Market Alert - The Close

Another sluggish session, kept that way as AAPL, despite missing the top line revenues on fewer than expected iPhone sales, traded down less than 1/3%. AAPL was an enigma, of course not rallying thanks to the miss, but also refusing to sell off even with a miss.

As you would suspect given AAPL's performance, the earnings magic lamp that helped drive NASDAQ to a higher high is still working. FEYE, YUM, NYT, EL all surged higher on earnings beats. Those that misses were, outside of AAPL, dealt some bitter hands. That is the way it should be. Well, maybe not AAPL, but AAPL is, as noted, an enigma.

SP500 -3.04%
NASDAQ -22.82, -0.37%
DJ30 8.01, 0.04%
SP400 -0.42%
RUTX -0.60%
SOX 0.34%

VOLUME: NYSE +1%, NASDAQ -1%. Trade is unchanged, holding at elevated levels. The lack of change shows a stable test by NYSE indices, at least that is our view, particularly when you look at the volume in relation to the chart patterns.

A/D: NYSE -1.5:1, NASDAQ -1.8:1.


Still now break higher from those NYSE indices that were and remain in good position to do just that. Yes, the patterns are still holding as of the Wednesday close. Will they after FB's miss afterhours? As noted above, thus far the earnings are treating the players as you would anticipate, so maybe FB just reaps the lower ad environment.

As for the charts, NASDAQ faded a bit as anticipated though 1 day lower by less than 0.4% after two weeks upside suggest there is a bit more fading to come. SP500 and DJ30 still look very good to make a move higher as their tight lateral pullbacks continue. SP400 and RUTX traded lower again but are showing doji at support. As with the large cap NYSE, these are very good upside patterns still forming. SOX is not bad either, holding the 20 day EMA on a test and posting a modest gain in a flag pattern formed after pushing to a higher high last week.

The index charts still show life, still look to be setting up for a new move. Counter this with reports that insiders in corporations are engaged in heavy selling at a level that has accompanied previous market selloffs, that GM's inventory is at a 10 year high level last seen in November 2007 just as the financial crisis recession hit. At the very same time you have the FOMC still talking tough as of the meeting statement today, apparently ready to keep its string of hiking into economic slowdowns intact.

Those economic aspects are hard to reconcile with rising stock prices, but the indices are still showing very good upside action and setups even as this economic news disseminates. Again, that news certainly does not sound upside positive, but the market has not lost its upside look at this juncture. For us that means we are going to continue looking at upside possibilities and whether they show up and then break higher.

Today we did buy some BAC post-FOMC. We sold DIS as the media companies were slammed, taking the last of the stock off the table with decent gains. Left the many stocks that have rallied to initial targets and beyond continue to work because the patterns in the indices and in many leading stocks still are in position to move higher again. Of course we are getting more than ready for that new move higher . . .

Have a great evening!

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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