Market Alert - The Close

RUTX and SP400 joined the large cap indices with a new closing high. Not new all-time highs, but for now a new closing high works. Of course, SP500, DJ30, NASDAQ and NASDAQ 100 all hit new highs, gapping upside, adding a bit more, then holding the gains into the close. The only non-new high is SOX, but it broke back up through the 50 day MA's, its own moral victory. Much tax reform rejoicing.

SP500 14.35, 0.54%
NASDAQ 58.18, 0.84%
DJ30 140.46, 0.57%
SP400 0.99%
RUTX 1.00%
SOX 2.16%

Yes, the Friday tax reform rally continued into Monday. The glee was augmented when Senator Lee became a 'yes.' Afterhours senator Collins also joined the 'yes'; the hits keep coming.

The market loves the idea of the tax reform passage and is rampaging upside on the prospect. All the more reason we are anticipating some 'dog catches the car, what next?' moments after the anticipation of passage becomes passage.

Thus we took more gain as stocks surged (AKAM, DEPO, ROKU), cleaned up laggards that did not participate in the move, picked up some new positions in stocks breaking higher, and also letting stocks that are running continue to run (e.g. GOOG, AAPL). On more moves higher we will be banking some more gain.

The big decision is whether to wait until the bill passes and see if another surge comes or to wait. What we most likely do is what we did Monday: take gain as plays hit targets or after they have posted a good run, then when we see the move upside surge and reverse, take more off the table. We can and will let parts of positions continue to work: no one knows if passage equals a top for sure, so we want to have exposure fi this rally proves to be more than just a tax bill run.

It was encouraging to see lots of stocks move, and of course many smaller caps rallying back, e.g. CNIT, NVAX. It was also good to see some Chinese stocks work well, e.g. YY, JD. This in addition to the big names that are running. The stock market that plays together . . .

There are still stocks out there with nice patterns and nice patterns making good moves. Obviously as we picked up some more new positions today and like the look of stocks such as BIDU that are turning back up after a base. So, even with the notion the market may check back after tax passage, as some check back, other leaders tend to emerge. Thus, we keep an eye on these and pick up the JD's and NVAX and maybe BIDU as they move higher -- even as we bank gain on other positions such as e.g. GOOG, MSFT, etc. if they start to stumble after passage of the tax bill.

Have a great evening!
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
______________________________________
Alert Key
http://www.investmenthouse.com/alertkey.htm

PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.

Customer Support: http://investmenthouse.com/contact_us.php