| | | InvestmentHouse - US Bombs, Jobs Report Bombs (Weekend Newsletter)
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- US bombs, Jobs Report bombs, stock market hangs in its trends.
- SP500, DJ30, SOX testing 50 day EMA, NASDAQ holds its trend, while
RUTX/SP400 try to return to more bullish looks.
- Jobs report weak and weather is blamed as retail and construction drop.
- Steel stocks show signs of returning to the upside as did retail before
them.
- Market still sets up new patterns and they are breaking higher as well.
Friday you had your choice for breakfast, 59 Tomahawk missiles that bombed
Syria or a Jobs Report that bombed itself. Neither were good market
scenarios. Futures were lower as you would expect, but not horrid.
Overnight when news of the bombing broke, stock futures dove into the abyss,
more or less. They quickly recovered, however. It took a crappy jobs
report to send them back down ahead of the open. From there, however, a
steady recovery into early afternoon. That even took the market positive --
before it gave up the recovery and all but RUTX and SOX closed flat.
SP500 -1.95, -0.08%
NASDAQ -1.14, -0.02%
DJ30 -6.85%, -0.03%
SP400 -0.10%
RUTX 0.01%
SOX 0.47%
VOLUME: NYSE -6%, NASDAQ -10%
A/D: NYSE -1.1:1, NASDAQ slightly negative breadth.
All in all, considering the news, this was not bad action. Reason to sell
but no sellers. Meaning? SP500 and DJ30 continued holding support of the
50 day MA. NASDAQ is holding its position near the top of its range, using
the 20 day EMA as support. SOX did a good job of testing the 50 day MA late
week and bouncing.
The two black sheep, SP400 and RUTX, are attempting to rejoin the flock.
SP400 midcaps are in something of a 4+ month head and shoulders, but the
past 6 weeks look as if they are putting in an inverted head and shoulders.
RUTX is similar, though not quite as elegant perhaps as SP400.
Mind you Friday was no great shakes, but it avoided a selloff when it would
appear the market could have found plenty of reason to sell.
Jobs Report
Q1 ended with weak jobs, particularly from retail that saw another loss,
dropping 30K jobs. So much for the 'predictive' powers of the ADP report.
And it was supposedly redesigned a couple of years ago to more closely track
the BLS number. Sounds as if another iteration is needed.
Non-Farm Payrolls: 98K versus 175K expected versus 219K prior (from 235K)
Unemployment 4.5% versus 4.7% expected and 4.7% February
Hourly Wages: 0.2% versus 0.3% expected versus 0.3% February (from 0.2%)
Year/year: 2.7% versus 2.6%
Workweek: 34.3 versus 34.4 expected versus 34.3 prior (from 34.4)
Participation rate: 63.0% versus 63.0% February. 94.213M working aged
people are still outside the working class. Impressive number of
non-working working aged people. Retirees? Some brush off the number
saying they are just baby boomers. But with so many older people joining
the workforce the past 8 years to make ends meet there are many younger
workers who are out of the workforce, opting to draw upon the various
programs available to nonworkers versus take on one of the menial jobs this
economy is good at producing. Why have the hassle of a job you are
overqualified for when you can play video games and stay on social media all
day and get paid to do it? I know of people who are doing this and have
been doing this for quite some time. The old adage is as true as it ever
was: if you pay someone not to work, unless the options for working are VERY
good, the person won't work. We make it very easy for people to choose not
to work.
Where the jobs are and are not:
Retail: -30K, another sharp decline
Professional/Business services: +56K
Healthcare: +14K
Mining: +11K
Manufacturing: +11K (26K prior month)
Construction: +6K (down from 59K, 46K Feb and Jan)
Most are saying, given the construction numbers, that weather knocked down
the number. Plausible explanation, for the very weak report, but there is
no question the jobs numbers remain, despite Zandi's commentary that the
market is roaring, are not that powerful.
Interestingly, last week Trump penned an order sharply limiting the use (and
abuse) of H1-b visas. Tech companies, the ones screaming the loudest about
not enough qualified labor, have used the program to bring in tech workers
(exempted from any restrictions) and REPLACE US-born workers. Trump removed
that exemption for tech, requiring the people to meet the requirements for
all other areas. Now the tech titans will scream all the more. Hey, it
takes a lot of cheap labor to make your billions. Hmmm, WHERE in US history
have we seen imported free or low-cost labor used to prop up the wealthy
class? I believe that was pre-civil war . . .
THE MARKET
CHARTS
All of the large cap indices held the same relative position. It was the
SP400 and RUTX that may be altering their patterns in a more upside
direction, but at this point they are still not there. You have to keep an
open mind when looking at chart patterns. They do not always speak to you,
at least clearly, and in those situations you have to be patient and let
them work through the patterns, keeping an eye on how leaders are
performing.
SP400: Peaked to start March and has since worked in a range of lower highs
and lower lows, but as noted earlier, has the possibility of a 6 week
inverted head and shoulders setting up. Possibility. It has to show it.
SP500, DJ30: Still holding over the 50 day MA's in their 3 week tight
lateral ranges, holding that important support level.
NASDAQ: Just off the all-time highs bumped in March and last week.
Trending higher, still has tech, software, and chip support.
SOX: This is a promising result for the entire market. SOX trended up the
20 day EMA after bouncing off the 50 day EMA in December. It went ahead and
made the 50 day MA test, getting it out of the way, somewhat clearing the
decks for a new move higher. As with SP500, DJ30, a test of an important
level.
RUTX: You can trace out a potential inverted head and shoulders the past 5
weeks somewhat similar to SP400 pattern. A bit rougher but the same idea,
and if SP400 uses it to break higher, the odds are RUTX would follow.
LEADERSHIP
Recently the market showed new life in retail and oil. Some others are
attempting to join the continuing group of leaders.
Metals: Yes some of them are back. AKS, ZEUS, STLD are very interesting.
Semiconductors: Keep pulling winners out of the hat. QRVO broke higher
Friday. SWKS as well. SIMO still looks very good as does AMKR, BRKS, PLAB,
MU.
Retail: Some are taking a breather after a great move, others still look
good. PIR broke higher Friday on good volume. WSM is taking a breather as
is LL after blistering break higher.
Oil: Not a grand week, but working on the move. APC still setting up the
inverted head and shoulders. APA started back up last week. SWN still
looks very strong to move higher. HAL is even putting in something of a
bottom at the 200 day SMA.
Biotechs/Drugs: Some fell out of patterns but many did not. CNAT is
screaming upside again. INVA is setting up for another move higher as is
TTPH.
China: Some of these stocks are coming around again, e.g. CTRP, VIPS.
Financial: Noncommittal, trying to ascertain what the Fed comments re the
balance sheet reduction mean for rates. BAC, JPM, KEY look less than great.
MARKET STATS
DJ30
Stats: -6.85 points (-0.03%) to close at 20656.1
Nasdaq
Stats: -1.14 points (-0.02%) to close at 5877.81
Volume: 1.656B (-9.4%)
Up Volume: 784.91M (-305.09M)
Down Volume: 852.69M (+179.8M)
A/D and Hi/Lo: Decliners led 1.02 to 1
Previous Session: Advancers led 2.14 to 1
New Highs: 66 (+18)
New Lows: 41 (-24)
S&P
Stats: -1.95 points (-0.08%) to close at 2355.54
NYSE Volume: 752.7M (-5.59%)
A/D and Hi/Lo: Decliners led 1.12 to 1
Previous Session: Advancers led 3.14 to 1
New Highs: 72 (-20)
New Lows: 11 (-23)
SENTIMENT INDICATORS
VIX: 12.87; +0.48
VXN: 13.49; +0.76
VXO: 11.66; +0.35
Put/Call Ratio (CBOE): 0.95; +0.05
Bulls and Bears: Bulls jumped back up to the higher end of the range after
a week of market doubt. When the market did not plunge farther off that
nasty Tuesday break lower a couple of weeks back, confidence stabilized.
Still cannot forget the 7 weeks over 60%, however, and that is still lurking
out there and is historically a market top indicator, just not a timing
indicator. Don't forget those 60+ readings in the equation.
Bulls: 55.8 versus 49.5. After a panic week, bulls rebound.
Bears: 18.3 versus 18.1. The bear rose as well but that means they were
more bearish, moving the opposite direction in terms of the view of the
market.
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 55.8 versus 49.5
49.5 versus 56.7 versus 53.4 versus 57.7 versus 63.1 versus 61.2 versus 61.8
versus 62.7 versus 61.8 versus 58.2 versus 60.6 versus 58.6 versus 60.2
versus 59.8 versus 59.8 versus 59.6 versus 58.8 versus 56.3 versus 55.6
versus 51.0 versus 42.9 versus 41.7 versus 47.1 versus 42.9 versus 46.1
versus 46.7 versus 45.2 versus 44.6 versus 49.0 versus 52.5 versus 55.9
versus 56.7 versus 56.2 versus 54.3 versus 52.9% versus 53.9% versus 54.4%
versus 52.5% versus 47.1% versus 41.6% versus 47.5% versus 45.9% versus
47.3% versus 45.4% versus 35.4% versus 40.2 versus 39.2
Bears: 18.3 versus 18.1
18.1 versus 17.3 versus 13.75 versus 17.3 versus 16.5 versus 17.5 versus
17.6 versus 16.7 versus 17.6 versus 17.5 versus 17.3 versus 18.3 versus 18.4
versus 19.6 versus 19.6 versus 19.2 versus 19.6 versus 22.3 versus 21.6
versus 23.5 versus 25.7 versus 24.3 versus 23.1 versus 23.8 versus 23.1
versus 22.8 versus 23.1 versus 24.3 versus 22.6 versus 22.8 versus 20.6
Versus 20.2 versus 20.0 versus 20.9% versus 21.2% versus 21.6% versus 23.3%
versus 24.7% versus 24.5% versus 23.8% versus 23.2% versus 23.5% versus
23.8% versus 23.7% versus 24.0% versus 21.7% versus 21.6% versus 21.7 versus
20.6% versus 21.7% versus 27.8% versus 27.8% versus 28.9% versus 27.8%
versus 30.3% versus 35.4%
OTHER MARKETS
Bonds (10 year): 2.37% versus 2.34%. Double bottom, inverted head and
shoulders, whatever, bonds look as if they want to break higher again near
term.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.34%
versus 2.33% versus 2.34% versus 2.33% versus 2.35% versus 2.40% versus
2.41% versus 2.382% versus 2.418% versus 2.376% versus 2.40% versus 2.41%
versus 2.40% versus 2.43% versus 2.463% versus 2.50% versus 2.529% versus
2.502% versus 2.602 versus 2.617% versus 2.58% versus 2.60% versus 2.55%
versus 2.51% versus 2.49% versus 2.48% versus 2.46% versus 2.260% versus
2.367% versus 2.31% versus 2.38% versus 2.42% versus 2.43% versus 2.42%
versus 2.45% versus 2.50% versus 2.473% versus 2.43% versus 2.41% versus
2.398% versus 2.340%
EUR/USD: 1.05906 versus 1.0645. Euro breaking lower from the lateral
consolidation at the 50 day MA.
Historical: 1.0645 versus 1.06760 versus 1.06804 versus 1.06702 versus
1.06584 versus 1.06855 versus 1.07546 versus 1.0815 versus 1.08640 versus
1.07894 versus 1.07670 versus 1.07920 versus 1.08117 versus 1.0748 versus
1.07395 versus 1.07710 versus 1.0732 versus 1.06070 versus 1.0636 versus
1.06746 versus 1.06746 versus 1.05384 versus 1.0566 versus 1.05764 versus
1.06266 versus 1.05214 versus 1.05327 versus 1.05710 versus 1.05877 versus
1.05616 versus 1.05830 versus 1.0557 versus 1.05474 versus 1.06108 versus
1.06665 versus 1.06148 versus 1.05762 versus 1.06023 versus 1.06411 versus
1.06557 versus 1.06825 versus 1.06814 versus 1.07219 versus 1.07880 versus
1.07605 versus 1.07892 versus 1.0791 versus 1.07294 versus 1.06957 versus
1.06843 versus 1.0683 versus 1.0756 versus 1.07274 versus 1.0761 versus
1.07027 versus 1.06394 versus 1.06381 versus 1.07114 versus 1.06450
USD/JPY: 111.096 versus 110.85. Little double bottom at the 200 day SMA.
Historical: 110.85 versus 110.794 versus 110.705 versus 111.386 versus
111.255 versus 111.114 versus 110.581 versus 111.335 versus 111.242 versus
111.295 versus 111.502 versus 112.289 versus 112.707 versus 113.349 versus
113.447 versus 114.726 versus 114.833 versus 114.807 versus 115.259 versus
114.563 versus 113.498 versus 113.966 versus 114.042 versus 114.169 versus
113.951 versus 112.966 versus 223.982 versus 112.169 versus 112.745 versus
113.324 versus 113.399 versus 112.906 versus 113.356 versus 113.880 versus
114.306 versus 113.65 versus 113.856 versus 113.265 versus 113.401 versus
112.207 versus 112.332 versus 111.815
Oil: 52.24, +0.54. Broke through the 50 day SMA and is trying to get back
to the 55ish level that has acted as resistance.
Gold: 1257.30, +4.00. Surged through the 200 day SMA Friday, but could not
hold that move. Reminiscent of late February when it tested the 200 day but
could not make the break.
MONDAY
US carrier battlegroup is steaming to North Korea, Russian warships steaming
to Syria, and who knows what more will transpire ahead of Monday. Similar
news Friday did not sink stocks. Didn't help them, but the sellers were not
selling.
SP500, DJ30, SOX are in good 50 day MA tests. NASDAQ is holding the 20 day
EMA. Could it be that SP400 and RUTX are forming up near term upside
patterns?
Some metals stocks, namely steel, are setting up new patterns, getting money
thrown at them. Retail, chips, drugs/biotechs still look solid. Oil is
trying to follow oil prices higher; perhaps those stocks will move if oil
breaks 55/bbl.
The point: there is leadership and some nascent new leadership trying to
form up. The indices are holding support, and those that broke just might
try to put in an upside pattern. As improbable as it would appear given the
Fed tightening and wanting to dump its balance sheet, the lack of tax and
healthcare reform, weaker Q1 economic activity, and a lot more international
intrigue, stocks are not selling and indeed appear as if they could move
higher. Again.
The Jobs Report stunk it up, again not acting as a catalyst up or down. The
market has not surged after those reports, but it has shown a slow build
upside with the leaders making the moves.
With that background we will continue looking at solid upside plays in solid
sectors. We have some really good ones to go for Monday, and if the
patterns in the market hold, there will be more of those as we have a pretty
good list from this weekend. Again, as improbable as the continuing move
may seem, it continues not to crack and to produce good upside patterns, and
importantly, breakouts.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 5877.81
Resistance:
5912
5928 is the March all-time high.
Support:
5800 from the February consolidation lows
The 50 day SMA at 5815
The 50 day EMA at 5795
The 2016 trendline at 5723
5661 is the late January upper gap point
5601 is the January lower gap point
The November prior all-time high at 5404
The 200 day SMA at 5395
5340 is the September and October 2016 twin peaks
5287.61 is the September 2016 high
5271.36 is the August 2016 intraday prior all-time high
5231.94 is the 2015 all-time high
5170 is the October intraday low.
5162 is the early November peak, 5176 is the December intraday peak
5100 from the April peak and early May peak
5042 is the March 2015 high
5008.57 is the early March 2015 post-bear market high
5007 is the 12/31 upper gap point from that big gap lower
4999 is the October upper gap point
4980 is the June 2016 peak
S&P 500: Closed at 2355.54
Resistance:
2390 is the March interim recovery high
2401 is the all-time high
Support:
The 2016 trendline at 2371
The 50 day SMA at 2347
The 50 day EMA at 2341
2301 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The 200 day SMA at 2222
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
2135 is the May 2015 all-time high
2130 is the June 2015 peak
2126 was the April 2015 prior all-time high
2120 is the June 2016 peak
2119 is the September 2016 low; February 2015 intraday high
2116 is the November 2015 high
2111 is the April 2016 recovery high
2104 is the December 2015 high
2094 is the December 2014 high
2079 is the intraday all-time high from November 2014
2062 is the January 2015 lower high
2046 is the July 2015 closing low
2040 is the March 2015 closing low
Dow: Closed at 20,656.10
Resistance:
21,100 is the March interim recovery high
21,169 is the all-time high
Support:
The 50 day SMA at 20,604
The 50 day EMA at 20,535
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
The 200 day SMA at 19,192
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
18,288 from March 2015
18,262 is the upper gap point from the Monday gap lower.
18,247 is the August 2016 low
18,168 is the April 2016 recovery high
18,100 to 18,181: interim peaks in the December 2014 to July 2015 range
18,016 is the June 2016 peak
17,992 is the early September low
17,978 is the November 2015 peak
17,960 is the October intraday low
17,600 is the rough bottom of the April to June range.
17,351 is the September 2014 all-time high. |
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