Bulls Respond With Late Session Pump
by Jerome "Mel" Hickerson
Before the open, in spite of mixed results in Asiaand lower markets in Europe, the futures in the U.S.pointed to a slightly stronger open. Challenger, Gray and Christmas reported that there were 38,810 planned job cuts announced in May, which was up 1.3% from the 38,326 inApril but down sharply from the 111,182 seen a year ago in May.
The session opened with a six point pop, quickly gave it back before 10am with the low of the day at 9:54, and then began to grind higher with little in the way of significant intraday pullbacks until about 2pm. 2:24marked a significant intraday low and from then through the close, the bears were on their heels as the bulls romped. The final ten minutes of the day saw a six point burst as the SPX closed on the session highs.
So what happened today to cause this uprising? First in mind is that we bounced from extremely oversold conditions; in normal market times, this is the action we see off these conditions. I realize that the previous several weeks are not the norm; but could we be returning to a normal market? It’s a possibility that shouldn’t be discounted.
Today’s chart bar painted what is known as a large range outside day up, an “LROD Up” day. Many experienced traders will see this pattern as a buy signal on any move up from today’s highs. But for me, I need to see a break above last week’s highs – 1103ish – before I feel that we are going much higher. A pullback and consolidation tomorrow makes sense to me.
Our trade systems struggled today with Powershares QQQ Trust and Market Vectors Gold Miner (GDX). When the system gave a short signal, we dropped maybe two cents. I never received a long signal because the market just kept creeping higher. My method thrives on intraday volatility and that really lacked today as the market was grinding higher. Every method has good days and bad days; unfortunately, today was not a good one for my methods. We did manage to step aside at breakeven; my mistake was in being so relieved to escape that I stood down the rest of the day when the better move would have been to get long for the closing ramp.
Day Trade Systems Update: (Signals today)
* QQQQ Short at: 11:03
* QQQQ Short at: 12:18
* GDX Short at: 12:22
* Cover Qs at: 2:03
* Cover GDX at: 2:08
SPX Summary for Wednesday, June 02, 2010
483 Advancers/11 Decliners
Today's SPX component winners and losers:
- Largest one day loser is KG with -2.40%
- Largest three day loser is APC with -20.24%
- Largest five day loser is APC with -16.12%
- Largest ten day loser is APC with -23.65%
- Largest one day winner is HAL with 11.59%
- Largest three day winner is AMGN with 9.18%
- Largest five day winner is NTAP with 17.42%
- Largest ten day winner is NTAP with 15.91%
*** SPX Technical Summary ***
The lowest 14 day RSI component is DELL; the highest 14 day RSI component is BDK. The average 14 day RSI of all 500 components is 38.
The greatest positive five day momentum component is NTAP; the greatest negative five day momentum component is APC. The average five day momentum of all 500 components is 2.25.
4.00% of the SPX components are giving a crossover Buy signal; 38.00% of the SPX components are giving a Sell signal. This is a 9.5 to 1 ratio of Sell signals over Buy signals.
SPX component signal changes today (evidence of trend):
- From Sell to Neutral: 121 components.
- From Buy to Neutral: 1 component.
- From Neutral to Sell: 1 component.
- From Neutral to Buy: 3 components.
Notice that the movement again today is all from Sell to Neutral. This is a positive for the market.
The moving averages:
Close 1098.38
9 EMA 1073.92 Falling
5 DMA 1085.90 Rising
10 DMA 1085.13 Falling
20 DMA 1114.71 Falling
50 DMA 1160.08 Falling
100 DMA 1138.05 Falling
200 DMA 1105.62 Rising
10 Wk MA 1149.24 Rising
Notice that some of the averages are beginning to rise.
NYSE Summary
On the NYSE 3181 issues were traded with 2669 advancing issues and 444 retreating issues, a ratio of 6.01 to 1 advancing. There were 34 new highs and 20 new lows.
Advancing volume was higher at a ratio of 20.60 to 1. The closing TRIN was 0.29 and the final tick was 817.
This is the highest closing tick since May 3rd suggesting a lot of last minute buying.
Evidence of trend:
Relative to the previous 30 session average, volume was -14.61% below 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, 14 sessions ended on a positive tick, 3 of last 10.
The 5 day moving average of New Highs is 21 while the 5 day moving average of new lows is 21 and the 10 day moving average of Net Advancing is -176.
The 5 day average of New Highs has once again caught the 5 day average of New Lows. May 20th was the last time this happened.
Remember: Breadth leads, indices follow. Today, the NYSE Advance/Decline line increased from 199727 to 201952. This 1.10% increase came while the SPX was gaining 2.52%. The 10 day moving ratio of positive volume is 0.92 and the 10 day moving Advance/Decline ratio is 0.89. The 10 day moving ratio of positive volume has trended 0.14 over the last three days and the 10 day moving Advance/Decline ratio has trended 0.15 over the last three days.
The NYSE Composite Index gained 2.68% today.
NYSE Statistics:
Absolute Breadth Index: 55.63 up from previous day of 53.98
Cumulative Volume Index: 39,952.68 up from previous day of 34,681.12
High Low Logic Index: 0.51 up from previous day of 0.46
McClellan Oscillator: (52.91) up from previous day of (207.35)
McClellan 10 DMA: (245.53) up from previous day of (271.50)
McClellan Summation Index: (1,711.38) down from previous day of (1,658.47)
% Stocks Above 200 DMA: 55.57 up from previous day of 48.62
% Stocks Above 40 DMA: 20.75 up from previous day of 15.32
New High / New Low Ratio: 50.00 up from previous day of 43.48
26wk New High/Low Ratio: 37.99 up from previous day of 34.46
13wk New High/Low Ratio: 30.16 up from previous day of 25.95
4wk New High/Low Ratio: 41.36 up from previous day of 33.62
Cumulative 4-Week New Hi-Low: 436,767 down from previous day of 436,805
Nasdaq Adv/Decline: 1,462 up from previous day of 1,402
Russell 1000 Advance/ Decline Line: 2,331 up from previous day of 2,237
Russell 2000 Advance/ Decline Line: (1,891) up from previous day of (1,977)
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 3
Economics
08:15 ADP Employment Change 52k cons.
08:30 Productivity Rev 3.6% cons.
08:30 Unit Labor Costs -1.6% cons.
08:30 Initial Claims 455k cons.
08:30 Continuing Claims 491k cons.
10:00 Factory Orders 1.0% cons.
10:00 ISM Services 55.6 cons.
05:00 European Union Retail Sales
Earnings
Before: CRMT, CHRS, JOYG, STP
After: JRJC, CMTL, COO, DCP, GII, MATK, ZQK, SAI, TTWO, ULTA
Speeches
07:30 Dennis Lockhart
01:15 Thomas Hoenig
A number of labor market reports come out in the morning ahead of Friday's big non-farm payrolls report from the federal government.
The weekly jobless claims tally from the Department of Labor is due before the start of trading. 455,000 Americans are expected to have filed new claims for unemployment versus 460,000 last week. Payroll services firm ADP is expected to report that employers added 56,000 private-sector jobs in May after adding 32,000 inApril. The ISM's services sector index for May is due in the morning along with government readings on first-quarter productivity and unit labor costs.
Mel’s Missives from the Matrix:
- Total tick for the day was 251,000 and the average tick for the day was 193. There were 205 ticks greater than 600 and 20 ticks more extreme than -600. There were 15 ticks greater than 1000 and no ticks more extreme than -1000. The tick action suggests institutional accumulation.
- The day's range was 26.46 points. The intraday trading range - 9:35to the close - was 26.31. The 5 DMA of daily range is 24.62.
- Evidence of the intraday trend: At 10amvolume was 72.68% of the 10 day average. By noonthe volume was 74.62% of the 10 day average, and by 2pmvolume was 71.23% of the 10 day average.
- The day's volume was 100.8% of the average daily volume for the last year. Volume was 74.3% of the last 10 day average and 98% of the previous day’s volume.
- Evidence of the intraday trend: The largest increase in relative volume came between 1:45and 2:00when relative volume increased 22.5% while the SPX was dropping -0.18%. The largest drop in relative volume came between 3:15and 3:30when relative volume dropped -22.9% while the SPX was rising 0.03%.
- 4% of the SPX stocks closed with two day RSI above 90. 15% closed with RSI above 80. 2% closed with RSI below 20 and 1% closed with RSI below 10.
- 78.2% of the SPX are above their five day moving average, 73.4% are above their 10 day average, 31.8% are above their 20 day moving average, 16.6% are above their 50 day moving average, and 36.4% are above their 100 day moving average.
- 34% of the SPX closed above their most recent previous high.
- 2% of the SPX stocks closed below their most recent previous lows.
- 483 SPX issues advanced and 11 issues declined, a net SPX advance/decline of 472.
- Evidence of the intraday trend: At 10am, 40% of the SPX components were in the top half of the range. By noon, 86.4% were in the top half of the range, and by 2pm, 79.4% were in the top half of the range.
- 97.6% of stocks closed in the top half of the day's range. (2.2% closed in bottom half.)
- 83.4% of stocks closed in the top 10% of the day's range. 89.6% of stocks closed in the top 20% of the day's range.
- 0% of stocks closed in the bottom 10% of the day's range. 0.4% of stocks closed in the bottom 20% of the day's range.
- 4% of stocks closed within 2% of their 52 week high. 10% of stocks closed within 5% of their 52 week high.
- 60.4% of stocks closed within 50% of their 52 week low. 29% of stocks closed within 25% of their 52 week low.
- 80.6% of stocks closed within ¼% of their high for the day.
- 0% of stocks closed within ¼% of their low for the day.
- Evidence of the intraday trend: At 10am, 69.6% of the SPX components were up since the open. By noon, 91.2% were up since the open, and by 2pm, 88.6% were up since the open.
- 96.8% of the SPX closed up from the previous close; 94.8% closed higher than the open.
- Sectors stronger than the SPX for Wednesday:
- Basic Materials -- Outperformed the SPX by +38%.
- Energy -- Outperformed the SPX by +192%.
- Financials -- Outperformed the SPX by +37%.
- Sectors weaker than the SPX for Wednesday:
- Industrials -- Underperformed the SPX by -0%.
- Technology -- Underperformed the SPX by -50%.
- Consumer Staples -- Underperformed the SPX by -88%.
- Utilities -- Underperformed the SPX by -50%.
- Health Care -- Underperformed the SPX by -42%.
- Consumer Discretionary -- Underperformed the SPX by -9%.
- The $SOX index strength was stronger relative to the SPX Wednesday by 1%.
- The XLF outperformed the SPX by 0.37% Wednesday.
- The 2 Day RSI of the SPX is 67. The Dow RSI is 70, the NASDAQ is 72 and the Russell is 61.
- Over the last four sessions, the average session closed 56.76% of the range above the low. Wednesday closed at 99.9% of the daily range.
- Upside momentum moved upward Wednesday, from Tuesday’s -0.25 to today’s 0. The ratio of SPX components giving a crossover sell signal compared to buy signals moved positively to S 9.5 to 1.
- The ISEE Equity 10 day moving average Wednesday was 145.6. 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.
- 207 SPX components moved upward and 158 components downward during the after hours with 194 million shares traded.
Trade 'em well on Thursday everyone!
-Mel
