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Thursday, February 22, 2018

Market Alert - Pre-Market

Futures vs FV: SP +10.24; DJ +66.22; NASDAQ +33.24

The Fed is out mitigating the interest rate worries blamed for the WED post-FOMC stock market selloff. Bullard (non-voting) said conditions would have to be 'perfect' for 4 rate hikes (100BP) in 2018, that too many hikes could slow the economy. No kidding.

Quarles says 'gradual hikes' are best, and encouragingly says crisis-era bank regulations need to be reviewed.

Seems as if the Fed is still the Fed, i.e. it is trying to soft-pedal its moves.


Earnings beats: BLMN; CHK; NCLH; ROKU (but lower guidance); JACK; AVIS

Misses: W (BL); HRL (TL); P (BL); CAKE (TL); WEN (TL)


Canada: December retail sales miss big. Overall: -0.8% vs 0.0 exp; Ex-autos -1.8% vs +0.3% expected. The rest of the world is supposedly experiencing a simultaneous rise with the US, but the data is starting to show the short expansion is at least slowing for other countries.


OTHER MARKETS
Bonds: 2.919% vs 2.952%. Bonds still moving higher.

EUR/USD: 1.2327 vs 1.2287

USD/JPY: 106.83 vs 107.55. Dollar fades, again, after the short bounce.

Oil: 62.04, +0.34

Gold: 1328.00, -3.50


Futures are in a low to high move, rising steadily toward the open. That is a better foundation for the market to hold moves given there is no early gap that just hangs there for sellers to shoot at.

That said, volatility remains in the market even as the indices try to consolidate the gains from the rebound and set up a move higher. We will see if they can hold this early move higher; suspect the sellers will return again. The key is how NASDAQ holds the line and the leadership it can provide.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Wednesday, February 21, 2018

Market Alert - Last Hour

A fairly impressive reversal after stocks jumped higher for 25 minutes post FOMC Minutes. The entire post-FOMC bounce is history with SP500, DJ30 threatening to join SOX as negative. NASDAQ holds a decent gain, but it too has given up the rally following the FOMC release.

SP500 0.65, 0.02%
NASDAQ 20.29, 0.28%
DJ30 -18.18, -0.07%
SP400 0.25%
RUTX 1.13%
SOX -0.77%
NASDAQ 100 0.22%

We opted to let the news work through the market and it is doing that. Will need to see how the indices close as they pushed higher with NASDAQ moving through the 78% Fibonacci retracement but since giving that level back. The market is in the digestion process of what the Fed actually said and believes, and thus the volatility. Would not be surprised if the selling catches a new bid late-session.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Market Alert - FOMC Minutes

Fed sticks with its 'gradual approach' to 'further' rate hikes as the economy has grown faster than its forecasts. That growth 'affirms' the Fed's 'gradual approach.' Moreover, its gradual approach would help the economy continue its growth.

Interestingly the FOMC says it does not see growth attributable to the tax cuts though the kind of reform implemented is the kind that leads to investment that leads to economic growth down the road. That is why the tax cuts were for the most part good tax cuts.

Fed Minutes say there are few signs of any wage growth, a positive for keeping the rate hikes the same. On the other hand, the Fed spent a lot of time talking about inflation, so therefore it is the area the Fed is watching.

The market hit session highs midmorning and held them into the FOMC. Stocks jumped higher on the FOMC minutes, hitting a session high in the first bar, hesitated some, Now breaking higher again. Don't see anything really market derailing, and overall it is dovish enough to keep the bids present today. Even so, the elements the Fed is concerned about are showing up as seen in the Jobs Report, CPI, PPI.

SP500 27.66, 1.04%
NASDAQ 93.11, 1.30%
DJ30 261.91, 1.06%
SP400 1.24%
RUTX 1.33%
SOX 0.43%

As you can see, the move higher is very even across the indices.




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

Futures vs FV: SP +1.89; DJ +0.25; NASDAQ +32.81

Futures putting in a low to high pre-market, rising higher and higher toward the open with NASDAQ once again leading the way higher. Futures gapped lower but have steadily recovered.

This action indicates the market is going to fight to hang onto the relief moves, attempting to consolidate, and in NASDAQ's case, resume the rally.

FOMC Minutes: The news of the day that could upside the upside is the 2:00ET FOMC minutes release. Some are expecting discussions of 4 rate hikes for 2018 versus 3 hikes. If the talk if of 4 that could pall the upside though with the rebound's resilience it will have to show it.

The big question is whether we move into new upside on this pre-market low to high or wait out the FOMC release. At this juncture, given the history of these kind of events, you prefer to see a clear break higher or lower, and play that move. That said, there are some very interesting stocks that can take some of the lead in a continued upside move. We will be interested in picking up some of those positions though perhaps a partial or half position to start given the FOMC minutes to come.


Mortgage apps: -6.6% vs -4.1% prior. Refi's at a 4 year low, no surprise as the 30 year mortgage moves to a 4 year high.


Earnings beats: GRMN; AAP; LZB; TXRD (BL)

Misses: LC (TB); BYD (TB); RAC (TB). When they miss, they are missing both top and bottom line.


OTHER MARKETS
Bonds: 2.884% versus 2.893% 10 year. Bonds rally back a bit more pre-FOMC minutes

EUR/USD: 1.2313 vs 1.2341

USD/JPY: 107.52 vs 107.40

Oil: 61.50, -0.29

Gold: 1331.20, 0.00


Futures continue the rise to the bell. Again, the FOMC minutes could prove a market turning event if they are significantly more hawkish than expected. Still, that people are talking about the FOMC possibly discussing 4 2018 hikes is part of the adjustment to the notion that can happen. Thus, such talk may cause a pause but perhaps not a roll over.

The big question still presented is whether the market breaks higher for more recovery, or breaks lower from this pause to resume the selling. Thus far the upside is showing resiliency for a test to higher resistance levels.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Tuesday, February 20, 2018

Market Alert - The Close

After six upside sessions and an indecisive close Friday, stocks started lower and by the close they certainly went their separate ways. The NYSE indices closed lower, SOX and NASDAQ 100 were positive, NASDAQ flat.

SP500 -15.96, -0.58%
NASDAQ -5.16, -0.07%
DJ30 -254.63, -1.01%
SP500 -0.68%
RUTX -0.88%
SOX +1.76%
NASDAQ 100 +0.13%

VOLUME: NYSE -6%, NASDAQ -7%.

ADVANCE/DECLINE: NYSE -2:1, NASDAQ -2:1. Small and midcaps leading the downside.

Mixed action, but the well known leaders such as AMZN, CRM, RHT, QRVO posted solid gains -- albeit off their session highs by the close. Those leaders tested the prior highs fully and faded some, but for the most part performed well.

The indices were down, up, then down. While they were unable to continue higher, the action Tuesday was not rollover action. Indeed, the charts look more like an ordinary pause. That makes two in a row and they could spend another session or two with this modest action and then break higher, beating the historical odds, or break lower, resuming the selloff.

SP500 is holding the 50 day EMA on light volume. NASDAQ is easing back to test its break higher. DJ30, the worst performer, faded to the 50 day EMA but volume was nothing different from recent trade, not bad given WMT's earnings miss and disappointing online sales. Its pattern is the most problematic of the group. On the other hand, SOX powered higher though it did stall at the November high, a key level potentially representing a left shoulder to a head and shoulders topping pattern. NASDAQ 100 is showing the same kind of lateral pattern as it tests the 5.5 session rise, showing lower and lower trade.

Thus, the session was perhaps disappointing in that it failed to hold a low to high move overall, but the action after a very sharp upside surge is consolidation action, exactly what you want to see after such a move. The worst action would be the sharp rollover, and this clearly was not the case. Now the market shows if it can hold the move as it digests the gains, and then whether it has the chops to move higher.

Rallying farther is a move that is somewhat against the odds, but not totally. Maybe the market wants to retrace 78% or even 100% of the prior move. It can do that and still fail, still following the historical pattern, just from a higher retracement level. Friday looked worrisome given the tombstone doji on the indices, but if they fight them off and move higher, we let AMZN, NFLX, QRVO, RHT, IMGN and others work, and we pick up some others that can make us some money on that move.

Of course, if you look at the 'gloomer' websites they proclaim the 'dead cat bounce dies.' That in itself is worth some more upside.

That said, today we were not buying because the market could not make up its mind between rallying and rolling over. We will be ready for each direction with plays that fit the move when it shows itself. If SP500 wants to move to the prior high, that is still another 135 points, enough to make some upside money.

Have a great evening!

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Market Alert - To the Close

The indices swung from negative to positive back to negative but for SOX, and NASDAQ 100 is hanging on thanks to AMZN's big gains. Even those however are cut in half.

The action on AMZN, NFLX are showing tombstone doji after an additional move higher to test he prior highs. The indices show moves higher followed by moves back down, but as of now these do not look like rollovers back to the prior low. As noted earlier, it could be the indices hang around for a few sessions and attempt to hold the line, consolidate the move back up, and then try a new upside move. Cannot discount that possibility just as you cannot discount that the indices roll over and fall to test that prior low.

The downside plays are off their lows so not moving into them today. Letting the upside work a bit to see if this move continues upside. SOX is at the November high; moved through it then faded and now is right at that level.

SP500 -12.58, -0.47%
NASDAQ FLAT
DJ30 -227.08, -0.89%
SP400 -0.60%
RUTX -0.89%
SOX +1.91%
NASDAQ 100 +0.26%
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Market Alert - Pre-Market

Futures vs FV: SP -13.62; DJ -149.38; NASDAQ -29.66

Futures are lower, gapping down early morning, selling off, then slowly, slowly recovering over the past four hours. Not the kind of recovery that you anticipate a lower open quickly flipping positive as happened last week, but futures are not dragging lower and lower, showing there is some kind of resistance to the selling.

WMT slower online sales are blamed for the market losses, but that is nonsense. HD earnings were strong and it is a Dow stock. WMT is having an impact on some other retailers, but the move straight upside off the lows is real reason why we were taking gain Friday ahead of a 3-day weekend after 6 upside sessions that started with the Friday reversal two Fridays back. A very strong relief move started to show some weariness as the indices faded to tombstone doji on that session as some leaders tested prior highs and faded a bit.

That makes the start of this week important in terms of a drop to test the prior low. The futures' slog upside off the morning lows suggest the market may try to bump at these resistance levels a bit before giving up and falling. But, you also cannot discount the possibility that the market rebound pauses for a few days and then tries even higher.


Not a ton of news. Some earnings as noted.

Small business confidence hits a record high in the aftermath of the tax reform passage.


Dollar: rebounding nicely.


Economy/market: BLK going overweight on stocks from neutral on the tax reform 'supercharging' earnings. Rah, rah.


Some stocks are opening higher: OSTK, ROKU, NVDA, CREE


OTHER MARKETS
Bonds: 2.913% versus 2.873%. Bonds sell again.

EUR/USD: 1.2325 vs 1.2405. Dollar bouncing from last week.

USD/JPY: 107.30 vs 106.30. Dollar bouncing against yen as well.

Oil: 61.92, +0.24

Gold: 1341.30, -14.90. Giving back some of the gains.


Stocks will open significantly lower, showing overall softness after the 6-day surge upside. As noted, however, while opening lower, they are trending higher toward the open, still showing some underlying support for stocks. Not saying stocks will close positive today, but this action shows there is an attempt still to buy a dip even after 6 days straight upside. Thus, stocks, even if the rally bounce is over, may try to hang around for a couple of sessions. Or they might even break higher once more.

With that, we will see how stocks bounce off a lower open, and that means not necessarily jumping into the downside plays right away or closing positions right at the open. We will see if there is a bounce and if it holds or folds.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Friday, February 16, 2018

Market Alert - Pre-Market

Futures vs FV: SP -3.85; DJ -32.37; NASDAQ -8.12

Futures started the morning higher but the past 1.5 hours have tailed from DJ +100 to flat. 5 upside sessions, expiration, 3-day weekend (President's Day). A lot to think about as the session opens.

Actually, flat is not bad, but the momentum for the morning is lower and we will see if bids return in the first half hour to hour.


Housing Starts, Jan: 9.7%, the highest since 10/16.
Single Family: 3.7%; Multi-family: 23.7%

Permits: 7.4%, highest since 6/2007
Single family: -1.7%, Multi: +26.5%

Despite claims about how strong single family is, the market is still apartments as home buying still lingers after the bust. Definitely improved, definitely working back, but high prices combined with the lingering fears from the bust keep many out of the market.


Import Prices ex-oil, Jan: 0.4 vs -0.1 prior. Highest in 6 years

Export prices ex-ag, Jan: 0.9 vs 0.1 (from 0.0)


Earnings beats: KO, CPB, DE, SJM, CBS, SHAK

Misses: HNZ (TB)


OTHER MARKETS
Bonds: 2.866% versus 2.904% 10 year. Bonds rebound some

EUR/USD: 1.2458 versus 1.2505. Dollar rebounds some as well

USD/JPY: 106.15 vs 106.16

Oil: 61.24, -0.10

Gold: 1356.80, +1.50


Futures continue to fade into the open. Would prefer a lower open with futures lower all morning as that gives something to build upon. As the open approaches, momentum is lower and it will take an effort by the buyers to turn it back up.

The market has risen 5 sessions and it is not surprising of the bids are a bit sluggish. We will see if they can return first hour into midmorning. Indeed, midmorning (11:00ET) could very well be a pivotal time for the market today that makes or breaks the session for the upside.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Thursday, February 15, 2018

Market Alert - Last Hour

Another strong move as NASDAQ continues blowing higher through its 50 day MA while SP500, DJ30 bump that resistance. SP400, RUTX are bumping the 50 day EMA on their bounce. Small and midcaps taking a bit of a back seat to the large caps today as NASDAQ 100 sports the best gain of the day thanks to CSCO, FAANG, MSFT.

SP500 27.72, 1.03%
NASDAQ 101.40, 1.42%
DJ30 266.22, 1.07%
SP400 0.83%
RUTX 0.82%
SOX 1.01%
NASDAQ 100 1.63%

Retailers continue performing and we picked up some WMT and BBY. Biotechs are hit and miss but strong overall, and we picked up some IMGN. Looking at more positions on SQ as it shows a solid break higher with some very decent volume.

The rebound rally continues, perhaps a bit longer in the tooth but still producing solid breaks higher from good patterns. We have some very good positions, and at this point want to see how much more upside the move has, letting our positions work.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Market Alert - Pre-Market

Futures vs FV: SP +15.97; DJ +232.51; NASDAQ +49.97

Stock futures gapped higher in a continuation of the continuation of the relief rally (still calling it that). Futures are off the highs as they have range-traded after the upside gap. Don't like these gaps as they give sellers something to shoot at. Sellers are still there; they are quiet now letting the market run upside, but they will return and take their shots at some point.

After the initial morning data (PPI, Philly Fed, NY PMI) futures fell to lower morning lows, but they came right back.


Earnings are credited with helping fuel the upside to new recovery highs.

Beats: CSCO; WMI; USFD; AMAT; SHOP; MAR; NTAP

Misses: AVP (TL); TRIP (BL)


Lots of data:

PPI, Jan: 0.4% vs 0.4% vs -0.1% prior.

Core PPI: 0.4% vs 0.2% vs -0.1% prior. Yr/yr: 2.2% vs 2.3%

Final Demand core: 2.7% vs 2.6% prior year/year

Core is hotter mo/mo even though lower year/year. Another example of rising costs though many say does not pass through. Right.


Empire PMI, Feb: 13.1 vs 19.0 exp vs 17.7 prior. Disappointing as all PMI's are fading some off end of year strength.


Philly Fed, Feb: 25.8 vs 22 exp vs 22.2 prior. Very solid.
Prices paid: Much stronger.


OTHER MARKETS
Bonds: 2.922% vs 2.913%

EUR/USD: 1.2492. Euro still strong

USD/JPY: 106.51. Yen still surging against dollar

Oil: 60.60, 0.00

Gold: 1354.70, -3.30


The rebound rally continues with an upside gap. The gap showed some resilience in light of the economic data that showed producer prices rising as well, indicating the entire pipeline sees more pricing pressure.

The gap makes it harder to enter positions given the view is this is still a relief move. We will see how the gap is treated and if there are entries, also watching what plays are hitting targets, and of course watching the potential resistance levels. SP500, DJ30 are going to jump up to the 50 day MA area, but we still think this rally has more upside to it than that level. It might, however, hit that level and meet some selling resistance before it continues.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Wednesday, February 14, 2018

Market Alert - The Close

After the Tuesday slow grind higher, the CPI posted a hotter than expected 2.1% year/year increase overall (but 1.8% core) and retail sales flipped negative (-0.3% versus +0.2% expected), hammering futures. From +13 on SP to -25+, DJ showing -250+, NASDAQ -75+. The recovery, the relief bounce, was proclaimed dead. Even the guy on the CNBC morning show said that volatility had returned and the market was heading lower again to test the prior lows. Get that buy list ready was the advice.

You better had already been ready to buy. We said that a dive lower here to the prior lows was not a reliable bottom, that this bounce really needed to continue. Watch how the bids return off a weaker open was the admonition.

NFLX opened positive as did TGT, others as well. Stocks all rallied from the open. A classic 'sky is falling' pre-market to a surge left to right, low to high, posting impressive scores. Growth led, always a good indication.

SP500 35.69, 1.34%
NASDAQ 130.1, 1.86%
DJ30 243.04, 1.03%
SP400 1.87%
RUTX 1.82%
SOX 2.23%
NASDAQ 100 1.85%

VOLUME: NYSE +12%, NASDAQ +21%. Volume back above average on some solid buying. That shows the buyers returning with some force, though relatively lighter than the recent selling volume.

ADVANCE/DECLINE: NYSE 2.2:1; NASDAQ 2.9:1

Predictably and hilariously, the 'world ends sometime soon but we have been making that call for 10 years and have not got it quite right yet' websites and doomsayers were calling the economic numbers stagflation and declared the current rally's demise.

The rally did not die, though it did kick back upside faster than we thought it would. It also showed more strength, with NASDAQ, NASDAQ 100, and SOX blowing up through the 50 day MA's. SP500 and DJ30 are just about to bump those levels.

RUTX and SP400 are still way off the 50 day MA's, but they posted large gains as they caught some strong bids for a change.

Chips were strong as some broken patterns ripped upside, e.g. LRCX, AMAT. They need to get back in the mix and we will see if their patterns can form up better. Retail was setting up as noted and it shot higher. Trucking jumped. Industrial metals took off from good patterns. Biotechs jumped upside. FAANG was solid. Financials started up off their 50 day MA tests.

In a second bit of irony, the morning calls that the rally was over turned to afternoon talk that the Friday low was THE low, that you had better be buying because you now were not going to get another chance.

That may ultimately be the case, though we doubt it. History says another test will come. Moreover, these relief moves can be explosive just as this one. I believe the phrase of art is 'rip your face off' rallies. Thus this is not out of character with the overall bottoming process I have previously outlined. It does show, however, why we play them, because they can really pour it on and make you money. Further, if this DOES beat the odds and turn into a sustained upside rally to new highs and beyond, then you are in and making money versus sitting on your hands wondering what happened.

We are enjoying moves higher in our newer positions on AMZN, NFLX, EPZM, RACE and added FB, CAT, JBHT, TGT, ESPR, SCHN, MSCC Wednesday. There are more good setups out there we are looking at, and we didn't pick up some because volume was somewhat light. You don't want to buy too late into a relief move, but we see more good patterns setting up and if the market decides it has enough good setups to continue rallying, then you buy. Just be aware that historically the move will stall and go back to test the prior low. There is always the chance it plays the improbable and continues rallying from here, and that is why when the stocks show good 'buy me' indications we move in.

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

NASDAQ, SOX are through the 50 day MA's as the relief bounce resumes a bit sooner than expected. It did, however, have a good rest as stocks started low on the CPI worries but steamed higher the entire session.

This even as the 10 year bond flicks at 3% (2.913%).

SP500 34.74, 1.30%
NASDAQ 126.35, 1.80%
DJ30 250.45, 1.02%
SP400 1.73%
RUTX 1.75%
SOX 2.11%
NASDAQ 100 1.77%

Growth is the strongest but everything is solidly higher. Some beaten down chips are ripping upside, e.g. LRCX, AMAT.

Stocks are more or less holding their gains toward the close. Will see if any late pullback occurs on the rebalancing of ETF's. Looking at positions on the likes of CAT, JBHT, FB, ESPR, MSCC.


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

Futures vs FV: SP -18.79; DJ -159.45; NASDAQ -47.86

SP futures were +13 ahead of the CPI and Retail sales for January, and after were down over 25 points in the initial wake of the economic data. Some rebounding after the algorithms sold the market on the headlines, but thus far there is no 'ah, a buying opportunity' rush back upside. As such, futures are off the lows but not much.

CPI, Jan: 0.5% vs 0.4% exp vs 0.2 prior (from 0.1). Yr/yr: 2.1% vs 1.9

Core: 0.3 vs 0.2 exp vs 0.1 prior (from 0.3%). Yr/yr: 1.8%.
Note the core for December fell dramatically. Thus the overreaction reaction to the CPI is an . . . overreaction.


Retail Sales, Jan: -0.3% vs 0.2% exp vs 0.0 prior (from 0.4%)

Ex-Autos: 0.0 vs 0.4 exp vs 0.1 prior (from 0.4%)

Big revisions down on the December numbers. Big. This is at least as disturbing as the CPI numbers. Indeed, the CPI revisions to core were significantly lower.


Okay, so you have higher consumer prices and flat to lower retail sales. What is the immediate conclusion on the 'world ends sometime soon but we have been making that call for 10 years and have not got it quite right yet' websites? Stagflation. Just passed pro-growth tax reform and ready to panic. Ah, but that is what happens when you have an all-powerful central bank controlling your wealth. You get these kind of reactions because the history of the Fed is acting too late and overreacting when it does act. It is so ironic is it not? You hear every day about how you cannot time markets. You are beat to death with it, yet those very people advocating that put their full faith in basically one person, who believes in the Phillips Curve, to be able to time markets. Einstein would label that insane. Thus, the reactions we have.


OTHER MARKETS
Bonds: 2.864% vs 2.8333% 10 year. Bonds sell some, rates rise again.

EUR/USD: 1.2302 vs 1.2361. Dollar rises on the news, anticipating rate hikes.

USD/JPY: 107.19 vs 107.76. Dollar is weaker despite a really weak Japan GDP print

Oil: 58.41, -0.78

Gold; 1333.40, +3.00. Turned from -4 to +3.


Futures are off their lows ever since the economic data, but again, it is no surge higher. Definitely a session where you see how the market closes. This was the bad case scenario for the data, and many are now saying the volatility has returned and the market must test the prior lows, etc. If it does test off this news, the 'bottom' is not reliable. You want to see the relief move hang in, claw back up after this setback, and put in another week or so of advance. It may be slow a la Tuesday, but that does the work needed for the market.

Thus, watch how the bids return after a weak morning, watch how the late afternoon trade unfolds. Today very well ends lower, but not a new huge selloff. If that is the case, that is, while frustrating, not bad action for the relief move and the ultimate process previously outlined.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Tuesday, February 13, 2018

Market Alert - To the Close

Stocks started lower, moved higher in slow, steady upside. Nothing spectacular at all, just a grind higher. Of course in the last 20 minutes or so there is some volatility with a big bar down at 3:45ET as the day's rebalancing takes effect.

SP500 10.27, 0.39%
NASDAQ 35.16, 0.49%
DJ30 61.65, 0.24%
SP400 0.28%
RUTX 0.36%
SOX -0.04%
NASDAQ 100 0.57%

None of the indices are making much headway and are still well below the 50 day MA as they fight their way back up from the selling. It is slow, but this is how the bases are rebuilt.

Picked up a bit more NFLX, looking at EPZM as well as it puts in a good break higher. SQ is coming to life again and looking at it as well. RHAT, AMZN, NVDA posting some pretty good gains as they help lead a move back up.

CPI out before the WED open and many are waiting to see the outcome, thus the somewhat quiet action, but low to high action nonetheless.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Market Alert - Pre-Market

Futures vs FV: SP -12.35; DJ -127.27; NASDAQ -40.35

Futures opened lower early morning and range-traded since. They are at the bottom of the range now having faded over the past hour. A bit more selling right now is testing the morning lows.

We anticipated something of a softer open today, and of course there are calls out that the 'dead cat bounce' is over as futures have the audacity to not go up every day. Sure it can be, but we anticipate this early dip is part of the continued relief bounce. Seen it many times as even the relief bounce moves to shake out buyers. We will see if that theory holds.


NFIB Small Business Sentiment, Jan: 106.9 vs 104.9 December


Fed: Cleveland Fed president Mester says the stock market decline is not impacting the US economy's outlook. More talk that the market is not being factored into Fed decisions. For now.


VIX Manipulation: Whistleblower says that the CBOE VIX price could be and was manipulated by companies with sophisticated algorithms where they could increase or decrease the VIX price without placing orders. Now THAT is a handy trick to have.


Earnings Beats: PEP; UA (TL); APRN; GNRC; VIPS

Misses: GNC (TL); Dunn/Bradstreet (TL)


AMZN: Stories are that AMZN is ramping up its medical supply business, and of course medical supply stocks are lower today.


Syria: This is a potential explosion. Bloomberg reports that US air strikes killed 100 or more Russian mercenary soldiers as those soldiers attached a refinery and production facility US-backed rebels held. Russia says it wasn't their people and all are saying it was a 'rogue' attack that was not called for by any side. US, Russia, Israel, Iran and who knows who else are fighting a proxy war in Syria. These are never good and mistakes are often made.


OTHER MARKETS
Bonds: 2.842% vs 2.857%. Modest bounce in the 10 year.

EUR/USD: 1.2343 vs 1.22887. Euro trying to bounce off the test.

USD/JPY: 107.59 vs 108.669. Dollar really whacked against the yen.

Oil: 58.76, -0.53. Giving back some of the strong move, but with the dollar lower, oil has an overall support.

Gold: 1328.60, +2.20


Futures continue struggling pre-market, but it is frequently the case that when futures gap higher or lower and trade in a range, that range is not the way the market ends. Given this day to day volatility as well, we are not expecting this pre-market to be the result. Again, we are looking for a return of some bids, if not today then Wed or Thurs as the relief move acts to test the market itself.

We will see how the bouncing stocks behave, particularly those that actually have decent patterns, e.g. AMZN, NFLX. AMZN is up modestly today on the medical supply news, NFLX is down 1.5 in the general market lethargy. That can provide an opportunity to pick up some more NFLX when it shows it is holding and starting back upside.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Alert Key
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