Market Alert - Last Hour

The stock indices trade near the session lows hit in the most recent leg lower over the past 1.5 hours. All of the indices are solidly lower, and on the large cap indices, the 50 day MA tests have not held on this expiration Friday. Not a great upside signal. RUTX, SP400 easily holding the 10 day EMA on this test.

SP500 -28.40, -1.05%
NASDAQ -1-1.89, -1.41%
DJ30 -255.45, -1.04%
SP400 -0.77%
RUTX -0.72%
SOX -1.30%

Most of the market leaders are holding up very well. That said, FAANG is struggling as AAPL set the downside pace and has dropped almost 4% to the 200 day MA. AMZN is down 2%. Between those two, there is significant pressure on NASDAQ. Other FAANG is lower as well, but nothing major.

Oil continues holding its own with may of those stocks posting modest gains in a markedly down tape.

Semiconductors continue their weakness as well -- still an issue for the overall market -- though LRCX is up a bit. Sector remains weak overall, again not great news for the market overall.

Software and other leaders are holding up well in another session of a pullback.

The DNC has filed a lawsuit against Russia, WikiLeaks, and Trump for conspiracy to injure the DNC in the 2016 election. A quick read of the filing indicates it is basically garbage with unsupported allegations. It would not have been filed at my law firm and runs the risk of sanctions for frivolity. Of course, it is a political filing more than a legal filing: hamstring, obfuscate, resist, etc. We are quarreling while Rome burns. History has a deadpan methodology for repeating.

So, four Fridays straight to the downside as the headline risk still exists in the minds of traders. Don't like the action on the large cap indices, but do like the small/midcaps as well as the leader action that remains solid. Therefore we continue playing the current move and let this late week weakness dissipate.




Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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