Market Alert - Last Hour

Stocks are on a rebound that started 35 minutes back. That of course after a big loss. I noted a few 'no buyers on the dip!' headlines screaming on the web mid-afternoon. That makes you look for a late rebound. It started, looks somewhat decent, but it has to add a lot more into the close to make a dent in the index losses.

SP500 -35.42, -1.48%
NASDAQ -132.99, -2.16%
DJ30 -312.87, -01.49%
SP400 -1.74%
RUTX -2.38%
SOX -3.71%

Many stocks are down hard, many testing support from the 20 day EMA to the 50 day MA. If they are holding support we are inclined to let them bounce, particularly if this last hour rebound gets stronger and stronger. We have several positions that are between support levels. If they can recover to support, we leave them alone. If not we will close them.

The move was working and now there is perhaps a so-called black swan event with these leaks that have implications aplenty but thus far it is a long way from clarity. Congress has subpoenaed the FBI and Comey records, memos, etc. on and about just about everyone in the news the past month. Comey is to testify next Wednesday. Comey has been all over the map when he appears before Congress so who knows who will show up that day.

The selloff is attributed to something of a straw breaking the market's back, the straws being the many stories about the President's actions. The battle lines are getting drawn clearer now. Even Dennis Kucinich, former House Rep and very liberal, says this is an operation from the intelligence community to take down the President and Kucinich, while not a Trump fan, says the problem is not Trump.

The timeline on the Flynn memo is the key piece we are seeing: it occurred AFTER Flynn was fired, thus not to protect him while holding office but in pursuing him after he left public office. We will see. If that is the case, that might be a relief for the market. That has not settled out yet, however.

The former Wells Fargo CEO summed up something we have been saying today: the President has too many 'unforced errors,' i.e. making statements that are unnecessary and cause problems for the agenda that most people want: taxes fairer, healthcare fixed to where it is high quality and affordable. That is the hammer on the stock markets.

The rebound is trying to continue after a pause.

Oil: -1.8M bbl draw this past week and that has kept oil stronger and oil stocks are showing relative strength as well.

Bonds are up as you would expect with the yield down to 2.228% 10 year.

Gold is up 22 clicks and back over the 200 day MA.





Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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