Dow Posts First Triple-Digit Gain of the Year
Market Recap:
Things were fairly quiet before the open. The government was to sell off some more of their Citi holdings and European markets were mixed. There was no economic news scheduled for release today and futures were flat as the open approached.
The week opening session began without a significant gap. The opening half hour moved upward almost three points before testing the lows just after 10am. But then the bulls took over the tape and pushed the index steadily higher until lunch hour. The next three hours were sideways within a tight range but the final hour saw a four point sell-off followed by a recovery of the losses to close within about one point of the top of the intraday range.
We wrote Saturday in our Subscriber Report than 1291 was a key intraday level to watch. Twice today it was tested and strongly rejected. It appears likely that a third test will occur early tomorrow and often a third test will break through resistance or support.
Checking our Market Leaders board, we find mixed results despite the strong day by the SPX and the Dow. The Financials (XLF) and China closed lower while all the rest of the leaders closed higher. The Dow and Germany closed at 52 week closing highs. Forty-one of the SPX components painted new 52 weeks today as well.
Market Trend: Nine Sectors Report
Turning to our Nine Sectors Report this evening we have two changes as Industrials and Consumer Discretionary both move from Sell to Neutral. Several other sectors are on the brink but remain Sells. So the Nine Sectors signal will remain Sell.
Today's oversold rally was not entirely unexpected. The key for the bears now is that they can't let this turn into a new uptrend. Any strength Tuesday morning must immediately be followed by selling. Most of today's session was completely devoid of any significant selling; the bears didn't put together their first extreme negative tick until almost 3pm. This can't happen tomorrow without this beginning to appear like another false start for the bears.
Volume & Breadth Indicators
For the SPX Index there were 345 components advancing and 138 components declining. On the NYSE 3,141 issues were traded with 2,143 advancing issues and 904 retreating issues, a ratio of 2.37 to one advancing. There were 130 new highs and 17 new lows. The five day moving average of New Highs is 191 while the five day moving average of New Lows is 24 and the ten day moving average of Net Advancing is 137.
Advancing volume was higher at a ratio of 1.93 to one. The closing TRIN was 1.23 and the final tick was 101. The five day average of TRIN is 1.35 and the ten day average of TRIN is 1.12. The NYSE Composite Index gained 0.64% today while the SPX gained 0.58%.
For the NYSE, relative to the previous 30 session average, volume was .59% above the average. Of the last 15 sessions 12 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 18 sessions ended on a positive tick, 6 of last 10. For the SPX, the day's volume was 85.6% of the average daily volume for the last year. Volume was 84.5% of the last 10 day average and 82.5% of the previous day’s volume.
Breadth was strong by notice that the advancing volume was weaker than the advancing issues ratio; this shouldn't be. It suggests a lack of enthusiasm to purchase the advancing stocks. The high closing value of the TRIN is surprising on an up day.
Total tick for the day was 259,000 and the average tick for the day was 167. There were 109 ticks greater than 600 and 13 ticks more extreme than -600. There were 1 ticks greater than 1000 and no ticks more extreme than -1000. The tick action suggests institutional accumulation.
The only noticeable thing about today's intraday volume pattern is the spike after 3pm along with the four point sell-off. Looking at the Nightly Breadth Indicators we see a choppy set of indicators suggesting possibly some choppiness ahead of us. It is worth noticing that all of the New High/New Low Ratios declined today in spite of the up session.
Moving Average and Support/Resistance Indicators:
47.2% of the SPX are above their five day moving average, 45.8% are above their 10 day average, 54% are above their 20 day moving average, 72.2% are above their 50 day moving average, and 86.2% are above their 200 day moving average.
There were no significant moving average crossovers today.
Sectors on the Move:
Sectors stronger than the SPX for Monday:
- Basic Materials -- Outperformed the SPX by +49%.
- Industrials -- Outperformed the SPX by +37%.
- Technology -- Outperformed the SPX by +97%.
Sectors weaker than the SPX for Monday:
- Energy -- Underperformed the SPX by -21%.
- Financials -- Underperformed the SPX by -77%.
- Consumer Staples -- Underperformed the SPX by -41%.
- Utilities -- Underperformed the SPX by -2%.
- Health Care -- Underperformed the SPX by -70%.
- Consumer Discretionary -- Underperformed the SPX by -18%.
In Late Trading:
186 SPX components moved upward and 146 components downward during the after hours with 182 million shares traded.
Tuesday, January 25
Economics
09:00 Case-Shiller 20 City Index
10:00 Consumer Confidence
10:00 FHFA Housing Price Index
Bank of Japan Interest Rate Decision
Australia Consumer Price Index
German Consumer Confidence
Swiss Consumption Indicator
Great Britain GDP
Canada CPI
POMO Schedule
Treasury Coupon Purchase: 1/31/2015-6/30/2016: $6-8 bln
Earnings
Before: MMM, AOS, AKS, ASH, BHI, BLK, EAT, CNI, CRS, COH, GLW, DD, HOG, JNJ, KEY, MDP, MNRO, NEE, BTU, RYN, RF, MNRO, BTU, PVTB, DGX, RF, SHW, TLAB, TRV, X, VZ, WFT, GWW
After: ALTR, ELY, CBT, CLMS, ELY, GILD, JNPR, KEYN, MRCY, MIPS, NSC, NAL RFMD, SYK, SUPX, TSS, TRMK, WMS, YHOO
Auction
01:00 2-Yr Note
The Case-Shiller November index of home prices in 20 major U.S. markets comes out before the market opens. The Conference Board will release its January report on consumer confidence shortly after the opening bell. There are five Dow stocks scheduled to report earnings in the morning, including MMM, DD, NJ, TRV, and VZ.
Have a good Tuesday!
-Mel