Market Alert - Last Hour

RUTX continues its impressive move, adding 0.5% on top of its new high. All indices are higher with NASDAQ 100 topping NASDAQ in percentage gain as those stocks that led lower Monday try to lead a bounce.

SP500 1.34, 0.05%
NASDAQ 11.75, 0.18%
DJ30 -3.34, -0.01%
SP400 0.21%
RUTX 0.53%
SOX -0.04%

Chairman Yellen was the biggest news point from what we can see. In a speech she noted that employment and inflation were not as the Fed expected they would be, that they had 'shifted' and just were not meeting the Fed's expectations. Shame on them I suppose. Yellen said the "significant uncertainties" in those markets "strengthens the case for a gradual pace of tightening . . . however, the Fed must also be wary of moving too gradually" as it would be "imprudent to keep monetary policy on hold until inflation is back to 2%."

Hmmm. Isn't inflation AT 2%?

New Home Sales, August disappointed, coming in at the lowest rate since 12/2016 (560K annualized from 580K prior).

Healthcare bill will not be voted upon as Collins came out against it. Okay, 0-3.

The action is more of the same with a decent response to the Monday sharper drop by large cap NASDAQ stocks and some chips. The other indices are doing the same thing: DJ30 and SP500 testing near support, RUTX moving to a higher new high, SP400 still moving higher, while SOX and NASDAQ test the same support they tested Monday, sporting modest gains.

While this move keeps the indices over support, not convinced it is the move that saves NASDAQ and SOX from further selling. AAPL for instance, is bouncing off the Monday doji, but once it gets back near 155-156 we start looking at an entry for the downside play.

Looking at PLAY downside as it is down after a bear flag move back up to the 10 day. Not a sharp break lower, but it is definitely weaker in an upside relief bounce market.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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