For the Bears, It's a Start
by Jerome "Mel" Hickerson
Before the open, ADP reported that the private sector job market continued to shrink in March. The ADP report showed that the private sector lost 23,000 jobs in March, which was well below the consensus expectations for a gain of 40,000. The ADP report does not include government jobs. Census hiring, which has been estimated to be as high as 200k this month, is not included in this report. The Asian markets were lower while European markets were hovering around breakeven. Stock futures were pointing to a lower open.
A most entertaining session today, it opened with a three point gap down, quickly attempted to bounce, then sharply cratered setting the low of the day at 9:50. The next three hours were trade oscillating upward as the SPX double topped setting the high of the session at 2:07. Shortly after that the index rolled over hard and limped into the close on a small bounce.
Economic news today was not good; yet the SPX gave up less than four points. Still, that four points made it just two points off the worst day in five weeks. For bears, it's a beginning. But this market has been able to repeatedly recover a day's losses within 30 minutes on the following day.
Once again, I don't think the market recovers strongly here; I still see a multi-day pullback on the horizon. The problem is that the horizon is like an optical illusion; it keeps moving further away as we try to approach.
The short-term overbought conditions have dissipated. But there remain so many signs of impending weakness: Breadth deterioration, weakness in key sectors, small intraday trading range, low volume. You have to wonder if the market can hold up until earning season begins anew in a couple weeks.
Day Trade Systems Update: (Signals today)
* SPX Scalp Short at: 10:46
* UYM Long at: 11:30
* UYM Short at: 12:07
* SPX Scalp Short at: 12:48
* UYM Long at: 1:15
* SPX Scalp Short at: 2:17
* Bounce Alert at: 2:56
We had a good session day trading today. Even with the tight range, the session was volatile enough that there was adequate movement to profitably trade.
SPX Summary for Wednesday, March 31, 2010
142 Advancers/343 Decliners
Today's SPX component winners and losers:
• Largest one day loser is SAI with -6.80%
• Largest three day loser is F with -9.31%
• Largest five day loser is F with -9.70%
• Largest ten day loser is CNX with -12.19%
• Largest one day winner is JDSU with 5.29%
• Largest three day winner is EXPE with 8.63%
• Largest five day winner is JDSU with 12.15%
• Largest ten day winner is TIE with 13.55%
*** SPX Technical Summary ***
The lowest 14 day RSI component is BDK; the highest 14 day RSI component is RX. The average 14 day RSI of all 500 components is 57.
The greatest positive five day momentum component is JDSU; the greatest negative five day momentum component is F. The average five day momentum of all 500 components is 0.1.
45.80% of the SPX components are giving a crossover Buy signal; 17.00% of the SPX components are giving a Sell signal. This is a 2.7 to 1 ratio of Buy signals over Sell signals.
SPX component signal changes today (evidence of trend):
• From Sell to Neutral: 7 components.
• From Buy to Neutral: 28 components.
• From Neutral to Sell: 18 components.
• From Neutral to Buy: 22 components.
The moving averages:
Close 1169.43
9 EMA 1166.98 Rising
10 DMA 1167.96 Rising
20 DMA 1157.05 Rising
50 DMA 1119.67 Rising
100 DMA 1115.86 Rising
200 DMA 1059.79 Rising
10 Wk MA 1121.57 Falling
NYSE Summary
On the NYSE 3192 issues were traded with 1241 advancing issues and 1844 retreating issues, a ratio of 1.49 to 1 declining. There were 177 new highs and 5 new lows.
Declining volume was higher at a ratio of 1.96 to 1. The closing TRIN was 1.32 and the final tick was -313.
Evidence of trend:
Relative to the previous 30 session average, volume was 11.91% above the average. Of the last 15 sessions 3 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 25 sessions ended on a positive tick, 6 of last 10.
Remember: Breadth leads, indices follow. Today, the NYSE Advance/Decline line decreased from 204477 to 203874. This -0.30% decrease came while the SPX was losing -0.33%. The 10 day moving ratio of positive volume is 0.89 and the 10 day moving Advance/Decline ratio is 0.99. The 10 day moving ratio of positive volume has trended -0.29 over the last three days and the 10 day moving Advance/Decline ratio has trended -0.23 over the last three days.
The NYSE Composite Index lost -0.17% today.
Thursday, April 1
Economics
08:30 Initial Claims
08:30 Continuing Claims
10:00 Construction Spending -1.0% cons.
10:00 ISM Index 57.0 cons.
Earnings
Before: KMX, NGPC, SCHL, WOR
Weekly and continuing jobless claims are due in the morning. February construction spending from the Census Bureau is due out after the start of trading. Spending is expected to have fallen 1% after falling 0.6% in January. The Institute for Supply Management's manufacturing index, due out after the start of trading, is expected to have risen to 57.0 in March from 56.5 in February. March auto and truck sales are also due throughout the day.
Friday, April 2
US markets are closed for Good Friday
Mel’s Missives from the Matrix:
• Total tick for the day was 29,000. There were 49 ticks greater than 600 and 66 ticks more extreme than -600. There were no ticks greater than 1000 and 1 tick more extreme than -1000. The tick action suggests institutional distribution.
• The day's range was 8.79 points. The 5 DMA of daily range is 9.37.
• Evidence of the intraday trend: At 10am volume was 104.35% of the 10 day average. By noon the volume was 88.72% of the 10 day average, and by 2pm volume was 85.76% of the 10 day average.
• The day's volume was 87.9% of the average daily volume for the last year. Volume was 89.6% of the last 10 day average and 102.7% of the previous day’s volume.
• 10% of the SPX stocks closed with two day RSI above 90. 19% closed with RSI above 80. 24% closed with RSI below 20 and 11% closed with RSI below 10.
• 48.2% of the SPX are above their five day moving average, 51.8% are above their 10 day average, and 67.8% are above their 20 day moving average.
• 15% of the SPX closed above their most recent previous high.
• 29% of the SPX stocks closed below their most recent previous lows.
• 142 SPX issues advanced and 343 issues declined, a net SPX advance/decline of -201.
• Evidence of the intraday trend: At 10am, 34.4% of the SPX components were in the top half of the range. By noon, 75.2% were in the top half of the range, and by 2pm, 75.8% were in the top half of the range.
• 36.2% of stocks closed in the top half of the day's range. (63.6% closed in bottom half.)
• 3% of stocks closed in the top 10% of the day's range. 7.4% of stocks closed in the top 20% of the day's range.
• 7.8% of stocks closed in the bottom 10% of the day's range. 25% of stocks closed in the bottom 20% of the day's range.
• 21.6% of stocks closed within 2% of their 52 week high. 54.6% of stocks closed within 5% of their 52 week high.
• 39% of stocks closed within 50% of their 52 week low. 9.8% of stocks closed within 25% of their 52 week low.
• 6% of stocks closed within ¼% of their high for the day.
• 20.4% of stocks closed within ¼% of their low for the day.
• Evidence of the intraday trend: At 10am, 17% of the SPX components were up since the open. By noon, 43.4% were up since the open, and by 2pm, 47.2% were up since the open.
• 28% of the SPX closed up from the previous close; 43.4% closed higher than the open.
• Sectors stronger than the SPX for Wednesday:
- Energy -- Outperformed the SPX by +78%.
- Financials -- Outperformed the SPX by +46%.
- Technology -- Outperformed the SPX by +3%.
- Utilities -- Outperformed the SPX by +9%.
• Sectors weaker than the SPX for Wednesday:
- Basic Materials -- Underperformed the SPX by -17%.
- Industrials -- Underperformed the SPX by -24%.
- Consumer Staples -- Underperformed the SPX by -24%.
- Health Care -- Underperformed the SPX by -14%.
- Consumer Discretionary -- Underperformed the SPX by -40%.
• The $SOX index strength was weaker relative to the SPX Wednesday by -0.31%.
• The XLF outperformed the SPX by 0.46% Wednesday.
• The 2 Day RSI of the SPX is 31. The Dow RSI is 28, the NASDAQ is 33 and the Russell is 26.
• Over the last four sessions, the average session closed 51.94% of the range above the low. Wednesday closed at 41.3% of the daily range.
• Upside momentum increased Wednesday, from Tuesday’s -0.14 to today’s 0.1. The ratio of SPX components giving a crossover buy signal compared to sell signals dropped to B 2.69 to 1.
• The ISEE Equity 10 day moving average Wednesday was 197.2. The lowest 10 day average in the last 52 weeks was 141.5 on 06/29/09 and the highest 10 day average in the last 52 weeks was 207.3 on 01/19/10.
• 206 SPX components moved upward and 183 components downward during the after hours with 250 million shares traded.
Good trading on Thursday everyone!
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"Mel"
