Market Alert - The Close

Another ugly session on the stock indices led lower again by growth as some of the future expectations are pared back. National ISM saw new orders surge, but ISM itself was lower and missed expectations at 59.3 (60.0 expected, 60.8 March). Construction spending February was up from January but missed expectations (0.1% versus 0.5% expected versus 0.0% prior). Trump popularity rallied to 50%, higher than his predecessor at this juncture, but he is managing to PO most everyone with what he does and doesn't do. Of course trying to figure him out is a lesson in frustration -- for all sides.

Ugly for certain and the commentary by the journalists on the financial stations was ominous, but many of the professional money managers were not, at least so they were saying, worried. The programs took over early when the market opened lower: they were going to test those February lows on SP500 and DJ30, and push NASDAQ and the other indices toward their 200 day SMA and closer to the February lows. Mission accomplished, more or less.

SP500 -58.89, -2.23%
NASDAQ 193.32, -2.74%
DJ30 458.92, -1.90%
SP400 -2.31%
RUTX -2.41%
SOX -3.90%

VOLUME: NYSE -8%; NASDAQ -7%. Volume remained above average but it did back off. Thursday volume was end of quarter. It is clear the sellers were in control on the day but it was not a runaway to the downside.

ADVANCE/DECLINE: NYSE -4.2:1, NASDAQ -4.2:1. Definitely a downside bias.

Stocks also managed a bounce. Somewhat. Some more than others. Don't want to overstate the move: for many it was no bounce or a rather anemic one. Whether it was just some late short covering or something more always remains to be seen, but it was more than interesting that DJ30 barely undercut the 200 day SMA and undercut the February low by 15 points then rebounded to hold both.

SP500 did not reach the February low but it did reach the 200 day SMA and broke it on the close. A modest rebound but not as interesting as the DJ30.

NASDAQ undercut the early 2016 trendline, not reaching the February lows or the 200 day SMA. Still a nice uptrend remains even with the carnage we were told was occurring in the stocks. Yes AMZN was beat up pretty good, NFLX as well, but they were not major breaks, not a major torching.

SP400 is testing the 200 day SMA nicely, undercutting it intraday, holding it on the close. Ditto RUTX.

Don't want to sound Polly Anna, but after this kind of selling that was not a total torching. It is STILL all working at trying to show a bottom at the February low or not. Still. DJ30 is just there, SP500 is closer as is NASDAQ. They are in the process. It is not a failed test, it is not a completed test, it is not s successful test. It is a test in progress, and after all of this selling the indices are still just testing a prior low. That means we are still watching how stocks hold support or not, and if they use the selling to set up bullish patterns or not. Monday showed some decent action in a few, while many were struggling.

Have a great evening!
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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