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Monday, April 16, 2018

Market Alert - The Close

Stocks were set to rally on a 'mission accomplished,' one and done missile attack on Syria. Over the weekend I noted that the US coalition claimed all the targets were hit while Russia claimed it shot down 70+ of 100 or so missiles. The pictures released today show that if Russia was correct, it didn't matter. The munitions targets attacked were not only hit, but nothing but scorched ground was left. Okay, perhaps mission was accomplished.

Stock futures gapped higher early morning and held the gains into the open. Stocks did waffle a bit on some profit taking after the gap, but held their ground into midday and then started rallying early afternoon. Then another range formed into the close.

Nice gains, not blowout, but solid enough with some better internals as well.

SP500 21.54, 0.81%
NASDAQ 49.63, 0.70%
DJ30 212.90, 0.87%
SP400 1.01%
RUTX 0.87%
SOX 0.23%
NASDAQ 100 0.71%

VOLUME: NYSE +4%, NASDAQ +2%. Not scaring anyone with the volume, but trade again expanded, even if just slightly, on the upside. Still well, well below average and really, when you are honest, rather shaky trade. That may change, however, after the NFLX earnings as many were quite nervous about earnings expectations. NFLX' earnings were decent, but the guidance was the key.

ADVANCE/DECLINE: NYSE 2.7:1, NASDAQ 1.8:1. Not blowing the socks off here either. You can see the RUTX, SP400 lead helping bump up NYSE breadth.

Gains on the indices, but outside RUTX and SP400, the indices are still stymied at the 50 day MA's. Again they have bumped into the 50 day MA's, and again they faded. Perhaps the NFLX earnings will embolden investors to move in ahead of other earnings. That is of course the basis for the current rally even with its pensive internals thus far. The next big step is whether investor confidence increases and enough buying occurs to push the big cap indices through that near resistance. It is good to see the small and midcaps leading, but it is time for the others to kick in.

We did not pick up many new positions. We grabbed some GLUU early on as it broke higher; nice. Passed on VMW and FSCT; good moves but they gapped upside so we wanted to see how they hold the move. If so, they are still buys. Others still look good, e.g. VRX, FCX, ICLK, PANW improving, FND still nice -- plenty of stocks to help led upside.

Others we are already in are set up as well, e.g. LRCX (earnings Tuesday after the close), MU, WYNN, PENN, CASA, VCEL, RHT, ZBRA, HAL, DO, NTNX, AMED -- many. Some clinkers as well, e.g. DVAX that looked super with a nice gap but then tanked. Or LITE that scratched a good setup and gapped lower to the 200 day SMA and the early April lows.

Overall, however, the action remains quite solid, but it is getting to be time, now that earnings are starting to come in, when these stocks should start showing their moves. Again, perhaps the NFLX earnings can push them into buying.

Speaking of NFLX, it closed at 307.76, gapped higher to 328.65 immediately on results, and has settled in at 324ish late in the afterhours session. We will see how it holds the afterhours moved in the open session Tuesday.

Have a great evening!
Jon Johnson, Chief Market Strategist
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