QID and DXD plays from Tuesday, just to be ready if the bounce runs out of gas.
At the same time, man, there are some good looking moves from many different sectors. TWLO, SNAP, SLAB (some took today off). CL, PEP, V - some we just exited recently are showing new moves. We picked up some TWLO and PTCT, perhaps should have moved into MTCH; if the latter continues upside, we will be looking at that tomorrow.
This is what makes this market trying at times. Breakouts are sold, then rebound. Overall, however, the market indices have a mostly bearish pattern. They broke down through support, negative sentiment running high. They then bounced hard on lighter trade Tuesday, up a bit more on more lighter volume Wednesday. The question on everyone's mind is whether this move can continue or if it is done. Breakouts are still getting sold, but then bids return.
The next big test after Wednesday is how the indices trade off today's doji. Big roaring rebound off very sharp selling. Now doji at resistance. Again, updating the entry points on the downside plays in the event this bearish looking bounce stalls and falls.
In sum . . . prognosis is still not upside friendly longer term. The indices are forming bear flags off the sharp selling, moving up on lower volume. Yes, yes, the Fed can change all of that with a friendly rate cut. FFF contracts are not strong enough yet to indicate that is more likely than not near term. Therefore, you prep for some more downside with this less than bullish (and indeed bearish) technical setup even with some areas moving higher and nicely so. We put some money to work on those upside as they rally near term, but if they stall, then we have to opt for defense over upside offense, moving the offensive moves to downside plays.
Late breaking news is that the initial talks between Mexico and the US resulted in no deal. But, the President and most of his team are overseas so this was not unexpected. This was considered the opening of discussions not the decision day. Thus, while the futures just dipped on this news, there is a lot more talking to be done. In any event, Fitch decided to downgrade Mexico's credit to BBB.
Have a great evening!
CHARTS
To view, click on the following links:
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
http://investmenthouse1.com/ihmedia/f/charts/nasdaq100.jpg
MARKET STATS
DJ30
Stats: +207.39 points (+0.82%) to close at 25539.57
Nasdaq
Stats: +48.36 points (+0.64%) to close at 7575.48
Volume: 2.19B (-11.69%)
Up Volume: 1.02B (-1.14B)
Down Volume: 1.16B (+862.83M)
A/D and Hi/Lo: Decliners led 1.34 to 1
Previous Session: Advancers led 3.24 to 1
New Highs: 93 (+37)
New Lows: 119 (+42)
S&P
Stats: +22.88 points (+0.82%) to close at 2826.15
NYSE Volume: 819.013M (-7.87%)
Up Volume: 356.31M (-426.935M)
Down Volume: 443.468M (+343.66M)
A/D and Hi/Lo: Advancers led 1.02 to 1
Previous Session: Advancers led 4.4 to 1
New Highs: 175 (+53)
New Lows: 61 (+41)
SENTIMENT
VIX: 16.09; -0.88
VXN: 20.87; -0.62
VXO: 17.62; -0.99
Put/Call Ratio (CBOE): 0.99; +0.03
Bulls and Bears:
Bulls faded farther, falling below 50 with a pretty solid 6 point drop over 3 weeks. Bears fell yet again. Bears lower on selling, VIX not spiking on selling. Appears there are more issues to resolve that this range trading action at the head and shoulders neckline has not been able to rectify.
Bulls surprisingly resilient, falling but not much. Bears actually rose. Still no extremes though bulls were close to the 60's that has marked tops. Apparently this was close enough for stock market work.
It did its work in the late 2018 selling with a crossover of the bulls and bears, and when that occurs you expect a recovery. That has been the case. Now with the indices bumping resistance you look for extremes, but bulls are not hitting that 60ish level that has prompted selling/corrections in this long rally from 2009.
Indicator level: Shading to yellow for this week even as bulls backed off. Not in the 60's, but not much fear from the selling.
Bulls: 49.0 versus 49.5 versus
Bears: 17.3 versus 17.2
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.
OTHER MARKETS
INTEREST RATES
Threat level: Red-ish. 3 month/10 year spread inverts a third time. 5 year, and 2 year are below the 3 month treasury. Third 10 year/3 month inversion this year. The positive: the 2 year/10 year is not inverted.
The 3 month yield versus the 10 year: Spread fell 1BP to -22BP. -26BP was the high water mark on this particular move.
The 2 year versus the 10 year: Spread climbs 3BP to 27BP. Still healing itself.
10 year: 2.124% versus 2.126%. Hung steady on Wednesday for a change.
3 month: 2.342% versus 2.357%
2 year: 1.847% versus 1.883%
Historical: the last sub-2% rate was in November 2016 (1.867%). Last trade over 3% was November 2018. 2.6% for quite some time, then yields started higher, first run from November to January, then mid-March.
The Dollar: There are two schools of thought. First, those who believe a strong dollar is in the interest of the US. Reagan (though not all of his advisors) and Clinton were strong dollar Presidents. Second, there are those who believe a strong dollar prevents the US from selling US goods abroad. The Bushes (1 and 2) and Obama were in this category. The thing is, the US is always its economic strength peak when its consumers are consuming, and that is when there is a strong economy and a strong dollar: they consume both US and foreign goods. History shows this again and again, and thus it is worth watching the dollar as a gauge of how the US economy is performing.
EUR/USD: 1.12269 versus 1.12523
Historical: Back into the 6-month range formed after the euro sold off from the early 2018 peaks after a week below it.
USD/JPY: 108.289 versus 108.15
Historical: Last below 109 in June 2018 then tumbled to 107 in early January 2019. 114.51 is the recent high from October 2018.
Oil: 51.68, -1.80
Gold: 1333.60, +4.90. Surged to the February high at 1350, then a big retracement and a big tombstone doji. Up too much, too fast and time to test.
End part 1
_______________________________________________________
Member: tweet@investbilling.com
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
6/5/2019 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: None issued
Entry alerts: PTCT; TWLO
Trailing stops: AXSM
Stop alerts: None issued
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:
https://www.investmenthouse.com/alertdaily.html
********************************************************************
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.
****NOTE: DUE TO TECHNICAL ISSUES THERE IS NO VIDEO THIS EVENING*****
SUMMARY
- Stocks continue higher for a second session as the Tuesday momentum continues.
- Weak ADP and the new belief the Fed is ready to cut if problems arise helps fuel the upside.
- The Fed can rescue the indices but it needs bad data to do it.
- Internals on this second day of upside are pathetic: another session of weaker volume, breadth flat at best.
- Still some great patterns upside, but the indices still look like relief bouncers.
Stocks continued the move higher with futures up early, building on the Tuesday second strongest day of 2019. ADP jobs rattled the early optimism as it missed and missed big (27K vs 170K exp vs 271K prior). The market swallowed that, reset, and moved back up to the open. After the higher open, stocks were sold into 10:30ET. Found a bid once more and rallied the rest of the session, closing out near the early morning highs.
SP500 2.288, 0.82%
NASDAQ 48.36, 0.64%
DJ30 207.39, 0.82%
SP400 0.32%
RUTX -0.12%
SOX -0.75%
NASDAQ 100 0.76%
VOLUME: NYSE -8%, NASDAQ -12%. Second session of declining volume as the big money is holding back on the bounce. That tends to limit the longevity of these oversold moves.
ADVANCE/DECLINE: NYSE was just a hair above flat; NASDAQ -1.4:1. Not the kind of breadth bull moves need.
So, another day upside is great news for the bulls. But, it is not dispositive at all.
SP500, NASDAQ and DJ30 all moved through the next resistance. Kudos. Volume was lower, however, and each of these indices showed doji after gapping higher. Breadth faded from strong levels Tuesday to out and out downside Wednesday.
This has VERY much the look of a relief bounce bear flag after the indices broke important support on volume. At 2826, SP500 is not far enough above the 2800 level to really mean anything, particularly with lower volume.
Sound negative? No, just addressing reality. Great to see a bounce, a good start if you can build on it. This pattern is problematic at best - standing alone.
What could help it? The Fed. The lowdown on the Powell and Evans comments from Tuesday is that they are dovish. A former Fed governor was on CNBC this morning saying that the Fed was signaling it was going to cut rates. With the Fed behind it, the market can do anything. Indeed, last week the chance of a June rate cut was 10% according to the FFF contract. Today that was up to 33%.
Thus, if the Fed steps in the market jumps. It always does.
For now, the charts are not that promising upside. So, we are going to update the QID and DXD plays from Tuesday, just to be ready if the bounce runs out of gas.
At the same time, man, there are some good looking moves from many different sectors. TWLO, SNAP, SLAB (some took today off). CL, PEP, V - some we just exited recently are showing new moves. We picked up some TWLO and PTCT, perhaps should have moved into MTCH; if the latter continues upside, we will be looking at that tomorrow.
This is what makes this market trying at times. Breakouts are sold, then rebound. Overall, however, the market indices have a mostly bearish pattern. They broke down through support, negative sentiment running high. They then bounced hard on lighter trade Tuesday, up a bit more on more lighter volume Wednesday. The question on everyone's mind is whether this move can continue or if it is done. Breakouts are still getting sold, but then bids return.
The next big test after Wednesday is how the indices trade off today's doji. Big roaring rebound off very sharp selling. Now doji at resistance. Again, updating the entry points on the downside plays in the event this bearish looking bounce stalls and falls.
In sum . . . prognosis is still not upside friendly longer term. The indices are forming bear flags off the sharp selling, moving up on lower volume. Yes, yes, the Fed can change all of that with a friendly rate cut. FFF contracts are not strong enough yet to indicate that is more likely than not near term. Therefore, you prep for some more downside with this less than bullish (and indeed bearish) technical setup even with some areas moving higher and nicely so. We put some money to work on those upside as they rally near term, but if they stall, then we have to opt for defense over upside offense, moving the offensive moves to downside plays.
Late breaking news is that the initial talks between Mexico and the US resulted in no deal. But, the President and most of his team are overseas so this was not unexpected. This was considered the opening of discussions not the decision day. Thus, while the futures just dipped on this news, there is a lot more talking to be done. In any event, Fitch decided to downgrade Mexico's credit to BBB.
Have a great evening!
CHARTS
To view, click on the following links:
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
http://investmenthouse1.com/ihmedia/f/charts/nasdaq100.jpg
MARKET STATS
DJ30
Stats: +207.39 points (+0.82%) to close at 25539.57
Nasdaq
Stats: +48.36 points (+0.64%) to close at 7575.48
Volume: 2.19B (-11.69%)
Up Volume: 1.02B (-1.14B)
Down Volume: 1.16B (+862.83M)
A/D and Hi/Lo: Decliners led 1.34 to 1
Previous Session: Advancers led 3.24 to 1
New Highs: 93 (+37)
New Lows: 119 (+42)
S&P
Stats: +22.88 points (+0.82%) to close at 2826.15
NYSE Volume: 819.013M (-7.87%)
Up Volume: 356.31M (-426.935M)
Down Volume: 443.468M (+343.66M)
A/D and Hi/Lo: Advancers led 1.02 to 1
Previous Session: Advancers led 4.4 to 1
New Highs: 175 (+53)
New Lows: 61 (+41)
SENTIMENT
VIX: 16.09; -0.88
VXN: 20.87; -0.62
VXO: 17.62; -0.99
Put/Call Ratio (CBOE): 0.99; +0.03
Bulls and Bears:
Bulls faded farther, falling below 50 with a pretty solid 6 point drop over 3 weeks. Bears fell yet again. Bears lower on selling, VIX not spiking on selling. Appears there are more issues to resolve that this range trading action at the head and shoulders neckline has not been able to rectify.
Bulls surprisingly resilient, falling but not much. Bears actually rose. Still no extremes though bulls were close to the 60's that has marked tops. Apparently this was close enough for stock market work.
It did its work in the late 2018 selling with a crossover of the bulls and bears, and when that occurs you expect a recovery. That has been the case. Now with the indices bumping resistance you look for extremes, but bulls are not hitting that 60ish level that has prompted selling/corrections in this long rally from 2009.
Indicator level: Shading to yellow for this week even as bulls backed off. Not in the 60's, but not much fear from the selling.
Bulls: 49.0 versus 49.5 versus
Bears: 17.3 versus 17.2
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.
OTHER MARKETS
INTEREST RATES
Threat level: Red-ish. 3 month/10 year spread inverts a third time. 5 year, and 2 year are below the 3 month treasury. Third 10 year/3 month inversion this year. The positive: the 2 year/10 year is not inverted.
The 3 month yield versus the 10 year: Spread fell 1BP to -22BP. -26BP was the high water mark on this particular move.
The 2 year versus the 10 year: Spread climbs 3BP to 27BP. Still healing itself.
10 year: 2.124% versus 2.126%. Hung steady on Wednesday for a change.
3 month: 2.342% versus 2.357%
2 year: 1.847% versus 1.883%
Historical: the last sub-2% rate was in November 2016 (1.867%). Last trade over 3% was November 2018. 2.6% for quite some time, then yields started higher, first run from November to January, then mid-March.
The Dollar: There are two schools of thought. First, those who believe a strong dollar is in the interest of the US. Reagan (though not all of his advisors) and Clinton were strong dollar Presidents. Second, there are those who believe a strong dollar prevents the US from selling US goods abroad. The Bushes (1 and 2) and Obama were in this category. The thing is, the US is always its economic strength peak when its consumers are consuming, and that is when there is a strong economy and a strong dollar: they consume both US and foreign goods. History shows this again and again, and thus it is worth watching the dollar as a gauge of how the US economy is performing.
EUR/USD: 1.12269 versus 1.12523
Historical: Back into the 6-month range formed after the euro sold off from the early 2018 peaks after a week below it.
USD/JPY: 108.289 versus 108.15
Historical: Last below 109 in June 2018 then tumbled to 107 in early January 2019. 114.51 is the recent high from October 2018.
Oil: 51.68, -1.80
Gold: 1333.60, +4.90. Surged to the February high at 1350, then a big retracement and a big tombstone doji. Up too much, too fast and time to test.
End part 1
_______________________________________________________
Member: tweet@investbilling.com
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
Tuesday, June 04, 2019
The Daily, Part 1 of 2
* * * *
6/4/2019 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: None issued
Entry alerts: ARNA; ARQL; DIS; SLAB
Trailing stops: None issued
Stop alerts: None issued
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:
https://www.investmenthouse.com/alertdaily.html
********************************************************************
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.
SUMMARY
- Stocks post the second strongest move of 2019 on an explosive short covering move.
- SP500, NASDAQ, DJ30 rally back up to next resistance. Now they must show they can move through and hold it.
- Prepare for a failure at resistance with some QID, DXD, SPY.
Stocks surged to their second best session of 2019 on an impressively sharp short squeeze. I know it is hard not to get excited with this kind of move, but a lot of damage has been done, stocks were oversold, negative emotions hit a crescendo with the Administration's anti-trust thrust, and stocks shot back upside to release some of the downside pressure. Perhaps they pull a 'December' and continue higher from here. Perhaps, but more than likely they end up testing nearer that December low before they put in a real bottom.
SP500 59.82, 2.14%
NASDAQ 194.10, 2.65%
DJ30 512.40, 2.06%
SP400 2.52%
RUTX 2.63%
SOX 4.21%
NASDAQ 100 2.70%
VOLUME: NYSE -10%, NASDAQ -7%. Volume faded on the upside. That is consistent with the recent market action and a relief bounce.
ADVANCE/DECLINE: NYSE 4.4:1, NASDAQ 3.2:1. Excellent breadth.
CHARTS
To view, click on the following links:
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
http://investmenthouse1.com/ihmedia/f/charts/nasdaq100.jpg
SP500 recovered around the last 3 days of selling, NASDAQ 1.5 days. That put SP500 back at 2800 and NASDAQ at the 200 day SMA. Those are of course key levels the tried to hold on the way down but failed. Now they have to prove they can take them out, prove that Tuesday was something more than just a snapback from an oversold condition with overwrought investor emotions. Nothing like anti-trust threats against the market's biggest players on top of trade wars, slowing economics, a Fed that hiked at the wrong time (again) as it hiked right into an inverting yield curve to jangle the market's nerves.
SOX managed to move back over its 200 day SMA as the most oversold index made a play upside with some 'names' posting good moves, e.g. AMD, SLAB, AMAT, TXN, MU. Not necessarily good patterns for all, but they were very oversold and the past week were acting as if they were forming a near term bottom to stage a bounce.
DJ30 jumped off the Monday doji, rallying to near the 200 day SMA though still 94 points off. As with NASDAQ and SP500, it has to show it can do more than must post a 1-day oversold surge.
SP400 surged back up just through the neckline of the head and shoulders and at resistance. As with the other indices, an excellent surge but has to show it can do more.
Catalysts anyone?
As noted, the market was oversold and negative emotion - though not the VIX - was running sharply higher. Monday I said that the seeds for a bounce were there looking at the NYSE indices and their action along with the negative sentiment. Some credit the Fed with the trigger. Stocks were higher with Evans' pre-market comments (though I don't think he was that dovish) and they really ignited with Powell's later comments.
The Fed must have felt bad as a few - including the Fed chair himself - hit the microphones to spread their personal wisdom and perhaps attempt to calm the markets.
Evans was out pre-market and those looking for something from the Fed interpreted his comments as leaning dovish because he said he wanted to keep the markets from stumbling. In the same breath, however, he said that the market must see something that he has not seen yet, referencing the stock selloff, bond surge, gold surge, oil decline.
Those comments summarize the Fed's mistakes over the past 8 decades. It NEVER sees what the market sees. By his words, Evans intimates that the Fed believes it knows more than the markets. If it did not, it would look at those same indicators itemized above and have an emergency meeting as to what the heck was going on. Markets LEAD economic activity; they always do. Why was Greenspan still hiking after the stock market crashed in 2000? Because he knew more than the markets - so he thought. Greenspan thought he knew why the yield curve inverted and that it was benign. Bernanke thought the same thing until everything came crashing down on him.
Evans unwittingly displayed the Fed's grotesque arrogance in his comments attempting to justify why the Fed was not cutting but that a pause in hikes was sufficient. As they pause the economic data continues to fall, following the various markets' moves.
Well, Powell came out later in the day and he also talked Fed action. No, he did not indicate the Fed was going to cut rates or raise rates. He did say, and I paraphrase as his comments were rather tortured English, 'unconventional' methods of Fed intervention should not be called unconventional because they will be needed again. Those words energized the rally even more. Stocks rallied sharply to midday, paused for a couple of hours, then sprinted to the close.
LEADERSHIP
It was good to see most sectors move higher sans real estate and utilities, two sectors that led recently. Growth as well as staples, industrial and even oil rallied sharply.
I would not say they healed themselves, however.
Software rebounded but the leading names still show damaged patterns, e.g. HUBS, WDAY, VMW, MSFT. Maybe they recover, but it would not be the typical response to rally back from here.
Semiconductors: These actually are better. AMAT bouncing on a decent pattern, AMD as well, SLAB. XLNX looks good on volume if it continues. Way oversold so bouncing. Still some seriously bad patterns, but some good ones as well.
Drugs/Biotech/Healthcare: Some really good moves from some really good patterns, e.g. ARNA, ARQL, HIIQ, TNDM.
FAANG: Some big moves but some troubled patterns. AMZN surged 40 points and is still below the 200 day SMA. FB held the 200 day SMA as you would expect, but the bounce was so-so. AAPL showed a mediocre move as well. NFLX not bad, moving up into its range on volume. GOOG was massively disappointing with a 1.6% move off the massive gap lower. Yes these stocks were up, but they were crushed before this.
MARKET STATS
DJ30
Stats: +512.40 points (+2.06%) to close at 25332.18
Nasdaq
Stats: +194.10 points (+2.65%) to close at 7527.12
Volume: 2.48B (-7.12%)
Up Volume: 2.16B (+820M)
Down Volume: 297.17M (-1.013B)
A/D and Hi/Lo: Advancers led 3.24 to 1
Previous Session: Advancers led 1.11 to 1
New Highs: 56 (-2)
New Lows: 77 (-93)
S&P
Stats: +58.82 points (+2.14%) to close at 2803.27
NYSE Volume: 888.996M (-9.48%)
Up Volume: 783.245M (+62.379M)
Down Volume: 99.808M (-155.558M)
A/D and Hi/Lo: Advancers led 4.4 to 1
Previous Session: Advancers led 1.86 to 1
New Highs: 122 (+22)
New Lows: 20 (-93)
SENTIMENT
VIX: 16.97; -1.89
VXN: 21.49; -2.73
VXO: 18.61; -2.03
Put/Call Ratio (CBOE): 0.96; -0.17
Bulls and Bears:
Bulls faded farther, falling below 50 with a pretty solid 6 point drop over 3 weeks. Bears fell yet again. Bears lower on selling, VIX not spiking on selling. Appears there are more issues to resolve that this range trading action at the head and shoulders neckline has not been able to rectify.
Bulls surprisingly resilient, falling but not much. Bears actually rose. Still no extremes though bulls were close to the 60's that has marked tops. Apparently this was close enough for stock market work.
It did its work in the late 2018 selling with a crossover of the bulls and bears, and when that occurs you expect a recovery. That has been the case. Now with the indices bumping resistance you look for extremes, but bulls are not hitting that 60ish level that has prompted selling/corrections in this long rally from 2009.
Indicator level: Shading to yellow for this week even as bulls backed off. Not in the 60's, but not much fear from the selling.
Bulls: 49.0 versus 49.5 versus
Bears: 17.3 versus 17.2
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.
OTHER MARKETS
INTEREST RATES
Threat level: Red-ish. 3 month/10 year spread inverts a third time. 5 year, and 2 year are below the 3 month treasury. Third 10 year/3 month inversion this year. The positive: the 2 year/10 year is not inverted.
The 3 month yield versus the 10 year: Spread fell 3BP to -23BP. -26BP was the high water mark on this particular move.
The 2 year versus the 10 year: Spread climbs 1BP to 24BP. Continues healing itself.
10 year: 2.126% versus 2.078%. Wow, yields rallied back. Still, the 10 year was below the Friday yield close.
3 month: 2.357% versus 2.341%
2 year: 1.883% versus 1.844%
Historical: the last sub-2% rate was in November 2016 (1.867%). Last trade over 3% was November 2018. 2.6% for quite some time, then yields started higher, first run from November to January, then mid-March.
The Dollar: There are two schools of thought. First, those who believe a strong dollar is in the interest of the US. Reagan (though not all of his advisors) and Clinton were strong dollar Presidents. Second, there are those who believe a strong dollar prevents the US from selling US goods abroad. The Bushes (1 and 2) and Obama were in this category. The thing is, the US is always its economic strength peak when its consumers are consuming, and that is when there is a strong economy and a strong dollar: they consume both US and foreign goods. History shows this again and again, and thus it is worth watching the dollar as a gauge of how the US economy is performing.
EUR/USD: 1.12523 versus 1.12446
Historical: Back into the 6-month range formed after the euro sold off from the early 2018 peaks after a week below it.
USD/JPY: 108.15 versus 108.00
Historical: Last below 109 in June 2018 then tumbled to 107 in early January 2019. 114.51 is the recent high from October 2018.
Oil: 53.48, +0.23
Gold: 1340.30, +2.50
WEDNESDAY
Huge short squeeze surge pushed stocks higher all the way to the close. We picked up some obvious positions upside that did not have issues in the recent selling, e.g. AMD, ARNA, ARQL, SLAB, DIS. That is okay: good patterns held up during the selling, now moving up.
As for the rebounds in the damaged patterns, they have to prove they can do more than just rebound.
Moreover, NASDAQ, SP500, DJ30 have to show they can move through the resistance, hold a test, and then rebound from there. Problem solved if that happens. Likelihood? It is Missouri time: has to show me.
Thus, at this time you look at some more QID, some DXD positions to play a downside if NASDAQ, SP500, DJ30 et al fail at resistance.
Have a great evening!
End part 1 of 2
_______________________________________________________
Member: tweet@investbilling.com
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
6/4/2019 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: None issued
Entry alerts: ARNA; ARQL; DIS; SLAB
Trailing stops: None issued
Stop alerts: None issued
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:
https://www.investmenthouse.com/alertdaily.html
********************************************************************
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.
SUMMARY
- Stocks post the second strongest move of 2019 on an explosive short covering move.
- SP500, NASDAQ, DJ30 rally back up to next resistance. Now they must show they can move through and hold it.
- Prepare for a failure at resistance with some QID, DXD, SPY.
Stocks surged to their second best session of 2019 on an impressively sharp short squeeze. I know it is hard not to get excited with this kind of move, but a lot of damage has been done, stocks were oversold, negative emotions hit a crescendo with the Administration's anti-trust thrust, and stocks shot back upside to release some of the downside pressure. Perhaps they pull a 'December' and continue higher from here. Perhaps, but more than likely they end up testing nearer that December low before they put in a real bottom.
SP500 59.82, 2.14%
NASDAQ 194.10, 2.65%
DJ30 512.40, 2.06%
SP400 2.52%
RUTX 2.63%
SOX 4.21%
NASDAQ 100 2.70%
VOLUME: NYSE -10%, NASDAQ -7%. Volume faded on the upside. That is consistent with the recent market action and a relief bounce.
ADVANCE/DECLINE: NYSE 4.4:1, NASDAQ 3.2:1. Excellent breadth.
CHARTS
To view, click on the following links:
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
http://investmenthouse1.com/ihmedia/f/charts/nasdaq100.jpg
SP500 recovered around the last 3 days of selling, NASDAQ 1.5 days. That put SP500 back at 2800 and NASDAQ at the 200 day SMA. Those are of course key levels the tried to hold on the way down but failed. Now they have to prove they can take them out, prove that Tuesday was something more than just a snapback from an oversold condition with overwrought investor emotions. Nothing like anti-trust threats against the market's biggest players on top of trade wars, slowing economics, a Fed that hiked at the wrong time (again) as it hiked right into an inverting yield curve to jangle the market's nerves.
SOX managed to move back over its 200 day SMA as the most oversold index made a play upside with some 'names' posting good moves, e.g. AMD, SLAB, AMAT, TXN, MU. Not necessarily good patterns for all, but they were very oversold and the past week were acting as if they were forming a near term bottom to stage a bounce.
DJ30 jumped off the Monday doji, rallying to near the 200 day SMA though still 94 points off. As with NASDAQ and SP500, it has to show it can do more than must post a 1-day oversold surge.
SP400 surged back up just through the neckline of the head and shoulders and at resistance. As with the other indices, an excellent surge but has to show it can do more.
Catalysts anyone?
As noted, the market was oversold and negative emotion - though not the VIX - was running sharply higher. Monday I said that the seeds for a bounce were there looking at the NYSE indices and their action along with the negative sentiment. Some credit the Fed with the trigger. Stocks were higher with Evans' pre-market comments (though I don't think he was that dovish) and they really ignited with Powell's later comments.
The Fed must have felt bad as a few - including the Fed chair himself - hit the microphones to spread their personal wisdom and perhaps attempt to calm the markets.
Evans was out pre-market and those looking for something from the Fed interpreted his comments as leaning dovish because he said he wanted to keep the markets from stumbling. In the same breath, however, he said that the market must see something that he has not seen yet, referencing the stock selloff, bond surge, gold surge, oil decline.
Those comments summarize the Fed's mistakes over the past 8 decades. It NEVER sees what the market sees. By his words, Evans intimates that the Fed believes it knows more than the markets. If it did not, it would look at those same indicators itemized above and have an emergency meeting as to what the heck was going on. Markets LEAD economic activity; they always do. Why was Greenspan still hiking after the stock market crashed in 2000? Because he knew more than the markets - so he thought. Greenspan thought he knew why the yield curve inverted and that it was benign. Bernanke thought the same thing until everything came crashing down on him.
Evans unwittingly displayed the Fed's grotesque arrogance in his comments attempting to justify why the Fed was not cutting but that a pause in hikes was sufficient. As they pause the economic data continues to fall, following the various markets' moves.
Well, Powell came out later in the day and he also talked Fed action. No, he did not indicate the Fed was going to cut rates or raise rates. He did say, and I paraphrase as his comments were rather tortured English, 'unconventional' methods of Fed intervention should not be called unconventional because they will be needed again. Those words energized the rally even more. Stocks rallied sharply to midday, paused for a couple of hours, then sprinted to the close.
LEADERSHIP
It was good to see most sectors move higher sans real estate and utilities, two sectors that led recently. Growth as well as staples, industrial and even oil rallied sharply.
I would not say they healed themselves, however.
Software rebounded but the leading names still show damaged patterns, e.g. HUBS, WDAY, VMW, MSFT. Maybe they recover, but it would not be the typical response to rally back from here.
Semiconductors: These actually are better. AMAT bouncing on a decent pattern, AMD as well, SLAB. XLNX looks good on volume if it continues. Way oversold so bouncing. Still some seriously bad patterns, but some good ones as well.
Drugs/Biotech/Healthcare: Some really good moves from some really good patterns, e.g. ARNA, ARQL, HIIQ, TNDM.
FAANG: Some big moves but some troubled patterns. AMZN surged 40 points and is still below the 200 day SMA. FB held the 200 day SMA as you would expect, but the bounce was so-so. AAPL showed a mediocre move as well. NFLX not bad, moving up into its range on volume. GOOG was massively disappointing with a 1.6% move off the massive gap lower. Yes these stocks were up, but they were crushed before this.
MARKET STATS
DJ30
Stats: +512.40 points (+2.06%) to close at 25332.18
Nasdaq
Stats: +194.10 points (+2.65%) to close at 7527.12
Volume: 2.48B (-7.12%)
Up Volume: 2.16B (+820M)
Down Volume: 297.17M (-1.013B)
A/D and Hi/Lo: Advancers led 3.24 to 1
Previous Session: Advancers led 1.11 to 1
New Highs: 56 (-2)
New Lows: 77 (-93)
S&P
Stats: +58.82 points (+2.14%) to close at 2803.27
NYSE Volume: 888.996M (-9.48%)
Up Volume: 783.245M (+62.379M)
Down Volume: 99.808M (-155.558M)
A/D and Hi/Lo: Advancers led 4.4 to 1
Previous Session: Advancers led 1.86 to 1
New Highs: 122 (+22)
New Lows: 20 (-93)
SENTIMENT
VIX: 16.97; -1.89
VXN: 21.49; -2.73
VXO: 18.61; -2.03
Put/Call Ratio (CBOE): 0.96; -0.17
Bulls and Bears:
Bulls faded farther, falling below 50 with a pretty solid 6 point drop over 3 weeks. Bears fell yet again. Bears lower on selling, VIX not spiking on selling. Appears there are more issues to resolve that this range trading action at the head and shoulders neckline has not been able to rectify.
Bulls surprisingly resilient, falling but not much. Bears actually rose. Still no extremes though bulls were close to the 60's that has marked tops. Apparently this was close enough for stock market work.
It did its work in the late 2018 selling with a crossover of the bulls and bears, and when that occurs you expect a recovery. That has been the case. Now with the indices bumping resistance you look for extremes, but bulls are not hitting that 60ish level that has prompted selling/corrections in this long rally from 2009.
Indicator level: Shading to yellow for this week even as bulls backed off. Not in the 60's, but not much fear from the selling.
Bulls: 49.0 versus 49.5 versus
Bears: 17.3 versus 17.2
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.
OTHER MARKETS
INTEREST RATES
Threat level: Red-ish. 3 month/10 year spread inverts a third time. 5 year, and 2 year are below the 3 month treasury. Third 10 year/3 month inversion this year. The positive: the 2 year/10 year is not inverted.
The 3 month yield versus the 10 year: Spread fell 3BP to -23BP. -26BP was the high water mark on this particular move.
The 2 year versus the 10 year: Spread climbs 1BP to 24BP. Continues healing itself.
10 year: 2.126% versus 2.078%. Wow, yields rallied back. Still, the 10 year was below the Friday yield close.
3 month: 2.357% versus 2.341%
2 year: 1.883% versus 1.844%
Historical: the last sub-2% rate was in November 2016 (1.867%). Last trade over 3% was November 2018. 2.6% for quite some time, then yields started higher, first run from November to January, then mid-March.
The Dollar: There are two schools of thought. First, those who believe a strong dollar is in the interest of the US. Reagan (though not all of his advisors) and Clinton were strong dollar Presidents. Second, there are those who believe a strong dollar prevents the US from selling US goods abroad. The Bushes (1 and 2) and Obama were in this category. The thing is, the US is always its economic strength peak when its consumers are consuming, and that is when there is a strong economy and a strong dollar: they consume both US and foreign goods. History shows this again and again, and thus it is worth watching the dollar as a gauge of how the US economy is performing.
EUR/USD: 1.12523 versus 1.12446
Historical: Back into the 6-month range formed after the euro sold off from the early 2018 peaks after a week below it.
USD/JPY: 108.15 versus 108.00
Historical: Last below 109 in June 2018 then tumbled to 107 in early January 2019. 114.51 is the recent high from October 2018.
Oil: 53.48, +0.23
Gold: 1340.30, +2.50
WEDNESDAY
Huge short squeeze surge pushed stocks higher all the way to the close. We picked up some obvious positions upside that did not have issues in the recent selling, e.g. AMD, ARNA, ARQL, SLAB, DIS. That is okay: good patterns held up during the selling, now moving up.
As for the rebounds in the damaged patterns, they have to prove they can do more than just rebound.
Moreover, NASDAQ, SP500, DJ30 have to show they can move through the resistance, hold a test, and then rebound from there. Problem solved if that happens. Likelihood? It is Missouri time: has to show me.
Thus, at this time you look at some more QID, some DXD positions to play a downside if NASDAQ, SP500, DJ30 et al fail at resistance.
Have a great evening!
End part 1 of 2
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Monday, June 03, 2019
The Daily, Part 1, 6-3-19
* * * *
6/3/2019 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: QID
Entry alerts: CDNS; CMG; HIIQ
Trailing stops: COUP; ETN; FB; MTCH; VRSN
Stop alerts: ADBE; DOCU; MSFT; NFLX; TWTR; V
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:
https://www.investmenthouse.com/alertdaily.html
********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy, Technical Summary, and the Next Session. Choose the segments you are interested in without having to search a longer video. Click on the link to the portion you wish to view.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/mo/mo.mp4
TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/ts/ts.mp4
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************
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.
SUMMARY
- And we thought the Mexico tariffs were bad. Anti-trust actions against big tech names trumps all.
- AAPL, AMZN, GOOG (and you know FB is to come) said to be under anti-trust investigation.
- ISM falls to pre-election levels.
- While FAANG are pounded, many NYSE stocks perform fine, though the skew is toward slower growth companies.
- Oversold even farther, in position to bounce, but have to watch how NASDAQ, SP500 trade at the 200 day SMA.
Over the weekend I posited whether the tariffs on Mexico broke the market's back. If they did not, anti-trust investigations may seal the deal.
Anti-trust possibilities tore into large cap tech to start the week. At first it was GOOG with various outlets reporting the DOJ was prepping for opening an investigation. GOOG gapped down almost 70 points. Then AMZN was targeted with the FTC actually beginning an anti-trust probe. Cannot leave out AAPL; reports then surfaced the DOJ was likely to begin an investigation of AAPL. Kind of interesting given AAPL is selling $1K phones, not flooding the market with low-priced units to crowd out competition. No reports mentioned FB, but it was down 7.5%, dropping to the 200 day SMA, just for completeness.
Then afterhours it is reported Congress is getting in on the action with the Judiciary Committee issuing a press release that it is going to hold hearings covering three areas regarding these large tech and retail companies.
One can argue the companies such as GOOG and AMZN and likely FB to come brought it on themselves. Kudos to them for creating such successful products. But, they just had to push too far and get too greedy in capturing and selling and otherwise using customer data. They ruled the world in their sectors and they act like it as well. Knowing the regulator mindset, that is begging for the regulators to come after them.
ISM May printed at 52.1 versus 52.6 expected versus 52.8 April. That is the worst print since October 2016, just before the election. A more real time data point showing the Fed, if it is looking, that data is softening, confirming the distortion in the yield curve.
So, it was an awful day in stocks, right? Not really. SP500 was lower 0.28%, hardly measuring up to NASDAQ's -1.61%. DJ30, SP400, RUTX, SOX were all higher. Not a total crushing of stocks, just big tech and those that feed those big tech stocks.
SP500 -7.62, -0.28%
NASDAQ -120.13, -1.61%
DJ30 4.74, 0.02%
SP400 0.69%
RUTX 0.31%
SOX 0.33%
NASDAQ 100 -2.10%
VOLUME: NYSE +1%; NASDAQ +15%. NYSE volume holds well above average. NASDAQ volume jumps higher above average.
ADVANCE/DECLINE: NYSE +1.9:1, NASDAQ +1.1:1. Definitely a large cap NASDAQ event.
While big tech was bombed along with its drones, S&P stocks were quite solid with many higher. Semiconductors were up, though that might be an effect of Infineon buying CY. In any event, the news did not, as of yet, quell purchases across the market. Thus, some life remains but much of it is in the slower growth areas more typical of a bear market or less than bull market.
Thus, seeing stocks such as CLX, CL, KO rally is not that comforting the markets will continue higher. You can make money off them upside, but they are not screaming 'bull market ahead.'
And that is where the speculation comes in. Some are now saying the Fed will come to the rescue with a rate cut as early as this month. Others note that when Congress gets involved with hearings, that is usually the apex of the negativity and the bottom of the selling trough.
Could be, but even those are not absolute to the day of the comment. There is still room downside and SP500 likely gets sold to 2650 - many are looking at that.
Here is the rub: the market may try to bounce off this recent selling before SP500 sells to that level. Stocks looked ready to bounce last week when the Mexico tariffs were announced. After this kind of jerk lower it could bounce. Can't count on it with the high volume selling and we had to exit several positions, but the violent low can lead to a reflex move upside. After that, however, when everyone feels the pressure is off, it rolls back down.
CHARTS
Quite a negative sentiment session that saw NYSE indices positive or close thereto. They could post a relief bounce, particularly as they did not sell much in the face of that negativity.
NASDAQ and NASDAQ 100 dropped below the early March low, just over 7250. That is a somewhat roundish number where NASDAQ could attempt a bounce. 7000 looks much better for a serious bottom.
SP500 held near the March low, showing a candlestick doji. With the decent performance of most S&P stocks the 500 could bounce and try that 200 day SMA. Of course, overall the pattern remains bearish; any bounce is just an oversold relief move.
SOX held the same range just below the 200 day SMA and right at 1300 support, continuing the lateral move now 7 sessions old. That it held is good, that it could not make a serious break higher with the M&A (Infineon buying CY) shows there is still lethargy: AMD surged upside but could not hang onto the move.
DJ30 showed a doji on the session, just below 25,000. Good volume. Perhaps it is ready for an oversold move as well similar to SP500.
RUTX, SP400 both posted gains, market leading in SP400. A bit oversold, so perhaps a bit of upside here as well.
LEADERSHIP
Semiconductors: Some look ready to bounce. AMAT, XLNX, SLAB, TXN - enough names to jump SOX off support at 1300.
Software: the dam broke. NOW, DATA, VMW, MSFT, HUBS, WDAY were all slammed.
Social: Slammed. FB on fears the DOJ will name it next. TWTR, MTCH sold hard. SNAP hung on but it did give up an early solid move higher.
Insurers: Bouncing up from a short pullback, e.g. ALL, TRV, MET.
Drugs/Biotech/Healthcare: Again, these stocks are still holding up well, waiting to see if they can break higher. ARNA, PTCT, BSX. Picked up some HIIQ, looking to grab some ARNA and others as they continue.
Food: Catching a bid again, e.g. KO, PEP, WING, MDLZ.
MARKET STATS
DJ30
Stats: +4.74 points (+0.02%) to close at 24819.78
Nasdaq
Stats: -120.13 points (-1.61%) to close at 7333.02
Volume: 2.67B (+14.59%)
Up Volume: 1.34B (+701.51M)
Down Volume: 1.31B (-360M)
A/D and Hi/Lo: Advancers led 1.11 to 1
Previous Session: Decliners led 2.86 to 1
New Highs: 58 (-6)
New Lows: 170 (-65)
S&P
Stats: -7.61 points (-0.28%) to close at 2744.45
NYSE Volume: 982.134M (+1.04%)
Up Volume: 720.866M (+472.196M)
Down Volume: 255.365M (-456.287M)
A/D and Hi/Lo: Advancers led 1.86 to 1
Previous Session: Decliners led 2.23 to 1
New Highs: 100 (+18)
New Lows: 113 (-139)
SENTIMENT
VIX: 18.86; +0.15
VXN: 24.22; +0.99
VXO: 20.64; -0.34
Put/Call Ratio (CBOE): 1.13; -0.06. 19 of 22 sessions over 1.0 on the close.
Bulls and Bears:
Bulls faded farther, falling below 50 with a pretty solid 6 point drop over 3 weeks. Bears fell yet again. Bears lower on selling, VIX not spiking on selling. Appears there are more issues to resolve that this range trading action at the head and shoulders neckline has not been able to rectify.
Bulls surprisingly resilient, falling but not much. Bears actually rose. Still no extremes though bulls were close to the 60's that has marked tops. Apparently this was close enough for stock market work.
It did its work in the late 2018 selling with a crossover of the bulls and bears, and when that occurs you expect a recovery. That has been the case. Now with the indices bumping resistance you look for extremes, but bulls are not hitting that 60ish level that has prompted selling/corrections in this long rally from 2009.
Indicator level: Shading to yellow for this week even as bulls backed off. Not in the 60's, but not much fear from the selling.
Bulls: 49.0 versus 49.5 versus
Bears: 17.3 versus 17.2
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.
OTHER MARKETS
INTEREST RATES
Threat level: Red-ish. 3 month/10 year spread inverts a third time. 5 year, and 2 year are below the 3 month treasury. Third 10 year/3 month inversion this year. The positive: the 2 year/10 year is not inverted.
The 3 month yield versus the 10 year: Spread climbs 4BP to -26BP. Widest of this bout of inversion.
The 2 year versus the 10 year: Spread climbs 2BP to 23BP. Continues healing itself.
10 year: 2.078% versus 2.133. More fear, more reason for bonds to rally to a higher breakout high. Way overbought right now, but the negative news keeps hitting so people keep buying bonds.
3 month: 2.341% versus 2.354%
2 year: 1.844% versus 1.924%
Historical: the last sub-2% rate was in November 2016 (1.867%). Last trade over 3% was November 2018. 2.6% for quite some time, then yields started higher, first run from November to January, then mid-March.
The Dollar: There are two schools of thought. First, those who believe a strong dollar is in the interest of the US. Reagan (though not all of his advisors) and Clinton were strong dollar Presidents. Second, there are those who believe a strong dollar prevents the US from selling US goods abroad. The Bushes (1 and 2) and Obama were in this category. The thing is, the US is always its economic strength peak when its consumers are consuming, and that is when there is a strong economy and a strong dollar: they consume both US and foreign goods. History shows this again and again, and thus it is worth watching the dollar as a gauge of how the US economy is performing.
EUR/USD: 1.12446 versus 1.11685. Euro makes the expected breakout over the 50 day EMA, the largest close above that level since mid-March.
Historical: Back into the 6-month range formed after the euro sold off from the early 2018 peaks after a week below it.
USD/JPY: 108.00 versus 108.291. Dollar fades farther against the yen. About at the usual bounce point to test the falling 10 day EMA.
Historical: Last below 109 in June 2018 then tumbled to 107 in early January 2019. 114.51 is the recent high from October 2018.
Oil: 52.25, -0.25. Oil showing a doji after getting pounded. Perhaps time to try an oversold bounce.
Gold: 1327.90, +16.80. Exploding higher for a second session. The late February high was 1349.90. Looks as if it will test that level.
TUESDAY
Well, there was no oversold bounce Monday, but the action of the NYSE indices - in light of all the negative stories - could provide that starting Tuesday. Heck, even the big techs are down so hard they could bounce - FB is at the 200 day SMA and that is a pretty strong point to try a bounce. Things can get so bad they bounce.
Do you play it? With certain stocks. Food, rejuvenated personal products, some insurers that tested. On the relief bounce side, some chip stocks could be bouncing. Some FAANG such as FB as noted, even NFLX that undercut its range and the 200 day SMA and forced us to close the position but then managed to sneak back above the 200 day at the close. Heck, one fellow is saying that TSLA is so bad it is now a play for a bounce off lows hit in 2016. The same can be said for NVDA now at lows from November 2018 and January 2019.
Even with bounce possibilities, remember SP500 and NASDAQ are still just below the 200 day SMA and have to face that level on any rebound. They held it on the way down and thus it is a level they have to beat on any move higher. With this market and its chronic weakness and distribution selling, that is a tougher hill to climb. Fortunately, other stocks can make that move even if those indices struggle there.
Have a great evening!
end part 1
_______________________________________________________
Member: tweet@investbilling.com
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.
6/3/2019 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: QID
Entry alerts: CDNS; CMG; HIIQ
Trailing stops: COUP; ETN; FB; MTCH; VRSN
Stop alerts: ADBE; DOCU; MSFT; NFLX; TWTR; V
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:
https://www.investmenthouse.com/alertdaily.html
********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy, Technical Summary, and the Next Session. Choose the segments you are interested in without having to search a longer video. Click on the link to the portion you wish to view.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/mo/mo.mp4
TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/ts/ts.mp4
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
https://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************
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.
SUMMARY
- And we thought the Mexico tariffs were bad. Anti-trust actions against big tech names trumps all.
- AAPL, AMZN, GOOG (and you know FB is to come) said to be under anti-trust investigation.
- ISM falls to pre-election levels.
- While FAANG are pounded, many NYSE stocks perform fine, though the skew is toward slower growth companies.
- Oversold even farther, in position to bounce, but have to watch how NASDAQ, SP500 trade at the 200 day SMA.
Over the weekend I posited whether the tariffs on Mexico broke the market's back. If they did not, anti-trust investigations may seal the deal.
Anti-trust possibilities tore into large cap tech to start the week. At first it was GOOG with various outlets reporting the DOJ was prepping for opening an investigation. GOOG gapped down almost 70 points. Then AMZN was targeted with the FTC actually beginning an anti-trust probe. Cannot leave out AAPL; reports then surfaced the DOJ was likely to begin an investigation of AAPL. Kind of interesting given AAPL is selling $1K phones, not flooding the market with low-priced units to crowd out competition. No reports mentioned FB, but it was down 7.5%, dropping to the 200 day SMA, just for completeness.
Then afterhours it is reported Congress is getting in on the action with the Judiciary Committee issuing a press release that it is going to hold hearings covering three areas regarding these large tech and retail companies.
One can argue the companies such as GOOG and AMZN and likely FB to come brought it on themselves. Kudos to them for creating such successful products. But, they just had to push too far and get too greedy in capturing and selling and otherwise using customer data. They ruled the world in their sectors and they act like it as well. Knowing the regulator mindset, that is begging for the regulators to come after them.
ISM May printed at 52.1 versus 52.6 expected versus 52.8 April. That is the worst print since October 2016, just before the election. A more real time data point showing the Fed, if it is looking, that data is softening, confirming the distortion in the yield curve.
So, it was an awful day in stocks, right? Not really. SP500 was lower 0.28%, hardly measuring up to NASDAQ's -1.61%. DJ30, SP400, RUTX, SOX were all higher. Not a total crushing of stocks, just big tech and those that feed those big tech stocks.
SP500 -7.62, -0.28%
NASDAQ -120.13, -1.61%
DJ30 4.74, 0.02%
SP400 0.69%
RUTX 0.31%
SOX 0.33%
NASDAQ 100 -2.10%
VOLUME: NYSE +1%; NASDAQ +15%. NYSE volume holds well above average. NASDAQ volume jumps higher above average.
ADVANCE/DECLINE: NYSE +1.9:1, NASDAQ +1.1:1. Definitely a large cap NASDAQ event.
While big tech was bombed along with its drones, S&P stocks were quite solid with many higher. Semiconductors were up, though that might be an effect of Infineon buying CY. In any event, the news did not, as of yet, quell purchases across the market. Thus, some life remains but much of it is in the slower growth areas more typical of a bear market or less than bull market.
Thus, seeing stocks such as CLX, CL, KO rally is not that comforting the markets will continue higher. You can make money off them upside, but they are not screaming 'bull market ahead.'
And that is where the speculation comes in. Some are now saying the Fed will come to the rescue with a rate cut as early as this month. Others note that when Congress gets involved with hearings, that is usually the apex of the negativity and the bottom of the selling trough.
Could be, but even those are not absolute to the day of the comment. There is still room downside and SP500 likely gets sold to 2650 - many are looking at that.
Here is the rub: the market may try to bounce off this recent selling before SP500 sells to that level. Stocks looked ready to bounce last week when the Mexico tariffs were announced. After this kind of jerk lower it could bounce. Can't count on it with the high volume selling and we had to exit several positions, but the violent low can lead to a reflex move upside. After that, however, when everyone feels the pressure is off, it rolls back down.
CHARTS
Quite a negative sentiment session that saw NYSE indices positive or close thereto. They could post a relief bounce, particularly as they did not sell much in the face of that negativity.
NASDAQ and NASDAQ 100 dropped below the early March low, just over 7250. That is a somewhat roundish number where NASDAQ could attempt a bounce. 7000 looks much better for a serious bottom.
SP500 held near the March low, showing a candlestick doji. With the decent performance of most S&P stocks the 500 could bounce and try that 200 day SMA. Of course, overall the pattern remains bearish; any bounce is just an oversold relief move.
SOX held the same range just below the 200 day SMA and right at 1300 support, continuing the lateral move now 7 sessions old. That it held is good, that it could not make a serious break higher with the M&A (Infineon buying CY) shows there is still lethargy: AMD surged upside but could not hang onto the move.
DJ30 showed a doji on the session, just below 25,000. Good volume. Perhaps it is ready for an oversold move as well similar to SP500.
RUTX, SP400 both posted gains, market leading in SP400. A bit oversold, so perhaps a bit of upside here as well.
LEADERSHIP
Semiconductors: Some look ready to bounce. AMAT, XLNX, SLAB, TXN - enough names to jump SOX off support at 1300.
Software: the dam broke. NOW, DATA, VMW, MSFT, HUBS, WDAY were all slammed.
Social: Slammed. FB on fears the DOJ will name it next. TWTR, MTCH sold hard. SNAP hung on but it did give up an early solid move higher.
Insurers: Bouncing up from a short pullback, e.g. ALL, TRV, MET.
Drugs/Biotech/Healthcare: Again, these stocks are still holding up well, waiting to see if they can break higher. ARNA, PTCT, BSX. Picked up some HIIQ, looking to grab some ARNA and others as they continue.
Food: Catching a bid again, e.g. KO, PEP, WING, MDLZ.
MARKET STATS
DJ30
Stats: +4.74 points (+0.02%) to close at 24819.78
Nasdaq
Stats: -120.13 points (-1.61%) to close at 7333.02
Volume: 2.67B (+14.59%)
Up Volume: 1.34B (+701.51M)
Down Volume: 1.31B (-360M)
A/D and Hi/Lo: Advancers led 1.11 to 1
Previous Session: Decliners led 2.86 to 1
New Highs: 58 (-6)
New Lows: 170 (-65)
S&P
Stats: -7.61 points (-0.28%) to close at 2744.45
NYSE Volume: 982.134M (+1.04%)
Up Volume: 720.866M (+472.196M)
Down Volume: 255.365M (-456.287M)
A/D and Hi/Lo: Advancers led 1.86 to 1
Previous Session: Decliners led 2.23 to 1
New Highs: 100 (+18)
New Lows: 113 (-139)
SENTIMENT
VIX: 18.86; +0.15
VXN: 24.22; +0.99
VXO: 20.64; -0.34
Put/Call Ratio (CBOE): 1.13; -0.06. 19 of 22 sessions over 1.0 on the close.
Bulls and Bears:
Bulls faded farther, falling below 50 with a pretty solid 6 point drop over 3 weeks. Bears fell yet again. Bears lower on selling, VIX not spiking on selling. Appears there are more issues to resolve that this range trading action at the head and shoulders neckline has not been able to rectify.
Bulls surprisingly resilient, falling but not much. Bears actually rose. Still no extremes though bulls were close to the 60's that has marked tops. Apparently this was close enough for stock market work.
It did its work in the late 2018 selling with a crossover of the bulls and bears, and when that occurs you expect a recovery. That has been the case. Now with the indices bumping resistance you look for extremes, but bulls are not hitting that 60ish level that has prompted selling/corrections in this long rally from 2009.
Indicator level: Shading to yellow for this week even as bulls backed off. Not in the 60's, but not much fear from the selling.
Bulls: 49.0 versus 49.5 versus
Bears: 17.3 versus 17.2
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.
OTHER MARKETS
INTEREST RATES
Threat level: Red-ish. 3 month/10 year spread inverts a third time. 5 year, and 2 year are below the 3 month treasury. Third 10 year/3 month inversion this year. The positive: the 2 year/10 year is not inverted.
The 3 month yield versus the 10 year: Spread climbs 4BP to -26BP. Widest of this bout of inversion.
The 2 year versus the 10 year: Spread climbs 2BP to 23BP. Continues healing itself.
10 year: 2.078% versus 2.133. More fear, more reason for bonds to rally to a higher breakout high. Way overbought right now, but the negative news keeps hitting so people keep buying bonds.
3 month: 2.341% versus 2.354%
2 year: 1.844% versus 1.924%
Historical: the last sub-2% rate was in November 2016 (1.867%). Last trade over 3% was November 2018. 2.6% for quite some time, then yields started higher, first run from November to January, then mid-March.
The Dollar: There are two schools of thought. First, those who believe a strong dollar is in the interest of the US. Reagan (though not all of his advisors) and Clinton were strong dollar Presidents. Second, there are those who believe a strong dollar prevents the US from selling US goods abroad. The Bushes (1 and 2) and Obama were in this category. The thing is, the US is always its economic strength peak when its consumers are consuming, and that is when there is a strong economy and a strong dollar: they consume both US and foreign goods. History shows this again and again, and thus it is worth watching the dollar as a gauge of how the US economy is performing.
EUR/USD: 1.12446 versus 1.11685. Euro makes the expected breakout over the 50 day EMA, the largest close above that level since mid-March.
Historical: Back into the 6-month range formed after the euro sold off from the early 2018 peaks after a week below it.
USD/JPY: 108.00 versus 108.291. Dollar fades farther against the yen. About at the usual bounce point to test the falling 10 day EMA.
Historical: Last below 109 in June 2018 then tumbled to 107 in early January 2019. 114.51 is the recent high from October 2018.
Oil: 52.25, -0.25. Oil showing a doji after getting pounded. Perhaps time to try an oversold bounce.
Gold: 1327.90, +16.80. Exploding higher for a second session. The late February high was 1349.90. Looks as if it will test that level.
TUESDAY
Well, there was no oversold bounce Monday, but the action of the NYSE indices - in light of all the negative stories - could provide that starting Tuesday. Heck, even the big techs are down so hard they could bounce - FB is at the 200 day SMA and that is a pretty strong point to try a bounce. Things can get so bad they bounce.
Do you play it? With certain stocks. Food, rejuvenated personal products, some insurers that tested. On the relief bounce side, some chip stocks could be bouncing. Some FAANG such as FB as noted, even NFLX that undercut its range and the 200 day SMA and forced us to close the position but then managed to sneak back above the 200 day at the close. Heck, one fellow is saying that TSLA is so bad it is now a play for a bounce off lows hit in 2016. The same can be said for NVDA now at lows from November 2018 and January 2019.
Even with bounce possibilities, remember SP500 and NASDAQ are still just below the 200 day SMA and have to face that level on any rebound. They held it on the way down and thus it is a level they have to beat on any move higher. With this market and its chronic weakness and distribution selling, that is a tougher hill to climb. Fortunately, other stocks can make that move even if those indices struggle there.
Have a great evening!
end part 1
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