Market Alert - The Close

The large cap NYSE stock indices did not close out at session highs -- the highs were hit just after the open and the gains slipped into mid-afternoon -- but they did rally in the last 1+ hours to improve the close.

The small and midcap stock indices were another story. They started higher, tested just a bit, and did indeed push to higher highs by the close. NASDAQ and SOX showed similar action though they closed just off their highs

SP500 12.76, 0.58%
NASDAQ 53.24, 1.01%
DJ30 45.82, 1.01%
SP400 1.11%
RUTX 1.79%
SOX 1.23%

Textbook action from RUTX and SP400 as they tested their stellar upside moves by fading to the 10 day EMA then surging higher off that near support. We thought they might fade a bit further but not the case Monday. Again, a textbook test of strength, surging upside, posting the most minimal of tests, then jumping back up with a 1%+ gain.

DJ30 of course pushed to a new all-time high but after gapping upside it faded the move. The Dow was again paced by GS, JPM, IP, and on Monday, DIS.

SP500 gapped and rallied to the 2016 trendline, now just below the all-time high from November, and faded. Financial, metals, and even some big tech names helped push it higher.

NASDAQ also gapped and rallied, moving up to its 2016 up trendline then fading to close just below the 10 day EMA and the October lateral consolidation. Some of the FAANG stocks helped send NASDAQ higher along with some other names such as MSFT. Volume was still so-so on the move higher, not washing out the stronger downside volume last week. Not the greatest of patterns, but the overall trend higher continues despite some rotation back out of techs, and with this market I would not automatically count NASDAQ out of the upside running.

We picked up some energy positions on HFC and LGCY as well as a retailer (KIRK). It was easy to let other positions such as AKS, FCX, TX, ZEUS, BAC, OIH, PDS, DIS run higher as they continue some impressive moves. As long as they keep getting the bids you give them more leash to run with.

Of course there are those saying that the rally is in something of a final crescendo even as others say the long run is still acting 'new.' I can tell you there is good leadership that is getting money thrown at it, and there could be more leaders emerging such as retail as those stocks come off good patterns. FB was up and we could have moved in but volume was low. F those stocks actually do more than bounce for a session then perhaps the new money is back in and the wicked rotation seen in the back half of last week subsides.

Have a great evening!

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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