Market Alert - The Close

A mixed bag with the growth indices, particularly NASDAQ and SOX, receiving the money. The recent rotation beneficiaries were lower.

The action leaves NASDAQ bumping at the prior all-time highs, SOX just below the 50 day MA's -- no real change in these though both continue a recovery. Dramatically weak volume.

SP500 backed off from the move past the early August peak though this is a very modest fade on very modest volume. DJ30 also faded on miniscule trade, this after a 4-session run off the prior Wednesday reversal off the 50 day MA. Rather normal tests after a good move higher off the recent support test.

SP400 traded flat and showing a doji, holding onto the Tuesday breakout. For now that works. RUTX continued higher, extending its breakout move.

SP500 -1.14, -0.04%
NASDAQ 29.93, 0.38%
DJ30 -88.69, -0.34%
SP400 -0.01%
RUTX 0.26%
SOX 0.45%
NASDAQ 100 0.37%

VOLUME: NYSE -20%, NASDAQ -7%. NYSE trade is a miniscule 554M. The last time it was lower was July 3, just before the Independence Day holiday. Okay, that pretty much confirms there was no selling pressure, just no bids. NASDAQ trade slid in just below the Monday and Tuesday trade levels, also impressively light. There was not a lot of buying on higher volume that indicates accumulation.

ADVANCE/DECLINE: NYSE 1.1:1, NASDAQ 1.5:1. Still upside as SP500 and DJ30 slipped, rather meager as NASDAQ rallied.

Today's twist was more money toward the NASDAQ and SOX areas while the recent leading groups faded. Many of the latter recovered well off the lows, e.g. HON, many did not. Perhaps it was worries about trade with Trump dealing with Cohen and the administration denying any deal on NAFTA. Perhaps it was just DJ30 and SP500 taking a breath or two after decent rallies off last week's test of important support. Or perhaps SP500 simply had no stomach for a bump near the old high.

Regardless of the reason(s), the action on the day was not egregious to the downside and not a powerhouse upside. At least now NASDAQ will get its shot at the prior highs as well; perhaps it can move through after SP500 showed some stage fright.

We picked up positions on BCRX, OPK, closed ADBE, M. NASDAQ stocks are bouncing but are also bumping into resistance. Other NASDAQ stocks look intriguing, e.g. AAPL on a test, AMZN after a test. TTWO jumped upside as did NVDA. XLNX, AMD in chips broke higher. Other sectors show interesting setups, e.g. WMT. JNJ may present a new entry shortly.

The market still shows upside promise but I am not sure the NASDAQ is the path to serious new highs. Many of its names are rebounding from selling but not much more. Of course there are exceptions, and if AMZN, AAPL and the like rally, we are interested. The risk/reward for these is worrisome, but if they make good moves, they make good moves.

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

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