Market Alert - The Close

Monday showed the possibility of a nice upside session along the lines of the prior Monday. Futures up and rising into the open. No major political stories hitting the wires, durable goods report was weak but that was nothing new as economic data has limped in recently.

Stocks did open higher, but it was not to be, at least in terms of a solid move. The NYSE indices closed higher but modestly so, while the bigger pre-market movers such as NASDAQ gapped higher only to reverse to a loss. NASDAQ looked ready to extend the Friday break upside from its lateral range. By the close, it was . . . back to the range.

SP500 0.77, 0.03%
NASDAQ -18.10, -0.29%
DJ30 14.79, 0.07%
SP400 0.39%
RUTX 0.13%
SOX -0.97%

VOLUME: NYSE -62%; NASDAQ -48%. Big volume drops after the Russell rebalance. NYSE trade fell below average so the upside gains mean little, as if the light gains didn't speak to that themselves. NASDAQ trade was still above average as NASDAQ and SOX gapped upside then the gains were rejected by an above average number of sellers. Not the best action for these indices trying to put together new upside moves.

The upside trends remain, good patterns remain either in pullbacks to support, new breakouts possible, or good moves continuing. Monday, however, simply did not see a lot of these stocks move. Not bad action at all, but as the session did not show much, these stocks did not show much either.

Thus, there are still good patterns out there even after the morning gains were tossed. On the other hand, the market is taking on a very summer-ish lethargy. Perhaps this past week where the indices stalled after a solid initial move is an outlier and the indices start rallying again. They certainly had their chance to do so with a solid upside open Monday, but they just did not take the ball and run with it.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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