Market Alert - The Close

After selling afterhours Friday and then recovering that ground pre-market Monday, stocks didn't really appear too confident about moving higher. They were not moving lower, but the upside didn't have a lot of bravado. NASDAQ managed a half percent gain and SOX shot 1.5% higher, but that was due to a takeover bid for ARMH driving the chips' move. Wasn't a bad session at all, but outside of SOX and perhaps NASDAQ, the session didn't change much: SP500 and DJ30 are trading at new highs, SP400 is still at the cusp of a new high, and RUTX is at resistance, looking to break into that 2015 range holding the all-time high.

SP500 5.15, 0.24%
NASDAQ 26.19, 0.52%
DJ30 16.50, 0.09%
SP400 0.09%
RUTX 0.22%
SOX 1.51%

VOLUME: NYSE -15%, NASDAQ -2%. Volume slides even farther below average on NYSE, now a full two weeks of below average trade as the NYSE large cap indices rally to new all-time highs. That is always a caution flag on upside moves. NASDAQ trade is also quite low the past two weeks on the move through the April and June twin peaks, though it did ring the bell at average and above on three occasions. Even so, not all that comforting. That is what you get when the Fed is buying, right?

A/D: NYSE 1.8:1, NASDAQ 1.2:1

It may be the case that some stocks are starting a pre-earnings run. Several big name NASDAQ stocks broke higher from short consolidations, e.g. FB, GOOG. AMZN is in a nice 10 day EMA test and could launch a pre-earnings move as well. If they want to participate now and lead with some pre-earnings runs, not too many bulls will complain.

The lighter volume overall is an issue, but the big names were moving upside on better trade. Again, if they want to lead, that gives the indices a bit more upside as NASDAQ plays catch up to the large cap NYSE indices.

There are also other areas still moving higher. Industrial metals were at it again and we took partial gain on SID. AKS surged, FCX still looks good. Precious metals are holding up well, e.g. NEM, HMY. Chips worked well thanks to ARMH takeover excitement (AVGO, OCLR, NPTN). Software held its ground (CRM, BLKB). Oil stocks were fine despite oil losing some ground (CWEI, SWN, UNT, ATW, APC). Overall, leaders not only held up but many moved up.

We picked up some chips, electronics/security upside, some ACN puts downside.

The lack of volume is worrisome, but again, there is some pre-earnings excitement, and if the buyers (central banks or otherwise) want to push stocks up into earnings, we will gladly let positions run, take some gain along the way, and perhaps get to play some of the big names on a run toward their results.

Have a great evening!

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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