Bang, Zoom!
by Jerome "Mel" Hickerson
The week began after a long weekend in which the futures were mostly positive until just before the open. The regular session began with slight selling pressure from the futures but quickly shook that off, turning skyward and running hard.
Once again we see the phenomenon of light volume on the up days. Today’s SPX volume looks respectable until you lift the hood and see that Citi (which reported a $7,600,000,000.00 quarterly loss just before the open) was almost 20% of the SPX total volume. So beyond the Citi volume, the SPX volume was pretty weak. (Note also that Citi jumped almost 4% today in spite of quarterly losses that exceeded some countries annual budget.)
Today’s ascent was basically a one wave assault to the mountain top; pullbacks were basically non existent as the low of the day was one minute into the session and the high of the day was in the final minute. It was an impressive showing by the bulls; a huge bounce from Friday’s bearish session.
The question now is whether we are looking at a triple top or whether the indices bust up above the current trading range. My money is on the triple top scenario, but a break above 1150 tomorrow won’t be shocking. A run up to 1170 doesn’t seem all that unlikely.
The trend is obviously upward (see charts). The dip buyers come rushing in to buy every dip. So why is my money on the triple top scenario? Simply put, there are signs of weakness internally; signals that the market has come too far too fast and that buyers are becoming scarce. When buyers are scarce, the only thing that holds the market up is a lack of sellers. But what happens when some catalyst sends sellers looking for the exit? I am not sure what that catalyst will be, but with the extreme bullish sentiment it seems likely that something will happen soon to break the trend.
For Wednesday, our model is suggesting a struggle for the SPX. We are in the middle of a two day Long signal; as mentioned before, the recent pattern has been for the second day of such a signal to be sluggish; an inside day doji would not surprise me.
Wednesday, January 20
Economics
08:30 Building Permits 585k cons.
08:30 Core PPI 0.2% cons.
08:30 Housing Starts 580k cons.
08:30 PPI 0.0% cons.
10:30 Crude Inventories
Earnings
Before: AIT, ASML, BAC, BK, EAT, COH, COV, HCBK, MTB, MS, NTRS, STT, PGR, USB, WFC
After: DOX, EBAY, FFIV, LOGI, MTSC, NVEC, STX, SWKS, SBUX, TSS, WGOV, XLNX
Events
EXR at UBS Self Storage Real Estate Summit
BTE, KOG, EXXI, GTE at IPAA Oil & Gas Investment
Symposium Florida
PRXI Analyst Meeting
SPW Annual Investor Meeting
SPX Summary for Tuesday, January 19, 2010
444 Advancers/56 Decliners.
Today's SPX component winners and losers:
• Largest one day loser is THC with -4.61%
• Largest three day loser is PWR with -10.24%
• Largest five day loser is PWR with -11.74%
• Largest ten day loser is PCS with -19.72%
• Largest one day winner is WMB with 8.52%
• Largest three day winner is HUM with 10.44%
• Largest five day winner is SVU with 14.09%
• Largest ten day winner is ZION with 27.31%
*** SPX Technical Summary ***
The lowest 14 day RSI component is EXPE; the highest 14 day RSI component is SYK. The average 14 day RSI of all 500 components is 54.
Yesterday's lowest RSI EXPE earned -0.13% today.
Yesterday's highest RSI SYK earned 1.62% today.
The greatest positive five day momentum component is SVU; the greatest negative five day momentum component is PWR. The average five day momentum of all 500 components is 0.13.
42.80% of the SPX components are giving a crossover Buy signal; 17.40% of the SPX components are giving a Sell signal. This is a 2.5 to 1 ratio of Buy signals over Sell signals.
SPX component signal changes today (evidence of trend):
• From Sell to Neutral: 12 components.
• From Buy to Neutral: 51 components.
• From Neutral to Sell: 13 components.
• From Neutral to Buy: 7 components.
*** SPX Component Swing Trade Ideas ***
New Crossover Buy Signals:
V CSCO EMN EMC EFX TE TMO
New Crossover Sell Signals:
APH BDX CBS CTAS CSC FSLR IP NKE OXY OMC PGR RHT
High Positive Momentum:
SVU TWC WYN HUM EK SE MRK STZ LXK TXT TSN UNH
High Negative Momentum:
PWR PCS AA FSLR S KLAC TER ATI GT RDC NVLS
Mel’s Random Hits:
• Total tick for the day was 266,000. Breadth was positive from the open, briefly negative just before 3:00, then strong into the close.
• The day's range was 14.68 points.
• The day's volume was 85.5% of the average daily volume for the last year. Volume was 100.33% of the last 10 day average. Almost 20% of that volume was C.
• 9% of the SPX stocks closed with two day RSI above 90. 23% closed with RSI above 80. 11% closed with RSI below 20 and 5% closed with RSI below 10.
• 63% of the SPX are above their five day moving average, 56% are above their 10 day average, and 68% are above their 20 day moving average.
• 7% of the SPX stocks closed below their most recent previous lows.
• 36% of the SPX closed above their most recent previous high.
• 83.8% of stocks closed in the top half of the day's range. (16.2% closed in bottom half.)
• 2.0 of stocks closed in the bottom 20% of the day's range.
• 35.4% of stocks closed in the top 10% of the day's range.
• 26.0% of stocks closed within 2% of their 52 week high.
• 22.0% of stocks closed within 50% of their 52 week low.
• 40.0% of stocks closed within ¼% of their high for the day.
• 1.8% of stocks closed within ¼% of their low for the day.
• 88.6% of the SPX closed up from the previous close; 90.0% closed higher than the open.
• Sectors weaker than the SPX for the day: Energy, Financials, Industrials, Consumer Staples, and Utilities.
• Sectors stronger than the SPX for the day: Basic Materials, Consumer Discretionary, Technology, and Health Care.
• The $SOX index strength was stronger than the SPX today.
• The 2 Day RSI of the SPX is 68. The Dow RSI is 71, NASDAQ is 68 and Russell 71.
• SPX components moved upward slightly during the after hours with 132 million shares traded.
Have a great Wednesday!
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"Mel"
