Fed Day Gyrations Leave SPX Little Changed
by Jerome "Mel" Hickerson
Market Recap:
With the Fed on tap this afternoon, things were quiet premarket. It has been typical for Fed mornings to be quiet and drift a bit higher. Housing Starts rose 10.5% in August to an annualized rate of 598K, which was well above the consensus for 545K. Building Permits for August rose by 2% to 569K. This was also above the consensus of 557K and the July’s reading of 559K.
The Fed day session began sluggishly without an opening gap. The hours leading into the Fed announcement continued the sluggish action but uncharacteristically (for Fed day mornings) the SPX worked slowly downward three points. But the 2:15 pm announcement brought the characteristic gyrations as the index moved suddenly downward and then reversed seconds later to climb 12 points putting the high of the day on the chart just 15 minutes after putting the low on the chart. But the final 80 minutes saw selling as the index tested the intraday lows before a mild bounce in the final 20 minutes. At the end of the day, the session closed in the bottom 30% of the intraday range not far from where it began the day.
Turning to our Market Leaders board, we see mixed results but mostly down with the Dow and Germany being the exceptions. Today is notable as one of the rare recent days that technology was down.
Market Trend: Nine Sectors Report
Checking our Nine Sectors Report we find two negative moves as Technology moves from a Buy to Neutral and Health moves from Neutral to Sell. For four of the nine sectors today was a rare Fed day inside day on the chart; this serves to illustrate just how calm today was compared to the typical Fed day reaction. Only one sector - Health Care - closed higher than it opened today.
Volume & Breadth Indicators
For the SPX Index there were 152 Advancers/334 Decliners. On the NYSE 3,143 issues were traded with 1,079 advancing issues and 1,942 retreating issues, a ratio of 1.8 to one declining. There were 220 new highs and 7 new lows. The five day moving average of New Highs is 217 while the five day moving average of New Lows is 10 and the ten day moving average of Net Advancing is 553. The Net Advancing data indicates a bullish trend.
Declining volume was higher at a ratio of 2.22 to one. The closing TRIN was 1.24 and the final tick was -840. The NYSE Composite Index lost -0.28% today.
For the NYSE, relative to the previous 30 session average, volume was 3.55% above the average. Of the last 15 sessions 4 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 19 sessions ended on a positive tick, 8 of last 10. For the SPX, the day's volume was 88.6% of the average daily volume for the last year. Volume was 116.7% of the last 10 day average and 116.2% of the previous day’s volume.
Notice the high ratio of declining stocks for a day that closed so near to break even. And the ratio of declining volume was even more negative. The final tick also reflects reluctance to hold long positions overnight.
Further, total tick for the day was 3,000 and the average tick for the day was 2. There were 55 ticks greater than 600 and 49 ticks more extreme than -600. There were 6 ticks greater than 1000 and 3 ticks more extreme than -1000.
The extreme tick action was mild and mixed today while the total tick was flat. The last time the tick action looked this way was August 5th. The nightly breadth indicators are more bearish than bullish with the Cumulative Volume Index trending downward and percentage of stocks above their 200 DMA and 40 DMA decreasing. We place a large emphasis on market breadth and it is suggesting a pullback here.
Moving Average Indicators:
78.40% of the SPX components are giving a crossover Buy signal; 2.80% of the SPX components are giving a Sell signal. This is a 28 to 1 ratio of Buy signals over Sell signals.
75.2% of the SPX are above their five day moving average, 82.4% are above their 10 day average, 91% are above their 20 day moving average, 81.4% are above their 50 day moving average, 68.6% are above their 100 day moving average, and 59.2% are above their 150 day moving average.
The NYA 20 DMA crossed above its 50 DMA and the DOW 20 DMA crossed above its 100 DMA; these are both bullish trend signals longer-term. Also worth noting is that the Dollar’s 50 DMA crossed below the 200 DMA (the so-called “Death Cross”.) If the dollar inversely correlates to the equities, this cross-over could have longer-term bullish implications for the equities as well.
Sectors on the Move:
Sectors stronger than the SPX for Tuesday:
- Energy -- Outperformed the SPX by +24%.
- Industrials -- Outperformed the SPX by +43%.
- Technology -- Outperformed the SPX by +24%.
- Consumer Staples -- Outperformed the SPX by +6%.
- Health Care -- Outperformed the SPX by +31%.
Sectors weaker than the SPX for Tuesday:
- Basic Materials -- Underperformed the SPX by -31%.
- Financials -- Underperformed the SPX by -66%.
- Utilities -- Underperformed the SPX by -27%.
- Consumer Discretionary -- Underperformed the SPX by -18%.
Stocks on the Move:
Today's SPX component winners and losers:
- Largest one day loser is SNDK with -6.06%
- Largest three day loser is SNDK with -9.77%
- Largest five day loser is SNDK with -10.50%
- Largest ten day loser is CLF with -9.28%
- Largest one day winner is NVDA with 5.42%
- Largest three day winner is NBR with 8.74%
- Largest five day winner is NOVL with 14.36%
- Largest ten day winner is JDSU with 21.39%
In Late Trading:
126 SPX components moved upward and 208 components downward during the after hours with 182 million shares traded.
Wednesday, September 22
Economics
10:30 Crude Inventories
Japan All Industry Activity Index
Bank of England Minutes
Euro-Zone Industrial New Orders
Canada Retail Sales Less Auto’s
Canada Retail Sales
Euro-Zone Consumer Confidence
New Zealand Gross Domestic Product
Earnings
Before: KMX, GIS, JEF, ZLC
After: BBBY, CPRT, IHS, RHT, SCS
Before the opening bell, Golden Valley, Minn.-based cereal maker General Mills is expected to report it earned 63 cents per share last quarter, down from $1.28 a share a year earlier. The weekly crude oil inventories report is also due in the morning. After the closing bell, Bed Bath & Beyond will report its quarterly earnings. Analysts expect the home furnishings retailer earned 63 cents a share, versus 52 cents in the prior year
Make it a great Wednesday!
-Mel
