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Friday, December 2, 2016

Market Alert - To the Close

I guess you can call this session something of a snapback, but it is very modest and has not changed the patterns from the Thursday thumping. The Dow is struggling but it is still the best looking though extended.

We took some gain on ADBE and URI, looking at perhaps buying some NFLX as it is holding its move. Yes, yes, it is Friday and when the market is in correction that can be an issue. So, we only take a partial.

More after the close.

Jon Johnson, Chief Market Strategist
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Market Alert - Pre-Market

Futures vs FV: SP +0.32; DJ +3.07; NASDAQ -0.25

Futures started the pre-market low but have steadily climbed to positive. The past hour is back and forth following the jobs report, but for the most part holding the recovery. Gee where have you seen that before? Thursday? Banner day that was.

But, the bids returned so we will see how long they last. After the damage done to NASDAQ, SOX Thursday it will be interesting to see where the bids return.

Non-Farm Jobs: 178K vs 179K vs 142K (from 161K October)

Unemployment: 4.6% vs 4.9% prior.

How? Because those not in the workforce jumped 446,000 pushing those working aged people outside the workforce to 95.1M, a new record! While the Administration crows over 4.3% unemployment, the way it got there was pushing more working aged people out of the workforce. Good job.

Wages: -0.1% versus +0.2% expected versus 0.4% October. So much for the bounce.

Business and professional: 63K
Healthcare 28K
Construction 19K
Retail -8K
Manufacturing -4K

Construction remains better and those are some good jobs. Now we need to see mining and manufacturing return. As some anecdotal evidence, we note that machine shops in Texas are suddenly quite busy with 'rush' jobs as oil field action picks up.

Bonds: 2.398% vs 2.454%

EUR/USD: 1.0662 VS 1.0663

USD/JPY: 113.846 vs 113.945

Oil: 51.09, +0.03. Flipping back to positive from a negative morning.

Gold: 1175.70, +6.40

The Fed is seen as on track to hike and hike more often after the November data, not just the jobs data. Hey, that is just playing catch up to the bond market, right?

Futures are hanging in, but that has not been an accurate forecast of the session's direction. Thursday did some damage to tech, chips while others jumped then faded the moves. That has not likely worked through the market yet. Retail, however, looks good, and if we see our plays move, we move.

Jon Johnson, Chief Market Strategist
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Thursday, December 1, 2016

Market Alert - Pre-Market

Futures vs FV: SP +5.29; DJ +59.42; NASDAQ +9.49

End of November looked to continue the consolidation, and early pre-market looked to do the same. Then a bid returned to stocks and a steady rise ensued toward the open. Thus all indices show gains heading into the bell.

Oil is still higher, over $50/bbl as the OPEC deal holds for a day. That is worth at least a point for the day, right?

Auto sales in November . . . raced? F +5.2% vs 0.85% expected. There you go again with that optimism. Of course TM missed a bit at 4.3% vs 4.4% expected.

World PMI's higher ahead of US ISM: China, Japan, India beat and in low 5's. EU posts 53.7 as expected.

AAPL: Digitimes says AAPL has lowered its iPhone 7 orders. So it says.

Challenger: -13% is the lowest of 2013.

Jobless: +35K, the biggest rise in 2 years but still low at 268K.

Earnings beats: BOX, PVH

Misses: GES (TL, BL), DG (TL, BL), LE (BL), EXPR warns for Q4. Not the proliferation of apparel makers/sellers. But, PVH beat after a really bad prior quarter.

Bonds: 2.412% vs 2.388%. Bonds lost $1.7T in value in November.

EUR/USD: 1.0632

USD/JPY: 114.29

Oil: 50.71, +1.27. Over a psychologically important level.

Gold; 1170.10, -3.80. The loss slows but still the slamming continues.

Futures are holding their move higher into the open as perhaps a new month, new money effect takes shape after all. Not so certain this move will hold. The indices had good news Wednesday and could not hold a move higher, typically a tell-tale sign that a move is weary and needs more rest.

Thus we will want to see some of these moves hold before we commit to them, BUT with the energy plays this is a bit of a different story as the driver there is not the same as for the rest of the market.

Jon Johnson, Chief Market Strategist
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Wednesday, November 30, 2016

Market Alert - The Close

Wednesday wasn't the day that the futures suggested. A nice pop in futures, nothing huge, but OPEC announced a deal was a done deal and futures jumped sharply 4.5 hours ahead of the open. They even improved into the open. All indices opened higher and rallied farther. For 10 minutes. That turned out to be the peak for much of the market.

After 10 minutes the stock indices started to slid and solid into the first hour. Some back and forth trade into the afternoon session, then a selloff to lower session lows into the close.

SP500 -5.85, -0.27%
NASDAQ -56.25, -1.05%
DJ30 1.98, 0.01%
SP400 -0.22%
RUTX -0.44%
SOX -0.65%

VOLUME: NYSE +76% (1.6B); NASDAQ +11% (1.9B). Massive end of month volume, necessitated by the huge surge in stocks that forced end of month moves.

A/D: NYSE -1.5:1, NASDAQ -1.8:1. That is how narrow the move was.

A sad finish for stocks but not all stocks. The stocks that got the whole rally started were in the lead along with oil stocks, the latter surging on confirmation of a long sought production deal. APC +15%, WLL +30%, RIG +17%, CWEI 18%. Yes CWEI doesn't make those 30% gains as easily as it used too - back when we bought it the first time near 25. Financial stocks rallied, industrial equipment, chemicals.

FAANG doesn't have a bite right now, not even a bark. Chip stocks tried to rally, turned soft. Metals, one of the first leaders, posted slight gains after giving up their early moves. Software faded some of their moves as did internet. Not bad, just not participating.

Still part of the consolidation? The intraday patterns certainly suggest it. It looked as if the OPEC deal would be the day's tide that lifted all stocks after a 1.5 day 'test.' That initial reaction, as noted, did not last, and the intraday reversals suggest the short pullback is not enough to digest the 10% RUTX and other stellar index gains. So, while a narrow slice of the market moved up by the close, the majority of stocks suggest still some testing.

Perhaps something of a return to the first part of the rally where very specific groups rallied initially, then new money would seek new areas while the first leaders rest? Could be. Leadership groups, even those that did not surge with oil, are still in good position. How they test of course tells the tale. Thus far the leaders are still holding their patterns and that is always the test when there is a pullback: who holds up best at those times is often a leader when the next move starts.

We took some gain on WLL, RIG per the plan as they shot higher, leaving half the position to work. We bought some CWEI stocks as well as some TX and XLNX. They looked great - then faded the move along with most stocks outside the small cadre of Wednesday gainers.

Jobs Report on Friday and I suppose some are paying attention, but that is all 'old administration' stuff. This rally is about the future and optimism, begging the question, of course, how long can just some good feelings about the future hold on? We are going to find out as this test will show just how animal the animal spirits are.

Have a great evening!

Jon Johnson, Chief Market Strategist
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Market Alert - Pre-Market

Futures vs FV: SP +9.44; DJ +80.4; NASDAQ +9.74

Futures at session highs, rising all morning as optimism returns . . . after just a 1.5 day layover. Notably NASDAQ lags on this move as it looks to be the same leaders that took two days off (metals, financial, oil, industrial equipment, etc.) are leading the morning move.

The big news is oil. OPEC is said to have a deal in place where Iran freezes, Saudi Arabia takes a 'big hit,' and Russia is placated. The trifecta? Oil has shot higher and oil stocks are following after a rough day Tuesday.

Jobs: Trump supposedly saving 1,000 Carrier jobs in Indiana. Some tax breaks? Or is it in part that 80+% of UTX' revenue (parent of carrier) comes from government contracts? Stranger things have happened. The joke is he is not even President yet and has -- oh, you have heard it already.

ADP: 216K vs 160K expected

Personal Income, Oct: 0.6% vs 0.4% exp vs 0.4% (from 0.3%)

Personal Spending, Oct: 0.3% vs 0.5% exp vs 0.7% (from 0.5%)

Savings jumped ahead of election while spending faded. Typical for October, however.

On top of Consumer Confidence hitting 107 in November (100 expected), the data appears somewhat more favorable. Incomes are still up thanks to . . minimum wage hikes.

Bonds: 2.377% vs 2.30% 10 year

EUR/USD: 1.0608 vs 1.0649

USD/JPY: 113.59 vs 112.44

Oil: 48.79, +3.55

Gold: 1182.30, -8.50

Futures set to gap up as the market cannot wait for more of a pullback. OPEC is no doubt triggering the event that people were waiting for but just cannot hold back on now that a deal has been cut. Hope it sticks . .

Jon Johnson, Chief Market Strategist
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Tuesday, November 29, 2016

Market Alert - Pre-Market

Futures vs FV: SP -0.78; DJ +13.1; NASDAQ +2.26

Futures are continuing to fall into the open after a higher early in the early morning session. Steadily dropping the past two hours to a morning low, the decline accelerating after some relatively decent economic data.

GDP, Q3 2nd: 3.2% vs 3.0% vs 2.9% 1st iteration

The gain was led by consumption: 2.8% vs 2.1% prior

Pricing: 1.4% vs 1.5% prior read

Profits: 7.6% vs -1.9%. Seems an aberrational change.

Business Investment: -1.2% vs 0.1% prior. another outlier?

Oil: OPEC minister says "no cut in production." Oh no, who could have guessed that? Oil stocks are down hard again on this news.

Earnings beats: TIF, MNK

Misses: SCVL (shoes)

Cyber Monday: Online shopping said to rise 10.1%.

Bonds: 2.347% vs 2.31% 10 year. Bonds fading after the Monday bounce.

EUR/USD: 1.0578 VS 1.0617. Dollar rebound.

USD/JPY: 113.105 vs 111.916. Big jump versus yen

Oil: 45.29, -1.79. Back down as OPEC deal looks no go.

Gold: 118.50, -8.30

Futures fading into the open as noted, at session lows. Oh no! Really? This is pretty orderly and a needed test, and just the second day. A 3 to 4 day test would be great. Will see how stocks such as FB, GOOG, AMZN, NFLX pick up the slack.

Jon Johnson, Chief Market Strategist
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Monday, November 28, 2016

Market Alert - The Close

New computers were installed over the holidays and it has been the usual 'joy' working out the bugs today. Old systems running next to the new ones just in case, working the kinks out of software that was kink-less on the other machines, etc. The usual fun. Still working on it so please bear with us tonight!

The Trump Bump finally took a day off. Of course SP500 and NASDAQ already took a few days off a couple of weeks back after that initial post-election surge. DJ30 took a few personal days a week ago before blasting to new highs. RUTX, SP400 and SOX didn't even slow down. Now they are taking some time, at least a day, after a strong upside surge to new highs.

SP500 -11.63, -0.53%
NASDAQ -30.11, -0.56%
DJ30 -54.25, -0.28%
SP400 -0.74%
RUTX -1.29%
SOX -0.42%

VOLUME: NYSE +112%, NASDAQ +113%. Big gains, but the trade is after the half session Friday. In the bigger picture, trade was below average. So, higher trade but below average so no heavy selling, just a below normal volume showing after the sprints higher.

A/D: NYSE -2:1, NASDAQ -2.3:1. Elevated but not massive downside.

Basically a dearth of information on the day. The Black Friday results trickled in but they were certainly without excitement. Bricks and mortar seemed lower while AMZN and WMT claimed record mobile device shopping. Okay that is nice, but so what if there was more mobile shopping? Were the sales higher because people are using mobile than say a PC as they did in the past? Hard to tell. WMT touted a 70% increase in mobile 'event traffic,' whatever the heck that means. Define 'event,' right? I would suggest that because WMT used the euphemism, its sales were not up all that much, certainly not the 70% number it threw out there for analyst consumption.

Retailers were mixed. Box stores were lower thanks to their stores. AMZN was down as well, however. WMT was flat after a good run, and many discounters, e.g. TJX, ROST, COST, were a bit lower, but they also put in some pretty good runs as well.

Pretty much all the recent leaders took a breather, e.g. metals, oil, semiconductors, industrial equipment and machinery, transports. So much so utilities, a totally defensive group, were one of the session leaders.

Oil was up as Iraq said it would 'cooperate' in shaping a deal and was even 'optimistic.' Okay that was good for oil rising over $1, but then some backsliding took place as the optimism died off again with the realization Iran is still out there and who knows what Putin will do. Oil did close higher as noted, but that didn't help oil stocks.

With the indices and leaders pulling back a bit we were not in any hurry to move into new positions until this test winds down. Heck it may just be a one-day pause, but looking back at SP500 and NASDAQ in their short consolidations and the strong moves from RUTX and SP400 you would anticipate something similar, something along the lines of at least a 1-2-3 consolidation or pullback.

Thus we didn't buy but we did close out SYRG with a trailing stop as it was aggressive in the downside. All the oil positions were. We also closed NFLX as it broke below the 20 day EMA early, recovered and was holding in the afternoon, but then broke back below it. That double break had us concerned and we exited. Maybe too trigger happy, but the FAANG stocks looked less than great though FB is still working on the right shoulder of a potential short inverted head and shoulders pattern. We will see how these set up over the next few days; could be that since they were roughed up while other stocks rallied, that it is their time to try a bounce as the leaders test and rest. Again, we will see.

News picks up tomorrow with the second read of Q3 GDP and Consumer Confidence for November. Oh yes, and Friday is the jobs report as the stock market moves toward the rate hike showdown in December. If Yellen doesn't start jellin' with a rate hike, the market might actually have a crisis. Yellen jellin'? Watching too much TV.

Have a great evening!

Jon Johnson, Chief Market Strategist
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Market Alert - To the Close

Sluggish across the board as all indices are lower, more or less tracking the intensity of the upside. In other words, RUTX is down more than DJ30.

SP500 -11.95, -0.54
NASDAQ -31.12, -0.58%
DJ30 -57.42, -0.30%
SP400 -0.77%
RUTX -1.21%
SOX -0.46%

Nave not entered any new positions. Closed NFLX more or less flat as did not like the action. Closed SYRG with a trailing stop as oil stocks are hit after the early 'let's make a deal!' excitement again faded into harsh reality. Oil remains up 0.82, though well off its intraday high.

Getting a bit of a test today, not entirely unexpected, and after 15 upside days on RUTX, somewhat needed.

Jon Johnson, Chief Market Strategist
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Market Alert - Pre-Market

Futures vs FV: SP -5.71; DJ -29.14 NASDAQ -7.22

Futures are off after the stock indices pushed higher Friday in its half day session. A lot of upside, a bit of downside, but futures are coming back off their early lows. Will the resilience continue? Nothing but a few points downside to start the week says otherwise. Oh, and perhaps things are getting a big farther overbought after RUTX up 15 straight days and almost 1%/day over its 200 day MA (okay, the math is not perfect but the point is there).

Of course Black Friday is the main headline on Cyber Monday. It is said more shopped but bought less. AMZN and WMT reported increased mobile traffic with WMT saying 70% of its "event traffic" was from mobile. Not sure what either of that means. So they are buying from their phones versus computers? Makes sense as most of the younger crowd uses phones almost exclusively. 'Event traffic?' Does that mean final sales? Sadly, legal-eeze has hit retail sales reporting.

Oil: All weekend the talk was the death of the potential OPEC production limit deal. An OPEC production deal in jeopardy? Shocking!.

Then this morning someone from Iraq said he was 'optimistic' a deal could be reached as it would 'cooperate' in reaching a deal. Suddenly all is well and oil is back up. Brilliant! A news-starved, hopeful market seizes on the optimistic cooperation and voila, oil is up.

Other news:

Castro is dead. Another of the murderous tyrants dies. Unlike some who seem to have forgotten, or perhaps never learned, I won't pen nonsense such as 'he had a great impact on the Cuban people' as one commentator said, not in a negative way, but as if his impact was positive. He sure did have an impact! He slaughtered, tortured, abused, and impoverished millions of Cubans.

More Trump stuff. Recounts, voting fraud claims, in-fighting regarding Secretary of State nominations, etc. The usual.

Bonds: 2.325% vs 2.36%. Bonds rallying back . . . some.

EUR/USD: 1.0587 vs 1.0596

USD/JPY: 112.63 vs 113.14. Dollar fading some of the gains against the yen.

Oil: 46.64, +0.58

Gold: 119.20, +9.20

Black Friday was not the kind of traffic the bricks and mortars wanted, some commenting consumers were looking for big deals and not getting them so they did not buy. Looks as if a game of chicken is brewing in the holiday shopping season. That suggests the consumer is not quite as strong as claimed. Oh yes, yes, not as bad as in 2008 and 2009, but not anywhere near the 1980's in that recovery and the 1990's in that continued expansion from the 1980's. Those decades make this look like little leaguers against professionals.

So, futures are starting lower but not on the lows of the session, not at all. If you look at a morning SPY chart you can see a spike just before 5:00ET. That is when the Iraq minister said Iraq would 'cooperate' and he was thus 'optimistic.'

We will see what kind of pullback this brings in some stocks that started higher but on a light volume, shortened end of last week. Also watching NVDA, FCX, AKS, MAN, LRCX, etc. to see if some gain needs to be taken. They are off just a bit pre-market.

Jon Johnson, Chief Market Strategist
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Friday, November 25, 2016

Market Alert - Pre-Market

Futures vs FV: SP500 +3.13; DJ +53.82; NASDAQ +5.24

US stock futures are set to open higher again as Thanksgiving week continues the overall upside post-election bias.

Trade balance: Surprises to the negative side with a trade imbalance growing. That will detract from GDP as US consumers buy more goods but sell fewer. The conundrum with how the US measures its economy using GDP. Just looking at what is produced here penalizes the economic outlook because historically when the US consumer and businesses feel better, they buy more foreign goods as well as US goods.

Wholesale Sales, Advanced Oct: -0.4% vs 0.2% exp vs 0.1% prior (from 0.2%)

Of course most stories surround Black Friday. Mixed stories.
Reuters: "store traffic subdued."
Yet, TGT claims its best Thanksgiving sales ever.
As usual, we will know when we know, i.e. when all the nubmers are in.

Bonds: 2.373% vs 2.355%. 10 year continues to fall.

EUR/USD: 1.0594 vs 1.0555

USD/JPY 112.94 VS 112.495

Oil: 47.39, -0.58. Saudi Arabia refuses to attend non-OPEC producers' meeting

Gold: 1189.00, -3.40

Futures are holding gains toward the open, actually improving. This is just a half day session, closing at 1:00ET. Many big money traders are often off these days though with the post-election rally there may be more than usual logging in at work.

Half-day sessions can be tricky as the weekend is long and head fakes are possible. We will look at the good plays we have and see if they show good moves. We can always pick up some partials on the day if we don't want to get in heavy.

Jon Johnson, Chief Market Strategist
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Wednesday, November 23, 2016

Market Alert - To the Close

ASK, FCX are still surging, financials are higher along with oil stocks and industrial equipment. Chips are working well enough. No real reason to take gain on them today and will see how they trade on Friday. We note that some of the FANG look as if they are setting up to break higher, e.g. FB, AMZN, and of course NFLX. That means the amrket oculd get even more upside impetus to come. We will put together some plays on those to be ready just in case.

SP500 1.06, 0.05%
NASDAQ -8.51, -0.16%
DJ30 53.21, 0.28%
SP400 0.42%
RUTX 0.44%
SOX 0.10%

Jon Johnson, Chief Market Strategist
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Market Alert - PreMarket

Futures vs FV: SP -6.09; DJ30 -11.87; NASDAQ -17.99

Futures are struggling after the Tuesday surge with growth, in terms of NASDAQ, struggling the most. The big names on NASDAQ are still in less than great patterns.

Gold is plunging on stronger economic data.

Oil is lower after API shows a jump in gasoline inventories while oil was basically flat.

Durable Goods Orders, Oct: 4.8% vs 1.1% exp vs 0.4% prior (from -0.1)

Ex-Transports: 1.0% vs 0.3% exp vs 0.2% prior
Transpors: +12%
Private (read BA): +138.5%
Military aircraft: +33.1%
Obviously aircraft led the move.

Non-defense capital goods ex-aircraft: +0.4%. Yea, a positive reading!

Earnings beats: DE, GME
Misses: URBN (BL); HPE (TL)

Bonds: 2.348% versus 2.317%

EUR/USD: 1.0860 VS 1.0672

USD/JPY: 112.02 vs 111.12. Dollar soaring versus yen

Oil: 47.54, -0.49

Gold: 1190.30, -20.90

Futures continue falling into the open, and it is not a modest drop. It looks as if the sellers are going to take a shot on the Wednesday ahead of Thanksgiving. Sometimes the days around Thanksgiving can be violent. This is, however, the last full session of the week as Friday is a half session.

The lower open may give some possibilities for those willing to step in. Looking at positions on AKS and TX from last night's report. TX is basically flat, but AKS is down near 8.80 (closed at 8.89); it could give a decent entry once we see the selling subside.

Jon Johnson, Chief Market Strategist
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