- 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!
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.
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.