| | | InvestmentHouse Weekend Update:
investmenthouse.com
- Stocks continue the rebounds, NYSE indices off near support, NASDAQ
continuing its recovery, SOX gives up its gain.
- Jobs report decent, not great, but it is enough for stocks.
- NYSE leadership rebounds, FAANG rallies but closes off highs. All move up
together but NASDAQ, SOX face important tests that will either show buys or
retracements back lower.
-
After playing favorites the past three weeks, toward the end of last week
stocks tried their kumbaya move, i.e. all rising together versus supporting
some and forgetting others. The result was a recovery in NASDAQ and SOX,
but to varying degrees of success.
SP500 14.52, 0.55%
NASDAQ 27.24, 0.40%
DJ30 117.68, 0.49%
SP400 0.39%
RUTX 0.08%
SOX -0.50%
NASDAQ 100 0.45%
VOLUME: NYSE -10%, NASDAQ -6%. Trade backing off on a move higher, not the
best price/volume action. NYSE trade below average, NASDAQ trade below
average for the third straight session (i.e. all three upside days). Again,
not great price/volume action, particularly for NASDAQ on this bounce.
ADVANCE/DECLINE: NYSE 1.5:1, NASDAQ 1.2:1. Nothing stellar, and indeed
somewhat lagging the day's price gains.
The NASDAQ recovery started Wednesday with a gap lower and recovery to
positive. Thursday and Friday continued the rebound with solid enough
gains, though Friday NASDAQ gapped higher then spent the day fading half the
move.
The fuel for the move? Well, the NYSE indices were perfectly set to bounce
after a short pullback to the 10 or 20 day EMA. NASDAQ and SOX were sold
off hard in that sudden rotation turn, and they were a bit overdone near
term and were rebounding through Thursday, showing some upside momentum
returning.
Friday itself saw the EU and UK strike a deal on Brexit to take it to the
'second phase.' Fears were things were not going well (they were not) and
that it might fall apart. Instead, the UK capitulated to blackmail and
struck a 'deal.'
Then there were jobs. It was a good report, not a great report, but it beat
non-farm expectations, manufacturing jobs grew solidly at 31K, wages were
decent, and the workweek improved nicely.
Non-Farms: 228K versus 190K expected versus 247K Oct (from 261K)
Manufacturing: One of the strongest months in a decade.
Workweek: 34.5 versus 34.4 expected versus 34.4 Oct. Could it finally be
that the workweek expands as companies need more work performed? Perhaps --
the PROBLEM is the ACA is still there with its 29 hour/week cap when the
mandates and taxes kick in. Until that changes, change in the workweek
remain likely muted.
Wages: 0.2% versus 0.3% expected versus -0.1% Oct. +2.5% year/year missing
the 2.7% expected.
What's with wages given that better paying manufacturing positions are
becoming more dominant? It could be a seasonal matter. Retail hires
rebounded from a weaker October given it is time to hire for holiday
demands. Those retail jobs are low pay jobs, and with that influx of jobs
that helped drag down the overall wage level.
Again, a good enough report, not great. It was more about the jobs mix and
the hours worked, and a bit of wage improvement. Important details no
doubt.
After the jobs report the futures more than doubled their gains from 49 on
DJ30 to 131 at the morning peak. As Reuben Feffer's (Ben Stiller) boss
(Alec Baldwin) in 'Along Came Polly' would say, good things.
The stock indices all started higher, but all but SP500 and DJ30 closed off
the high. Those two rallied into midday, faded into mid-afternoon, then
sprinted to the close and a higher high.
SP400 midcaps were similar but they could not find the legs for a for a last
hour sprint, instead just hanging on. RUTX peaked midday and faded the rest
of the session.
NASDAQ, NASDAQ 100, and SOX were similar. The first two peaked at the open
and faded the rest of the session. SOX' action was the same, but its
descent was more severe, giving up all of the gains and closing lower.
So, gains yes, but it was not an all-out, damn the torpedoes rush higher.
Most of the NYSE stocks that were up held their moves higher. Many NASDAQ
stocks, including FAANG, closed well off the high and indeed hit their high
on the open or very early and then backed off.
That can mean the recovery moves on NASDAQ and SOX are capping out. It can
also mean that after the reversal session Tuesday and the recovery into
Friday, those stocks need to take a breather after 4 days upside. After
that they can continue on upside, and if so, any little pullback can be used
to pick up positions. Indeed, Friday we took FB off with a trailing stop
because of its action, intending to move back in after it tests with some
better option positions.
Overall the session was solidly decent. High praise indeed, right? But,
after a 4-day recovery by NASDAQ showed some weariness and SOX hitting the
50 day SMA on the open and then flipping negative, solidly decent is not
bad.
NASDAQ and SOX are hardly out of the woods and free to sail higher. SOX
looks extremely problematic right now. NASDAQ, as noted, can take a short
break and continue higher, but it could also be that the rebound from the
sharp selloff has run out of gas. How the leaders respond this week tells
that tale. Again, if we get a nice, short test and a new move in NASDAQ
leaders, we are all over them with more positions.
As it was we picked up some AAP, BIIB and AMZN Friday, took some gain in
PII, and closed TELL and FB. Again, a test by FB to the 50 day MA-ish (176)
that holds and starts up is a new buy. Indeed, a GOOG test of the 20 day
EMA (1022ish), and AMZN looks really good testing the 10 day EMA, one of the
reasons we picked up new positions Friday.
Getting into the last bit of the year, NYSE indices made a test and started
to bounce, looking very good in their trends higher. SOX looks at best
iffy, while NASDAQ, if it just takes a pause or a modest pullback, could
continue with a second move off the selling and challenge for a new high.
After all, it was a nice, orderly test that still held its uptrend even with
the NASDAQ mega caps and FAANG selling sharply, then bounced back upside.
Therefore we continue to look at upside plays even if they are trades on
stocks such as HON that is in a great uptrend but in a routine test. Or
perhaps CVX that broke out then put in a great 10 day EMA last week. DIOD
is possible with a big ABCD at the 78% Fibonacci retracement.
At the same time, SOX and SMH look bearish with failing tests of the 50 day
MA from below. They can set up ABCD patterns and ultimately rally back, but
that means another downside leg in the pattern to establish a D point.
Playing that leg lower is a perfectly legitimate play and can make excellent
money, as long as you know what you are playing.
LEADERSHIP
FAANG: Up for another session then reversing in some cases to losses.
Important pause/test for them this coming week, i.e. can they keep the move
going after a breather, or was that all that was left in the tank? FB
gapped higher, started to sag so we closed the position and will see if it
tests the 50 day or some other support and resets to continue the upside
move. AAPL still looks good to move higher off its downward wedge. AMZN up
on the week, up more Friday but it too closed off its high. GOOG Gapped to
a doji Friday, its fourth upside session. It could pause a bit and test
1025ish and if that holds, that would be a good entry once again.
Financial: Bouncing after tests into midweek. BAC up off the 10 day EMA
Thursday and Friday, JPM showing the same action. GS showing the same
action and indeed we entered last week.
Transports: Same action as the financials, i.e. a test into Wednesday
followed by upside into the weekend. CSX, KSU in rails show this action.
Truckers such as JBHT, ODFL rallied from Wednesday to weekend after their
tests. Airlines showed big moves Thursday, but Friday gave up some good
gains e.g. DAL, AAL, LUV. SAVE managed to hold its gains through Friday.
Chips: Some look great, e.g. MRVL. INTC is at the 50 day MA and looks in
very good position. Others are in position for more downside from the look:
NVDA shows a bear flag. AMAT, LRCX, XLNX show this as well, but after
another drop they could put in an ABCD pattern that would suggest more
upside.
Retail: After a pullback from Tuesday, many started back up Friday, e.g.
COST, AAP, JWN, AZO. Others look ready, just did not move yet, e.g. DDS,
TGT, WMT.
Metals: STLD, RS -- US steel stocks -- ran hard into the weekend. FCX is
very interesting, particularly if it can hold a test.
MARKET STATS
DJ30
Stats: +117.68 points (+0.49%) to close at 24329.16
Nasdaq
Stats: +27.24 points (+0.40%) to close at 6840.08
Volume: 1.82B (-5.7%)
Up Volume: 1.16B (-200M)
Down Volume: 616.9M (+73.55M)
A/D and Hi/Lo: Advancers led 1.22 to 1
Previous Session: Advancers led 1.75 to 1
New Highs: 97 (+21)
New Lows: 49 (-17)
S&P
Stats: +14.52 points (+0.55%) to close at 2651.50
NYSE Volume: 738.5M (-10.20%)
A/D and Hi/Lo: Advancers led 1.51 to 1
Previous Session: Advancers led 1.68 to 1
New Highs: 111 (+31)
New Lows: 29 (-19)
SENTIMENT INDICATORS
VIX: 9.58; -0.58
VXN: 14.42; -1.44
VXO: 8.54; -1.02
Put/Call Ratio (CBOE): 0.94; +0.10
Bulls and Bears: Bulls roared back from the dip a dip 3 weeks back, but
never fell below 60. That is a high level of bulls, suggesting that a lot
of money is already in the market. For now, however, the market still is
moving higher but it is noteworthy SOX is under pressure and the big name
techs, while they did bounce the past week, still have to show they can
recover the prior highs without slipping into a basing/consolidation
process. Why? Because you want the yearend rally to continue and to play
it.
Bulls: 64.2 versus 62.3
Bears: 15.1 versus 15.1
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: 64.2 versus 62.3
62.3 versus 61.5 versus 63.5 versus 64.4 versus 63.5 versus 62.3 versus 60.6
versus 60.4 versus 57.5 versus 54.3 versus 50.5 versus 47.1 versus 49.5
versus 49.5 versus 48.1 versus 50.5 versus 57.5 versus 60.0 versus 60.2
versus 57.8 versus 50.0 versus 52.5 versus 54.9 versus 51.5 versus 50.00
versus 55.8 versus 50.00 versus 51.9 versus 58.1 versus 58.7 versus 58.5
versus 54.7 versus 51.9 versus 56.3 versus 55.8 versus 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
Bears: 15.1 versus 15.1
15.1 versus 15.4 versus 15.4 versus 14.4 versus 14.4 versus 15.1 versus 15.2
versus 15.1 versus 17.0 versus 17.1 versus 19.0 versus 20.2 versus 19.1
versus 19.1 versus 18.3 versus 18.1 versus 17.0 versus 16.2 versus 16.5
versus 16.7 versus 18.6 versus 18.8 versus 18.6 versus 18.3 versus 19.2
versus 18.3 versus 17.1 versus 17.3 versus 17.9 versus 17.9 versus 18.3
versus 17.5 versus 18.3 versus 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
OTHER MARKETS
Bonds: 2.378% versus 2.362%. Bonds sold off hard Thursday, held the 20 day
EMA Friday. Sharp bounce, sharp drop. Now we see if bonds rally again and
drop rates.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.378%
versus 2.34% versus 2.353% versus 2.381% versus 2.363% versus 2.363 versus
2.412% versus 2.385% versus 2.326% versus 2.329% versus 2.321% versus 2.34%
versus 2.354% versus 2.367% versus 2.345% versus 2.37% versus 2.336% versus
2.375% versus 2.407% versus 2.402% versus 2.34% versus 2.326% versus 2.316%
versus 2.32% versus 2.332% versus 2.349% versus 2.358% versus 2.378% versus
2.37% versus 2.419% versus 2.456% versus 2.435% versus 2.421% versus 2.366%
versus 2.383% versus 2.318% versus 2.341% versus 2.30% versus 2.302% versus
2.275%
EUR/USD: 1.1764 versus 1.17754. Fell to the 50 day EMA and showing a doji
with tail that might bounce.
Historical: 1.17754 versus 1.17990 versus 1.18276 versus 1.18727 versus
1.18983 versus 1.18976 versus 1.18529 versus 1.18489 versus 1.1899 versus
1.19329 versus 1.18148 versus 1.17402 versus 1.1791 versus 1.1787 versus
1.1786 versus 1.1799 versus 1.16443 versus 1.16646 versus 1.16439 versus
1.15871 versus 1.15954 versus 1.1609 versus 1.16092 versus 1.16575 versus
1.15480 versus 1.1644 versus 1.16091 versus 1.16330 versus 1.18163 versus
1.17570 versus 1.1759 versus 1.17798 versus 1.18476 versus 1.17995 versus
1.1771 versus
USD/JPY: 113.48 versus 113.094. Good bounce on the week, moving through
the 50 day SMA.
Historical: 113.473 versus 112.473 versus 112.554 versus 112.442 versus
112.190 versus 112.55 versus 112.102 versus 111.583 versus 111.244 versus
111.523 versus 111.247 versus 112.349 versus 112.615 versus 112.124 versus
112.91 versus 112.879 versus 113.430 versus 113.615 versus 113.526 versus
113.379 versus 113.99 versus 113.723 versus 113.758 versus 114.064 versus
114.010 versus 114.010 versus 113.845 versus 113.640 versus 113.175 versus
113.675 versus 114.071 versus 113.607 versus 113.913 versus 113.31 versus
113.530 versus 112.561 versus 113.031 versus 112.21 versus 112.20 versus
111.852
Oil: 57.36, +0.67. Broke lower Wednesday, recovered the 20 day EMA nicely
to end the week, still trending higher.
Gold: 1248.40, -4.70. Broke through the 200 day SMA early week the really
broke lower Thursday. Friday a bit lower, showing a doji.
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6840.08
Resistance:
6914 is the late November all-time high
Support:
6796 is the early November 2017
The 50 day EMA at 6705
6641 is the October high
The 2016 trendline at 6565
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
The 200 day SMA at 6295
6205 is the late May all-time high
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows
S&P 500: Closed at 2651.50
Resistance:
Support:
The 20 day EMA at 2616
2597 is the November 2017 all-time high
The 50 day EMA at 2581
2549 is the upper channel line from the March 2009 uptrend channel
2491 is the August all-time high
2480 the late August and early August highs
The 200 day SMA at 2461
2453.46 is the June prior all-time closing high
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 24,329.16
Resistance:
24534 is the all-time high
Support:
23,602 is the early November 2017 high
The 20 day EMA at 23,875
23,608 is the early November high
The 50 day EMA at 23,404
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
The 200 day SMA at 21,846
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
21,169 is the March 2017 all-time high |
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