US - Market Direction 40 (May 17 - Dec 17)

Re: US - Market Direction 40 (May 17 - Dec 17)

Postby winston » Mon Nov 13, 2017 9:27 am

MONDAY

Last week saw the small caps really struggle with the GOP tax reform ineptitude and impotence. The big names that just broke out of bases tested their moves but are holding up very well.

Chips tested as well, coming back to near support. Software is still solid, oil is making some good moves and more are set up to make good moves.

There is plenty of potential for the upside to resume. As noted earlier, there are calls that the selling has just started or is about to start.

It may, but from the action last week and the leaders that are still out in the market, I am not seeing imminent failure.

There can ALWAYS be events that appear to upset even the best setups. Plenty of geopolitics, growing threats in the Middle East, continuing threats from Korea. The continued playing politics in our cesspool of a federal government, playing with our lives and our finances as they play power politics.

The market, however, has shown strength through it all. For now, at least, there is still the notion that the upside potential outweighs the downside given the status of the Fed and the chairman transition, the regulation rollback, a more business friendly climate (for all but certain groups it would appear), and still the outside hope of a meeting of the minds and votes on tax reform.

Therefore with the setups we see, we are still looking mostly upside. Oil, semiconductors, big industrials, retail, FAANG still sport solid setups we want to ride higher if they show the moves higher.

Source: Investment House
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Re: US - Market Direction 40 (May 17 - Dec 17)

Postby winston » Mon Nov 13, 2017 10:27 am

CHARTS

NASDAQ: Moved higher through Wednesday as the mega caps continued their moves, then faded through Friday, testing the 20 day EMA intraday Thursday and recovering, and holding the 10 day EMA in a narrow range Friday. Still a very solid uptrend, making a test of the 20 day EMA as it did in late October.

This makes the second test of the 20 day after rising off a 50 day MA test in September. MACD broke out to a higher high with price, upside volume on the break higher from late October is great, big names are leading upside. This does not look to be an index that is in the throes of a rollover.


SOX: Similar to NASDAQ, SOX gapped higher Monday and rallied to a higher post-2000 high Wednesday. Thursday was rougher, gapping lower, selling through the 10 day EMA, but recovering to hold that near support Friday. A bit more extended than NASDAQ as SOX has not tasted the 50 day MA since late August, trending up the 10 day EMA in a steady rise.


RUTX: Much is being made about the small caps, and that is understandable after its scintillating move from mid-August to October on the pass-through rates -- rates that now are showing ZERO change in the Senate plan. The easy test turned volatile and that continued last week as a move higher through Monday collapsed Tuesday and RUTX fell to the 50 day MA to end the week. Still 24 points above the 38% Fibonacci retracement and the July high.

SP400: The midcaps shook off the tax issues. Lower on the week, but a very modest test to the 20 day EMA, holding that level Thursday and Friday with doji. Not powerful, but holding its move higher at near support.

SP500: SP500 and SP500 are very similar right now. SP500 put in a new high Wednesday then tested it Thursday and Friday, closing just below the 10 day EMA for the week. Still a very nice trend upside.

DJ30: Finally tested after the 9 week move. Thursday DJ30 tapped the 20 day EMA on the low, the first touch of this level since early September when DJ30 rose off the 50 day EMA. Pretty normal test.

Source: Investment House
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Re: US - Market Direction 40 (May 17 - Dec 17)

Postby winston » Mon Nov 20, 2017 12:58 pm

MONDAY

Earnings are for the most part in the bank. The indices performed well through the season, keeping the October/November move working. Expiration saw some hiccups just as a consolidation in NASDAQ, SOX and some of the big names in each broke higher but then suffered some selling on expiration.

How those stocks handle that action this coming week tells an important story: was money starting to move out, or was it just a quick expiration move?

Is there rotation starting to other areas at the expense of some leaders, or will money continue to move to the market versus just move around the market? Or, for that matter, leave the market?

Overall the patterns remain fine, but whenever you have the market logging 5 weeks or more of
high confidence, bonds rallying when they should be fading, gold jumping, you have to start paying very close attention to the leading stocks. A LOT of these just came out of consolidations of prior moves, looking ready to break higher.

The big names are capable of driving the market higher on their own. If they lose their bids and
other parts of the market do not improve significantly, the rally has lost its legs.

We still see some upside possibilities, and some we passed on Friday due to strong moves that were a bit too strong for a Friday or that rallied then faded off the highs could still look good Monday. If so, we go where the money goes.

Source: Investment House
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Re: US - Market Direction 40 (May 17 - Dec 17)

Postby winston » Mon Nov 20, 2017 1:18 pm

CHARTS

NASDAQ: After a gap and rally to a new closing high Thursday, NASDAQ backed down some and volume faded. Okay, price/volume action was more or less in line. NASDAQ 100, where much of the NASDAQ selling occurred, was not bad either, easily holding over the 10 day EMA. Big rip, modest selling. At a new high, however, the volume was quiet Thursday, and you want to see the
modest Friday expiration indecision return to buying next week.

RUTX: Unlike NASDAQ, RUTX continued the Thursday break higher. While it is not at a new high, it is looking much better after going ahead with a test closer to the 38% Fibonacci retracement and the July peak. Buyers entered off that intraday test Wednesday, and buyers have been active since.

SP400: No new closing high here either, but getting close. SP400 also continued the Thursday rally and is within spitting distance of a new high.

SP500: SP500 also gapped and rallied Thursday off a doji, the Wednesday doji below the 20 day EMA. SP500 moved back up through the 10 day EMA but not to a new high. Friday a test that held near both the 10 and 20 day EMA. Not a rollover, but as with NASDAQ, not a lot of volume on the move that tests the recent high that didn't show a ton of volume either.

DJ30: Similar action, falling to the 20 day EMA after the Thursday gap above the 20 day and rally. DJ30 volume less than constructive of late and even though the Thursday move looked promising to avoid a 50 day MA test, DJ30 remains flirting with that larger dip after such a good rally higher.

Source: Investment House
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