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Friday, March 24, 2017

Market Alert - Afternoon Session

After a decent morning session stocks are under pressure to start the afternoon as volatility kicked in about an hour ago as reports started slipping out that the votes were not there to pass the House healthcare bill. Stocks sold, rebounded, now are back at the lows from an hour ago.

All are awaiting the a White House briefing (cameras are trained on an empty podium) as Paul Ryan meets with President Trump. The NY Times is reporting Ryan is telling Trump the votes are not there. Crappy bill, didn't live up to promises, didn't go to a market-based system for 98% of the population (the other 2% really needs help), and in the end just does not have support, even from inside the White House from what we hear.

So, you pull the bill, twist arms over the weekend, and see where it goes from there. The big stumbling block is that the changes agreed to by the Free Caucus hurt the scoring, giving less reason for the supporters to compromise. So, what could have been a start to the healthcare change looks stalled for now.

The market is not happy about it but is not diving. Mr. Spicer is on the podium now so we will hear what he has to say.

SP500 3.32, 0.14%
NASDAQ 26.53, 0.46%
DJ30 -8.50, -0.04%
SP400 0.23%
RUTX 0.44%
SOX 1.23%

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Market Alert - Pre-Market

Futures vs FV: SP +0.95; DJ +41.70; NASDAQ +3.56

Futures are trading at the morning highs, matching the overnight high last night after stocks bumped higher off a weak US close. Trending upside the past 2 hours as there is a bit of upside momentum as the market resets after Trump's ultimatum to the HOUSE to pass the proposed healthcare bill (a 'great' bill he says) or forget getting the ACA repealed for . . . now. A big showdown with one House republican whining 'is this a republic' when told what to vote for, when to vote, etc.? Yes it is. There are windows to act and you need to act. If you cannot get your 'stuff' together and get it done, that is tough. And, it is tough for the US people who are struggling under this. Still feel they will do something, but then it goes to the Senate for a few months. At least. Interesting political gambles taking place.


Durable Goods, Feb: 1.7% vs 1.3% exp vs 2.3% prior (from 1.8%.

Ex-transports: 0.4% vs 0.7% exp vs 0.2 (from -0.2)

Five years of flat, lateral movement in Durables. In 99-2000 that preceded a recession. Again in 2006-07.


EU PMI's: much better
Overall: 56.3 vs 55.3 vs 55.4 prior


Russia: Cuts rates unexpectedly


Outflows: BAC reports $-8.9B from equity funds, a 38 week high.


Beats: MU blows it out; KBH

Misses: FL (BL); GME (TL)


OTHER MARKETS

BONDS: 2.414% VS 2.41% 10 year

EUR/USD: 1.0807 vs 1.0770. Dollar sells again.

USD/JPY: 111.05 vs 111.359

Oil: 47.94, +0.24

Gold: 1248.30, -1.80


Semiconductors received a boost from MU earnings. The big decision today is whether to buy the strong moves in good sectors if they show the moves. Will there be a H/C vote and if so when? Likely after the market close so will a failed vote bust the move higher or will investors say 'fine, move onto tax reform'? Problem is, ACA repeal IS tax reform given the trillions in the Justice Roberts re-write from the bench to make mandates, etc. a tax (after the Obama administration argued it was NOT a tax; if there was ever a clear case of judicial activism . . .)

If there are good individual moves in those leading sectors (e.g. biotech/drugs, chips) we can pick up some positions. We lightened up problematic positions Thursday, just not wanting to babysit patterns damaged Tuesday that did not rebound well enough. If we see opportunity from great patterns, that works.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Thursday, March 23, 2017

Market Alert - Pre-Market

Futures vs FV: SP -1.15; DJ -24.30; NASDAQ -5.81

Futuresa were modestly positive up to a half hour ago but they have turned negative in a fairly sharp drop. No one is reporting any major stories but perhaps it is related to a statement by dome obscure Freedom Caucus member. Interestingly, Rick Santelli on CNBC argued today that this was just sausage making, that a bill would pass. See, I am not the only one who remembers this. Reagan, Bush, Clinton, Obama -- all had to go through hoops of one form or another to get their legislation passed.

There is a negative story about Ford. It cuts its guidance as it notes "auto sales have reached a plateau." Some would argue that they are rolling over hard. Auto loans have really slumped, and used vehicle prices are described as 'crashing.' Years of buying autos now has needs mostly filled.

Jobless claims: 258K vs 239K vs 243K (from 241K). What if you gave a report and nobody cared? This is it. I note the claims jumped at the highest rate in 10 months, but at these levels and given the condition of the jobs market and the causes, this statistic means nothing.

Yellen gives a speech this morning but it is not about policy, but about how poor kids have a harder time succeeding as an adult. What? I guess this is a recognition of just how the US has changed from the land of opportunity to a land of what entitlements you get.

Earnings beats: ACN, CAG, PVH, CTAS

Misses: FIVE (TL); HRMN (TL)


OTHER MARKETS
Bonds: 2.40% vs 2.40% 10 year

EUR/USD: 1.0786 VS 1.0792

USD/JPY: 110.847 vs 111.29. Dollar really falling against yet.

Oil: 47.94, -0.10

Gold: 1254.60, +1.80


Well it looked as if there would be a continuation of the Wednesday modest recovery, but something rattled the markets over the past half hour or so. Perhaps it is the line of those against the healthcare bill waiting to get in front of the camera on the various news stations.

With this return to some mush at the open we will still be looking at how the leaders hold their support and see if there is a return to a bit of upside we can use as the morning progresses. The vote will not be until tonight after the markets close so there is plenty of time for the push/pull in the equity indices.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Wednesday, March 22, 2017

Market Alert - To the Close

The stock indices closed mixed but there are some strong moves in some leading groups such as biotech, chips. So yes, we did pick up some positions today, but they are on strong movers that were solid even Tuesday. At the same time we closed some positions that were not rebounding with the rest of the market.

SP500 4.43, 0.19%
NASDAQ 27.81, 0.48%
DJ30 -6.71, -0.03%
SP400 0.17%
RUTX -0.07%
SOX 1.10%

We anticipate there could be more of a bounce into the House of Reps' vote tomorrow and thus are letting those stocks that are bouncing continue to bounce. There were enough votes to kill the bill, then a Freedom Caucus member said he would support it, then a black cat crossed the road . . . you get the picture. Still anticipating using a further bounce to exit unless there are some strong moves, strong as we are seeing in some of the recent leadership groups.

London terror attack tells the same story that we have seen unfold with unfettered immigration. Only after the cows have left do countries such as Denmark and Sweden realize they have made a horrible, culture, heritage, and perhaps country-ending mistake.

House Intelligence Committee (an oxymoron?) Chairman Nunes, on his own, discovered that intelligence agencies were indeed surveilling Trump Tower, the Trump transition team, and perhaps Trump himself post-election. It was likely just part of surveilling contacts with foreign agencies and individuals, but the other side of the conversations were supposed to be masked but were not, a violation of the law. Wow, our intelligence and government agencies violating laws they are sworn to uphold. Imagine that?

Overall a very modest relief move from the Tuesday selling. Again, we let positions that were recovering off early weakness and showing doji at support continue to work into Thursday ahead of the House vote. We closed some, will close some more on a further bounce that is anything short of very solid. At the same time there are great sectors working and we picked up a few great movers today that held up during the market turmoil and then rallied once the Tuesday turmoil was over.

Unfortunately, that was not a large market segment. The rest of the market was hammered and came up for some air Wednesday. We will play a further move higher to jettison laggard positions and any that are not showing clear strength. Then we see how the House votes.

Have a great evening!



Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Market Alert - Pre-Market

Futures vs FV: SP -0.32; DJ -29.01; NASDAQ +3.42

It is always dodgy when political news dominates the headlines versus economic news. Of course right now political news is economic as the President's tax agenda is hostage to the healthcare bill that supposedly has to be passed first in order to take on taxes.

As of now the bill is set for the Thursday vote but the votes are not there at the moment. Sausage making at its finest and it is always amazing to me how the electorate is so shocked at how this works. It is politics; everyone wants something for their district or themselves. Deals are made, last minute calls. It happens this way all the time. Remember the Cornhusker deal to get the ACA passed? Likely the bill passes by a close vote then goes to the Senate for major changes and where again the same 'it will never pass' meme will prevail. It may not make it, but every major bill works this way.

Earnings:

NKE TL miss, world future orders are lower. From grand to what happened.

FedEx BL miss, but it has a great outlook. Explains the miss as a large customer not shipping as much over the holidays and FedEx loaded up in anticipation of a big season. Oops.

WGO (motor homes) beats. Things cannot be THAT bad if buying motorhomes is up.

Retail: BEBE is closing all physical stores to concentrate on on-line sales. The direction of retail becomes clearer. Dollar priced stores will dominate, some discounters, some boutiques, then everything else online.

Existing Home Sales at 10:00ET.


OTHER MARKETS
Bonds: 2.407% vs 2.43%. Bonds continue to rally as tax cut future is in jeopardy.

EUR/USD: 1.0800 vs 1.0813. Dollar bounces back just a hair.

USD/JPY: 111.24 vs 111.792

Oil: 47.64, -0.60

Gold: 1248.80, +2.30


Politics moves through its grinder and takes the market with it. Futures are off the early morning lows but are at best sluggish, fading toward the open. The market weakness is not over because there is a Thursday vote that is still on for now (meaning they hope to get the votes). If that is cancelled, not good. If it is on the market remains on pins and needles and you will see the actual vote on CNBC, Fox Business, Bloomberg, etc.

We want to use strength to take some off the table. Unfortunately the futures are not that strong. Of course we will see how the leaders in chips, biotech, and others hold support.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Tuesday, March 21, 2017

Market Alert - To the Close

They are smoking the market lower in the last few minutes of trade. It was decent entering the last hour and even to just a half hour left and we were using that to close positions that were not holding support. Then as does happen on selling days, the last part of the day saw sell programs hit, pushing the indices to the lows. Now a bit of a bounce in the last few minutes is likely.

Basically a day where the market lost confidence and was torched. We closed positions not holding support and will see if those that did hold can put in an oversold bounce or relief move that we can use to exit in the event the bids stay away and the sellers remain emboldened.

SP500 -30.23, -1.27%
NASDAQ -107.35, -1.82%
DJ30 -243.15, -1.16%
SP400 -1.94%
RUTX -2.41%
SOX -2.34%

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Market Alert - Afternoon Session

At the start of the afternoon session SPY is trying to bounce off a double bottom set up from 11:30ET to 12:50ET. This is the setup to try and put together an afternoon bounce. It is just coming off that second low so nothing is set.

SP500 -21.54, -0.91%
NASDAQ -75.92, -1.29%
DJ30 -179.81, -0.86%
SP400 -1.62%
RUTX -2.13%
SOX -1.86%

As for SPY, it has plummeted through the 20 day MA, half way to the 50 day MA. NASDAQ and DJ30 have just cracked the 20 day MA. SP500 is below the lows from 2 weeks back, RUTX is at those lows.

SOX is back to the 10 day EMA.

All drops are significant as noted above. We now see if there is any meaningful attempt to rally off the intraday double bottom. It will take a significant buy on the dip to do that, and we may end up using it to exit assuming it does make the move higher.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Market Alert - Midmorning

After starting higher and a decent move by the growth stocks, the indices have reversed rather dramatically.

SP500 -15.23, -0.64%
NASDAQ -47.36, -0.80%
DJ30 -126.93, -0.60%
SP400 -1.35%
RUTX -1.21%
SOX -1.15%

Europe closed and the market was selling into that close, purportedly on fears that after the President's meeting with House lawmakers that even passing the proposed healthcare overhaul in the House is problematic.

Financials are selling off and cracking the 50 day MA's. This has been a straight down drop that has yet to try a bounce. We will see what kind of bounce can be mustered after this initial scare lower. That will tell more of the tale.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Market Alert - Pre-Market

Futures vs FV: SP +5.68; DJ +37.14; NASDAQ +16.24

Futures are higher even as CNBC discusses how the Trump rally is fading. Specifically it notes a switch to large cap defensive. Really? Many of the Dow and SP stocks have rallied for quite some time and are still doing so; no switch there. They cannot find anything positive in the market, talking about where SP500 is right where it was a week ago, how NASDAQ put in 3 days of less than a point gain -- all the while ignoring SOX at a higher high, RUTX on the rebound, and NASDAQ not in a bad position. The anchors opine market is not sure what it wants (and neither are they). Yet the market continues moving up.

Bloomberg talks about Openheimer saying a summer correction is coming, though they do say it is too early to play for it and that the SP500 will be higher before that. Indeed, their indicators point higher. This is another financial station WANTING a downside story. OPC indeed says they see more early/mid-cycle indications versus late cycle. Wow, a negative headline for the market that was totally reversed by the interview WHERE have we heard/seen this before?

Lots of negativity . . . but not. We agree with OPC: a correction is coming at some point, but right now the indications are upside.

Lots of discussion about the Thursday House vote on healthcare reform. That is a correct discussion. A market built on real economic hope and change depends upon making concrete steps to get there. Thursday is thus important. The market appears to be believing it will happen as the President meets with House republicans this morning. As we laid out this weekend, the path is there thanks to the OMB analysis.

As always, the news is noise. Interesting, sausage making entertainment, but noise nonetheless. Look at the leaders and the index action. SOX is hitting higher highs and that is usually good for the market.


OTHER MARKETS
Bonds: 2.493% vs 2.463%. Bonds fading some after a 4-day bounce

EUR/USD: 1.0799 VS 1.0739

USD/JPY: 112.563 VS 112.496

Oil: 48.40, +0.18

Gold: 1233.80, -0.20


Futures are at the session highs but that is also the top of the morning range, i.e. they are not rallying higher and higher but range-bound. That means that the bids will need to keep coming and pushing. We will have to see if the bids hang in after the open and push last week's Wednesday post-FOMC rally.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Monday, March 20, 2017

Market Alert - The Close

Another uninspired session -- for the market overall -- while the same leaders continued to perform with a move higher or at least held their ground. Indeed, many areas, despite the mixed close, continued to hold and set up quite decently.

SP500 -4.78, -0.20%
NASDAQ 0.53, 0.01%
DJ30 -8.76, -0.04%
SP400 -0.52%
RUTX -0.53%
SOX 0.77%

VOLUME: NYSE -67%, NASDAQ -43%. Back below average after that huge quad-expiration spike. Going nowhere but no churn as volume was low.

A/D: NYSE -1.4:1, NASDAQ -1.6:1.

This market is dull, slow, sporting low and rangebound volatility. Many remain worried and skeptical of continued gains, pointing out the next 20% move would more likely be downside than upside. Wow, 20% is a big number and that is pretty negative. Not all say 20%; you hear 10%, 5% -- just some number downside. There is that old adage about never shorting a dull market. Outside of some leaders, this is about as dull as you can get.

One thing the worried groups point to is President Trump's steadily declining approval (now in the 30's) and the high disapproval level (in the 50's). With the daily pounding from the press and the talk of the healthcare and tax policy reform plans stalling, it is easy to see that happen. Getting the reforms passed is totally doable as discussed over the weekend, and making that happen will be a big shot in the arm for the markets.

The question on the minds of the hand-wringers is will it be soon enough. Most say no way, there are too many bridges to cross to get both the House and Senate agreed by anytime before summertime recess.

I believe that they are again underestimating this guy. They underestimated his ability to put together a winning election game plan, saying he didn't have the ground game and other indicia of historically successful campaigns. But his group figured out how to use the internet even better than Google and others who make their livings gleaning data from the web and they were obviously highly effective in targeting the areas their web research told them were the important areas. I think that despite all the press about how no one wants to work with Trump, those that meet with him are bear hugged so to speak, finding it hard to disagree with what he wants of them. As with shorting a dull market, I would not sell Trump's chances short if nothing else based upon his history in the election and a reputation for getting things done.

That said, the near term is what is on the big money managers' and fund managers' minds, and the timing is nothing happening in the next few weeks. Even so, the market continues to hold support and in some areas move higher as no sellers show up and investors still put money to work in solid sectors, e.g. semiconductors, biotechs/drugs, software.


NEWS/ECONOMY

Today the news was as slow and dull as parts of the market.

The G-20 turned out to be a nonevent in terms of the world market reaction as well as the impact of the failure to agree on the same pat language included in the last several statements. Is the failure to agree any surprise given the outcome of the US election? Anyone shocked by this? Of course not. This was part of what Trump ran on and thus not any seriously negative market reaction to the events.

The big takeaway was the failure to affirm free trade by dropping the phrase "resist all forms of protectionism." Treasury Secretary Mnuchin blunted any consternations over leaving that wording out by stating "was not necessarily relevant from my standpoint." That seemed to take care of the issue and the currency markets are fairly quiet in the aftermath. Hey, they did agree to combat currency devaluations, so there. Some say it was a failed meeting, some called it disappointing, but it was what was likely to happen with the Trump administration in power.

China: Did not like the outcome and is supposedly set to meet each trade adjustment by the US with reciprocity. Okay, we will see.

China did report home prices +11.8% yr/yr, more than expected though lower than the 12.2% prior.


The other news was the FBI Director heading to Congress to discuss Russia's involvement in the election. It would appear our worries were unfounded. Whatever Russia did if it did anything at all, had no impact on the election according to Comey. No evidence, no evidence, no evidence was repeated often. Not a lot of excitement after a ton of speculation.


MARKET

While most of the market snoozed, SOX continued its upside, punching out another new high (though still not an all-time high; those from 2000 are still a long way off, over 300 points to the upside). I know it is just a relatively small index, the market tends to follow it. SMH (semiconductor ETF) hit higher highs as well. While some early leader chips are a bit stymied, new blood is working higher for the chips, the definition of a rallying leader group.

On the other end, RUTX and SP400 led the downside, but their action was not terrible, just testing the bounce off the 50 day EMA for SP400, the bottom of the range for RUTX. Not a bad session, just testing a 3-day move higher with respect to RUTX.

All in all, the indices did nothing to hurt their position, and SOX posted another nice move. The other indices tested modestly, holding near support. Not upside for sure, but at this juncture not trend-breaking and, as I have said many times, thus far no sellers are willing to really make a run at the market.

CHARTS

SOX continues higher. The other charts, while showing sluggish action on lower MACD (suggesting slowed momentum), are still technically in good shape and trending higher. Upside catalysts have not sent them surging in new breakouts, but they also are not getting sold off on the lack of the Trump agenda steaming ahead. It is a matter of seeing which side leads the move.

SOX: New post-2000 high as the chips are in a pattern of a break higher, a short pause, then a new break higher. Nothing huge, just very steady as the group continues putting forth new stocks to move higher even as the original group leaders test their upside moves.

RUTX: Down 0.53%, but after a 3-day bounce from a short double bottom over the lows in the December/February trading range, all RUTX is doing is testing the 50 day MA's while holding the move higher. A good setup to continue higher, it only has to do it.

NASDAQ: Eked out a gain as it spent its third session in a tight lateral test over the 10 day EMA following the Wednesday break higher. NASDAQ is sitting just below the early March new high, in great position to make a new break higher. It is helpful the chips are still solid and FAANG enjoyed a pretty good day. Obviously NASDAQ will need a bit more than those two groups, however, as they performed decently but NASDAQ was flat.

DJ30: Very similar to NASDAQ in a 3-day lateral move after bouncing off a short double bottom at the 20 day EMA.

SP500: Faded a third session, moving below the 10 day EMA and may want to test the 20 day EMA again as it did last Tuesday and the Thursday before. The financials are not helping as they faded as bonds rallied and pushed yields lower. The financials are not getting a benefit from the Fed hiking rates and indeed are struggling with C at the 50 day EMA and BAC gapping below the 20 day EMA Monday.

SP400: Very similar to RUTX, holding at the 20 day EMA in a 3-day lateral move after jumping off a short double bottom at the 50 day MA's.


Some of the same groups that have led upside continued. There were some good moves in chips and we picked up some positions (PLAB, RTEC). Biotechs were on the move as positions we had last week rallied along with some that tested and are rebounding. We picked up some new positions (IMGN, INVA). China stocks, despite the G-20, were moving and we picked up a new NTES position as CTRP, BABA put in good moves and others in the group look solid (YNDX, BIDU, BITA).


The action was not terrible at all. You would think the market was falling all around you given the commentary about corrections. We still feel one will come, and perhaps it does indeed emerge out of this lethargic period once the leaders exhaust themselves. If that is the way it plays out, that works because we will see the leaders slow, turn, and crack.

The thing you hate the most is waking up one morning with the futures down hard. It can happen, and if some negative surprise hits that could be the trigger. After all, potential upside triggers have had little to no effect. For now the moves are so good in the biotechs, China stocks, and semiconductors we continue to play them, but realizing that with this much negative sentiment, while it helps climb the wall of worry, the big funds are the ones that have keep putting money to work to raise the market. If they all go on a buyer's strike, the new money is spent and there is no more coming in. Even so, the sellers would still have to show up. For now, if these sectors keep running, we will be taking some gain as a matter of course and will have more cash on hand.

Have a great evening!
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Market Alert - To the Close

The indices show another mixed somewhat mushy market with small cap NYSE leading lower while the other indices are no pillar of the upside. NASDAQ keeps flipping from positive to negative and back, mired at the flat line.

SP500 -4.20, -0.18%
NASDAQ 0.63, 0.01%
DJ30 0.53, 0.01%
SP400 -0.50%
RUTX - 0.44%
SOX 0.76%

SOX again leads, moving to a higher high, as the same leadership groups perform decently enough while the rest of the market continues to tread water.

The Comey congressional hearings on Russian election involvement revealed nothing. Some were sad, some were happy, many said 'duh.'

Quite lethargic though those areas moving continue to move and thus we picked up some new positions. Those are holding well enough.

Going to close IP.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Market Alert - Pre-Market

Futures vs FV: SP -2.40; DJ -4.62; NASDAQ -3.21

The big news over the weekend was the G-20 and the failure to affirm free trade by dropping the phrase "resist all forms of protectionism." Treasury Secretary Mnuchin blunted any consternations over leaving that wording out by stating "was not necessarily relevant from my standpoint." That seemed to take care of the issue and the currency markets are fairly quiet in the aftermath. Hey, they did agree to combat currency devaluations, so there. Some say it was a failed meeting, some called it disappointing, but it was what was likely to happen with the Trump administration in power.

China: Did not like the outcome and is supposedly set to meet each trade adjustment by the US with reciprocity. Okay, we will see.

China did report home prices +11.8% yr/yr, more than expected though lower than the 12.2% prior.


Outside of the usual upgrades and downgrades (SNAP got its first and only buy rating), there is hardly any financial news today.


Trump Supreme Court nominee is set for 3 days of questions in front of the Senate. That should be a circus.


FBI Director Comey appears before Congress to testify about how the Russians are coming, the Russians are coming. John McCain will try to use this to bloviate as possible as will other career members of Congress. I hate slow economic news days.


OTHER MARKETS
Bonds: 2.501% vs 2.500% 10 year

EUR/USD: 1.0746 VS 1.07395. Dollar remains weaker post-FOMC

USD/JPY: 112.773

Oil: 48.07, -0.71

Gold: 1231.50, +1.30


Futures are off the lows but are in the range of the morning. Futures started lower and have range-traded in a narrow band all pre-market, not trending higher or lower. Kind of directionless in the premarket. The sellers had a chance perhaps to sell after the G20, but they are not really pushing their hand this morning. Many are talking about a topping market, but as we have noted for awhile, thus far the sellers just are not that aggressive or cohesive.

We still see many solid patterns and we will see if the bids come in after a soft start to the week. Futures are trying to break higher from their pre-market range.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Friday, March 17, 2017

Market Alert - To the Close

An expiration session for certain with a fade to midmorning, a rise to mid-afternoon, and now a fade to the closing bell. Up, down and in the end, flat.

SP500 -2.44, -0.10%
NASDAQ 2.01, 0.03%
DJ30 -12.77, -0.07%
SP400 0.19%
RUTX 0.34%
SOX 0.22%

We picked up some MXWL, some BIDU (though it came back at us), overall stocks holding gains and indeed moving higher, at least outside of the financial stocks that don't look that well as they hug the 20 day EMA. Overall again no sellers entered. There is always next week, but looking at patterns, most look good again.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Market Alert - Pre-Market

Futures vs FV: SP +2.83; DJ +25.45; NASDAQ +0.37

Modest gains to start a quadruple expiration session even as the big brokerages again discount further equity upside. Are they trying to paint the tape for a pullback to trade and buy again and thus make money on volatility? They do not like low volatility markets because a lot of GS' and others' profits come from their trading activities. Think about that as we watch the volatility today.


Industrial Production: 0.0 vs 0.2 vs -0.1 Jan (from -0.3)

Capacity: 75.4 vs 75.5 Jan (from 75.3)


Oil: S. Arabia says OPEC could extend cuts into June.


Trump/Merkel meet today. THAT will accomplish a lot.


Earnings beats: TIF; ADBE

Saint Patrick's Day. Not sure what that has to do with anything but they are talking about wearing green on the financial stations. Oh, and there is a pub crawl in town tonight.


OTHER MARKETS
Bonds: 2.517 vs 2.529 10 year. Bonds moving higher again post-FOMC

EUR/USD: 1.0738 VS 1.0766

USD/JPY: 113.137 vs 113.271

Oil: 49.09, +0.34. Saudi Arabia says OPEC could extend cuts into June

Gold: 1229.60, +2.50


Modest futures again as the upside bias remains but is thus far not making good on the Wednesday new break higher after the test. Could be a bit interesting today in terms of volatility, and will not likely tell us much of anything about next week's direction.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Market Alert - Alert Test

As you have noticed, we ran a full test this morning of the alert system. Please ignore all pre-market action alerts. The Pre-Market general alert will be sent this morning as usual. Thank you.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Thursday, March 16, 2017

Market Alert - The Close

Oh no, no follow through. That was the cry on most of the financial stations afterhours. RUTX and NASDAQ managed slight gains as the small caps ty to keep playing catch up to the other indices. It was, all in all not a satisfying session for the bulls, and it gave the bears fodder to argue for a pullback.

SP500 -3.88, -0.16%
NASDAQ 0.71, 0.01%
DJ30 -15.55, -0.07%
SP400 -0.06%
RUTX 0.23%
SOX -0.18%

VOLUME: NYSE -12%, NASDAQ -9%. Volume faded back below average as the indices paused following a solid volume advance Wednesday. Not necessarily bad action.

A/D: NYSE 1.3:1, NASDAQ 1.5:1.


The indices faded some of the Wednesday post-FOMC move. SP500 and DJ30 held at the 10 day EMA on the low. SOX and NASDAQ held well above the 10 day EMA while SP400 both held over that level as well. Not much upside, not much downside.

It was certainly not a reversal of the Wednesday move higher. Yes NASDAQ failed to take out the prior high on the close. SOX gave up its new high, barely. SP500 and DJ30 were not that close to a high anyway. Oh yes, DJ30 hit 21K then gave it up; I guess you could argue that was a reversal. Nah. It was just a non-day after a new rebound. You can call that ominous, and it may turn out to be, but there was nothing in the session or in the leaders that really raised any alarms or warning flags.

Leadership did not post a power move across the board as some gave back some recent gains while others posted excellent moves. Several sectors of leaders were mixed on the session, e.g. semiconductors, biotechs, China. Doesn't mean they did not have strong moves in the sector, it is just that some early runners were winded while new arrivals were running. Others had no issues at all, e.g. materials, software, and a mix of stocks from our 'miscellaneous plays' (PENN, SQ, GRMN, PII).

Mixed? Yes, but mixed still with an upside bias still in place.

So was this great action? No. Overall sluggish. There were some great moves yet again and we picked some of them up and let current positions work. Was it a reversal? No. Once again the sellers are nowhere to be found. A lot of people are talking selling, and it makes some sense with the weaker economic data in Q1 (outside the sentiment data points), the Fed still ready to hike, uncertain administration agenda items.

I don't want to sound like a raging bull, but even Credit Suisse and UBS are claimed to be telling their clients to buy stocks given "it feels really difficult and challenging to put money at work . . . ultimately those are often the better investments. That sense if skepticism, that wall of worry, which is still there, . . . is not a discouragement." Okay, maybe there is reason to take pause when the big banks are pushing stocks, but on the other side you have major houses still claiming the market is at a top. Houses divided? Perhaps there is something to that 'wall of worry' claim.

All I can say is that the indices pulled back to test the move higher, put in a normal test, leadership held up and some moved up during the overall fade, the indices started higher, leaders were still moving higher. Now we see if the move can continue. Nothing has changed in the economic, Fed, or other stories, so you would anticipate the upside bias would continue to hold and control. If it does not, THEN that is something to really pay attention.


Even with a slow overall session there were solid moves. We picked up a variety of positions that still moved well. IDRI, INFI, JPM, PCRX, SQ, ZBRA. Still plenty of stocks moving well even as the market overall idled.

Was this a bad session, a warning? That remains to be seen. You get a 50-50 split whether a session after a new rally starts continues higher or tests a bit. After a good pullback to set up the bounce, regardless of which kind of session occurs next, the rally still typically continues, especially if leaders hold and still move higher.

It can still fail of course, but it will have to show actual sellers entering. And if sellers show up and downside occurs on volume with leadership reversing, yes, that is a problem. For now, there is a lot of fear of the heights, but without sellers, that is all it is.

Have a great evening!
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Market Alert - Pre-Market

Futures vs FV: SP +3.29; DJ +58.90; NASDAQ +11.90

Global stocks are higher after the US post-Fed rally and on the Dutch populist candidate clearly losing in the election. All in the status quo must be okay, with the exception of Trump, and the establishment is working on that.

Bonds rallied (but are off some today), gold is surging, dollar is lower again. The markets are acting as if they feel the Fed was not as hawkish as they thought, or the Fed is hiking into a weakening economy.

The latter was evidenced by a Bloomberg reporter actually asking why the Fed is hiking when the data it looks at is fading fast. Yellen blamed 'noise' in GDP data and reiterated that the Fed forecasts were the true standard by which to measure the US economic future. Oh, I see -- it is the Fed's opinions that are accurate, not the data. Cool. I am relieved.


Housing Starts, Feb: +3% as single family rose 6.5% while multi-family fell 7.7%. That is normal in a housing recovery. Finally.

Permits: -6.2%. Hmmm. All is well?


Philly Fed, March: 32.8 vs 25.0 exp vs 43.3 prior.

Prices surged, New orders flat.


Trump Budget: Defense +54B, cuts to HUD, foreign aid, EPA. Exactly what he said he would do.


Fed: GS says the market rally is NOT what the Fed wanted as a result of its rate hike. Oh the absurdity of a small group of people who think they are smarter than markets and try to set global rates for money, bonds, etc. It is fraught with problems in perception and of course economic reality. Again, reduce the Fed's mandate to only providing liquidity when certain criteria is met and then only for a know, finite period. A short, finite period. Then markets might just work and recover quickly.


OTHER MARKETS
Bonds: 2.528% vs 2.502%. After rallying on the FOMC rate hike, bonds are coming back some, giving up some of the gains.

EUR/USD: 1.0733 vs 1.0732. Euro holding its post-FOMC gains as the Dutch election rejects the populist candidate

USD/JPY: 113.31 vs 113.447. Dollar continues to weaken against the yen as currency markets expected a more hawkish Fed.

Oil: 48.98, +0.12

Gold: 1231.00, +30.30. Gold surging back on, again, a perceived less hawkish Fed and perhaps worries about economics.


Stocks are holding gains but are off the highs. A flat pre-market, flat all morning. That is a target for sellers to shoot at. Ha ha ha ha ha ha ha! Sorry, the thought of sellers in the market was just too much. Hey, we will see if they actually take a shot after the 'big' news from the FOMC.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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