Market Alert - The Close

New highs all around. Why not? The improbable trade continues post-election with DJ30 resuming upside after a 3-day lateral move as some financial stocks, metals, and energy moved higher. It didn't hurt at all, particularly NASDAQ, that FAANG stocks enjoyed a solid session.

SP500 16.28, 0.75%
NASDAQ 47.35, 0.89%
DJ30 88.76, 0.47%
SP400 0.67%
RUTX 0.50%
SOX 0.73%
NASDAQ 100 1.06%

VOLUME: NYSE -4%, NASDAQ -5%. Trade was lower starting last Wednesday, falling below average for the first time in a while. NASDAQ trade held above average until Friday. Dipping a bit as the indices extend their runs. Good volume up to just recently so there is upside buying, but it will need to renew some solid volume if things continue upside.

A/D: NYSE 3:1, NASDAQ 1.5:1. Breadth finally improved some though it was skewed toward NYSE. NASDAQ action was dominated by the big names as NASDAQ 100 led the move and thus breadth lagged. You always want to see breadth spread out in a rally and thus the NYSE 3:1 is good to see but it is the lone solid reading in the move higher. The market has been very selective in the sectors moving higher each session. At least there is rotation as money works from one area to another, and the nice thing is, it is not fleeing one sector in favor of another, just more money coming in to chase the new areas. That leaves those that rallied still holding their gains as they consolidate, e.g. metals, financials.


Some of those stocks testing started back upside, but not across the board. Financial stocks saw BAC, TCBI move higher but others such as STT, JPM, WFC continued the lateral moves. Some metals surged, e.g. FCX, while others continued flat, e.g. AKS. Energy never stopped its move as APC, RIG, SYRG jumped and we picked up some PDS.

As noted, big name NASDAQ worked very well with FB surging 4%, NFLX +2.4%, AMZN 2.6%, AAPL 1.5%. Chips worked as well as LRCX, MU added more upside though NVDA had to take a breather.

Yes the indices are extended, but a lot of stocks are not. They have either rallied and then put in a nice test, or they were setting up for their turn to rally and started higher. Given the stocks continue to show solid setups, we were buying into both of these groups. BAC, URI and FCX tested and started back up so we bought them. CF and PDS were starting moves so we bought into them.

We will see how long this money continues to seek new buys and thus continues the upside market pressure. As noted, the money is working its way into different areas but is not liquidating those that it moves from. With money coming in overall and not leaving, that keeps the indices holding their gains and indeed moving higher as more money comes in.

Have a great evening!

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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