Market Alert - The Close

Stocks were mushy all Friday perhaps outside of the semiconductors. Once again there is just a bit too much happening in the geopolitical sense to initiate any major buys ahead of the weekend. Trump, the alleged dotard, references the serious issues the Rocket Man will face if he continues his ways. Mr. Pajamas 2 responds that he might just carry out an above ground H-bomb test in the Pacific. There is also the Germany election Sunday with Mother Migration Merkel expected to win but not to get the kind of coalition she has abused, I mean enjoyed, in the past.

At the same time, though stocks may be a bit mushy, they still hold solid gains as well as their trends, certainly not selling off because of any weekend worries. And why should they? After all Jeremy Seigel predicts the market has another 10% gain to year end. Why sell when you have that going for you?

Well, perhaps, just perhaps, there will be a selloff to end September and carry into October before that 10% rally kicks in. Would not be surprised to see that happen as that is the historic market pattern for this time of year AND there is that algorithm market pattern as well that kicks in after the indices hit new highs and rally a bit more. Then, after selling back, the cycle starts over to the upside. Those two patterns dovetail right now, an appropriate metaphor given it is dove season in many places right now.

Thus, the indices finished the session decently and finished the week quite decently, showing few signs of melting down or otherwise selling off. Some stocks struggled into the weekend and we closed those positions that reflected some of those struggles. We also, however, let the strong continue to work and will see if next week brings the algorithm down cycle or a renewed upside move if this rather mild test runs its course.

SP500 1.62, 0.06%
NASDAQ 4.23, 0.07%
DJ30 -9.64, -0.04%
SP400 0.33%
RUTX 0.46%
SOX 0.50%

VOLUME: NYSE flat; NASDAQ -7%. Very noncommittal ahead of the weekend with trade again just below average on NYSE, below average on NASDAQ.

ADVANCE/DECLINE: NYSE 1.8:1; NASDAQ 1.9:1. Not bad given the modest action. Obviously related to the better showings in the small and midcaps.

Have a great weekend!

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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