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

[winston]

MARKET SUMMARY

- Indices try a fourth session upside, get there, but cannot hold it.
- Overall index patterns just do not look upside positive.
- Leadership remains but it is narrower and of course the chips are down.
- SOX is at the top of its pre-breakout gains where it has to make a stand.
- If need be, get comfortable with the downside.

Source: Investment House

[winston]

HIGHS AND LOWS

NEW HIGHS OF NOTE LAST WEEK

Starbucks (SBUX)... World Dominator of coffee
Hershey (HSY)... Global Elite chocolatier
Mondelez (MDLZ)... snacks
PepsiCo (PEP)... snacks and soft drinks
J&J Snack Foods (JJSF)... snacks and frozen products
J.M. Smucker (SJM)... jams and spreads
Planet Fitness (PLNT)... low-cost gyms
Match (MTCH)... digital matchmaker
Cable One (CABO)... cable television
Thomson Reuters (TRI)... media
Okta (OKTA)... identity-protection software
Harris (HRS)... military technology
Leidos (LDS)... military technology
Kratos Defense & Security Solutions (KTOS)... military technology
Alleghany (Y)... insurance
W.R. Berkley (WRB)... insurance
RenaissanceRe (RNR)... insurance
American States Water (AWR)... utilities

NEW LOWS OF NOTE LAST WEEK

L Brands (LB)... retail
Overstock (OSTK)... retail
Macy's (M)... retail
Grubhub (GRUB)... food delivery
Tesla (TSLA)... electric carmaker
W.W. Grainger (GWW)... industrial supplies
Chemours (CC)... chemicals

Source: Daily Wealth

[behappyalways]

The stock market would be much lower if it weren’t for companies buying back their own shares
https://www.cnbc.com/2019/05/25/the-sto ... hares.html

[winston]

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. At the same time, however, there are definite downside setups that correspond to the issues the indices are showing.

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.

Source: Investment House

[winston]

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.

Source: Investment House

[winston]

MARKET SUMMARY

- Indices try a fourth session upside, get there, but cannot hold it.
- Overall index patterns just do not look upside positive.
- Leadership remains but it is narrower and of course the chips are down.
- SOX is at the top of its pre-breakout gains where it has to make a stand.
- If need be, get comfortable with the downside

Source: Investment House

[winston]

HIGHS AND LOWS

NEW HIGHS OF NOTE LAST WEEK

Chubb (CB)... "the world's best business"
Travelers (TRV) ... "the world's best business"
W.R. Berkley (WRB)... "the world's best business"
American Express (AXP)... America's "financial backbone"
Okta (OKTA)... identity-protection software
Motorola Solutions (MSI)... telecom
Costco Wholesale (COST)... membership-only stores
Hershey (HSY)... elite chocolate brand
Church & Dwight (CHD)... household brands
Avon Products (AVP)... beauty products
Lennox (LII)... HVAC equipment
Waste Management (WM)... trash and recycling
Casella Waste Systems (CWST)... trash and recycling
American Water Works (AWK)... utilities
American Electric Power (AEP)... utilities
Aqua America (WTR)... utilities

NEW LOWS OF NOTE LAST WEEK

Tupperware Brands (TUP)... household goods
Tailored Brands (TLRD)... retail
Nordstrom (JWN)... retail
L Brands (LB)... retail
Gap (GPS)... retail
Kohl's (KSS)... retail
Fossil (FOSL)... watches
Goodyear Tire & Rubber (GT)... tires
Tesla (TSLA)... electric vehicles
Fiat Chrysler Automobiles (FCAU)... cars and trucks

Source: Daily Wealth

[winston]

MONDAY

Friday saw SP500 and NASDAQ break. Already bearish in the rollovers, Friday they gapped below the 200 day SMA.

Broke the neckline in the head and shoulders Wednesday, held the 200 day SMA that session and Thursday, ready to bounce. Then the next bad news and the 200 day SMA went.

Now it is a matter of time as to when the indices are oversold enough again after this news is digested to try and relief bounce.

A 200 day SMA test would be a nice setup for more downside entries and we will watch for that at the start of next week.

Money is still finding the upside as it rotates through the market. The healthcare and drug side is receiving some money along with the other familiar leaders in social, software, insurance.
We will still look at some plays on those - if the money is moving that way we will try some hookups for relatively quick moves.

The focus, however, has to skew toward the downside now, and thus, this weekend and as next week progresses we will look at more of these.

Ideally a bit of an oversold bounce early week is best, but often after this kind of spanking on a Friday leads to more selling early week. We will see what kind of entries the market gives us.

Source: Investment House

[winston]

SUMMARY
- Trump proposes tariffs on Mexico, perhaps breaks the market's back.
- Economic data still mixed in US, bad elsewhere.
- SP500, NASDAQ fail the attempt to hold the 200 day SMA
- Leadership as thin as tissue paper, but those leading are solid.
- One pair of bonds inverted, oil in freefall, gold jumping, stocks down for another week.
- Bias remains downside but remember oversold bounces start when things look worst.

Source: Investment House

[winston]

HIGHS AND LOWS

NEW HIGHS OF NOTE LAST WEEK

Booz Allen Hamilton (BAH)... "offense" contractor
Heico (HEI)... aerospace & electronics
Veeva Systems (VEEV)... cloud services
Workiva (WK)... cloud services
American Tower (AMT)... wireless "picks and shovels"
Public Storage (PSA)... self-storage giant
Dollar General (DG)... discount retailer
Hershey (HSY)... chocolate and snacks
Zynga (ZNGA)... mobile games
Waste Management (WM)... trash and recycling
Vanguard Inflation-Protected Securities Fund (VIPSX)... bonds
Nuveen Municipal Value Fund (NUV)... muni bonds

NEW LOWS OF NOTE LAST WEEK

Kraft Heinz (KHC)... snack foods
Tupperware Brands (TUP)... food-storage containers
Tapestry (TPR)... luxury apparel
The Gap (GPS)... apparel
Gannett (GCI)... newspapers
Honda Motor (HMC)... cars and trucks
Fiat Chrysler Automobiles (FCAU)... cars and trucks
Occidental Petroleum (OXY)... oil and gas
Marathon Petroleum (MPC)... oil and gas
Steel Dynamics (STLD)... steel

Source: Daily Wealth