Market Alert - The Close

Futures tried the upside versus the downside, and the result was the same: DJ30 posted a new high. SP500 played footsie at the upper channel line, though it did put in another new high. NASDAQ went nowhere. RUTX and SP400 continued playing catchup to the rest of the indices, posting solid percentage gains yet again. So, whether futures start lower or futures start higher, the market moves higher. Today it just cut to the chase and moved higher.

SP500 3.64, 0.15%
NASDAQ 6.17, 0.10%
DJ30 63.01, 0.28%
SP400 0.47%
RUTX 0.65%
SOX 1.24%

VOLUME: NYSE -63%. NASDAQ -33%. NYSE trade fell back but held the same above average levels from last week prior to expiration. NASDAQ trade fell as well, but managed to hold above average as well.

ADVANCE/DECLINE: NYSE 1.3:1, NASDAQ 1.5:1. RUTX up 2/3%, SP400 almost 0.5% but breadth was weak. Still not a very powerful move. Still doesn't seem to matter.

But, the move higher was not all that smooth. Breadth is lousy despite very solid gains on the small and midcaps. There was also an early afternoon hiccup that saw stocks plunge lower, at least relative to the daily move, and sent NASDAQ negative intraday. All indices recovered and NASDAQ squeaked out a gain, but that kind of no news, out of the blue sharp selling shows some program selling hitting the market.

That has not happened for quite a while. It does not signal a market selloff is coming no matter what, but given the indices hitting new highs, the market's MO of selling back after new highs and some additional rallying, the return of 'what the heck was that?' selling -- in the middle of a 'routine' upside session -- is something you need to notice.

Perhaps it is just rotation. FAANG stocks outside of NFLX are weak. At the same time retailers remain solid along with autos, auto parts makers, heavy machinery -- storm recovery stocks -- continue showing good action and buying. Financial stocks continued improving ahead of the FOMC meeting.

Chips still strong. Biotechs and drugs. China stocks. Software is still solid. Rotation without dropping out a lot of sectors, though FAANG is struggling.

For now definitely good enough to let positions work and add incrementally. We took some NVDA gain as it gapped, rallied, but then started to backpedal in that early afternoon NASDAQ selling. Picked up some IDRA (biotech) and SQ (breakout move), and was ready to pick up some more NFLX. Yes, there are stocks we will still buy because they look great, can really fly when they move, and, despite the early afternoon jerk lower, the action remains good.

Have a great evening!

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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