Another Day for the Creeper Rally
Market Recap:
Despite another rate hike in China and a successful bond auction in Greece, there was little in the way of new inputs in the pre-market as overseas markets were showing little movement and the futures in the U.S. were running very close to fair value. There was no economic data to review before the bell this morning and little news on the calendar for the rest of the day.
The Tuesday session began without a significant gap and quickly moved lower to put the low of the day on the chart at 9:46 am. As we have mentioned several times, a morning low and an afternoon high are characteristics of a bullish trend. Today was no different as the market traded off the lows and moved higher to put the high of the day on the chart moments before the close.
It was yet another tight range affair on low volume. These are often clues that the market bulls are losing strength but this market pays no mind to anything; it just continues to creep onward, higher and higher each day as it is the bears that are being exhausted right along with the bulls. The bulls continue to laugh off any and all suggestions of a correction. Yes, this will someday come to an end. But if you swing trading short-side, your money supply may come to an end before the Fed's comes to an end.
Checking our Market Leaders board after today's session we see almost every leader closed higher today. All but the chip makers (SOX) closed green today. SOX once again was up 1% intraday and closed red, the second day in a row it followed this pattern. This could be significant for the broader markets; we'll have to watch the next couple of days. But this is a caution signal for swing long positions. Four of our leaders managed 1% trading ranges today as compared to the SPX at 0.67%.
Market Trend: Nine Sectors Report
Turning to our Nine Sectors Report this evening we have only two changes, one positive and one negative as the Energy sector moves from Neutral to Sell and Utilities moves from Sell to Neutral. The Nine Sectors signal remains another day stuck in Neutral.
We continue to like the odds for something of a breather or pullback to close out the week. Specifically, we anticipate a red close on Wednesday. Remember: The first clue of something different will be a morning low after the first hour.
Volume & Breadth Indicators
For the SPX Index there were 315 components advancing and 161 components declining. On the NYSE 3,146 issues were traded with 1,934 advancing issues and 1,104 retreating issues, a ratio of 1.75 to one advancing. There were 266 new highs and 11 new lows. The five day moving average of New Highs is 238 while the five day moving average of New Lows is 10 and the ten day moving average of Net Advancing is 459. The Net Advancing data indicates a bullish trend.
Advancing volume was higher at a ratio of 1.84 to one. The closing TRIN was 0.95 and the final tick was 1112. The five day average of TRIN is .99 and the ten day average of TRIN is 1.02. The NYSE Composite Index gained 0.52% today while the SPX gained 0.42%.
For the NYSE, relative to the previous 30 session average, volume was -10.06% below the average. Of the last 15 sessions 11 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 21 sessions ended on a positive tick, 9 of last 10. For the SPX, the day's volume was 85.6% of the average daily volume for the last year. Volume was 82.1% of the last 10 day average and 92.9% of the previous day’s volume.
Advancing issues was strong but advancing volume barely kept pace. Yet the broader NYSE Composite Index outperformed the SPX. Overall volume was quite low today.
Total tick for the day was 142,000 and the average tick for the day was 92. There were 34 ticks greater than 600 and 15 ticks more extreme than -600. There were no ticks greater than 1000 and no ticks more extreme than -1000. The tick action suggests institutional accumulation.
There is no clear and obvious pattern intraday to the volume today, but it was curious to see the volume declining during the rally at the close. The close is most often a time of increasing volume. Looking at our Nightly Breadth Indicators we really continue to have a mixed bag. The McClellan Oscillator has edged into overbought territory. But catches our attention yet again are the falling New High/New Low ratios. Still, this market ignores everything but Cramer ranting "Buy! Buy! Buy!"
Moving Average and Support/Resistance Indicators:
77% of the SPX are above their five day moving average, 81.4% are above their 10 day average, 79.2% are above their 20 day moving average, 79.8% are above their 50 day moving average, and 90.2% are above their 200 day moving average.
There were no significant moving average crossovers today. But the upper portion of our Moving Average board remains entirely green as all moving averages are rising.
Sectors on the Move:
Sectors stronger than the SPX for Tuesday:
- Financials -- Outperformed the SPX by +30%.
- Industrials -- Outperformed the SPX by +26%.
- Consumer Staples -- Outperformed the SPX by +6%.
- Consumer Discretionary -- Outperformed the SPX by +78%.
Sectors weaker than the SPX for Tuesday:
- Basic Materials -- Underperformed the SPX by -10%.
- Energy -- Underperformed the SPX by -75%.
- Technology -- Underperformed the SPX by -9%.
- Utilities -- Underperformed the SPX by -43%.
- Health Care -- Underperformed the SPX by -13%.
In Late Trading:
215 SPX components moved upward and 139 components downward during the after hours with 115 million shares traded.
Wednesday, February 9
Economics
07:00 MBA Mortgage Purchase Index
10:30 Crude Inventories
Japan Consumer Confidence
German Trade Balance
Britain Visible Trade Balance
POMO Schedule
Treasury Coupon Purchase: 2/15/2015-7/31/2016: $6-8 bln
Earnings
Before: AGU, AHCI, ANR, BECN, BAH, CAE, KO, CSC, DTE, ELN, IR, ENER, ICE, LRN, MAG, NOC, PTI, RL, SON, WYN
After: ATVI, AAP, AKAM, ALL, CSCO, CLB, CYBI, DIOD, EFX, EQIX, GSIC, IRBT, LGF, LOOP, MET, NUAN, PACR, PL, PRU, SB, SCSS, SCI, SWI, TAL, TLEO, TEX, TMK, TQNT, TBI, WFMI
Trade well!
-Mel