Market Alert - Last Hour

Crazy volatility continues. Not the VIX but the day to day volatility as the sellers surge one day, the buyers the next, back to the sellers, back to the buyers. Today it is the buyers' turn as the indices post 1+% moves.

SP500 24.16, 1.13%
NASDAQ 79.09, 1.53%
DJ30 202.57, 1.12%
SP400 1.14%
RUTX 1.11%
SOX 2.30%

Note the rather uniform gains in the NYSE indices. SOX and NASDAQ are the outliers as SOX has a better pattern and its components are dragging NASDAQ big components higher.

Reasoning? A best of both worlds, just right scenario? Economic data shows some better (Philly Fed, wages) while some still stinks (retail sales, Empire Manufacturing, Business inventories)? Perhaps that is it, though tonight I delve deeper into those wage gains, and sadly, it is mostly not real and any gains that are real are not due to any strengthening in the economy.

Whatever the reason, the volatility is high and is typically not a good indication for a market tickling higher highs. SP500, DJ30, RUTX, SP400 are all up but not changing their patterns.

On the other hand, SOX still looks good in its 'normal' as I styled it pullback. SOX is dragging NASDAQ higher and improving that index's pattern.

The big swings in this day to day volatility make it hard to stay the course. Some downside positions look too strong (NVDA, AVGO) while others are up but not altering their negative patterns. Most upside plays are bouncing so you let them work.

For the past hour and one-half the market has hit a high and stalled, but it is near the session high.

Again, the volatility makes it hard to stay the course, particularly with downside on an upside day, questionable (again) economic data, and the FOMC decision less than a week away. As for the question I asked earlier in the session, i.e. if the market was figuring out that worse data was really not a good thing because the Fed might not have any more power, the market clearly does not appear to believe that just yet.

Looking at ACAD upside, watching NVDA, AVGO to close, perhaps AMZN.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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