New computers were installed over the holidays and it has been the usual 'joy' working out the bugs today. Old systems running next to the new ones just in case, working the kinks out of software that was kink-less on the other machines, etc. The usual fun. Still working on it so please bear with us tonight!
The Trump Bump finally took a day off. Of course SP500 and NASDAQ already took a few days off a couple of weeks back after that initial post-election surge. DJ30 took a few personal days a week ago before blasting to new highs. RUTX, SP400 and SOX didn't even slow down. Now they are taking some time, at least a day, after a strong upside surge to new highs.
SP500 -11.63, -0.53%
NASDAQ -30.11, -0.56%
DJ30 -54.25, -0.28%
SP400 -0.74%
RUTX -1.29%
SOX -0.42%
VOLUME: NYSE +112%, NASDAQ +113%. Big gains, but the trade is after the half session Friday. In the bigger picture, trade was below average. So, higher trade but below average so no heavy selling, just a below normal volume showing after the sprints higher.
A/D: NYSE -2:1, NASDAQ -2.3:1. Elevated but not massive downside.
Basically a dearth of information on the day. The Black Friday results trickled in but they were certainly without excitement. Bricks and mortar seemed lower while AMZN and WMT claimed record mobile device shopping. Okay that is nice, but so what if there was more mobile shopping? Were the sales higher because people are using mobile than say a PC as they did in the past? Hard to tell. WMT touted a 70% increase in mobile 'event traffic,' whatever the heck that means. Define 'event,' right? I would suggest that because WMT used the euphemism, its sales were not up all that much, certainly not the 70% number it threw out there for analyst consumption.
Retailers were mixed. Box stores were lower thanks to their stores. AMZN was down as well, however. WMT was flat after a good run, and many discounters, e.g. TJX, ROST, COST, were a bit lower, but they also put in some pretty good runs as well.
Pretty much all the recent leaders took a breather, e.g. metals, oil, semiconductors, industrial equipment and machinery, transports. So much so utilities, a totally defensive group, were one of the session leaders.
Oil was up as Iraq said it would 'cooperate' in shaping a deal and was even 'optimistic.' Okay that was good for oil rising over $1, but then some backsliding took place as the optimism died off again with the realization Iran is still out there and who knows what Putin will do. Oil did close higher as noted, but that didn't help oil stocks.
With the indices and leaders pulling back a bit we were not in any hurry to move into new positions until this test winds down. Heck it may just be a one-day pause, but looking back at SP500 and NASDAQ in their short consolidations and the strong moves from RUTX and SP400 you would anticipate something similar, something along the lines of at least a 1-2-3 consolidation or pullback.
Thus we didn't buy but we did close out SYRG with a trailing stop as it was aggressive in the downside. All the oil positions were. We also closed NFLX as it broke below the 20 day EMA early, recovered and was holding in the afternoon, but then broke back below it. That double break had us concerned and we exited. Maybe too trigger happy, but the FAANG stocks looked less than great though FB is still working on the right shoulder of a potential short inverted head and shoulders pattern. We will see how these set up over the next few days; could be that since they were roughed up while other stocks rallied, that it is their time to try a bounce as the leaders test and rest. Again, we will see.
News picks up tomorrow with the second read of Q3 GDP and Consumer Confidence for November. Oh yes, and Friday is the jobs report as the stock market moves toward the rate hike showdown in December. If Yellen doesn't start jellin' with a rate hike, the market might actually have a crisis. Yellen jellin'? Watching too much TV.
Have a great evening!
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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