Indices Close Narrowly Mixed Near New Highs
Market Recap:
Although Asian markets followed Wall Street higher, European markets were mixed as our open approached and stock futures in the U.S. were slightly lower after S&P downgraded Ireland. Challenger, Gray and Christmas reported that there were 38,519 planned job cuts announced in January which was up 20% from December’s 32,004 but down 46% from year ago levels. The planned job cut total for the month of January was the lowest seen in the month since Challenger started keeping records in 1993. ADP reported that the private sector job market expanded again during the month of January. The report shows that private sector jobs rose by 187K jobs during the month, which was above the consensus expectations for a gain of about 147K. December’s report was revised lower to a gain of 247K jobs from the initial report of 297K.
Today's session began with a small gap lower and quickly moved to put the low of the day on the chart just twelve minutes into the day. The SPX traded very choppy before moving to the high of the day at 10:32 just five points off the low. The rest of this very forgettable session traded listlessly in a very tight two point range.
Today's chart painted a narrow-range doji. There was a time when a narrow range inside day suggested a coming reversal of a short-term trend. But over the last two years, everything simply seems to suggest more upside coming.
Looking at our Market Leaders board tonight we see a mixed board with Technology diverging from small caps as well as overseas leaders mixed. It was a tight range day as the markets seemed to have that "deer in the headlights" feel.
Market Trend: Nine Sectors Report
Turning to our Nine Sectors Report this evening we have only one change after today's lifeless session as the Technology sector moves from Sell to Neutral. We haven't quite yet triggered a Nine Sectors signal change but it is getting close. The signal remains a Sell for now.
Looking ahead to the rest of the week, we're leaning towards another listless session tomorrow as we believe many traders will simply play it safe and wait for the big kahuna of economic data to be released on Friday before the open. Expectations are soaring regarding this number and our hunch is that we see a "sell the news" reaction after the number is released.
Volume & Breadth Indicators
For the SPX Index there were 159 components advancing and 323 components declining. On the NYSE 3,125 issues were traded with 1,413 advancing issues and 1,609 retreating issues, a ratio of 1.14 to one declining. There were 261 new highs and 9 new lows. The five day moving average of New Highs is 172 while the five day moving average of New Lows is 13 and the ten day moving average of Net Advancing is 333. The Net Advancing data indicates a bullish trend.
Declining volume was higher at a ratio of 1.84 to one. The closing TRIN was 1.62 and the final tick was 467. The five day average of TRIN is 1.1 and the ten day average of TRIN is 1.15. The NYSE Composite Index lost -0.21% today while the SPX lost -0.27%.
For the NYSE, relative to the previous 30 session average, volume was -1.76% below the average. Of the last 15 sessions 13 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 20 sessions ended on a positive tick, 7 of last 10. For the SPX, the day's volume was 89.9% of the average daily volume for the last year. Volume was 87.3% of the last 10 day average and 86.1% of the previous day’s volume.
If you’re a bear, today should concern you. Today was very normal action following the rally yesterday. The ten day average of Net Advancing has moved into bullish territory. New Highs were quite strong today despite the lifeless market. The breadth data really looks like the prelude to the market going higher.
Total tick for the day was 114,000 and the average tick for the day was 74. There were 26 ticks greater than 600 and 5 ticks more extreme than -600. There were no ticks greater than 1000 and no ticks more extreme than -1000. The tick action suggests institutional accumulation.
Volume today was just as lifeless as the market; making sense of any volume patterns is impossible. Checking the Nightly Breadth Indicators is almost as useless as well as the indicators show the effects of the big down day followed by big up day with a couple of small range inside days sandwiched in. In other words, the indicators are mixed and choppy and suggesting that we see at least another choppy small range day.
Moving Average and Support/Resistance Indicators:
70% of the SPX are above their five day moving average, 70.4% are above their 10 day average, 66.4% are above their 20 day moving average, 73.6% are above their 50 day moving average, and 88% 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 Wednesday:
- Basic Materials -- Outperformed the SPX by +11%.
- Energy -- Outperformed the SPX by +33%.
- Technology -- Outperformed the SPX by +46%.
Sectors weaker than the SPX for Wednesday:
- Financials -- Underperformed the SPX by -56%.
- Industrials -- Underperformed the SPX by -4%.
- Consumer Staples -- Underperformed the SPX by -10%.
- Utilities -- Underperformed the SPX by -27%.
- Health Care -- Underperformed the SPX by -6%.
- Consumer Discretionary -- Underperformed the SPX by -2%.
In Late Trading:
217 SPX components moved upward and 129 components downward during the after hours with 79 million shares traded.
Thursday, February 3
Economics
08:30 Initial Claims
08:30 Continuing Claims
08:30 Productivity
08:30 Unit Labor Costs
10:00 Factory Orders
10:00 ISM Services
China Services PMI
Swiss Exports
Swiss Imports
European Central Bank Rate
POMO Schedule
Treasury Coupon Purchase: 8/15/2016-1/31/2018: $7-9 bln
Earnings
Before: ARJ, ABFS, AN, BEAV, BX, CI, CAH, CVS, DO, DOW, EL, GR, HAR IP, ITT, K, LAZ, LQDT, HZO, MA, MTRX, MD, MF, MCO, NOV, NYT, ONNN, RDWR, RAI, RSTI, RGLD, R, SLE, SNE, HOT, TEN TZOO, VIA.B
After: ABCO, AFG, CPT, CSTR, CMRE, CQ, DLB, ESE, FFG, FISV, HAIN, HLIT, IN, XXIA, LVS, LIFE, MXL, MAAA, MTX, MPWR, NCR, OPXT, POWI, PWER, QFT, SIMG, RLD, TSYS, TRMB, UTI, ZRAN
The government's weekly jobless claims report comes out before the start of trading, with 425,000 Americans expected to file new claims for unemployment, after 454,000 were filed in the previous week. Factory orders are due from the Commerce Department after the start of trading. Orders are forecast to have dropped 0.7% in December after increasing 0.7% in November. The ISM services sector index for January is expected to have decreased to 57.0 from 63.5 inDecember. Readingson unit labor costs and fourth--quarter business productivity are also due. Ben Bernanke will address the National Press Club in Washingtonat 12:30 pm ET.
Have a great Thursday!
-Mel