Good News from China Doesn't Hold the Market Up
by Jerome "Mel" Hickerson
There was no economic data to review this morning. But the word that the Chinese will allow some flexibility with their currency put a fire under stock markets around the globe, as just about every country exporting goods to China would benefit. The news from China had the futures flying high overnight as the overseas markets in Asia and Europe were green across the board.
The session opened with a 12 point gap upward, continued upward a few more points, retreated, and then surged to put the high of the day on the chart at 10:01. The rest of the day was slow downward drift with minor short-lived rally attempt. The downward move accelerated about 2:45 before a feeble bounce attempt beginning around 3:20 gave the SPX a little life to bring it off the lows.
For me, most notable about today’s action was the tick action. The extreme ticks were all negative; and the extreme ticks were extreme. Seeing -1500 ticks is rare and this kind of tick is usually the result of computerized distribution of large amounts of stock.
Looking at the daily chart, it’s impossible to not take notice of today’s chart bar: A large range outside day down (LROD). It’s a classic bearish chart pattern, especially when combined with the preceding doji bars. Nothing is ever certain but this certainly has the look of market rejection. A follow-up down day on Tuesday would certainly add to the bearish look of the daily chart.
Day Trade Systems Update: (Signals today)
* SDS at: 10:14
* GDX at: 10:39
* SSO at: 11:05
* GDX at: 11:20
* GDX at: 12:32
* SSO at: 12:34
* GDX at: 1:07
* SSO at: 1:44
* GDX at: 2:01
* SDS at: 2:19
* SSO at: 3:19
Our trade systems found today’s action a bit difficult. While we finished the day with a profit, the gentle drift downward today was not conducive for our system to have an easy day. We were once again focused on ProShares Ultra S&P500 ETF (SSO), ProShares Ultrashort S&P500 ETF (SDS), and Market Vectors Gold Miners (GDX).
SPX Summary for Monday, June 21, 2010
156 Advancers/329 Decliners
Today's SPX component winners and losers:
- Largest one day loser is MYL with -3.71%
- Largest three day loser is ODP with -8.91%
- Largest five day loser is GME with -13.80%
- Largest ten day loser is ESRX with -49.96%
- Largest one day winner is AA with 6.13%
- Largest three day winner is MTB with 15.37%
- Largest five day winner is MTB with 21.94%
- Largest ten day winner is MTB with 27.32%
*** SPX Technical Summary ***
The lowest 14 day RSI component is DHR; the highest 14 day RSI component is BDK. The average 14 day RSI of all 500 components is 60.
The greatest positive five day momentum component is MTB; the greatest negative five day momentum component is GME. The average five day momentum of all 500 components is 2.03.
70.00% of the SPX components are giving a crossover Buy signal; 3.60% of the SPX components are giving a Sell signal. This is a 19.4 to 1 ratio of Buy signals over Sell signals.
SPX component signal changes today (evidence of trend):
- From Sell to Neutral: 1 component.
- From Buy to Neutral: 3 components.
- From Neutral to Sell: 8 components.
- From Neutral to Buy: 59 components.
The moving averages:
Close 1113.20
9 EMA 1116.80 Rising
5 DMA 1115.30 Rising
10 DMA 1096.23 Rising
20 DMA 1087.88 Rising
50 DMA 1137.52 Falling
100 DMA 1133.44 Rising
200 DMA 1110.75 Rising
10 Wk MA 1121.82 Falling
NYSE Summary
On the NYSE 3211 issues were traded with 1299 advancing issues and 1817 retreating issues, a ratio of 1.40 to 1 declining. There were 105 new highs and 9 new lows.
Declining volume was higher at a ratio of 1.30 to 1. The closing TRIN was 0.93 and the final tick was 211.
Evidence of trend:
Relative to the previous 30 session average, volume was -28.20% below 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, 18 sessions ended on a positive tick, 10 of last 10.
The 5 day moving average of New Highs is 54 while the 5 day moving average of new lows is 13 and the 10 day moving average of Net Advancing is 668. The Net Advancing data indicates a bullish trend.
Remember: Breadth leads, indices follow. Today, the NYSE Advance/Decline line decreased from 205999 to 205481. This -0.25% decrease came while the SPX was losing -0.39%. The 10 day moving ratio of positive volume is 1.63 and the 10 day moving Advance/Decline ratio is 1.55. The 10 day moving ratio of positive volume has trended 0.56 over the last three days and the 10 day moving Advance/Decline ratio has trended 0.34 over the last three days.
The NYSE Composite Index lost -0.13% today.
NYSE Statistics:
Absolute Breadth Index: 49.96 down from previous day of 58.71
Cumulative Volume Index: 49,646.62 down from previous day of 49,948.36
High Low Logic Index: 0.36 down from previous day of 0.39
McClellan Oscillator: 123.96 down from previous day of 178.94
McClellan 10 DMA: 116.17 up from previous day of 85.17
McClellan Summation Index: (840.45) up from previous day of (964.41)
% Stocks Above 200 DMA: 59.73 down from previous day of 60.41
% Stocks Above 40 DMA: 49.47 down from previous day of 49.60
New High / New Low Ratio: 92.86 up from previous day of 78.21
26wk New High/Low Ratio: 80.81 up from previous day of 72.92
13wk New High/Low Ratio: 76.10 up from previous day of 72.01
4wk New High/Low Ratio: 93.03 up from previous day of 91.17
Cumulative 4-Week New Hi-Low: 439,337 up from previous day of 437,921
Nasdaq Adv/Decline: 1,468 down from previous day of 1,503
Russell 1000 Advance/ Decline Line: 2,422 down from previous day of 2,468
Russell 2000 Advance/ Decline Line: (1,858) down from previous day of (1,812)
Notes:
Absolute Breadth Index: Low numbers suggest a topping process and high numbers suggest a bottoming process.
Cumulative Volume Index: If this begins to trend down while the averages are trending up, it is a bearish sign. If this begins to trend up while the averages are trending down, it is a bullish sign.
High Low Logic Index: High readings are bearish; low readings are bullish.
McClellan Oscillator: -100 is oversold and +100 is overbought. Also watch for crosses above and below zero.
McClellan Summation Index: Interpreted as bullish or bearish when it crosses over the zero line.
Cumulative 4-Week New Hi-Low: The difference between the number of issues reaching new highs (during a 4-week period) and the number of issues reaching new lows (during the same 4-week period).
Tuesday, June 22
Economics
10:00 Existing Home Sales 6.10 mcons.
10:00 FHFA Housing Price Index
04:00 German ifo Survey
07:00 Canadian CPI
Earnings
Before: CCL, CMC, GRB, JEF, WAG
After: ADBE, APOG, FUL, JBL, RHT
Auction
01:002-Yr Note Auction
The existing home sales index from the National Association of Realtors is due in the morning. The index is expected to have risen to a seasonally adjusted annual rate of 6.10 million units in May, up from a 5.77 million unit rate in April, according to a consensus of economists. The FHFA Housing price index for April is also due in the morning, but is not typically a market mover.
Mel’s Missives from the Matrix:
- Total tick for the day was -144,000 and the average tick for the day was -93. There were 52 ticks greater than 600 and 156 ticks more extreme than -600. There were no ticks greater than 1000 and 21 ticks more extreme than -1000. The tick action suggests institutional distribution.
- The day's range was 22.99 points. The intraday trading range - 9:35 to the close - was 22.93. The 5 DMA of daily range is 13.38.
- Evidence of the intraday trend: At 10am volume was 96.56% of the 10 day average. By noon the volume was 84.01% of the 10 day average, and by 2pm volume was 85.14% of the 10 day average.
- The day's volume was 90.5% of the average daily volume for the last year. Volume was 88.8% of the last 10 day average and 99.1% of the previous day’s volume.
- Evidence of the intraday trend: The largest increase in relative volume came between 3:00and 3:15 when relative volume increased 39.3% while the SPX was dropping -0.41%. The largest drop in relative volume came between 2:30 and 2:45 when relative volume dropped -26.0% while the SPX was dropping -0.07%.
- 8% of the SPX stocks closed with two day RSI above 90. 14% closed with RSI above 80. 28% closed with RSI below 20 and 11% closed with RSI below 10.
- 39.2% of the SPX are above their five day moving average, 81.2% are above their 10 day average, 79.4% are above their 20 day moving average, 40.2% are above their 50 day moving average, 46.8% are above their 100 day moving average, and 53.4% are above their 150 day moving average.
- 11% of the SPX closed above their most recent previous high.
- 41% of the SPX stocks closed below their most recent previous lows.
- 156 SPX issues advanced and 329 issues declined, a net SPX advance/decline of -173.
- Evidence of the intraday trend: At 10am, 59.8% of the SPX components were in the top half of the range. By noon, 23.6% were in the top half of the range, and by 2pm, 8.2% were in the top half of the range.
- 7.8% of stocks closed in the top half of the day's range. (92% closed in bottom half.)
- 0.6% of stocks closed in the top 10% of the day's range. 0.8% of stocks closed in the top 20% of the day's range.
- 2.8% of stocks closed in the bottom 10% of the day's range. 31.2% of stocks closed in the bottom 20% of the day's range.
- 4% of stocks closed within 2% of their 52 week high. 18.6% of stocks closed within 5% of their 52 week high.
- 59.8% of stocks closed within 50% of their 52 week low. 28.4% of stocks closed within 25% of their 52 week low.
- 1% of stocks closed within ¼% of their high for the day.
- 2.2% of stocks closed within ¼% of their low for the day.
- Evidence of the intraday trend: At 10am, 92.4% of the SPX components were up since the open. By noon, 75.8% were up since the open, and by 2pm, 56.8% were up since the open.
- 30.8% of the SPX closed up from the previous close; 7.4% closed higher than the open.
- Sectors stronger than the SPX for Monday:
- Basic Materials -- Outperformed the SPX by +98%.
- Energy -- Outperformed the SPX by +25%.
- Financials -- Outperformed the SPX by +11%.
- Industrials -- Outperformed the SPX by +41%.
- Consumer Staples -- Outperformed the SPX by +11%.
- Health Care -- Outperformed the SPX by +21%.
- Sectors weaker than the SPX for Monday:
- Technology -- Underperformed the SPX by -34%.
- Utilities -- Underperformed the SPX by -32%.
- Consumer Discretionary -- Underperformed the SPX by -42%.
- The $SOX index strength was weaker relative to the SPX Monday by -0.47%.
- The XLF outperformed the SPX by 0.11% Monday.
- The 2 Day RSI of the SPX is 40. The Dow RSI is 77, the NASDAQ is 23 and the Russell is 21.
- Over the last four sessions, the average session closed 55.6% of the range above the low. Monday closed at 21.9% of the daily range.
- Upside momentum moved slightly downward Monday, from Friday’s 2.43 to today’s 2.03. The ratio of SPX components giving a crossover sell signal compared to buy signals also moved slightly downward to B 19.44 to 1.
- The ISEE Equity 10 day moving average Monday was 146. The lowest 10 day average in the last 52 weeks was 136.6 on 06/14/10 and the highest 10 day average in the last 52 weeks was 249.3 on 04/15/10.
- 132 SPX components moved upward and 285 components downward during the after hours with 93 million shares traded.
Trade 'em well on Tuesday everyone!
-Mel
