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

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

Postby winston » Mon Apr 22, 2019 8:05 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
http://investmenthouse1.com/ihmedia/f/c ... daq100.jpg


NASDAQ 100 gapped and rallied over the old high on Wednesday but reversed. Thursday it advanced to challenge the highs again, but closed just below that resistance, showing a doji. This week some seriously important large cap NASDAQ stocks report of course that will bear upon NDX' action at the resistance.

DJ30 is bumping the last resistance level from January 2018 the last resistance before the September/October peaks, the latter the all-time high. Same story here: can it punch through given the strength of the so-called old economy stocks?

SP500 bumped the late August 2018 peak and backed off, but is holding well at the 10 day EMA. Four weeks upside, hit penultimate resistance, paused. Logic says it tests, but earnings are coming in better than expected and helping lift stocks initially -- as we anticipated.

NASDAQ Broke into no-man's land the past week, surpassing penultimate resistance and now looking at the late August all-time high. Four week run, reversed a solid upside Wednesday gap. It will need solid earnings this week to push it at that old high.

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

Postby winston » Mon Apr 22, 2019 7:53 pm

HIGHS AND LOWS

NEW HIGHS OF NOTE LAST WEEK

Microsoft (MSFT)... tech giant
Broadcom (AVGO)... semiconductors
Oracle (ORCL)... software
Arista Networks (ANET)... computer systems
Cisco (CSCO)... Internet "plumbing"
Ubiquiti Networks (UBNT)... wireless networks
Motorola Solutions (MSI)... telecom
Global Payments (GPN)... electronic payments
Paychex (PAYX)... payroll services and software
Automatic Data Processing (ADP)... payroll processor
Shopify (SHOP)... e-commerce
Deckers Outdoor (DECK)... footwear
Nike (NKE)... athletic apparel
Estée Lauder (EL)... cosmetics
Procter & Gamble (PG)... everyday goods
Dollar General (DG)... discount retailer

Hershey (HSY)... snacks and chocolate
McDonald's (MCD)... "addictive" burgers
Tyson Foods (TSN)... Big Food
Kansas City Southern (KSU)... railroads
Norfolk Southern (NSC)... railroads

NEW LOWS OF NOTE LAST WEEK

UnitedHealth (UNH)... health insurance
Cigna (CI)... health insurance
Humana (HUM)... health insurance
Cantel Medical (CMD)... medical equipment

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

Postby winston » Mon Apr 29, 2019 9:20 am

MONDAY

Yes, I am focusing on the probabilities of significant more upside from here without a test being lower.

Therefore, we will still have new upside plays for this week; just too many good setups not to. Moreover, even if the leaders of the rally need to rest and test, this move has shown rotation to new areas that then rally as the leaders take deserved break.

Not to acknowledge that ignores the ongoing theme in the market, i.e. money moving to new areas and driving them higher, maintaining the upside bias.

Accordingly, some more upside plays in some new and even recycled areas that have now had some rest. few downside remain on the report as well because as we saw with CMG, the gains can be quite satisfying and come in very quickly.

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

Postby winston » Mon Apr 29, 2019 9:20 am

MONDAY

Yes, I am focusing on the probabilities of significant more upside from here without a test being lower.

Therefore, we will still have new upside plays for this week; just too many good setups not to. Moreover, even if the leaders of the rally need to rest and test, this move has shown rotation to new areas that then rally as the leaders take deserved break.

Not to acknowledge that ignores the ongoing theme in the market, i.e. money moving to new areas and driving them higher, maintaining the upside bias.

Accordingly, some more upside plays in some new and even recycled areas that have now had some rest. few downside remain on the report as well because as we saw with CMG, the gains can be quite satisfying and come in very quickly.

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

Postby winston » Mon Apr 29, 2019 9:37 am

MARKET SUMMARY

- SP500, NASDAQ start breaking to new highs, but despite the excitement on the Friday close, the breaks higher are still nominal and on no volume.

- Lots of earnings, lots of movement, little upside advancement by the major indices.

- SOX remains the market key, and it shows some cracks.

- GDP Q1 surprises big upside. Sure it can be explained away, but with lower prices and inflation, Powell's comments about cutting rates could be put to the test.

- Huge week of data, FOMC decisions, and more and more big name earnings.

- Struggle at the old highs after 5 weeks upside and lots of better than expected earnings suggests the market may be a bit winded near term.

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

Postby winston » Mon Apr 29, 2019 9:53 am

Charts

NASDAQ 100 showed the same action as NASDAQ, a new closing high but below the Thursday intraday high. SOX gapped lower gratis INTC's guidance, and though it put in an admirable recovery, it still closed below the prior week's upside gap point. Even so, SOX and NASDAQ 100 cleared the path for the other indices to hit new highs.

DJ30 dutifully followed though it is still well off the old highs thanks to a series of setbacks starting with BA and most recently INTC on Friday. In between it dealt with MMM, IBM, CAT, WBA, XOM, CVX, DOW -- all of these have recently caused DJ30 to stumble despite solid results from other components. Thank goodness for CSCO, MSFT, AXP, JPM (hard to believe), UTX, DIS, V.

I am not saying a rollover is imminent. Nope. Just that near term -- near term -- things are perhaps a bit overdone in terms of the move (5 weeks on this leg), sentiment (new high watches every session), economics (GDP just hit 3.2%), and the Fed (with stronger GDP will Powell REALLY still say he would cut rates if inflation remained low?

Would he leave them as is or perhaps start wondering about resuming hikes?). It seems realistic to consider the indices may need to test relatively near term in order to better set up the next leg higher.

That is not a bearish position, it is just acknowledging the run to this point and that the indices, after all the good news and good moves, are still struggling at resistance. Some retracing and resetting would not be signs the market is in trouble. SOX needs to be watched as it will forecast the rest of the market down the road, but as of Friday, there was nothing overtly negative or worrisome in the larger picture.

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

Postby winston » Mon Apr 29, 2019 9:53 am

Charts

NASDAQ 100 showed the same action as NASDAQ, a new closing high but below the Thursday intraday high. SOX gapped lower gratis INTC's guidance, and though it put in an admirable recovery, it still closed below the prior week's upside gap point. Even so, SOX and NASDAQ 100 cleared the path for the other indices to hit new highs.

DJ30 dutifully followed though it is still well off the old highs thanks to a series of setbacks starting with BA and most recently INTC on Friday. In between it dealt with MMM, IBM, CAT, WBA, XOM, CVX, DOW -- all of these have recently caused DJ30 to stumble despite solid results from other components. Thank goodness for CSCO, MSFT, AXP, JPM (hard to believe), UTX, DIS, V.

I am not saying a rollover is imminent. Nope. Just that near term -- near term -- things are perhaps a bit overdone in terms of the move (5 weeks on this leg), sentiment (new high watches every session), economics (GDP just hit 3.2%), and the Fed (with stronger GDP will Powell REALLY still say he would cut rates if inflation remained low?

Would he leave them as is or perhaps start wondering about resuming hikes?). It seems realistic to consider the indices may need to test relatively near term in order to better set up the next leg higher.

That is not a bearish position, it is just acknowledging the run to this point and that the indices, after all the good news and good moves, are still struggling at resistance. Some retracing and resetting would not be signs the market is in trouble. SOX needs to be watched as it will forecast the rest of the market down the road, but as of Friday, there was nothing overtly negative or worrisome in the larger picture.

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

Postby winston » Mon Apr 29, 2019 9:43 pm

HIGHS AND LOWS

NEW HIGHS OF NOTE LAST WEEK

W.R. Berkley (WRB)... P&C insurance
American Express (AXP)... credit-card giant
Shopify (SHOP)... e-commerce
VMware (VMW)... cloud software
Broadcom (AVGO)... semiconductors
Qualcomm (QCOM)... semiconductors
Match (MTCH)... digital matchmaker
Disney (DIS)... entertainment giant
Tyson Foods (TSN)... Big Food
Post (POST)... Big Food
J.M. Smucker (SJM)... Big Food
McDonald's (MCD)... global fast-food giant
Denny's (DENN)... diner franchise
Yum Brands (YUM)... KFC, Taco Bell, Pizza Hut
Costco Wholesale (COST)... membership-only stores
Dollar Tree (DLTR)... discount stores
Five Below (FIVE)... discount stores
Planet Fitness (PLNT)... low-cost gyms
Norfolk Southern (NSC)... railroads
Canadian Pacific Railway (CP)... railroads
Honeywell (HON)... manufacturing

NEW LOWS OF NOTE LAST WEEK

Tesla (TSLA)... electric-car maker
Tapestry (TPR)... high-end accessories
Fossil (FOSL)... watches
Nordstrom (JWN)... clothing retailer
Weight Watchers (WW)... weight-loss help

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

Postby winston » Tue Apr 30, 2019 9:04 am

Divergence

If the Russell 2000 is able to break to new short-term highs over the next few days, we would be much more confident that the S&P 500 will be able to achieve long-term highs.

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

Postby winston » Mon May 06, 2019 8:03 am

MONDAY

Friday was a good price move. The indices are again at the threshold of a breakout by NASDAQ and SP500.

Still leadership in position to push the indices higher. Breadth very good. Volume, disappointing.

Perhaps the lateral consolidation is all the indices need to break higher yet again.

We will look at more upside as there are still good setups, and if NASDAQ leads SP500 on a breakout to higher highs there will be good entries off these setups.

Again, since some sellers did enter this past week, early week will be important -- will they show again after a Friday that was all gushing upside because Berkshire bought some AMZN stock.

If they do show up, well, the market is not ready for the new highs and needs to consolidate some more.

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