A Late Day Bounce Leaves Bears Unhappy
by Jerome "Mel" Hickerson
Before the open, the news was that Goldman's troubles were long from over as both the UK and Germany were calling for investigations into the matter. The major overseas markets were down across the board. Futures pointed to a lower open.
The first session of the week began with a very small gap down; smaller than suggested by the pressure from the futures. The SPX then worked its way upward until 10:15. Then selling began and was heavy until setting the low of the day at 12:13. The next couple of hours were sideways choppy trade with a slight upward bias. Shortly after 2pm, heavy buying hit the tape and the index worked upward 14 points into the close.
This bounce was not unexpected but the timing was. As frustrating as this bounce might have been to bears, this was normal market action. The constant upward motion of recent weeks might lead one to believe that markets move only one direction; but chopping around, upward and downward, is much more normal.
Today's internal action leaves us with some mighty strange looking features: Some oscillators such as McClellan's are oversold while others are overbought. This leaves technical analysis in a paralyzed state of confused indicators; many breadth indicators were falling while the market was rising today. But in spite of the widespread belief that technical analysis is failing right now, notice this: Intraday the 20 DMA was 1183.68. The low of the day today was 1183.68; a perfect bounce off the 20 DMA., the first line of defense on any pullback.
Day Trade Systems Update: (Signals today)
* UYM long, stop at LOD at: 12:21
* SPX Short at: 2:24
SPX Summary for Monday, April 19, 2010
272 Advancers/214 Decliners
Today's SPX component winners and losers:
• Largest one day loser is WFR with -4.55%
• Largest three day loser is GS with -11.77%
• Largest five day loser is X with -9.42%
• Largest ten day loser is MEE with -18.71%
• Largest one day winner is C with 7.00%
• Largest three day winner is GME with 5.64%
• Largest five day winner is DV with 10.85%
• Largest ten day winner is C with 14.79%
*** SPX Technical Summary ***
The lowest 14 day RSI component is CEPH; the highest 14 day RSI component is BDK. The average 14 day RSI of all 500 components is 58.
The greatest positive five day momentum component is DV; the greatest negative five day momentum component is X. The average five day momentum of all 500 components is -0.09.
62.60% of the SPX components are giving a crossover Buy signal; 12.60% of the SPX components are giving a Sell signal. This is a 5.0 to 1 ratio of Buy signals over Sell signals.
SPX component signal changes today (evidence of trend):
• From Sell to Neutral: 3 components.
• From Buy to Neutral: 23 components.
• From Neutral to Sell: 9 components.
• From Neutral to Buy: 9 components.
Notice the movement from Buy to Neutral today.
The moving averages:
Close 1197.52
9 EMA 1190.13 Falling
5 DMA 1201.85 Rising
10 DMA 1195.85 Rising
20 DMA 1184.00 Rising
50 DMA 1143.25 Rising
100 DMA 1127.97 Rising
200 DMA 1076.71 Rising
10 Wk MA 1159.01 Rising
NYSE Summary
On the NYSE 3187 issues were traded with 1343 advancing issues and 1735 retreating issues, a ratio of 1.29 to 1 declining. There were 101 new highs and 13 new lows.
Advancing volume was higher at a ratio of 1.28 to 1. The closing TRIN was 0.6 and the final tick was 365.
Evidence of trend:
Relative to the previous 30 session average, volume was 16.57% above the average. Of the last 15 sessions 7 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 24 sessions ended on a positive tick, 8 of last 10.
The 5 day moving average of New Highs is 360 while the 5 day moving average of new lows is 8 and the 10 day moving average of Net Advancing is 62.
Remember: Breadth leads, indices follow. Today, the NYSE Advance/Decline line decreased from 207947 to 207555. This -0.19% decrease came while the SPX was gaining 0.45%. The 10 day moving ratio of positive volume is 0.99 and the 10 day moving Advance/Decline ratio is 1.04. The 10 day moving ratio of positive volume has trended -0.67 over the last three days and the 10 day moving Advance/Decline ratio has trended -0.44 over the last three days.
The NYSE Composite Index gained 0.16% today.
NYSE Statistics:
Absolute Breadth Index: 28.74 down from previous day of 31.79
Cumulative Volume Index: 78,008.10 up from previous day of 76,623.43
High Low Logic Index: 0.73 down from previous day of 0.84
McClellan Oscillator: (112.16) down from previous day of (76.77)
McClellan 10 DMA: 19.01 down from previous day of 39.84
McClellan Summation Index: 3,508.52 down from previous day of 3,620.68
% Stocks Above 200 DMA: 85.91 down from previous day of 86.39
% Stocks Above 40 DMA: 76.55 down from previous day of 78.20
New High / New Low Ratio: 92.47 down from previous day of 96.73
26wk New High/Low Ratio: 83.25 down from previous day of 92.70
13wk New High/Low Ratio: 78.10 down from previous day of 89.19
4wk New High/Low Ratio: 40.04 down from previous day of 63.48
Cumulative 4-Week New Hi-Low: 442,240 down from previous day of 442,325
Nasdaq Adv/Decline: 1,728 down from previous day of 1,750
Russell 1000 Advance/ Decline Line: 2,649 down from previous day of 2,654
Russell 2000 Advance/ Decline Line: (1,624) down from previous day of (1,605)
Notes:
Absolute Breadth Index: Low numbers suggest a topping process and high numbers suggest a bottoming process.
Cumulative Volume Index: If this begins to trend down while the averages are trending up, it is a bearish sign. If this begins to trend up while the averages are trending down, it is a bullish sign.
High Low Logic Index: High readings are bearish; low readings are bullish.
McClellan Oscillator: -100 is oversold and +100 is overbought. Also watch for crosses above and below zero.
McClellan Summation Index: Interpreted as bullish or bearish when it crosses over the zero line.
Cumulative 4-Week New Hi-Low: The difference between the number of issues reaching new highs (during a 4-week period) and the number of issues reaching new lows (during the same 4-week period).
Tuesday, April 20
Economics
02:00 Germany PPI
04:30 Great Britain CPI
05:00 Germany ZEW Survey
09:00 Canada Bank Announcement
Earnings
Before: AOS, AKS, BK, BIIB, EAT, COH, KO, DAL, ETN, EVR, FRX, GS, HOG, JEF, JNJ, JCI, LAB, MI, EDU, NVS, PCAR, PH, RF, STT, SVU, AMTD, UNH, USB, USG, WFT, WWW
After: ALTR, AAPL, BMI, CHE, CPTS, CREE, FULT, GILD, IBKC, JNPR, NBR, PLXS, STX, SYK, TPX, TSS, TUP, VMW, YHOO
There are no market-moving economic events scheduled for Tuesday.
Mel’s Missives from the Matrix:
• Total tick for the day was 3,000. There were 107 ticks greater than 600 and 106 ticks more extreme than -600. There were 9 ticks greater than 1000 and 16 ticks more extreme than -1000.
• The day's range was 14.19 points. The 5 DMA of daily range is 13.74.
• Evidence of the intraday trend: At 10am volume was 160.61% of the 10 day average. By noon the volume was 135.84% of the 10 day average, and by 2pm volume was 136.54% of the 10 day average.
• The day's volume was 131% of the average daily volume for the last year. Volume was 136% of the last 10 day average and 78.9% of the previous day’s volume.
• Evidence of the intraday trend: The largest increase in relative volume came between 11:30 and 11:45 when relative volume increased 68.4% while the SPX was dropping -0.12%. The largest drop in relative volume came between 12:45 and 1:00 when relative volume dropped -71.2% while the SPX was dropping -0.07%.
• 3% of the SPX stocks closed with two day RSI above 90. 7% closed with RSI above 80. 37% closed with RSI below 20 and 16% closed with RSI below 10.
• 30.4% of the SPX are above their five day moving average, 49% are above their 10 day average, 68.6% are above their 20 day moving average, 86% are above their 50 day moving average, and 86.2% are above their 100 day moving average.
• 7% of the SPX closed above their most recent previous high.
• 25% of the SPX stocks closed below their most recent previous lows.
• 272 SPX issues advanced and 214 issues declined, a net SPX advance/decline of 58.
• Evidence of the intraday trend: At 10am, 68.6% of the SPX components were in the top half of the range. By noon, 19% were in the top half of the range, and by 2pm, 18.4% were in the top half of the range.
• 82.4% of stocks closed in the top half of the day's range. (17.4% closed in bottom half.)
• 26.4% of stocks closed in the top 10% of the day's range. 43.6% of stocks closed in the top 20% of the day's range.
• 0.2% of stocks closed in the bottom 10% of the day's range. 1.2% of stocks closed in the bottom 20% of the day's range.
• 21.6% of stocks closed within 2% of their 52 week high. 57.6% of stocks closed within 5% of their 52 week high.
• 40.4% of stocks closed within 50% of their 52 week low. 10.4% of stocks closed within 25% of their 52 week low.
• 34% of stocks closed within ¼% of their high for the day.
• 1% of stocks closed within ¼% of their low for the day.
• Evidence of the intraday trend: At 10am, 45% of the SPX components were up since the open. By noon, 18.8% were up since the open, and by 2pm, 18.6% were up since the open.
• 56.6% of the SPX closed up from the previous close; 72.2% closed higher than the open.
• Sectors stronger than the SPX for Monday:
- Financials -- Outperformed the SPX by +41%.
- Consumer Staples -- Outperformed the SPX by +5%.
- Health Care -- Outperformed the SPX by +50%.
• Sectors weaker than the SPX for Monday:
- Basic Materials -- Underperformed the SPX by -45%.
- Energy -- Underperformed the SPX by -42%.
- Industrials -- Underperformed the SPX by -64%.
- Technology -- Underperformed the SPX by -3%.
- Utilities -- Underperformed the SPX by -32%.
- Consumer Discretionary -- Underperformed the SPX by -13%.
• The $SOX index strength was weaker relative to the SPX Monday by -1.47%.
• The XLF outperformed the SPX by 0.41% Monday.
• The 2 Day RSI of the SPX is 40. The Dow RSI is 58, the NASDAQ is 29 and the Russell is 24.
• Over the last four sessions, the average session closed 69.73% of the range above the low. Monday closed at 97.6% of the daily range.
• Upside momentum decreased Monday, from Friday’s 0.03 to today’s -0.09. The ratio of SPX components giving a crossover buy signal compared to sell signals also decreased to B 4.97 to 1.
• The ISEE Equity 10 day moving average Monday was 242.4. The lowest 10 day average in the last 52 weeks was 141.5 on 06/29/09 and the highest 10 day average in the last 52 weeks was 249.3 on 04/15/10.
• 230 SPX components moved upward and 134 components downward during the after hours with 111 million shares traded.
Trade 'em well on Tuesday everyone!
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"Mel"
