Bears Rule the Afternoon
by Jerome "Mel" Hickerson
Futures were near breakeven most of the night but moved positive pointing to a stronger open after Chinareleased strong export data. Asiaclosed mixed but mostly green while Europewas all green as we approached the open.
The session opened with an eight point pop upward, consolidated for about an hour, and then bullishly began climbing, putting the high of the day on the chart at 11:28. The DOW was more than 65 points above the 10,000 mark. But the rest of the day belonged entirely to the bears as the indices began a gentle stair-stepping downward pattern that accelerated a bit after 2:30 and threatened to cascade downward. A feeble bounce in the final minutes brought the indices off their lows.
Before I move on and prognosticate a bit, allow me to humbly apologize to all the pirates out there who may have been offended by my earlier references to pirates and the Jolly Roger. I meant no offense and certainly do not mean to imply that all pirates are bearish traders.
So, to move on, the afternoon today was anything but pretty. The ewavers and bears were no doubt thrilled by the afternoon action. And make no mistake: There was nothing bullish about today. But just how bearish was it?
Under the hood, the breadth data today was not nearly so ugly as the closing Dow might suggest. The advance/declines moved upward while positive and negative volume was largely neutral. The Russell small caps even managed a small gain.
So today’s afternoon sell-off may turn out to be meaningless. But I have to say this: I am watching a piece of data that I only find myself interested in a few times a year. I’ll have a better feel for the significance of this data tomorrow, but for those interested, the last times I was watching this data closely were January 12th and May 10th. So caution should be used if you are bullish here.
Our trade systems were active today. We were in almost constant scalp mode. Not all trades were successful but we had a pretty good day, focused on: United State Oil Fund (USO), Market Vectors Gold Miners (GDX), ProShares Ultra S&P500 ETF (SSO), and Spdr Gold Trust (GLD).
Day Trade Systems Update: (Signals today)
* USO Short at: 10:34
* GDX Short at: 11:00
* GLD Long at: 11:17
* GDX Long at: 11:40
* GDX Long at: 11:55
* GDX Long at: 1:07
* GDX Long at: 1:44
* GLD Long at: 2:45
* SSO at: 3:02
* SSO at: 3:23
SPX Summary for Wednesday, June 09, 2010
229 Advancers/256 Decliners
Today's SPX component winners and losers:
- Largest one day loser is APC with -18.69%
- Largest three day loser is APC with -22.87%
- Largest five day loser is APC with -21.47%
- Largest ten day loser is APC with -34.13%
- Largest one day winner is PLL with 9.06%
- Largest three day winner is BMY with 7.59%
- Largest five day winner is HSY with 5.16%
- Largest ten day winner is NBR with 15.64%
*** SPX Technical Summary ***
The lowest 14 day RSI component is LEN; the highest 14 day RSI component is BDK. The average 14 day RSI of all 500 components is 41.
The average five day momentum of all 500 components is -4.35.
8.00% of the SPX components are giving a crossover Buy signal; 73.00% of the SPX components are giving a Sell signal. This is a 9.1 to 1 ratio of Sell signals over Buy signals.
SPX component signal changes today (evidence of trend):
- From Sell to Neutral: 6 components.
- From Buy to Neutral: 13 components.
- From Neutral to Sell: 50 components.
- From Neutral to Buy: 7 components.
The moving averages:
Close 1055.69
9 EMA 1062.80 Rising
5 DMA 1067.17 Falling
10 DMA 1076.54 Falling
20 DMA 1095.49 Falling
50 DMA 1149.85 Falling
100 DMA 1134.18 Falling
200 DMA 1107.30 Rising
10 Wk MA 1133.67 Falling
NYSE Summary
On the NYSE 3206 issues were traded with 1584 advancing issues and 1511 retreating issues, a ratio of 1.05 to 1 advancing. There were 35 new highs and 45 new lows.
Declining volume was higher at a ratio of 1.02 to 1. The closing TRIN was 1.07 and the final tick was 122.
Evidence of trend:
Relative to the previous 30 session average, volume was 5.35% above the average. Of the last 15 sessions 8 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 13 sessions ended on a positive tick, 6 of last 10.
The 5 day moving average of New Highs is 29 while the 5 day moving average of new lows is 63 and the 10 day moving average of Net Advancing is 37.
Remember: Breadth leads, indices follow. Today, the NYSE Advance/Decline line increased from 199449 to 199522. This 0.04% increase came while the SPX was losing -0.6%. The 10 day moving ratio of positive volume is 0.89 and the 10 day moving Advance/Decline ratio is 1.02. The 10 day moving ratio of positive volume has trended 0.15 over the last three days and the 10 day moving Advance/Decline ratio has trended 0.14 over the last three days.
The NYSE Composite Index lost -0.55% today.
NYSE Statistics:
Absolute Breadth Index: 51.25 up from previous day of 47.50
Cumulative Volume Index: 39,562.72 down from previous day of 40,057.56
High Low Logic Index: 0.52 up from previous day of 0.46
McClellan Oscillator: (81.58) up from previous day of (106.80)
McClellan 10 DMA: (116.81) up from previous day of (140.06)
McClellan Summation Index: (2,190.30) down from previous day of (2,108.72)
% Stocks Above 200 DMA: 41.11 up from previous day of 40.34
% Stocks Above 40 DMA: 16.81 up from previous day of 15.69
New High / New Low Ratio: 40.91 up from previous day of 13.57
26wk New High/Low Ratio: 27.38 up from previous day of 6.83
13wk New High/Low Ratio: 23.28 up from previous day of 5.08
4wk New High/Low Ratio: 33.57 up from previous day of 6.51
Cumulative 4-Week New Hi-Low: 435,174 down from previous day of 435,268
Nasdaq Adv/Decline: 1,339 down from previous day of 1,343
Russell 1000 Advance/ Decline Line: 2,240 down from previous day of 2,246
Russell 2000 Advance/ Decline Line: (2,031) down from previous day of (2,029)
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).
Thursday, June 10
Economics
08:30 Initial Claims
08:30 Continuing Claims
08:30 Trade Balance -$41.6 b
02:00 Treasury Budget $127.0b
05:00 Italy GDP
07:00 Bank of England Announcement
07:45 ECB Announcement
08:30 Canada Merchandise Trade
07:50 Japan PPI
Earnings
Before: APWR, CRAI, DLM, LULU, NOOF, SCHS
After: ARST, FNSR, INXI, NSM
Auction
01:00 30-yr Bond Auction
The weekly jobless claims report from the Department of Labor is due in the morning. Roughly 450,000 Americans are expected to have filed new claims for unemployment last week versus 453,000 inthe previous week. Continuing claims is expected to have fallen to 4,600,000 from 4,666,000 inthe previous week. The April trade balance is due to be released by the government in the morning. The gap is expected to have widened to $41.2 billion from $40.4 billion in March.
Mel’s Missives from the Matrix:
- Total tick for the day was 66,000 and the average tick for the day was 43. There were 155 ticks greater than 600 and 115 ticks more extreme than -600. There were 11 ticks greater than 1000 and 14 ticks more extreme than -1000. The tick action suggests institutional accumulation.
- The day's range was 24.91 points. The intraday trading range - 9:35to the close - was 24.79. The 5 DMA of daily range is 26.48.
- Evidence of the intraday trend: At 10amvolume was 86.81% of the 10 day average. By noonthe volume was 97.14% of the 10 day average, and by 2pmvolume was 95.32% of the 10 day average.
- The day's volume was 119.6% of the average daily volume for the last year. Volume was 98.2% of the last 10 day average and 95.4% of the previous day’s volume.
- Evidence of the intraday trend: The largest increase in relative volume came between 2:45and 3:00when relative volume increased 30.6% while the SPX was dropping -0.65%. The largest drop in relative volume came between 2:15and 2:30when relative volume dropped -34.2% while the SPX was rising 0.03%.
- 0% of the SPX stocks closed with two day RSI above 90. 3% closed with RSI above 80. 25% closed with RSI below 20 and 14% closed with RSI below 10.
- 24.2% of the SPX are above their five day moving average, 18.8% are above their 10 day average, 13% are above their 20 day moving average, 9% are above their 50 day moving average, and 21% are above their 100 day moving average.
- 26% of the SPX closed above their most recent previous high.
- 6% of the SPX stocks closed below their most recent previous lows.
- 229 SPX issues advanced and 256 issues declined, a net SPX advance/decline of -27.
- Evidence of the intraday trend: At 10am, 53.2% of the SPX components were in the top half of the range. By noon, 84.8% were in the top half of the range, and by 2pm, 60.6% were in the top half of the range.
- 4.8% of stocks closed in the top half of the day's range. (95% closed in bottom half.)
- 0.6% of stocks closed in the top 10% of the day's range. 0.6% of stocks closed in the top 20% of the day's range.
- 14.4% of stocks closed in the bottom 10% of the day's range. 68.2% of stocks closed in the bottom 20% of the day's range.
- 1.4% of stocks closed within 2% of their 52 week high. 5.2% of stocks closed within 5% of their 52 week high.
- 68.4% of stocks closed within 50% of their 52 week low. 36.4% of stocks closed within 25% of their 52 week low.
- 1% of stocks closed within ¼% of their high for the day.
- 8.6% of stocks closed within ¼% of their low for the day.
- Evidence of the intraday trend: At 10am, 81.4% of the SPX components were up since the open. By noon, 90% were up since the open, and by 2pm, 84.6% were up since the open.
- 41.4% of the SPX closed up from the previous close; 21.4% closed higher than the open.
- Sectors stronger than the SPX for Wednesday:
- Basic Materials -- Outperformed the SPX by +73%.
- Industrials -- Outperformed the SPX by +59%.
- Consumer Staples -- Outperformed the SPX by +40%.
- Utilities -- Outperformed the SPX by +4%.
- Health Care -- Outperformed the SPX by +14%.
- Consumer Discretionary -- Outperformed the SPX by +78%.
- Sectors weaker than the SPX for Wednesday:
- Energy -- Underperformed the SPX by -45%.
- Financials -- Underperformed the SPX by -60%.
- Technology -- Underperformed the SPX by -25%.
- The $SOX index strength was weaker relative to the SPX Wednesday by -0.15%.
- The XLF underperformed the SPX by -0.6% Wednesday.
- The 2 Day RSI of the SPX is 26. The Dow RSI is 32, the NASDAQ is 8 and the Russell is 9.
- Over the last four sessions, the average session closed 30.6% of the range above the low. Wednesday closed at 11.1% of the daily range.
- Upside momentum moved downward Wednesday, from Tuesday’s -1.55 to today’s -4.35. The ratio of SPX components giving a crossover sell signal compared to buy signals moved negatively to S 9.13 to 1.
- The ISEE Equity 10 day moving average Wednesday was 153.6. The lowest 10 day average in the last 52 weeks was 141.5 on 06/29/09and the highest 10 day average in the last 52 weeks was 249.3 on 04/15/10.
- 165 SPX components moved upward and 190 components downward during the after hours with 224 million shares traded.
Trade 'em well on Thursday everyone!
-Mel
