Market Alert - The Close

Futures were up despite all of the geopolitical turmoil as investors appeared ready to brush off intrigue for a market rally. SP500, DJ30, SOX all tested the 50 day MA last week and were in position. NASDAQ at the 20 day EMA, RUTX and SP400 trying to put on a positive face.

That upside pre-market turned into more upside at the open. Stocks rallied straight up for 30 minutes, tested for a half hour and then surged upside gain. Then they did not. The next 1.75 hours, right into 12:00ET, they gave it all back and a bit more. An afternoon rebound pushed the indices to more or less flat, and it is a good thing the bell rang because an afternoon double top had set in. As it is, they indices hung on to the flat line. Basically no change for yet another market day.

SP500 1.62, 0.07%
NASDAQ 3.12, 0.05%
DJ30 1.92, 0.01%
SP400 0.23%
RUTX 0.18%
SOX -0.77%

VOLUME: NYSE -12%, NASDAQ -3%. Well below average NYSE trade, ditto NASDAQ. With the indices going nowhere, that is not bad as there was not a lot of churn or turnover of sellers moving out of stocks.

A/D: NYSE 2:1, NASDAQ -1.1:1. A bit better gains for the small and midcaps showed up in a decent advance/decline line for a flat market session.

THE MARKET

CHARTS

And as on Friday, all charts were dramatically unchanged.

SP500, DJ30 again show a tight doji over the 50 day MA as they extend laterally a very tight 2-week over that important support. MACD has not turned back upside, but it is threatening to do that. So far they are in position to move, they just cannot get the bids to make the move.

SOX: After bouncing from the 50 day MA Thursday and Friday, SOX faltered a bit Monday, fading back toward that level. Still a 'correct' kind of move, fading to test that support after a 4-month rally up the 20 day MA.

NASDAQ: Also showing doji in a lateral move, this one at the 20 day EMA. Tested the 50 day EMA mid-March, rebounded to the highs, and has faded, but just slightly. Perhaps it puts in a higher low and makes the next breakout and makes it stick.

SP400, RUTX: Both tried higher, could not make the move stick. They still posted gains and led the market in percentage moves, but could not hold on. Still have nascent inverted head and shoulders trying to form, right now where the bottom of the right shoulder would be. That means they need to hang on here, finish the shoulder, make the break higher . . if the pattern is going to work as is.


LEADERSHIP

Metals: Steel went from looking very interesting Friday to 'okay, show me if you really have anything' status. AKS faded the Friday move. ZEUS gave much of it back. STLD lost just a bit. All on low volume and that is okay, but certainly they could not continue the move.

Semiconductors: After some good breaks higher Friday it looked as if chips were going to do the same, starting with a good upside look. In the end most finished flat. SWKS started higher again, faded to flat. QRVO ditto. SIMO on the other hand moved up through the 200 day SMA and held, showing excellent volume. AMKR, BRKS, PLAB remain in good position. MU did not have a great day, and AMD looks as if it is ready to fall below the 50 day MA. XLNX downside play continues lower.

Retail: Overall still upside. WSM continued with a nice new move. PIR tried to extend the Friday move over the 50 day MA but faded most of the move. RH is still attempting to move higher. On the other hand, TJX looks weak along with ROST. DLTR still looks ready to resume the move, just hasn't. In eateries, PBBB (sandwiches) has a nifty double bottom with handle forming.

Oil: Nice session for some. APA is moving through the 50 day MA's. SWN continues to look good to make the move as does APC; just have not. NE started to make a move. There is still a lot of prospective upside.

Biotechs/Drugs: CNAT surged then faded to a loss. INVA surged upside for us. TTPH finished the 20 day EMA test. IMMU is getting interesting again as it tests and holds the 50 day MA.

China: BABA blasted higher for us. CTRP still looks good as does VIPS. YY could get interesting. NTES continues to struggle just below the 50 day MA. It would be good to see these come back around.

Financial: Again noncommittal, with BAC, JPM, KEY still below the 50 day MA, but at least not rolling over and perhaps JPM can put in a short double bottom.

A sluggish session but most leaders held on or even moved higher. SEDG surged and we picked up the position. SWKS moved up and we bought some just to see it fade the move to flat on the session. BABA surged but we let it run. Most were quiet but not rolling over.

The market has to deal with more of the same and frankly more of no real economic catalyst. The tax, healthcare, and regulatory reform are gathering dust just a bit over two months in. Geopolitical tensions and wars have overtaken them as front burner issues. You cannot ignore them but you have to be able to finance them, and that goes back to lightening the regulatory and tax burden, and getting people so they can actually have some affordable care to at least go to the doctor and stay healthy.

Not sure what the catalyst will be, but the indices continue doing a very good job of holding support and pushing leaders, including new, emerging groups, up toward leadership. That is the ultimate test for us, so we will continue looking at those very good patterns but also wondering just what is pushing them higher.

Have a great evening!


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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