Another Weekly Win
As the Friday open approached futures were on a four point bounce after the overnight lows around 5:00 am and were at the overnight highs. Asia had closed consistently green and Europe was mixed.
The February options expiration session opened without a significant gap and traded slightly downward for several minutes before beginning to ascend. This session avoided the first hour lows and gently traded upward to the high of the day at 12:27 before an almost six point sell-off leading up to 2:30. But the final ninety minutes of the week were a very low volume rally as the index managed to close back near the highs of the day.
The pattern of closing at the highs has been persistent. In the last fourteen sessions the SPX has closed in the top 15% of the daily range eleven times and only once in the bottom 60% of the intraday range. But today was different in a couple of regards. The NASDAQ 100 (Qs) was down for the day, the second consecutive day and Russell 2000 closed lower than the open. So there may be a few signs of weakness creeping in, although in this strong uptrend that may mean little.
Checking our Market Leaders board we find a mixed board with the Russell Technology and Sox both closing lower. But half of the leader board closed at new 52 week highs so the market rally continues.
SPX big winners were Intuit Inc (INTU) 7.12%, Xl Capital Ltd (XL) 5.33%, and Apollo Group Inc Cl A (APOL) 4.99%. SPX big losers were CF Industries Holdings Inc (CF) -6.74%, Tesoro Corp (TSO) -6.57%, and JDS Uniphase Corp (JDSU) -5.49%.
SPX five day big winners are Family Dollar Stores Inc (FDO) 19.%, Williams Companies Inc (WMB) 12.52%, and Advanced Micro Devices (AMD) 10.87%. SPX five day big losers are Netapp Inc (NTAP) -12.46%, JDS Uniphase Corp (JDSU) -10.51%, and CenturyLink Inc (CTL) -8.58%.
Market Recap – Weekly Review:
The SPX gained 13.86 points during the week. The range for the week was 19.46 points, 1.46%. The four week RSI of the four indices (SPX, Dow, NASDAQ, and Russell 2000) is 87. Pullbacks often occur as this RSI reaches 80 and bounces near 20.
Total tick for the week was 832,000. On the NYSE, the advance/decline line increased during the week by 2,373 and the 10 day average of Net Advancing decreased from 606 to 528. There were 1,620 New Highs and 54 New Lows. These stats clearly reveal that this was an incredibly strong week despite gaining only 19 points. The average range this week was barely seven points a day; certainly a tough environment to day trade the indices. Friday's range was less than six points yet it wasn't even the narrowest range of the week.
Market Trend: Nine Sectors Report
Turning to our Nine Sectors Report we had three changes as a result of Friday’s action as Basic Materials moved from Neutral to Sell, and both Energy and Health Care moved from Neutral to Buy. Once again, the Nine Sectors signal flips back into Neutral. We have seen this scenario time and time again the last six months as this market stubbornly rejects any and all sell signals and simply continues higher.
The largest volume gain Friday compared to the previous day's volume came in the Consumer Discretionary Sector (118.62% of previous volume) and the largest volume decline came in the Energy sector (84.27% of previous volume). Combined volume of the nine sectors of the SPX was 103.87% of the previous session. The largest positive change day over day came from the Health Care sector and the largest negative moving sector was Basic Materials.
Volume & Breadth Indicators
For the SPX Index there were 277 components advancing and 199 components declining. On the NYSE 3,156 issues were traded with 1,752 advancing issues and 1,277 retreating issues, a ratio of 1.37 to one advancing. There were 350 new highs and 8 new lows. The five day moving average of New Highs is 293 while the five day moving average of New Lows is 11 and the ten day moving average of Net Advancing is 528. The Net Advancing data indicates a bullish trend.
Advancing volume was higher at a ratio of 1.0 to one. The closing TRIN was 1.37 and the final tick was 843. The five day average of TRIN is .98 and the ten day average of TRIN is .99. The NYSE Composite Index gained 0.12% today while the SPX gained 0.19%.
For the NYSE, relative to the previous 30 session average, volume was 13.13% above the average. Of the last 15 sessions 5 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, 9 of last 10. For the SPX, the day's volume was 88.1% of the average daily volume for the last year. Volume was 94.7% of the last 10 day average and 100% of the previous day’s volume.
It’s interesting to notice that advancing volume was only equal to declining volume when advancing issues were 1.37 to one advancing. Volume Friday was dismal; all the volume was at the open.
Total tick for the day was 150,000 and the average tick for the day was 97. There were 15 ticks greater than 600 and 16 ticks more extreme than -600. There were no ticks greater than 1000 and no ticks more extreme than -1000.
The intraday volume pattern was typical of options expiration in that much of the volume came at the open; 25% of the day’s volume came in the first five minutes of the day. But after the open, volume was so light as to resemble holiday volume. Looking at the Nightly Breadth Indicators we find a mixed bag suggesting possible choppiness ahead.
Moving Average and Support/Resistance Indicators:
65.6% of the SPX are above their five day moving average, 73.2% are above their 10 day average, 81.6% are above their 20 day moving average, 81.6% are above their 50 day moving average, and 91% are above their 200 day moving average.
There were no significant moving average crossovers Friday.
Sectors on the Move:
Sectors stronger than the SPX for Friday:
- Energy -- Outperformed the SPX by +32%.
- Financials -- Outperformed the SPX by +10%.
- Industrials -- Outperformed the SPX by +9%.
- Consumer Staples -- Outperformed the SPX by +8%.
- Health Care -- Outperformed the SPX by +6%.
- Consumer Discretionary -- Outperformed the SPX by +34%.
Sectors weaker than the SPX for Friday:
- Basic Materials -- Underperformed the SPX by -129%.
- Technology -- Underperformed the SPX by -34%.
- Utilities -- Underperformed the SPX by -3%.
In Late Trading:
202 SPX components moved upward and 146 components downward during the after hours with 86 million shares traded.
Week of February 21 - February 25 Overview
02/22/11 9:00 Case-Shiller 20-city Index/-0.024
02/22/11 10:00 Consumer Confidence/67
02/23/11 7:00 MBA Mortgage Index/NA
02/23/11 10:00 Existing Home Sales/5.23M
02/24/11 8:30 Initial Claims/410K
02/24/11 8:30 Continuing Claims/3900K
02/24/11 8:30 Durable Orders
02/24/11 8:30 Durable Orders ex Transportation/0.006
02/24/11 10:00 FHFA Housing Price Index/NA
02/24/11 10:00 New Home Sales/310K
02/24/11 11:00 Crude Inventories/NA
02/25/11 8:30 GDP - Second Estimate/0.033
02/25/11 8:30 GDP Deflator - Second Estimate/0.003
02/25/11 9:55 Michigan Sentiment - Final
Monday, February 21
U.S. Markets Closed
Tuesday, February 22
09:00 Case-Shiller 20-City Index
10:00 Consumer Confidence
New Zealand Inflation Expectations
Canada Retail Sales
Treasury Coupon Purchase: 08/31/2016-02/15/2015: $6-8 bln
Before: AMED, AEE, BKS, CBRL, DAKT, DSX, EE, FST, FRO, HD, HRL, JASO, KNOL, M, MDT, ODP, SAH, SHOO, TNC, UNT, VFC, WMT
After: CBI, CHK, CTV, WIRE, EPIQ, GFIG, LOPE, HLF, HTZ, HPQ, LEAP, MHK, PZZA, PEGA, RSH, CLUB, ZIXI
Have a great three day weekend!