Apple Upstages the Fed
Market Recap:
Asian markets followed the post-Apple futures higher. European markets were also up this morning after the ECB's Draghi basically said there is no reason for the central bank to ramp up assistance programs. U.S. futures were pointing to a sharply higher open. The Commerce Department reported that Durable Goods orders were down -4.2% during the month, which was far worse than the consensus expectations for a decline of -2.0%. When you strip out the volatile orders for transportation, orders fell by -1.1%, which was also below the consensus for +0.3%.
This was a session riddled with FOMC business throughout. The Apple-fueled futures immediately caused a large gap upward at the open. Traders were content to take things higher for the first half hour but the morning high was quickly in. The rest of the morning drifted lower while the afternoon drifted higher. But after the morning gap this was a tight range session unlike most FOMC announcement days.
Our Market Leaders Board shows today's strength. Technology, running on Apple's earnings, was by far the strongest leader while the Financials and the Dow were lagging.
SPX big winners were Edwards Life Sciences (EW) 11.2%, Apple Inc (AAPL) 8.07%, and Aflac Inc (AFL) 7.37%. SPX big losers were C.H. Robinson Worldwide (CHRW) -7.7%, Hess Corp (HES) -6.89%, and Caterpillar Inc (CAT) -4.64%.
SPX five day big winners are Gilead Sciences Inc (GILD) 12.79%, Edwards Life Sciences (EW) 12.56%, and Ebay Inc (EBAY) 11.12%. SPX five day big losers are Big Lots Inc (BIG) -21.6%, Netflix Inc (NFLX) -19.27%, and First Solar Inc (FSLR) -14.29%.
New Ten Day Highs: ABT, AET, AFL, AKAM, ATI, ALL, AEE, AEP, AXP, AMT, AMGN, AIV, AIZ, T, AN, AVB, AVY, BBT, BMS, BIIB, XL, BA, BXP, BSX, BF/B, CBG, CNP, CF, CB, XEL, CI, CINF, CMS, KO, CCE, CL, ED, STZ, GLW, CVH, DRI, DVA, DE, DELL, XRAY, DFS, D, DOW, DTE, DUK, DD, ETFC, EMN, ETN, EIX, EMR, EOG, EQR, EL, XOM, FE, FMC, GPS, GD, GE, GR, GT, HOG, HAR, HRS, HIG, HCP, HCN, HSY, HON, HRL, HCBK, HBAN, ITW, TEG, IPG, IP, IRM, ITT, KMB, KIM, KFT, LLL, LEG, LUK, LLY, LTD, LMT, L, LSI, MMC, MAS, MA, MWV, TAP, NBR, NWL, GAS, NI, NBL, NSC, NU, NOC, OMC, PH, JCP, POM, PEP, PFE, PCG, PNW, PXD, PCL, PNC, PPG, PCP, PFG, PGN, PSA, QLGC, PWR, STR, RRC, RTN, RF, RSG, RHI, SLE, SCG, CVG, SLB, SNI, SHW, SPG, SNA, STT, SUN, STI, TLAB, TMO, TIF, TWX, TSS, TRV, UNP, UNM, USB, VAR, VTR, VZ, VNO, WPI, WLP, WDC, WU, AMZN
New Ten Day Lows: AMD, AN, BIG, CELG, CHRW, CSCO, COP, SAI, DV, DPS, FSLR, FTI, GD, GNW, HES, IGT, LXK, LO, MDP, MU, MOLX, NOV, RSH, ROK, COL, SHLD, TMK, VXX, WMT
Volume & Breadth Indicators
For the SPX Index there were 414 components advancing and 84 components declining. On the NYSE 3,156 issues were traded with 2,350 advancing issues and 706 retreating issues, a ratio of 3.33 to one advancing. There were 132 new highs and 13 new lows. The five day moving average of New Highs is 81 while the five day moving average of New Lows is 37 and the ten day moving average of Net Advancing is 308. The Net Advancing data indicates a bullish trend.
Advancing volume was higher at a ratio of 3.81 to one. The closing TRIN was 1.02 and the final tick was 483. The five day average of TRIN is 1.44 and the ten day average of TRIN is 1.24. The NYSE Composite Index gained 1.04% today while the SPX gained 1.35%.
For the NYSE, relative to the previous 30 session average, volume was 0.54% 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, 17 sessions ended on a positive tick, 7 of last 10. For the SPX, the day's volume was 91.4% of the average daily volume for the last year. Volume was 103.1% of the last 10 day average and 104.8% of the previous day’s volume.
Looking at the NYSE 15-second tick data, the total tick for the day was 125,000 and the average tick for the day was 81. There were 56 ticks greater than 600 and 18 ticks more extreme than -600. There were 8 ticks greater than 1000 and no ticks more extreme than -1000. The tick action suggests institutional accumulation.
Looking at the one-minute tick data, there were 81 ticks greater than 500 and 28 ticks more extreme than -500. 61.2% one-minute ticks were positive. There were 10 ticks greater than 900 and 2 ticks more extreme than -900. The tick action suggests institutional accumulation.
The tick data today shows that buyers had control of the tape from start to finish.
The intraday volume pattern today was ragged and uneven; without a discernable pattern. The Nightly Breadth Indicators remain mixed with the McClellan Oscillator in neutral territory and the Summation Index remaining bearish.
Moving Average and Support/Resistance Indicators:
74.6% of the SPX are above their five day moving average, 64.6% are above their 10 day average, 52.6% are above their 20 day moving average, 50.4% are above their 50 day moving average, and 74.8% are above their 200 day moving average.
There were no significant moving average crossovers today. Our moving average Power Rating is 51 of a possible 100.
Sectors on the Move:
Sectors stronger than the SPX for Wednesday:
- Basic Materials -- Outperformed the SPX by +75%.
- Technology -- Outperformed the SPX by +138%.
- Consumer Discretionary -- Outperformed the SPX by +23%.
Sectors weaker than the SPX for Wednesday:
- Energy -- Underperformed the SPX by -38%.
- Financials -- Underperformed the SPX by -49%.
- Industrials -- Underperformed the SPX by -118%.
- Consumer Staples -- Underperformed the SPX by -78%.
- Utilities -- Underperformed the SPX by -80%.
- Health Care -- Underperformed the SPX by -30%.
Checking the sectors of the SPX tonight: (The sector Buy and Sell signals come from a mechanical trend trading system; there will be some whipsaw but the signal will never be on the wrong side for long.)
The Basic Materials sector advancing issues (29) totaled 288,502 shares traded (9,948 average per stock) and declining issues (1) totaled 7,024 shares traded (7,024 average per stock.) 17 components are on an uptrend (10 new uptrends today) and 13 components are on a downtrend (no new downtrends today.) There were 2 New Highs and no New Lows. The sector is on a Buy signal and closed below the daily pivot. The sector 5-Day average closed -.25% below the 20-Day average.
The Energy sector advancing issues (27) totaled 315,228 shares traded (11,675 average per stock) and declining issues (16) totaled 356,219 shares traded (22,264 average per stock.) 15 components are on an uptrend (4 new uptrends today) and 28 components are on a downtrend (2 new downtrends today.) There were no New Highs and no New Lows. The sector is on a Sell signal and closed below the daily pivot. The sector 5-Day average closed -.81% below the 20-Day average.
The Financials sector advancing issues (60) totaled 676,547 shares traded (11,276 average per stock) and declining issues (21) totaled 1,295,493 shares traded (61,690 average per stock.) 38 components are on an uptrend (7 new uptrends today) and 43 components are on a downtrend (2 new downtrends today.) There were 7 New Highs and no New Lows. The sector is on a Sell signal and closed below the daily pivot. The sector 5-Day average closed -1.15% below the 20-Day average.
The Industrials sector advancing issues (49) totaled 297,088 shares traded (6,063 average per stock) and declining issues (12) totaled 313,203 shares traded (26,100 average per stock.) 35 components are on an uptrend (13 new uptrends today) and 26 components are on a downtrend (2 new downtrends today.) There were 3 New Highs and 1 New Lows. The sector is on a Sell signal and closed above the daily pivot. The sector 5-Day average closed -.19% below the 20-Day average.
The four 'risk sectors' totaled 165 advancing issues and 50 declining issues today with 34 new uptrends and 6 new downtrends. 45.5% of Risk Sector components are Uptrending.
The Technology sector advancing issues (67) totaled 1,981,438 shares traded (29,574 average per stock) and declining issues (11) totaled 563,478 shares traded (51,225 average per stock.) 26 components are on an uptrend (13 new uptrends today) and 53 components are on a downtrend (2 new downtrends today.) There were 3 New Highs and 2 New Lows. The sector is on a Sell signal and closed above the daily pivot. The sector 5-Day average closed -1.64% below the 20-Day average.
The Consumer Staples sector advancing issues (34) totaled 314,353 shares traded (9,246 average per stock) and declining issues (8) totaled 86,256 shares traded (10,782 average per stock.) 17 components are on an uptrend (2 new uptrends today) and 25 components are on a downtrend (2 new downtrends today.) There were 5 New Highs and no New Lows. The sector is on a Buy signal and closed below the daily pivot. The sector 5-Day average closed .16% above the 20-Day average.
The Utilities sector advancing issues (26) totaled 128,961 shares traded (4,960 average per stock) and declining issues (5) totaled 41,111 shares traded (8,222 average per stock.) 26 components are on an uptrend (3 new uptrends today) and 6 components are on a downtrend (no new downtrends today.) There were 2 New Highs and no New Lows. The sector is on a Sell signal and closed above the daily pivot. The sector 5-Day average closed .41% above the 20-Day average.
The Health Care sector advancing issues (47) totaled 502,521 shares traded (10,692 average per stock) and declining issues (4) totaled 62,638 shares traded (15,660 average per stock.) 27 components are on an uptrend (11 new uptrends today) and 24 components are on a downtrend (1 new downtrends today.) There were 3 New Highs and no New Lows. The sector is on a Buy signal and closed above the daily pivot. The sector 5-Day average closed .07% above the 20-Day average.
The Consumer Discretionary sector advancing issues (75) totaled 769,582 shares traded (10,261 average per stock) and declining issues (6) totaled 69,370 shares traded (11,562 average per stock.) 41 components are on an uptrend (24 new uptrends today) and 40 components are on a downtrend (no new downtrends today.) There were 2 New Highs and 1 New Lows. The sector is on a Sell signal and closed below the daily pivot. The sector 5-Day average closed -.34% below the 20-Day average.
Based on the SPX sector data, we are on a Sell for the SPX and the Russell 2000.
What We Learned from Wednesday's Action:
Wednesday was session 1 to close above the 5 DMA, session 1 to close above the 10 DMA, session 1 to close above the 20 DMA, and session 1 to close above the 50 DMA. This was also session 12 for the 5 DMA to close below the 20 DMA. One early sign of a sustainable rally or pullback is often a close above or below the 10 DMA. The SPX closed 11.88 points above the 10 DMA.
The SPX 5 DMA is 1377.02, 10 DMA is 1378.84, 20 DMA is 1387.22, 50 DMA is 1381.16, 100 DMA is 1332.62, and 200 DMA is 1273.76.
On Wednesday the SPX traded both below and above the opening range. 80.6% of the SPX closed up from the previous close; 65% closed higher than the open. During Wednesday's session the SPX gained 18.61 points from open to close. The SPX intraday trading range was 6.59 points. The 5-Day average intraday trading range is 10.7 points, the 10-Day average is 11.54 points, and the 20-Day average is 12.21 points. The trading range is contracting. The 5-Day SPX gain is 0.40%, the 10-Day gain is 1.61%, and the 15-Day gain is -1.60%.
Note: The Opening Range Breakout is one of the simplest day trading set-ups to understand. The first hour of the trading day is the most volatile. Bears and bulls are battling it out in the stock market, trying to show you who’s going to be in charge for the day. If we break out of that trading range, it's telling us that new buying or selling is impacting traders' assessments of value. Looking back at today’s breakouts also helps us grasp sentiment going forward because when a clear trend is established it often carries through for several sessions.
Our Technical Summary reflects how much the technicals have changed; we've got about equal amounts of green and red on the chart.
Looking Ahead:
The Market Environment for Thursday is -1. Greater than three is bullish and less than negative three is bearish. The short-term trend appears to be higher. Mel's 10 Day Oscillator is 45 (below 35 is oversold and above 65 is overbought.) Based solely on the technicals, our bias is slightly bearish for Thursday's session.
Today was one of the most sluggish FOMC days in memory as the action was all with the overnight gap. Intraday trading range was less than seven SPX points, quite unusual for a Fed Day.
Technicals are very neutral here. It is quite possible that the SPX runs higher for a couple of days (but we anticipate Thursday being a down session.) We remain short (via TZA) and plan to ride out any possible upcoming surge higher.
But this is an unclear time for either side as the indices and sectors mostly closed right at their pivots. The SPX climbed back above the 50-day and 20-day averages while the Financials closed below both. The Russell 2000 closed above the 20-day but below the 50-day average. This is muddled; cash is not a bad place to be while the smoke settles.
Thursday, April 26
Economics
08:30 Initial Jobless Claims – consensus 368K
08:30 Continuing Claims – consensus 3285K
10:00 Pending Home Sales – consensus 1.3%
11:00 Kansas City Fed
11:00 Fed to purchase $1.5b-$2b notes in 25 to 30-year range
1:00 Treasury selling $29b 7-year notes
04:30 JPY All Industry Activity Index
09:00 EUR Euro-Zone Consumer Confidence
09:00 EUR Euro-Zone Business Climate Indicator
12:00 EUR German CPI
23:30 JPY Jobless Rate
23:30 Household Spending
Earnings
Before: DDD, AET, AIXG, ALU, AFAM, MO, AM, APU, ARGN, ABC, AME, AMLN, AIT, ART, ABG, AME, AMLN, AIT, ART, ABG, AZN, AVEO, AVT, BLL, BDC, BLC, BMS, BHE, BRY, BWA, BGG, BCO, BMY BRKR, BC, BG, CAB, CCMP, CAM CRR, CRI, CSH, CELG, GTLS, CME, CMS, CCE, CL, CLP, CNMD, CNX, COR, OFC, CRY, DLX, DB, DLR, D, UFS, DOW, DNKN, ELNK, ELN, EME, ETR, EQT, EVR, XOM, FSS, FIS, FAF, FVE, F, FORR, GMT, GEL, GR, GTI, GPK, GPI, HHS, HW, HP, HERO, INCY, IART, IPG, IVC, IVZ, IRM, ESI, JBLU, JRN, KBW, K, KMT, LLL, LANC, LSTR, LAZ, TVL, LINE, LKQX, LMT, LYTS, MHO, CLI, MTRN, MJN, VIVO, MTH, MEA, PCS, MGI, MCO, MYL, BABY, NCI, NTCT, NEI, NIHD, NBL, NUS, OXY, ODFL, ORI, OCR, OSK, PACR, PMTI, PCX, PTEN, PEP, PNK, POT, PDS, PROV, PHM, RTN, REGN, O, REGN, RGS, RS, SOL, RTIX, SFE, SWY, SNH, SQNS, SHPGY, SLGN, SWI, SPNC, SAVE, HOT, STEL, STC, SWC, STRA, TSM, TASR, TLAB, TS, TWC, TRS, TYC, UGI, UBSI, UCBI, UAL, UTHR, USAP, UPS, VCI, VNTV, VDSI, VSI, VMC, WBC, WM,WST, WHR, WRLD, XEL, YNDX, ZMH
After: AAN, ABAX, AEM, AIQ, AMZN, DOX, AMKR, ANGI, ANH, AMCC, ARBA, ASIA, AACC ,ATHN, AVID, AXS, BYI, BMRN, BJRI, EPAY, BBRG, CELL, CAP, CAMP, ELY, CPT, CERN, CHH, CINF, CRBC, CLWR, COHR, CSTR, COLM, CYH, CMP, CPSI, CPTS, CTCT, DECK, PROJ, DGII, DRC, DNB, EMN, ECHO, EDR, EHTH, ELGX, EPIQ, EXPE, EXTR, FII, FR, FBHS, FIO, GERN, GFIG, GILD, GDOT, HBHC, HLS, HITT, HGSI, INFA, IM, IMI, ITMN, INAP, INVN, KERX, KEG, KLAC, LEG, MTW, MXIM, MXWL, MBLX, MCRL, MCRS, MTX, MIPS, MWW, NANO, NATI, N, NSR, NR, NTRI, NXPI, OCLR, OLN, ASGN, OPWV, OFIX, PCTI, PKI, PFG, QLIK, KWR, RSG, RMD, SABA, SCSC, SBCF, SGEN, SIMO, SSD, SWKS, SONS, SPSC, SBUX, SPN, SIVB, SYNA, TAL, TNGO, TCO, TSYS, TNAV, TSRA, THRX, TPCG, UHS, UACL, WOOF, VRSN, VRTX, VPRT, WTI, WRE, WAIR, WDC, WSH, GB, WYNN, ZOLL, ZNGA
Durable goods dropped 4.2%, more than the expected loss of 1.5%. Oil inventories rose 4 million barrels. Last week they added 3.9 million. On Thursday we will get initial claims and pending home sales.
Personal Note: Thursday will be spent at the hospital. Whether a full report gets done Thursday evening is questionable. As my condition progresses my strength weakens.
Good trading!
Thank you for reading. Think on it, trade on it, and be well.
-Mel