Many stocks that sold lower Thursday sold again Friday but are rebounding off the early lows (some held them into the afternoon). Overall the action looks good enough to keep them working, and indeed the SPY is starting to spike higher with about 35 minutes in the session.
SP500 -2.56, -0.11%, recovering 10 points off the low
NASDAQ -4.87, -0.08%, up 30 pts off its low
DJ30 -33.92, -0.16%
SP400 -0.05%
RUTX -0.28%
SOX -0.24%
New Home Sales, Jan: +3.7% but that was due to a downward revision in December.
Michigan Sentiment FEB final: 96.3 from 95.7 mid-month versus 98.5 JAN final. January was a 13 year high.
As noted Thursday, this session is not a great tell for the coming week. That said, the indices are not in any pain even with this fade. They are hanging in at the 10 and 20 day MA though some, e.g. SOX, had to come back from a gap lower to hold it. The salient point is, they did come back, i.e. buyers stepped in to buy the dip.
The market will have to show those bids not only entered on the dip but that they can drive the indices this coming week. The internal and sentiment issues are still there, and we are still waiting for the 'phenomenal' tax plan announcement, and thus we see if the bids do in fact continue next week, keeping the trend going. If so, the market would have fought off some weakness in key leaders and again found footing. As you can surmise, we don't plan on leaping into new plays on this recovery attempt from late week selling.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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