Day Six for the SPX Winning Streak
by Jerome "Mel" Hickerson, MarketsPath.com
The week opened with the typical Monday morning pressure from the futures, gapped up and set the high for the session just two minutes after the open. From there, the index began an orderly consolidation and retreat setting the low of the day at 12:48, after which the regular afternoon ramp upward commenced. From 1:00 through the close the indices marched slowly upward, closing near the afternoon highs.
Today’s session marked the sixth consecutive positive close for the SPX, equaling the longest winning streak since the rally began almost a year ago. Once again, it was not an easy win; the index spent much of the day in the red.
The action today seemed to be largely driven by two factors: 1) The overnight futures dominated the open, and 2) Waiting for earnings reports after the close. Most of the day just seemed to be holding its breath and waiting.
Alcoa reported a .01 per share profit while the consensus was expecting something like .06. It seems likely that this will affect Tuesday’s open, although it’s how the guidance is perceived that is more crucial than the actual earnings. But the Alcoa earnings report is rarely a report with lasting impact.
For Tuesday, our model continues to call for a pullback. The further we inch upward, the further I think we move when we turn downward. I feel confident that we are likely to make this turn Tuesday or Wednesday, with a move back into the 1105ish area likely before we bounce. I’ve been saying since late October that I thought 1150 would be our high, we were within a fraction of that today, so it seems to make sense that we turn soon.
Tuesday, January 12
Economics
08:30 Trade Balance -34.8B
Earnings
Before: GAP, INFY, KBH, SVU
After: EXFO, FUL, LLTC, XRTX
Speeches
07:00 Charles Plosser
Auctions
01:00 3-Yr Note Auction
The November trade balance, from the Commerce Department, is due out before the market opens. The trade gap is expected to have widened to $34.8 billion from $32.9 billion.
Mel’s Random Hits:
• Total tick for the day was +176,000. More than 71% of all ticks were positive. The entire session was positive with the exception of short periods between 9:45 and 10:15, 11:00 and 11:30, and 1:15 and 1:45. This session strongly resembled Thursday and Friday’s sessions. Breath remain bullish.
• The day's range was 7.72 points. This stretch of range contraction may come to an end Tuesday. I can hope.
• The day's volume was 76.6% of the average daily volume for the last year. Volume was 118% of the last 10 day average. The volume decreased throughout the day. The last day with at least 100% volume was December 18th.
• 19% of the SPX stocks closed with two day RSI above 90. 31% closed with RSI above 80. 13% closed with RSI below 20 and 5% closed with RSI below 10.
• 65% of the SPX are above their five day moving average, 69% are above their 10 day average, and 89% are above their 20 day moving average.
• 12% of the SPX stocks closed below their most recent previous lows.
• 31% of the SPX closed above their most recent previous high.
• 52.2% of stocks closed in the top half of the day's range. (47.8% closed in bottom half.)
• 12.2% of stocks closed in the bottom 20% of the day's range.
• 10.8% of stocks closed in the top 10% of the day's range.
• 36.4% of stocks closed within 2% of their 52 week high.
• 23.2% of stocks closed within 50% of their 52 week low.
• 18.8% of stocks closed within ¼% of their high for the day.
• 5.6% of stocks closed within ¼% of their low for the day.
• 54.6% of the SPX closed up from the previous close; 42.6% closed higher than the open.
• Sectors weaker than the SPX for the day: Basic Materials, Energy, Financials, Technology, and Consumer Discretionary.
• Sectors stronger than the SPX for the day: Industrials, Health Care, Utilities, and Consumer Staples.
• The $SOX index strength was weaker than the SPX today.
• Last week’s ramp higher seemed to be driven by the financials, and when the financials took a day off, the tech stocks drove the indices higher. Today, both the techs and the financials were weak and the SPX still managed higher. But can that continue?
• The 2 Day RSI of the SPX is 97. The Dow RSI is 96, NASDAQ is 69 and Russell 90. Is the NASDAQ leading the way down?
• SPX components moved upward slightly during the after hours with 83 million shares traded.
• The non-farm payroll numbers have been below estimates nine times while SPX was at 52 week highs. Monday was up small all nine times (now). Tuesday was up twice following the earlier eight times (the two wins were tiny). Odds therefore seem to favor a down Tuesday.
Have a great Tuesday!
-----------
"Mel"
