Market Alert - The Close

The market took its shot at rebounding off the Tuesday selling. Futures higher early on, but as noted in the premarket alert, they were holding but not advancing into the bell, and that is not a great indication of building strength.

Sure enough, the SP500 highs were hit on the open. NASDAQ and DJ30, direct AAPL beneficiaries, also hit their highs at the opening bell. After that, everything pretty much faded. Except SOX. It did fade early, but then it recovered into the bell and held its gap higher.

The move of course left the major indices still below their recent highs. NASDAQ and SOX are close. DJ30, SP500, RUTX, SP400 are not.

SP500 0.68, 0.03%
NASDAQ 27.86, 0.50%
DJ30 26.85, 0.14%
SP400 -0.22%
RUTX -0.04%
SOX 1.68%

We were looking (perhaps hoping?) for a relief bounce to test the Monday and Tuesday break lower. A decent rebound Tuesday afternoon set the stage, and higher futures as noted looked somewhat promising. Thanks to AAPL the NASDAQ jumped and held its move. DJ30 was weighed down by a lot of other issues and thus AAPL, despite its market cap, could only carry DJ30 so far.

And it was not that far when you look at the chart. DJ30 barely scratched up off the Tuesday close. SP500 about the same, unable to push past the Monday close after that gap lower. SP400 and RUTX gapped then flopped, giving up the move and closing negative again.

Just not the kind of 'rebound' that has any substance. While there are many stocks that still look very good, there were not a lot of stocks rallying even with AAPL's strong results. AAPL is in a basket pretty much by itself. Some of its suppliers did fine, but AAPL's earnings tide was more of a ripple for most of the market, and the ripple dissipated quickly.

It will be telling how the market reacts to FB in the morning. It initially gapped up afterhours but has given up most of that move as the evening wears on. Perhaps we should have closed more positions given the inability to hold the move, but again, most of our positions are in quality patterns that are holding so we are letting them work. If the market cannot capitalize on FB and remains sluggish, we will close more as the relief move never really materializes. More than that, we are looking at some downside plays as well as some stocks are set up to roll over.

Have a great evening!
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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