Market Alert - Last Hour

The stock indices hold solid gains toward the close. Sp500 holds its move over the 50 day MA but NASDAQ has not moved past its 50 day SMA while SOX failed at the 50 day SMA as well and also is now back below the 50 day EMA.

There is a reverse image move today where the techs, chips are stronger while the 'old economy' stocks are weaker. That has been the bifurcated trade the past several weeks. They cannot seem to get on the same train together.

SP500 16.17, 0.68%
NASDAQ 66.30, 1.09%
DJ30 97.63, 0.46%
SP400 0.96%
RUTX 0.91%
SOX 1.77%

Chips are up as LRCX and AMAT had their overweight ratings reiterated at Morgan Stanley. Those two are helping the SOX gains.

Even so, those main indices remain below resistance. This of course could be a new move higher in the making, but on as noted earlier, on a jobs report Friday with 'great' news, there is a lot of hurrah but often that struggles to hold over into the next week.

Thus we have been very hesitant to make any serious commitments today. AAOI in the chips looks very good and we may go ahead and start a partial there. AMD on the other hand, rallied nicely early but has backpedaled almost to the open price, showing a doji.

At the same time some biotechs struggle on the session as the leaders of late are off their feed while the market runs back to techs and chips. Again, the question is whether this is short term or the start of a new move. We don't have to decide today in our book, and frankly, they will have to show they can continue next week. Friday, jobs report, etc. . .

Thus, we likely pick up a bit of AAOI and then just see how the advance plays out to start next week.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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