Market Alert - The Close

The stock indices spent most of Wednesday with a third day of lateral testing that started from a solidly upside open to a solidly downside midday.

Even though the stock indices punted early gains after a weak but just over an hour later revised to a beat Chicago PMI and a weak Pending Homes number (-1.3%), the buyers could not stay away a full 3 days.

Starting with 2 hours left the indices started higher. A test as the last hour started led to a last hour run straight upside.

That back half of the session move pushed SP400 positive, SOX flat, and all the other indices within a fraction of flat.

SP500 -1.11, -0.05%
NASDAQ -4.67, -0.08%
DJ30 -20.82, -0.10%
SP400 0.03%
RUTX -0.07%
SOX Flat

NASDAQ, SP500, DJ30 bounced off an intraday test of the 10 day EMA.

SP400, RUTX recovered sharply off of new lower lows on this pullback, rising 16+ and 15 points from the session lows to close.

Solid moves back upside, and as noted earlier, despite the worry a 3-day market fade induced in many investors, seasoned and neophyte, this is a very normal test after NASDAQ, SP500, SOX broke to new and higher highs.

Now we see if the nice 3rd day afternoon recovery is the end of the test and good setups move upside again starting Thursday.

Have a great evening!

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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