Weekend Market Summary

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4/17/14
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TONIGHT:

We have DIVIDED the video into component parts: Market Overview, Technical Summary and Next Session. This allows you to choose the segments you are interested in without having to find the spot in a longer video. Click on the link to the portion you wish to view.

MARKET OVERVIEW

TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Market Overview Video

TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
Technical Summary Video

TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Next Session Video

MARKET SUMMARY

- Despite earnings misses, enough good news to propel stocks higher in the bounce.
- NASDAQ beats the first test in the rebound as growth plays catch up to NYSE large caps.
- Where have all the revenues gone? With what the US economy used to be. Now a revenues miss is considered a beat just as a 1.5% GDP economy is considered good.
- Jobless claims hold just over 300K.
- Philly Fed posts a 7 month high.
- Still a split market.

For a second session stocks continued the upside, still moving higher off of the Tuesday reversal session. We even heard talk Thursday about how this move 'has legs.' Art Cashen said on CNBC that the liquidation selling seen over the past several weeks could be over. Art is a market sage and is often right. I was struck, however, about how it was Holy Thursday and Art is a Catholic. The time of renewed hope is upon us. Connections?

In any event, the market rallied. Futures were not good thanks to IBM and GOOGL earnings. Those were plain misses. Yet GOOGL was called a success by some on CNBC. Maybe it is and will prove to be a buying point. I know that BAC's results on Wednesday were also called a success though it fell short on revenues. I know CMG was called a success as its revenues missed. UNH, AXP, DD, CMG and many others, indeed TWO-THIRDS of those reporting thus far have missed the top line revenues. Sales are not growing. They are continuing the lack of growth for quarter, after quarter, after quarter.

But, in this '1.5% average GDP is a great' European-style economy, some fancy footwork by management (read layoffs, working existing employees more, cutting benefits) to beat the bottom line, the fact that sales CONTINUE to decline is apparently not a worry. As long as companies 'invest' in themselves with stock buy backs and dividend payments stock prices continue to rise. And our government wonders why jobs remain low. Come on now guys and gals in the government. You know your policies are anti-investment policies for industry and entrepreneurs. You know that is why there are woeful levels of job openings. But, if the government can play fiction with the facts why can't the companies? Monkey see, monkey do.

Yes 2/3 of the companies reporting have missed the top line with 51% beating on the bottom line. Success! What an economy!

With that selective cognition of the facts, stocks overcame early weakness and rallied into the afternoon session before a slight dip into the close That dip took DJ30 negative, but growth was back in front, playing catch up to the strong Wednesday performance by the NYSE large caps.

SP500 2.54, 0.14%
NASDAQ 9.29, 0.23%
DJ30 -16.31, -0.10%
SP400 0.23%
RUTX 0.54%
SOX 1.85%

Volume: +19% NYSE, +3.5% NASDAQ. It was Holy Thursday before the Easter weekend so volume is usually light, but this time it was expiration so a bit of a bump there.

A/D: 1.4:1 NYSE, 1.7:1 NASDAQ. Ho-hum, but that is okay after the surge on the Wednesday move.

Maybe the 304K jobless claims (up from 302K prior) and a solid 16.6 on the April Philly Fed PMI (a 7 month high versus the 8.6 expected) helped boost prices past some poor earnings by IBM. Along with all of those scintillating 'beats' CNBC and other networks talk about, the market had the fuel it needed to get home on Thursday with overall gains.

CHARTS

The indices reversed Tuesday and built onto the gains into the weekend. That sets the stage for a follow through session this week, a session of strong gains on higher volume. I always view this as the next step after the initial sprint, kind of like the second leg of a relay race: the first leg gets your position in the race and if there is a successful passing of the baton then the next leg of the race can continue.

NASDAQ passed its first test as it clear the 10 day EMA . . . by a gnat's butt. It was surging well on the day, easily topping that level and looking at the 20 day EMA. It suffered that late selling and barely hung onto the 10 day. Not a pillar of strength (keeping it biblical; I can do that as I went to Holy Thursday services last night), but managing to close out the reversal week upside. Kind of a bobble of the baton but they kept hold of it.

SP500: Doji on the session but held a gain for the week that took SP500 back up through key levels. Now will there be follow through?

RUTX: Small caps cracked the 10 day EMA as well, also giving back some late. Solid move off the 200 day SMA. For now, that is all it is.

SOX: After laying back, SOX made the break Thursday, gapping up off the 50 day EMA lateral move. Good action at the 50 day all week, it was just holding back in reserve. Nice solid upside break.

OTHER MARKETS

Euro/Dollar: Flat on the session as the dollar paused after the week of gains.

1.3815 versus 1.3815 versus 1.3814 versus 1.3820 versus 1.3883 versus 1.3886 euro versus 1.3855 versus 1.3797 versus 1.3742 versus 1.3701 versus 1.3712 versus 1.3760 versus 1.3794 versus 1.3779 versus 1.3752 versus 1.3748 versus 1.3788 versus 1.3823 versus 1.3842 versus 1.3794

Dollar/Yen: Dollar a bit stronger.

102.44 versus 102.27 versus 101.80 versus 101.72 versus 101.43 versus 102.00 versus 101.70 versus 102.59 versus 103.10 versus 103.24 versus 103.92 versus 103.76 versus 103.68 versus 103.21 versus 102.81 versus 101.24 versus 101.99 versus 102.26 versus 102.25 versus 102.25 versus

Bonds: Dove lower after a three week run that included a breakout. Still holding the breakout, indeed the 10 day EMA, but a big hit to end the week.

10 year: 2.72% versus 2.64% versus 2.62% versus 2.64% versus 2.62% versus 2.65% versus 2.69% versus 2.68% versus 2.70% versus 2.73% versus 2.79% versus 2.80% versus 2.75% versus 2.73% versus 2.71% versus 2.68% versus 2.70% versus 2.75% versus 2.73% versus 2.77%

Oil: 103.85, +0.12. Right back to the February high at 105. Oil is pressing for a breakout. Joy.

Gold: 1294.20, -9.2. Slipped through the 200 day SMA after the sharp break lower Tuesday. Struggling to hold the move.

MARKET STATISTICS

NASDAQ
Stats: +9.29 points (+0.23%) to close at 4095.52
Volume: 1.894B (+3.61%)

Up Volume: 1.2B (-290M)
Down Volume: 732.04M (+388.16M)

A/D and Hi/Lo: Advancers led 1.72 to 1
Previous Session: Advancers led 2.44 to 1

New Highs: 52 (+19)
New Lows: 37 (+8)

S&P
Stats: +2.54 points (+0.14%) to close at 1864.85
NYSE Volume: 727M (+18.79%)

A/D and Hi/Lo: Advancers led 1.39 to 1
Previous Session: Advancers led 3.82 to 1

New Highs: 141 (+23)
New Lows: 69 (+4)

DJ30
Stats: -16.31 points (-0.1%) to close at 16408.54

SENTIMENT INDICATORS

VIX: 13.36; -0.82
VXN: 19.39; -1.02
VXO: 12.8; -0.73

Put/Call Ratio (CBOE): 0.85; -0.06

Bulls and Bears:

Bulls fade right back: 50.05 versus 54.6 versus 50.5 versus 54.6.

Bears bounce higher: 20.6 versus 18.6 versus 18.6 versus 7 of 8 weeks at mid-17.

Theory: When everyone is bullish and has put all their capital to work, where does the ammunition to drive the market come from? There is always new money to start a new year. After that is used will more money be coming? That is the question.

Note the extreme bullishness: it was this high in 2007 at the crash, in early 2005 as well.

Bulls: 50.5 versus 54.6 versus 50.5
54.7% 52.0% 54.6% 53.5% 46.5% 41.8% 45.9% 53.1% 57.6 56.1 60.6% 61.6% 60.0% 58.2% 57.1% 55.7% 53.6% 52.6% 55.2% 52.6 49.5 42.3% 45.4 46.4% 44.3% 42.3% 37.1% 37.1% 38.1% 43.3%.

Background: Last undercut 35%, the threshold for bullishness, in early June 2012.

Bears: 20.6 versus 18.6 versus 18.6
17.5% 17.4% 15.1% 17.2% 17.2% 17.4% 17.4% 15.3% 15.1 15.3% 15.2% 15.2% 14.0 14.3 14.3% 14.4 15.5 15.5% 15.6% 16.5% 18.5 21.6% 20.6% 18.6% 20.6% 21.6% 22.7% 23.7% 23.8% 21.6%.

Background: Over 35% is the threshold to be really be a good upside indicator. For reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.

MONDAY

This week is the lick log. Stocks have bounced off the selling with the Tuesday reversal, and Wednesday to Thursday brought them higher. NASDAQ and growth joined more on Thursday with the SOX and smaller issues really coming along. Growth in terms of NASDAQ and RUTX is still iffy; SOX looks solid. The NYSE large caps still look better than the growth areas in terms of leaders and money. Lick log indeed.

We have both some upside plays and downside. The upside are designed to play the bounce without necessarily needing a new breakout. Such is playing a bounce in the market that is not that certain. If it turns out to be a new rally, beautiful as we make even more on our plays. If it is just a bounce, we take our gain on plays designed to give profit without having to break a lot of ice to get where we want to go.

Also some downside as there are stocks that bounced with the market, but bounced right into resistance in patterns that need help. The market remains split in growth/large cap NYSE, and in upside and downside. If the bounce fizzles, if the follow through passing of the baton is bobbled and dropped, then those plays are ready. Heck, they may even be ready if the market does make a follow through given the bifurcation that still exists.

We go into the week with no expectations or hope of a rally to new highs, Easter renewal or not. We see upside possibilities, we see downside. Much of the upside we see is areas we really don't like to play, but if the upside keeps narrowing that may be all there is left. At least we can play downside as well; it is faster anyway, right?

Have a great Easter!

SUPPORT AND RESISTANCE

NASDAQ: Closed at 4095.52

Resistance:
The 10 day EMA at 4094 is being tested
4104 is the lower gap point from 12/20/13
4131 is the March 2014 low
The 50 day EMA at 4175
4240 is the lower November 2012 trendline
4246.55 is the January 2014 peak
4277 is the March lower gap point
4289 is the July 2000 recovery high
4342 is the upper channel line for the November 2012 to present uptrend.
4372 is the March 2014 high

Support:
4070 is the series of highs from late November/early December
3991 is the prior November 2013 high and the post-bear market high.
3968 is the February 2014 low
The 200 day SMA at 3949
3855 is the November low
3819 is the early October high
3801 is the September 2013 high.
The October low at 3750
3697 is the August high and a prior post-bear market high in the recovery.

S&P 500: Closed at 1864.85

Resistance:
1883.57 is the recent all-time high hit in early March.
1897 is the all-time high hit in April 2014

Support:
The December and January highs at 1848
1856 is the December 2012 up trendline
The 50 day EMA at 1848
1808 is the November and December 2013 twin peaks
1809 is the lower trendline from 11/2012
1775.22 is the October prior all-time high
1768 is the December 3013 low
The 200 day SMA at 1766
1738 is the February 2014 low
1730 is the September 2013 peak
1710 is the August 2013 peak.
1698 to 1700 are the July and August interim highs
1687 is the May high and post-bear market high
1685 is the mid-August 2013 upper gap point
1657 is the late August upper gap point
1654 is the June 2013 peak
1646 is the October 2013 low just before the surge into early 2014
1627 is the August 2013 low

Dow: Closed at 16,408.54

Resistance:
16,506 is the March 2014 peak
16,595 is a lower trendline off the 11/2012 low
16,589 is the December 2013 all-time high
16,632 is the April 2014 all-time high

Support:
16,257 is the January 2014 low
The 50 day EMA at 16,251
16,179 is the November 2013 peak.
The 200 day SMA at 15,774
15,739 is the December 2013 low
15,696 is the September 2013 peak
15,659 is the August 2013 peak
15,542 is the May 2013 intraday high
15,340 is the February 2014 low
15,318 is the June closing high
15,050 from the August 2013 interim recovery high
14,888 is the April peak and prior all-time high
14,844 is the June intraday low
14,762 is the August 2013 low
14,551 is the June 2013 intraday low on the selloff (14,659 closing)

Economic Calendar

April 17 - Thursday
- Initial Claims, 04/12 (8:30): 304K actual versus 312K expected, 302K prior (revised from 300K)
- Continuing Claims, 04/05 (8:30): 2739K actual versus 2800K expected, 2750K prior (revised from 2776K)
- Philadelphia Fed, April (10:00): 16.6 actual versus 8.6 expected, 9.0 prior
- Natural Gas Inventor, 04/12 (10:30): 24 bcf actual versus 4 bcf prior

April 21 - Monday
- Leading Indicators, March (10:00): 0.8% expected, 0.5% prior

April 22 - Tuesday
- FHFA Housing Price I, February (9:00): 0.5% prior
- Existing Home Sales, March (10:00): 4.60M expected, 4.60M prior

April 23 - Wednesday
- MBA Mortgage Index, 04/19 (7:00): 4.3% prior
- New Home Sales, March (10:00): 455K expected, 440K prior
- Crude Inventories, 04/19 (10:30): 10.013M prior

April 24 - Thursday
- Initial Claims, 04/19 (8:30): 312K expected, 304K prior
- Continuing Claims, 04/12 (8:30): 2750K expected, 2739K prior
- Durable Orders, March (8:30): 2.0% expected, 2.2% prior
- Durable Goods -ex tr, March (8:30): 0.5% expected, 0.1% prior (revised from 0.2%)
- Natural Gas Inventor, 04/19 (10:30): 24 bcf prior

April 25 - Friday
- Michigan Sentiment - Final, April (9:55): 82.6 expected, 82.6 prior

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