This Friday was more a whimper than a surge as the indices basically fought to a draw to close the week. Indeed, the week was pretty much a draw as far as the indices are concerned. A nice 1-2-3 fade through Wednesday, a good Thursday rebound, but then Friday just fizzled.
SP500 -1.74, -0.08%
NASDAQ 4.49, 0.09%
DJ30 -37.05, -0.20%
SP400 -0.15%
RUTX 0.06%
SOX 0.46%
VOLUME: NYSE -9%, NASDAQ -3%. Still very low, below average volume. Entire week on low volume. Not a lot of upside, not a lot of volume.
A/D: NYSE -1.1:1, NASDAQ -1.1:1.
Not a bad fizzle, just not able to extend the move higher. DJ30, SP500, RUTX, and SP400 all show doji sitting on the 10 day EMA, still in very good position to continue the break higher. NASDAQ is not bad, still working laterally and slightly higher on the week, though volume has really dropped off after such good price/volume action on the rally. It is still in great position, just needs the big names to join in the upside once again.
SOX is a bit worrisome as it put in a new closing high, but is struggling to get over late July high. SOX was an early leader in the move and indeed led the rest of the market higher. It is up off the test of that late July higher high, but didn't show much conviction on the week. As with NASDAQ, still in great shape to make a new breakout, just has to hang in and show that move. If not, it has something of a near term double top on lower MACD. Important time for SOX and indeed the rest of the market as it tends to follow SOX' lead.
The leaders still look good even if the NASDAQ big names took some time off on the week letting others do the work. Biotechs are quite strong though some of the big names didn't move; the others certainly did, e.g. AGEN, EXAS, BLUE. Retail was sagging then totally reversed course on earnings for the group. Perhaps money is leaving some areas such as industrial metals (at a critical juncture) but it is moving into others as retail sees a renaissance of sorts. Rotation has been the savior of this move ever since the February selloff was rescued by central bank; when one area falters, money does not leave the market, it just moves to another area. Lots of negativity from some really rich people as well as brokerages and banks that represent really rich people. Yet, the market is still moving higher.
Perhaps the economic data played a role Friday as it did the previous Friday. Not as an upside catalyst, but perhaps putting a lid on a further upside move following the Thursday rebound. Hey, at least the weak data didn't torpedo Thursday. It may, after all is digested, actually help if it keeps the Fed at bay. I mean, negative retail sales ex-autos when sales were expected to rise is not a great economic indication. Jobs are one thing and important, but they are not a leading indicator. Productivity, factory orders, and now retail sales are suggesting what was hoped to be an improvement in the data might, once again, indicate that bounce was yet another false hope ahead of a slump.
No banner move on the session as there was no better than expected economic data as on the prior Friday. Indeed, given the very weak productivity and retail sales this week. holding the gains to the weekend is a decent feat.
We picked up some AGEN as it rebounded from its test, also grabbed some more BLUE as it broke upside off its test. Took some gain on GRAM as it triggered the initial target. It then faded to a doji, but we banked some very nice gain on that initial surge.
Will see what news comes out this weekend, but though the indices were less than thrilling and satisfying overall, some leaders showed really good action.
Have a great weekend!
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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