US - Market Direction 42 (May 19 - Jul 20)

US - Market Direction 42 (May 19 - Jul 20)

Postby winston » Mon May 06, 2019 8:22 am

CHARTS

A 3.24% move higher in AMZN can energize otherwise wandering indices. It gapped NASDAQ and SP500 off the 20 day EMA. It rescued DJ30 from a trip to the 50 day MA. And of course, it brought NASDAQ 100 back to the top of the recent range.

What happens without Berkshire letting people know it was buying AMZN? Not much. That is why we did not buy AMZN Friday but will see if it tests a bit early week. We want to buy it, just didn't want to buy options inflated by the Berkshire news.

DJ30: Gapped higher and cleared the 20 day EMA after it was well on the way to the 50 day MA. Without AMZN the Dow is at the 50 day. As it is, DJ30 managed to hold the five week lateral range below the January 2018 high. Oh yes, there is still another peak from early September before the all-time high from early October.

NASDAQ: A new closing high by 2 points. Smashing move. No, it was not bad. A test of the 20 day EMA in a very shallow 3-day pullback then a gap and rally upside. AMZN really helped and all the FAANG played a roll, even GOOG as it rallied 1.96%, back toward the 50 day MA it gapped below on Tuesday. Lots of stocks helped the move back to the top of the range. The question for next week is will they help it break through that range with a -- altogether now -- definitive move.

SP500: Gapped off the 20 day EMA the same as NASDAQ, missing an all-time closing high by 0.2. Still at the prior highs, still suffering from some distribution the past week at the highs. Even so, it is hanging in, and if the techs lead, SP500 will follow. Oh, and the financials are still solid.

NASDAQ 100: A very solid two week lateral move, riding out INTC, GOOG and putting in a solid session Friday to take it back to the top of the range and a new closing high though not a new all-time high.

Source: Investment House
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Re: US - Market Direction 41 (Mar 18 - Dec19)

Postby winston » Mon May 06, 2019 8:24 am

MARKET SUMMARY

- Jobs strong on the headlines, Berkshire lets on it bought some AMZN, and Fed speakers walk back Powell's comments. Of course stocks jump.

- Stocks break higher but indices still in the same relative position and on light volume again, sans RUTX.

- RUTX finally breaks some resistance, still miles from a high, while SP500, NASDAQ still trying to put in a definitive high.

- Jobs created but still almost 1/3 of the US, over 100M working aged citizens, are not working.

- Plenty of good tech setups along with financials, rails, to name a few.

- After the excitement from Friday dies down, will the buyers remain or will sellers that showed up the past week show up again?

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Re: US - Market Direction 41 (Mar 18 - Dec19)

Postby winston » Mon May 06, 2019 8:54 pm

NEW HIGHS OF NOTE LAST WEEK

RingCentral (RNG)... cloud-based communications
VMware (VMW)... cloud computing
Qualcomm (QCOM)... semiconductors
Cirrus Logic (CRUS)... semiconductors
Okta (OKTA)... identity-protection software
PayPal (PYPL)... digital payments
Global Payments (GPN)... digital payments
Worldpay (WP)... payments processor
Paychex (PAYX)... payroll services and software
Chubb (CB)... insurance
Travelers (TRV)... insurance
W.R. Berkley (WRB)... insurance
Booz Allen Hamilton (BAH)... "offense" contractor
Harris (HRS)... "offense" contractor
Honeywell (HON)... manufacturing
Ingersoll Rand (IR)... manufacturing
Extra Space Storage (EXR)... self-storage
Cintas (CTAS)... uniforms
Tyson Foods (TSN)... beef, chicken, and pork
J.M. Smucker (SJM)... peanut butter, jelly, and more
Yum Brands (YUM)... KFC, Taco Bell, Pizza Hut
Church & Dwight (CHD)... household brands
Colgate-Palmolive (CL)... household brands
Unilever (UN)... household brands
Pool (POOL)... swimming pools

NEW LOWS OF NOTE LAST WEEK

Tanger Factory Outlet Centers (SKT)... outlet malls
GameStop (GME)... video-game retailer
Chico's FAS (CHS)... clothing
Antero Resources (AR)... oil and gas
CNX Resources (CNX)... oil and gas

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Re: US - Market Direction 41 (Mar 18 - Dec19)

Postby winston » Mon May 13, 2019 7:17 am

MONDAY

The trade news is old news. It is sinking in, there will not be a deal. What needs to sink in next is that it won't make much difference, that the Fed is still the primary game for stocks, AND without a trade deal the fear of a slowdown will at the LEAST keep the Fed on a pause. The President, of course, wants Powell to admit lower prices are not transitory and cut rates.

Either way, the Fed is compliant. Still. That is still a market positive.

Also a positive: indices holding at support with doji. Leaders holding at support in good patterns. That bodes well for a rebound to take on the old highs.

Negatives include the action of the chips. Some look great. Some are trying to hold. Some are problematic, and some are downright bad (e.g. INTC, XLNX, NVDA). If the chips go, the market will follow at some point.

Trade is also a negative on the stray headline or tweet. It can add upside if a deal is struck. As for more downside, not sure how much is remaining given the reality is sinking in that a deal is less than likely.

We will be playing the quality leaders that held up during the selling as they are the strongest in the market. Hopefully the leading chips will have the strength to pull the rest of that sector with them in a rally.

Source: Investment House
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Re: US - Market Direction 41 (Mar 18 - Dec19)

Postby winston » Mon May 13, 2019 7:25 am

CHARTS

For a second session, the indices sold to or below a key level, then rebounded to hold that level. The positive close Friday was a nice upside touch. Volume disappointing. Basically, the indices again tested key levels and recovered. Another session of good shakeout action that sets up a bounce.

The bounce is set up. First, will it happen or will the indices just roll over again and break the near support? Second, if they do bounce, will the bounce be more than just a relief move that again fails, e.g. DJ30 at the late February high, a potential left shoulder to a head and shoulders pattern?

Those are questions that are answered as the indices make the moves and the leaders make their moves. The prior highs of course have many fearful this is the top of at least this part of the rally and will trigger even more selling.

Again, the leaders will tell this party of the market story as they move higher, and after Thursday and Friday, many held on and several started higher. It would appear they will show us soon enough their intentions.


SP500: Reached to a lower pullback low below the 50 day MA's then reversed to a gain in an 'outside day' that was lower on the low and higher on the high than Thursday. Moreover, it was a reversal session at a key level after four moves up the 10 and 20 day EMA led to a 50 day MA test. Pretty classic action in an uptrend, testing a bit deeper after a good move. Again, the proximity of the old highs makes the test a bit more frightening to many.

NASDAQ: Also an outside day with a reach lower below the 50 day MA and recovery to positive. NASDAQ also made four moves up the 20 and 10 day EMA and then tested the 50 day MA with good shakeout sessions. That is normal: 4 rotations up the 10 and 20 day after a 50 day MA test, then another 50 day MA test. That said, this weekend Nidec cut its guidance for demand for hard drives 13%.

NASDAQ 100: Reached much lower below the 50 day MA, reversed to positive. Same setup as NASDAQ though the large cap techs have been spotty day to day with their leadership abilities.

DJ30: A second test of the 200 day SMA and a second rebound from the test. Moved to positive Friday but closed just below the 50 day MA. This hold of the 200 day SMA was necessary, but also does nothing to change the possibility of a right shoulder setting up to a head and shoulders top from mid-February. The failure below the prior all-time highs at the 'head' is what makes this action very much worth watching.

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Re: US - Market Direction 41 (Mar 18 - Dec19)

Postby winston » Mon May 13, 2019 7:27 am

MARKET SUMMARY

- More trade angst sends stocks lower, but stocks then rebound to close the week positive.

- More encouraging trade quotes from the administration turn stocks, or was it just that the indices made the technical tests of support we have discussed?

- So there is no trade deal with China. Anyone really going to lose sleep over it?

- CPI remains low-ish, and Powell may have to start wondering just how 'transitory' those prices are.

- Chips rebound but not as convincing as other leadership areas.

- Indices make the tests, leaders hold up quite well, will they now bounce to try the highs again?

Source: Investment House
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Re: US - Market Direction 41 (Mar 18 - Dec19)

Postby winston » Mon May 13, 2019 8:25 pm

HIGHS AND LOWS

NEW HIGHS OF NOTE LAST WEEK

Global Payments (GPN)... digital payments
Match (MTCH)... digital matchmaker
Roku (ROKU)... streaming devices
Thomson Reuters (TRI)... media
Cray (CRAY)... supercomputers
Harris (HRS)... military technology
FleetCor Technologies (FLT)... commercial payments
Wendy's (WEN)... burgers, fries, shakes
Tyson Foods (TSN)... sausages, chicken nuggets, hot dogs
J.M. Smucker (SJM)... peanut butter, jelly, and more
Pilgrim's Pride (PPC)... poultry
Sanderson Farms (SAFM)... poultry
Alleghany (Y)... insurance

NEW LOWS OF NOTE LAST WEEK

TiVo (TIVO)... digital-video recording
3D Systems (DDD)... 3D printers
Fossil (FOSL)... watches
Gap (GAP)... retail
Nordstrom (JWN)... retail
L Brands (LB)... retail
Macy's (M)... retail
HollyFrontier (HFC)... oil and gas
Fortuna Silver Mines (FSM)... mining
Westlake Chemical (WLK)... chemicals
AbbVie (ABBV)... prescription drugs

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Re: US - Market Direction 41 (Mar 18 - Dec19)

Postby winston » Mon May 13, 2019 8:25 pm

HIGHS AND LOWS

NEW HIGHS OF NOTE LAST WEEK

Global Payments (GPN)... digital payments
Match (MTCH)... digital matchmaker
Roku (ROKU)... streaming devices
Thomson Reuters (TRI)... media
Cray (CRAY)... supercomputers
Harris (HRS)... military technology
FleetCor Technologies (FLT)... commercial payments
Wendy's (WEN)... burgers, fries, shakes
Tyson Foods (TSN)... sausages, chicken nuggets, hot dogs
J.M. Smucker (SJM)... peanut butter, jelly, and more
Pilgrim's Pride (PPC)... poultry
Sanderson Farms (SAFM)... poultry
Alleghany (Y)... insurance

NEW LOWS OF NOTE LAST WEEK

TiVo (TIVO)... digital-video recording
3D Systems (DDD)... 3D printers
Fossil (FOSL)... watches
Gap (GAP)... retail
Nordstrom (JWN)... retail
L Brands (LB)... retail
Macy's (M)... retail
HollyFrontier (HFC)... oil and gas
Fortuna Silver Mines (FSM)... mining
Westlake Chemical (WLK)... chemicals
AbbVie (ABBV)... prescription drugs

Source: Daily Wealth
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Re: US - Market Direction 41 (Mar 18 - Dec19)

Postby winston » Mon May 20, 2019 12:27 am

MONDAY

While some solid upside leaders remain in solid shape, e.g. software, food, some retail, personal products, not all of them are bull market type stocks and there are just not a lot of them as well.

With semiconductors in a serious fight and the indices patterns in serious longer term topping patterns, there may not be enough leadership to move the market higher once again.

We are still playing some upside that looks quality, watching carefully for cracks in the solid patterns.

There are still upside possibilities such as VZ and software to name just a couple, and we will look at them in the event they win out.

At the same time, however, there are definite downside setups that correspond to the issues the indices are showing. We have more than a few of those working and will look to add more if the downside setups make the downside break.

I know some people do not like the downside, but those who embrace it when it is here find that the gains come rapidly - they also can disappear rapidly as what falls hard tends to bounce hard in relief moves before rolling over once more.

If you give it a shot, you will find that gains can come as easily and even more so than in a strong move higher.

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Re: US - Market Direction 41 (Mar 18 - Dec19)

Postby winston » Mon May 20, 2019 12:40 am

CHARTS

Looking at the charts, there are some very clear, quite ominous double tops on SP500, NASDAQ, NASDAQ 100 when you look at a weekly chart. DJ30 showing a triple top.

SOX is a bit different: its weekly chart shows it sitting on top of the range from late 2017 to early 2019 before the run to a new high. At least it has a breakout and a test it can rally off.

On the daily charts there is that same head and shoulders look from the past three months for pretty much all the indices: SP500, NASDAQ, NASDAQ 100, DJ30, SP400.

The upshot of this is that the patterns don't look all that great. After the 2018 range/topping event, the breaks to new highs or near new highs failed.

Most of the indices are now at the point of having to shake off a near term bearish pattern to have the opportunity to try and break up the bigger bearish pattern.

The market's eyes have to be on the semiconductors. A new high failed and the chips are now testing the tops of the 2018 to early 2019 range. The near term pattern here is a head and shoulders as well.

If SOX can shake this off, then the rest of the market has a shot at following - for the past few years, as the chips go, so the market goes.

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