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Monday, March 12, 2018

Market Alert - The Close

A mixed market after a big upside Friday on all indices. Something along the lines of what we thought, but it was not an across the market fade of that move. Indeed, the semiconductors continued higher over 1% and NASDAQ, though up a modest 0.36% (at least in terms of its recent moves), was not a wallflower.

SP500 -3.55, -0.13%
NASDAQ 27.51, 0.36%
DJ30 -157.13, -0.62%
SP400 0.11%
RUTX 0.25%
SOX 1.03%
NASDAQ 100 0.42%

VOLUME: NYSE -1.7%, NASDAQ flat. Volume remained mostly steady. On NASDAQ that was above average, positive as it was upside, but a bit of churn. On NYSE that was still well below average. As NYSE indices were flattish, that works.

ADVANCE/DECLINE: NYSE +1.2:1, NASDAQ +1.5:1. Nothing here out of sync with the market action.

One of the issues for the market was the dearth of news. GS' CEO is stepping down and Cohn is not the replacement. That matters not a lot to most people, but oh my the financial stations out of New York were buzzing. Yawn.

M&A: INTC joined into the AVGO/QCOM takeover affair, but INTC wants AVGO. It is one fish being swallowed by another being swallowed by another. At least that kept chip stocks higher.

NFLX suffered a 3% loss, purportedly on AAPL saying it was not interested in acquiring NFLX, that it would rather start its own studio than do so. Okay, when a simple 'no' is not enough, call AAPL apparently. Not only no, but hell no. Hey, at least there may be another entry point on NFLX for any who missed the break higher from earlier in March.

I opined over the weekend that after such a big move the market was going to be sluggish, perhaps lower to start the week. Sluggish for certain though only lower in some instances. The growth areas continued higher, continued their leadership, just as last week. The moves were simply muted after such big gains on the prior week and Friday.

Of course, you have to watch these pauses right now after such a solid move higher put many NYSE indices at resistance or potential resistance. As noted over the weekend, resistance has not stopped the rebound as NASDAQ and SOX defied the probabilities and moved to new highs without testing the February low, but you cannot ignore it and just be aware if there are any reversals on volume.

On the day we picked up some LLNW (internet related) and HIIQ (healthcare plans), took the March option gain on BLUE, let most positions work. It was, after all, a sluggish session post-big prior week rally; a bit of pullback after such a strong move upside. Normal, should hold after a 1-2-3 type test, but again, you have to be cognizant that SP500 and DJ30 patterns are still lagging a lot, and RUTX and SP400 still have potential ABCD downside patterns even after those good moves higher. Just keeping that in mind as you watch how the good moves test.

Have a great evening!
Jon Johnson, Chief Market Strategist
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