US - Market Direction 41 (Mar 18 - May 19)

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

Postby winston » Sun Mar 17, 2019 10:38 pm

MONDAY

Good move on the week, some key intersections with resistance.

The market has not yet resolved the trading range inflection point, but it certainly is making the case for a more bullish outcome.

No selling at the highs, just profit taking. More solid patterns. Dormant groups (e.g. FAANG) coming back into play. Semiconductors continuing their leadership role after a week or so hiatus. That certainly bodes well from an upside perspective.

That does not mean post-expiration week rally there is some profit taking. Indices up for a week, many stocks up for a week or more, some approaching resistance, some just feeling gravity after very good moves.

After perhaps some more upside, perhaps not, if there is some likely profit taking, we plan using that to position for some new upside buys.

Indeed, there are still a LOT of stocks in good position to move higher after a week's market gains. Many did move upside on Friday, so they may very well have some post-expiration weakness.

That works as well because we can use a bit of a pullback on the plays we have to set up some better entries. Chips still look good with many solid setups, some software as well.

In any event, the upside bias remains, a bit of a giveback early week is okay for the new plays, and if the recent leaders want to give back a bit more and set up again for new buys a la V did, even better.

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

Postby winston » Sun Mar 17, 2019 10:46 pm

CHARTS

SP500, NASDAQ: As noted, both put in strong weeks and closed just over the Oct/Dec range tops. Solid action, a bit extended.

After a strong-ish expiration session we are looking for some kind of test next week either after a bit more upside or starting Monday. Not a rollover from anything shown thus far, just a normal post-new high pause.

DJ30: A good Friday putting an upside emphasis on a week that saw the index miss out on a really good move due to the BA issues. It would be right there with SP500 and NASDAQ but for that drag.

NASDAQ 100: A strong week after the prior Friday gap to the 50 day EMA and reversal. Rallied to the top of the Oct/Dec range and stopped just below that point Friday. Solid, solid move as the FAANG had some bite again, but as it is below resistance perhaps GOOG, AMZN, AAPL, MSFT, CSCO take a breather after excellent weeks to the upside -- AND provide us with new entries after they take that breather.

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

Postby winston » Sun Mar 17, 2019 10:48 pm

MARKET SUMMARY

- More advances on expiration push SP500, NASDAQ over the top of the range -- barely.
- SOX posts a strong week, DJ30 lags but would be over resistance but for BA.
- Small and midcaps lag due to rotation to the big names.
- Economic data slips after showing improvement. Soft patch starting to firm overall, however.
- No Fed, no headache. Market preparing to do the improbable and try for new highs.
- After a very good week, before any more breakouts there is likely some kind of profit taking test.

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

Postby winston » Tue Mar 19, 2019 11:42 am

S&P 500 Hits Important Resistance Levels

by Alexander Kuptsikevich

The S&P 500 has overcome previous important levels of consolidations, and now it can be on the direct path to updating its highs at 2940, which is 4% higher than current levels.


Source: FX Empire

https://finance.yahoo.com/news/p-500-hi ... 02944.html
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Re: US - Market Direction 41 (Mar 18 - Dec19)

Postby winston » Mon Mar 25, 2019 8:24 am

MONDAY

Monday, the upside starts from scratch. Well, not quite.

The large cap growth indices are still in solid enough position, it is just that Friday sellers showed up for the first time in quite a while. NASDAQ, SP500 and SOX have to find footing at near support and rebound.

As noted before, Friday could have simply been an overreaction to the multitudinous stories regarding a yield curve inversion. A run to the door because, despite the upside move, there is still quite a bit of skepticism the market cannot continue farther.

Also as noted, the first day of an inversion is not the start of the selling. The market peak comes 3, 4, 6 even longer after the signal. And as for signals, the 3 month/10 year is not the pairing most indicative despite what the NY Fed claims. The 2 yr/10 year or 3 month/30 year are the keys. That said, the 2/10 is just 22BP from each other. Not much room for maneuvering.

The large cap growth that led the recent recovery and semiconductors look to be key to a near term hold and recovery for the larger growth stocks. Software stocks have held gains but have been very quiet for a few weeks; they fell rather aggressively Friday, indicating more downside to come. If they go what group will replace them? Not financials as they tank again.

The market is at one of those gut check points for the near term. Will the indices shake off the inversion worry and continue the upside, will they test back to midpoint or the bottom of the October/December consolidation range, or will they fully correct to the December low?

Those questions always arise when the market falters on some volume and at important levels. Those questions have to be asked, and because the Friday sharp selling came with a reversal of a solid move the session before, the move takes on more significance as it not only negated the prior move, it overran it.

Therefore, we have to look at both sides of the fence.

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

Postby winston » Mon Mar 25, 2019 8:36 am

CHARTS

To view, click on the following links:

http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg


The big news was in NASDAQ and SP500 with their reversals of the Thursday new break upside after a short test of prior resistance.

Equally important, however, are the travails of the small and midcap indices. Travails at the resistance highs, yes, but when you take a look at the RUTX chart, if it tests to logical support that puts it at the middle level of testing I discussed several weeks back: either a short test to form a right shoulder to inverted head and shoulders patterns, or a dip to the bottom of the resistance range, or, gulp, a test all the way back to the December low.

NASDAQ: Broke to a higher recovery high Friday on quite good volume. Friday it was sold and volume remained strong, well above average, but at least at levels hit Thursday on the upside -- suggesting that the selling was somewhat kneejerk with the inversion fears, BUT a strong move higher was met immediately with a strong move right back down. Monday we see if the big names that have performed so well pick right back up after a one-day issue.

SP500: Similar price action to NASDAQ though NSYE volume did not ramp higher Thursday. It did ram higher Friday, moving above average as the large caps and smaller caps sold. Definitely some distribution, i.e. dumping of shares where the sellers finally showed up. Now that it is back in the range, the immediate future is whether it shakes off Friday and rebounds out of the range OR it needs to test back farther, to the 200 day SMA (a very minor test) or deeper toward the bottom of the trading range (2635ish) similar to what was discussed with RUTX.

DJ30: Could be a bit of a double top taking shape from the late February high as easily as a right shoulder to an inverted head and shoulders. Higher volume, again above average volume, as the Dow fell away from the bottom of the Oct/Dec trading range. Very important test this week as the 50 day MA's and 200 day SMA are converging just over 25,000. If that doesn't hold, then you rea looking at 24,500 to 24.000ish.

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

Postby winston » Mon Mar 25, 2019 8:38 am

MARKET SUMMARY

- Weak German PMI reports, weak Japanese output, yield curve inversion fears, bring out the first serious sellers in a long time.

- After a solid break upside Thursday, SP500 and NASDAQ are sold back into the range.

- Small and midcaps threaten to break their uptrends.

- Friday was likely inversion panic, but was it even warranted?

- The market never peaks the first day of an inversion, so even if Friday was an yield curve inversion with meaning, the top is still a lot of upside moves away.

- Even if this wasn't an inversion to worry about, the move itself deserves respect, and some areas look very ready to sell.

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

Postby winston » Mon Mar 25, 2019 8:34 pm

NEW HIGHS OF NOTE LAST WEEK

Merck (MRK)... prescription drugs
Abbott Laboratories (ABT)... medical devices
Baxter (BAX)... medical devices
Thermo Fisher Scientific (TMO)... science and technology
Microsoft (MSFT)... tech giant
Analog Devices (ADI)... semiconductors
Broadcom (AVGO)... semiconductors
Cisco (CSCO)... Internet "plumbing"
Twilio (TWLO)... cloud technology
Global Payments (GPN)... electronic payments
Paychex (PAYX)... payroll services and software
Zendesk (ZEN)... customer-service software
Intuit (INTU)... TurboTax, QuickBooks
AutoZone (AZO)... auto parts
Lennox (LII)... HVAC equipment
General Mills (GIS)... packaged foods
Chipotle Mexican Grill (CMG)... "fast casual" burritos
Procter & Gamble (PG)... consumer goods
Kimberly-Clark (KMB)... consumer goods
Freshpet (FRPT)... pet food


NEW LOWS OF NOTE LAST WEEK

Tapestry (TPR)... high-end accessories
Urban Outfitters (URBN)... clothing retailer
GameStop (GME)... video-game retailer
Nordstrom (JWN)... retailer
Six Flags Entertainment (SIX)... theme parks

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

Postby winston » Mon Apr 01, 2019 11:10 am

MONDAY

Start of a new month and new quarter. The prior Friday was down hard, Monday held the line. This last Friday up some -- can it continue that new attempt at upside after a week of working off that prior sharp Friday selloff.

Many leaders are well-positioned -- just as they were all week. Some started upside Friday. If they can continue of course we like the buy.

That said, DJ30, SP400, RUTX still look to have work to do. Thus a large bit of the upside potential rests in SP500 and NASDAQ.

NASDAQ 100 as well as it too moves laterally just over the October/December resistance range. They showed some life Friday, perhaps just end of quarter position shuffling, perhaps presaging the week to come.

Yes, yes, after all this time STILL at the crossroads. Looking good -- just as they did 1, 2, 4, 5 weeks ago. At least they continued to consolidate and set up versus selling off when they certainly had the opportunity.

Therefore, we look for more upside in addition to some good-looking plays that still are ready to buy if the moves are made. A few downside won't hurt; the sellers were solid the prior Friday, and though they disappeared as fast as they showed up, they could do it again.

Best to be ready. Just in case. Trump and Xi could splash cold water on all the anecdotal 'good' trade news this past week. I still think the market is overly optimistic at what can be accomplished. That, however, is just my opinion, and the market does not care two beans for any one person's opinion. That is just my opinion as well.

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

Postby winston » Mon Apr 01, 2019 11:20 am

CHARTS


SP500/NASDAQ: Still joined at the hip in terms of the pattern. Broke out the prior Friday, immediately sold off, never a good sign. Hung on through the week in lateral moves at the 20 day EMA, just below the top of the October/December range, Friday gapping upside.

Better volume Friday, but it was also end of the quarter money moving. Not bad, did what was needed, many leading stocks in good patterns -- pretty pictures but they need to make pretty moves. Friday was a start, needs to follow through this week.


DJ30: Up toward the highs from the past four weeks with a good Friday upside break. That leaves DJ30 just below the upper resistance from the October/December range. As noted last week, DJ30 is trying to set up a right shoulder to a six month inverted head and shoulders.

It looks as if it has a couple more weeks of work to do in terms of symmetry; we will see how this move up to the top of the recent range performs. Some long dormant stocks such as UTX trying to wake up.


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