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Friday Maintains the Status Quo (Weekend Newsletter)

http://www.investmenthouse.com/frblog.php

- Friday maintains the status quo but of course that leaves the stock
indices still split heading into this week.
- NASDAQ, SOX, DJ30 still solid upside. SP500, RUTX, SP400still struggling.

Hello everyone! Apologies for the delayed report -- things got a bit wet
down here, and preparing for the event stole away a lot of our time last
week as well. Right now we are watching almost horizontal rain -- still!
And forecasts are for 15" to 20" through Wednesday. Hey, it rained 15" in
just over 3 hours last night. Spread out over 3 days, that now seems like a
cakewalk. At least it lets the water drain some in between the squalls.
Finding those silver linings.

Friday's silver lining for the stock market was it did not collapse. A rise
in futures failed to result in a new break higher, but the market also
avoided the sharp declines experienced late week the prior two weeks. So,
not falling was a win. High praise indeed!

SP500 4.08, 0.17%
NASDAQ -5.69, -0.09%
DJ30 30.27, 0.14%
SP400 7.50, 0.44%
SOX -5.44, -0.50%
RUTX 0.26%

VOLUME: NYSE -8%, NASDAQ -11%. Volume fell farther below average in a week
of very anemic trade. NYSE well below average, NASDAQ way below average as
well. No volume either way as the market closes the week noncommittal.

ADVANCE/DECLINE: NYSE 2.1:1, NASDAQ 1.5:1.

Cohn said Friday there would be tax reform before year end and that the
Administration would start a push this coming week. Futures jumped on the
news, but staying power was so-so at best.

Durable Goods orders were not bad once you took out Boeing. Of course, if
you take out defense spending Durables were -7.85 versus -6.8% overall. At
least business investment rose 0.4%, the third highest of the year.

The news helped, didn't hurt, didn't do much for the market in the end.
After the session, the stock indices remain in their same patterns, some
quite nice, some quite worrisome.

CHARTS

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

NASDAQ continues its rather solid 5 week consolidation of its last high,
holding the early week bounce up to the 50 day MA's. Not selling, working
on a positive pattern, not bad action.

DJ30 bounced from the 50 day MA early week, then spent the rest of the week
testing laterally. Still a pretty solid ACBD pattern here as well, making
the first bounce, and now after this test it needs to show a new break
higher in the pattern.

SOX faded Friday, but is holding the 50 day MA, trying to put in a higher
low at that important point to try to make the break higher. Important
index for next week.

SP500 made a big recovery Tuesday off the prior sharp selloff. After that,
however, SP500 stalled out and then moved laterally the rest of the week.
That closed it below the 50 day MA's, and the 2017 trendline. Precarious
position for the large caps.

SP400 still shows the bear flag despite moving higher Friday. After the
selloff, SP500 gapped higher Tuesday, rallying to the 200 day SMA. That
slammed the door shut on the rebound, however, and indeed a Friday move
higher through the 200 day MA was pushed back to close below that level.
Yes it enjoyed a gain, but it could not hold a break over that important
level.

RUTX shows very similar action, posting a Friday gain but also a doji below
the 200 day MA. This after a week of recovering from the prior sharp
Thursday selloff.

SUMMARY: Three indices working on some pretty darn decent upside patterns.
Three indices still unable to recover with any strength, and are also in
real danger of breaking back lower. Which one takes charge is STILL the
question for this upcoming week.


MARKET STATS

DJ30
Stats: +30.27 points (+0.14%) to close at 21813.67

Nasdaq
Stats: -5.68 points (-0.09%) to close at 6265.64
Volume: 1.44B (-10.56%)

Up Volume: 746.12M (-156.83M)
Down Volume: 650.23M (-36.36M)

A/D and Hi/Lo: Advancers led 1.51 to 1
Previous Session: Advancers led 1.47 to 1

New Highs: 79 (+16)
New Lows: 33 (-12)

S&P
Stats: +4.08 points (+0.17%) to close at 2443.05
NYSE Volume: 663.3M (-7.72%)

A/D and Hi/Lo: Advancers led 2.07 to 1
Previous Session: Advancers led 1.03 to 1

New Highs: 110 (+13)
New Lows: 18 (-17)


MONDAY

Still some great index patterns, still some sucking on the tailpipe. Still
some great leaders, just not a mass of leaders across the market. Some of
the weaker patterns became oversold then rebounded last week. Retailers
enjoyed some good moves after their long selloffs. Some potential
recoveries, some potential rollovers. Same position as the week before,
just older and wiser right?

That still leaves stocks such as NVDA, SOHU, DATA, NFLX, ACAD and others in
position to make a new move higher.

Looking at SDS again, the upside play on a downside SPY move, because it is
in a position to move higher as SPY moves lower. IWM? Looks like a
classic bear flag: after a violent selloff through the prior Thursday, IWM
has had its rebound to test the 200 day SMA break.

With the market still not coming together with either the good index
patterns pulling the weaker indices higher or vice versa, look at both sides
of the ledger and play the moves that are solid moves.

Hopefully the rain that won't stop will stop, at least maybe 'falling'
horizontally. Whether it does or not, however, the market will open Monday
and perhaps this week will show the break from the patterns.