Dow Streak Reaches Eight
by Jerome "Mel" Hickerson
Before the open, the government reported that the Consumer Price Index for February was unchanged, which was a tenth below the consensus for +0.1% and January’s reading of +0.2%. When you strip out food and energy, the Core CPI came in at +0.1%, which was in line with the consensus for +0.1%. The Labor Department reported that initial claims for unemployment insurance for the week ending March 13th fell by 5,000 to 457K, which was a little above the expectations for a reading of 455K. Continuing Claims for unemployment for the week ending March 6th were also above consensus at 4.579M vs. expectations for 4.522M.
The overseas markets were mixed and the futures at the time of the open were flat. The SPX opened with a little (all moves were little today) up then down move for the first 30 minutes but by 10:02 was putting the high of the day on the charts. A four wave descent followed with the low of the day coming at 12:06. The rest of the session was a very slow but relentless climb back to where we began the day. The entire round trip was 6.6 points.
We have now closed the last seven sessions all with a ten day average range under ten points. Three of the last ten days have had ranges of less than seven points. On top of that, today’s 0.38 point loss was the largest SPX loss in 15 sessions. Only once in the last 29 sessions has the SPX volume exceeded its 250 day average – and that one time it took Citi having more than 25% of the day’s volume to do it.
Since Monday, the SPX has gained less than 16 points, roughly 1.5% in four days. Hardly a moonbound rocket but not much fun if you are anxious for a pullback. Our matrix continues to say “be patient, this may run for another day or two.” I continue to believe that we revisit 1130, possibly even 1100. But the 50 DMA at 1115 and the 20 DMA at 1130 will provide support for the index.
Today painted an inside day doji on the chart. This sort of daily bar often will signify a possible reversal of trend. But it needs to be confirmed by tomorrow’s action.
Breadth is declining in spite of the huge surge Wednesday. Let’s listen to what it says and be patient.
SPX Summary for Thursday, March 18, 2010
205 Advancers/281 Decliners
Today's SPX component winners and losers:
• Largest one day loser is MI with -6.31%
• Largest three day loser is CHK with -6.46%
• Largest five day loser is CNX with -12.14%
• Largest ten day loser is CF with -13.96%
• Largest one day winner is GME with 6.77%
• Largest three day winner is LSI with 13.77%
• Largest five day winner is LSI with 15.01%
• Largest ten day winner is AIG with 29.72%
*** SPX Technical Summary ***
The lowest 14 day RSI component is PBG; the highest 14 day RSI component is RX. The average 14 day RSI of all 500 components is 72.
The greatest positive five day momentum component is LSI; the greatest negative five day momentum component is CNX. The average five day momentum of all 500 components is 1.42.
76.00% of the SPX components are giving a crossover Buy signal; 4.80% of the SPX components are giving a Sell signal. This is a 15.8 to 1 ratio of Buy signals over Sell signals.
SPX component signal changes today (evidence of trend):
• From Sell to Neutral: 4 components.
• From Buy to Neutral: 22 components.
• From Neutral to Sell: 6 components.
• From Neutral to Buy: 12 components.
NYSE Summary
On the NYSE 3177 issues were traded with 1281 advancing issues and 1780 retreating issues, a ratio of 1.39 to 1 declining. There were 367 new highs and 1 new low.
Declining volume was higher at a ratio of 1.83 to 1. The closing TRIN was 1.32 and the final tick was 150.
Evidence of trend:
Relative to the previous 30 session average, volume was -14.41% below the average. Of the last 15 sessions 2 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 27 sessions ended on a positive tick, 10 of last 10.
Remember: Breadth leads, indices follow. Today, the NYSE Advance/Decline line decreased from 204045 to 203546. This -0.25% decrease came while the SPX was losing -0.03%.
Friday, March 19
Economics
No significant economic events scheduled
Earnings
Before: PERY
Friday brings the quadruple options expiration, a quarterly event in which stock index futures and options and individual stock futures and options all expire at the same time. The event can lead to wild gyrations in prices in the underlying stocks and increased volatility in the broad market. However, the impact now tends to be pretty muted and spread throughout the week, rather than hitting in the last hour of the session Friday, as used to be the case.
Mel’s Random Hits:
• Total tick for the day was 8,000. There were 33 ticks greater than 600 and 43 ticks more extreme than -600.
• The day's range was 6.61 points.
• The day's volume was 81.66% of the average daily volume for the last year. Volume was 91.5% of the last 10 day average and 85.5% of the previous day’s volume.
• 22% of the SPX stocks closed with two day RSI above 90. 31% closed with RSI above 80. 13% closed with RSI below 20 and 7% closed with RSI below 10.
• 75.2% of the SPX are above their five day moving average, 79.4% are above their 10 day average, and 89.8% are above their 20 day moving average.
• 15% of the SPX closed above their most recent previous high.
• 30% of the SPX stocks closed below their most recent previous lows.
• 215 SPX issues advanced and 276 issues declined, a net SPX advance/decline of -61.
• 49.4% of stocks closed in the top half of the day's range. (50.6% closed in bottom half.)
• 11.4% of stocks closed in the top 10% of the day's range. 22.6% of stocks closed in the top 20% of the day's range.
• 6.6% of stocks closed in the bottom 10% of the day's range. 16.6% of stocks closed in the bottom 20% of the day's range.
• 35.4% of stocks closed within 2% of their 52 week high. 59.4% of stocks closed within 5% of their 52 week high.
• 34% of stocks closed within 50% of their 52 week low. 9% of stocks closed within 25% of their 52 week low.
• 19.8% of stocks closed within ¼% of their high for the day.
• 10.2% of stocks closed within ¼% of their low for the day.
• 42.4% of the SPX closed up from the previous close; 43% closed higher than the open.
• Sectors stronger than the SPX for Thursday:
- Industrials
- Technology
- Consumer Staples
- Health Care
- Consumer Discretionary
• Sectors weaker than the SPX for Thursday:
- Basic Materials
- Energy
- Financials
- Utilities
• The $SOX index strength was weaker than the SPX Thursday.
• The 2 Day RSI of the SPX is 93. The Dow RSI is 99, NASDAQ is 94 and Russell 62.
• Over the last four sessions, the average session closed 80.3% of the range above the low. Today closed at 70.6% of the daily range.
• Upside momentum increased Thursday, from Wednesday’s 2.04 to today’s 1.42. The ratio of SPX components giving a crossover buy signal compared to sell signals also decreased marginally to 15.8 to 1.
• 191 SPX components moved upward and 189 components downward during the after hours with 36 million shares traded.
Good trading on Friday everyone!
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"Mel"
ETF’s we trade:
Ultra S&P500 ProShares (NYSE: SSO)
Ultra Dow30 ProShares (NYSE: DDM)
Ultra QQQ ProShares (NYSE: QLD)
PS UTLRSHRT QQQ (NYSE: QID)
UltraShort S&P500 ProShares (NYSE: SDS)
UltraShort Dow30 ProShares (NYSE: DXD)
PowerShares QQQ Trust (NASDAQ: QQQQ)
Direxion Daily Small Cp Bear 3X (NYSE:TZA)
Direxion Daily Small Cp Bull 3X (NYSE:TNA)
