Market Alert - The Close

After a lateral move for a week, kind of, at least on NASDAQ, SP400, RUTX, stocks broke nicely higher. Futures were up, stocks fought off a fade after the bell, then rallied to midmorning. That was the top. The indices moved laterally the rest of the session, holding the gains to the close.

SP400 9.24, 0.43%
NASDAQ 53.56, 1.06%
DJ30 36.02, 0.19%
SP400 0.48%
RUTX 0.77%
SOX 1.63%

VOLUME: NYSE -1%, NASDAQ +10%. Volume remains well below average on NYSE, but NASDAQ, with its break higher and gains by MSFT on its earnings, saw volume move back up to average and better.

A/D: NYSE 2:1, NASDAQ 2.2:1. Decent though not blowout.

Nice breakouts from NASDAQ and SOX as the latter built on its Monday gap. RUTX and SP400 showed good moves, but they did not blow away their lateral consolidations. Solid moves, the foundation is laid, now can they follow through with the breakouts. SP500 cleared a 3-day lateral move of its own, though it continues to move on low, below average volume. DJ30 just continued rising, gapping to a modestly higher high on rising volume thanks to MSFT's nice volume gains.

The big name tech stocks enjoyed solid moves and we participated more in their pre-earnings moves. AMZN, GOOG, FB, MSFT, SBUX all showed good moves. We already had FB positions and added some AMZN and GOOG.

Oil struggled early but recovered as oil prices recovered on a lower inventory draw. Metals struggled though tried to recover in some cases though precious metals were hard hit.

Software surged as ROVI, CALD and company rallied along with MSFT. Biotechs and drugs enjoyed a better day as BLUE rallied almost 7%, KERX surged to our initial target, letting us bank some strong 23% stock, 80% option gain. Chips were solid with AVGO, LRCX, TSRA and others posting solid gains.

Again, it is hard to explain the move higher in any terms other than the belief that central banks are backing and will continue backing markets. Yes the economic data headlines appear better, and certainly the first round of earnings is good enough to continue driving this move. With no volume the move keeps the stomach churning a bit, but if the markets have faith in the central banks, then the market doesn't need any stinking volume, right?

With the breaks higher we picked up some AMZN and GOOG as noted, also some CALD, TSRA, THC, and TSLA. Dumped some metals (SCHN, HMY) though SCHN did rebound decently, making it an interesting potential new play, again!

After hours EBAY and QCOM beat and are nicely higher. INTC beat as well but it has reacted lower about a point. Again, thus far earnings are helping drive the upside, and even with INTC, the earnings are still overall pushing the move higher.

Have a great evening!

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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