Market Alert - Afternoon session

A very resilient turn from a lower open, and diving into the open at that, to a steady sprint higher. The indices are boasting 1.5% to 2+% gains as they all bounce off the Thursday doji at support. It looks solid with good breadth. Volume will be the question as it is running 15% to 20% lower thus far. While low volume can bounce the market for a bit, as seen in April, if things don't remain perfect, it does not take much to push back on a low volume bounce.

SP500 38.86, 1.48%
NASDAQ 134.35, 1.90%
DJ30 376.50, 1.57%
SP400 1.63%
RUTX 1.67%
SOX 2.19%
NASDAQ 100 1.99%

This could turn out to be a very tradable bounce. People are all pumped up because the old fart from Omaha bought a lot of AAPL in Q1 and 'leaked' that information to CNBC this morning. The old buy first, knowing that so may follow your steps that as soon as you are ready to leak it you get a pop. Buffett loves to sell calls against his stock. Think he is selling some against AAPL today? That would be his MO.

Back to the tradable rally. Not any volume yet, but the patterns formed at support and bounced off a doji. Any day but this Friday and we likely would be buying quite a bit. We still may buy some if there is a dip in the last hour. Not full positions, just buying some in the event the rally has a half-life longer than the weekend and can continue.

If it is a real rally that gets volume, then there will be many opportunities to enter, not just today.

One thing working FOR the market is that the US/China trade negotiations have already ended as China did not like how aggressive the US was and didn't want to move so fast. Thus, they agreed to keep talking. Sometimes that is all you get. With China you typically get nothing then it just does stuff on its own as if it felt it should do that. How it saves face. In any event, that takes away the chance of a nasty weekend disappointment, at least regarding this story.

Seeing how this holds, looking for a last hour dip we can use to pick up a few partial positions, then head into next week to see if the Friday bounce off some very decent support can keep it going.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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