Like Zombies, the Bulls Keep Coming
by Jerome "Mel" Hickerson
Before the open, the Labor Department reported that initial claims for unemployment insurance for the week ending April 24th fell by 11,000 to 448K, which was above the expectations for a reading of 445K. Continuing Claims for unemployment for the week ending April 17th were above consensus at 4.645M vs. expectations for 4.618M. The major overseas markets were split by region with Asia lower and Europe higher. Futures pointed to a strong open.
The regular session opened with a strong gap upward and was trading up eight points within a few minutes. The high of the session was at 2:35 but the entire day was strong in spite of a very mild pullback in the last 90 minutes. With today's action, the indices have managed to repair the weakness and vulnerability that Tuesday's action brought.
Friday's session looks like a toss up; oversold conditions from Tuesday have now become overbought -- but not nearly so overbought as we've see recently. End of month and first of month sessions are often bullish but my guess is that we see tight range choppy trade with not a lot of upside for a couple of days.
Caution to bears: I do not yet see a good reason to rush to reload short-side swings. Breadth was exceptionally strong today and this usually means more upside ahead. Overbought indicators, especially in this market, are simply not a good enough reason to get short. Patience will mean money saved more often than not. I believe there is weakness ahead but not necessarily tomorrow or Monday.
Tip for Swing Traders: If you swing trade and find yourself biased in the direction of your positions (and who can avoid that?), clear your mind occasionally by completely clearing your positions. This can be very effective at reducing your bias; you can always re-evaluate and possibly reenter positions as warranted. The cost of commissions is much cheaper than carrying your bias forward.
Day Trade Systems Update: (Signals today)
* GDX at: 11:41
SPX Summary for Thursday, April 29, 2010
403 Advancers/91 Decliners
Today's SPX component winners and losers:
• Largest one day loser is HAR with -22.13%
• Largest three day loser is HAR with -23.86%
• Largest five day loser is HAR with -21.11%
• Largest ten day loser is AKS with -22.82%
• Largest one day winner is AKAM with 19.93%
• Largest three day winner is FSLR with 14.44%
• Largest five day winner is AKAM with 15.49%
• Largest ten day winner is HBAN with 20.35%
*** SPX Technical Summary ***
The lowest 14 day RSI component is AKS; the highest 14 day RSI component is BDK. The average 14 day RSI of all 500 components is 55.
The greatest positive five day momentum component is AKAM; the greatest negative five day momentum component is HAR. The average five day momentum of all 500 components is -0.32.
48.80% of the SPX components are giving a crossover Buy signal; 23.80% of the SPX components are giving a Sell signal. This is a 2.1 to 1 ratio of Buy signals over Sell signals.
SPX component signal changes today (evidence of trend):
• From Sell to Neutral: 6 components.
• From Buy to Neutral: 31 components.
• From Neutral to Sell: 21 components.
• From Neutral to Buy: 10 components.
The moving averages:
Close 1206.78
9 EMA 1196.53 Rising
5 DMA 1202.24 Falling
10 DMA 1202.26 Falling
20 DMA 1197.85 Rising
50 DMA 1163.71 Rising
100 DMA 1136.06 Rising
200 DMA 1089.25 Rising
10 Wk MA 1170.79 Rising
NYSE Summary
On the NYSE 3203 issues were traded with 2338 advancing issues and 766 retreating issues, a ratio of 3.05 to 1 advancing. There were 308 new highs and 10 new lows.
Advancing volume was higher at a ratio of 3.90 to 1. The closing TRIN was 0.78 and the final tick was 315.
Evidence of trend:
Relative to the previous 30 session average, volume was 21.04% above 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, 22 sessions ended on a positive tick, 7 of last 10.
The 5 day moving average of New Highs is 327 while the 5 day moving average of new lows is 12 and the 10 day moving average of Net Advancing is 222. The Net Advancing data indicates a bullish trend.
Remember: Breadth leads, indices follow. Today, the NYSE Advance/Decline line increased from 210482 to 212054. This 0.74% increase came while the SPX was gaining 1.28%. The 10 day moving ratio of positive volume is 0.94 and the 10 day moving Advance/Decline ratio is 1.15. The 10 day moving ratio of positive volume has trended 0.12 over the last three days and the 10 day moving Advance/Decline ratio has trended 0.04 over the last three days.
The NYSE Composite Index gained 1.19% today.
NYSE Statistics:
Absolute Breadth Index: 31.51 down from previous day of 33.04
Cumulative Volume Index: 81,820.15 up from previous day of 77,675.85
High Low Logic Index: 0.57 down from previous day of 0.66
McClellan Oscillator: 8.14 up from previous day of (78.48)
McClellan 10 DMA: (22.99) down from previous day of (17.64)
McClellan Summation Index: 3,467.47 up from previous day of 3,459.33
% Stocks Above 200 DMA: 85.17 up from previous day of 84.19
% Stocks Above 40 DMA: 72.61 up from previous day of 66.81
New High / New Low Ratio: 98.01 up from previous day of 87.76
26wk New High/Low Ratio: 92.49 up from previous day of 73.32
13wk New High/Low Ratio: 91.59 up from previous day of 67.85
4wk New High/Low Ratio: 74.86 up from previous day of 32.43
Cumulative 4-Week New Hi-Low: 445,990 up from previous day of 445,670
Nasdaq Adv/Decline: 1,822 up from previous day of 1,775
Russell 1000 Advance/ Decline Line: 2,810 up from previous day of 2,745
Russell 2000 Advance/ Decline Line: (1,469) up from previous day of (1,538)
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).
Friday, April 30
Economics
08:30 GDP-adv 3.5% cons.
08:30 Chain Deflator-adv 0.9% cons.
08:30 Employment Cost Index 0.5% cons.
09:45 Chicago PMI 60.0 cons.
09:55 Michigan Sentiment 71.8 cons.
02:45 France PPI
04:00 Italy CPI
04:00 Italy PPI
04:00 European Union M3 Money Supply
05:00 European Union HICP Flash
05:00 European Union Unemployment Rate
08:30 Canada IPPI
08:30 Canada Monthly GDP
Earnings
Before: AXL, AGP, AVP, CVX, CSUN, CEG, CVH, DISCA, UFS, DHI, ITT, JRCC, RUTH SPG, TTES, VFC
The first reading on gross domestic product growth in the first quarter is due before the start of trading. GDP likely grew at a 3.5% annualized rate after growing at a 5.6% annualized rate in the fourth quarter of last year. The University of Michigan's consumer sentiment index for April is due after the start of trading. The index is expected to have risen to 71.8 from 69.5 in March. The Chicago PMI is also due after the start of trading. The index is expected to have risen to 60 from 58.8 in March. Any number over 50 indicates expansion.
Mel’s Missives from the Matrix:
• Total tick for the day was 294,000 and the average tick for the day was 191. There were 116 ticks greater than 600 and 8 ticks more extreme than -600. There were 2 ticks greater than 1000 and no ticks more extreme than -1000. The tick action suggests institutional accumulation.
• The day's range was 16.06 points. The 5 DMA of daily range is 16.95.
• Evidence of the intraday trend: At 10am volume was 87.31% of the 10 day average. By noon the volume was 81.15% of the 10 day average, and by 2pm volume was 84.08% of the 10 day average.
• The day's volume was 120.8% of the average daily volume for the last year. Volume was 88.2% of the last 10 day average and 88.5% of the previous day’s volume.
• Evidence of the intraday trend: The largest increase in relative volume came between 12:30 and 12:45 when relative volume increased 43.7% while the SPX was rising 0.20%. The largest drop in relative volume came between 1:30 and 1:45 when relative volume dropped -26.2% while the SPX was rising 0.07%.
• 7% of the SPX stocks closed with two day RSI above 90. 25% closed with RSI above 80. 12% closed with RSI below 20 and 7% closed with RSI below 10.
• 58.2% of the SPX are above their five day moving average, 59% are above their 10 day average, 63% are above their 20 day moving average, 79.2% are above their 50 day moving average, and 82.6% are above their 100 day moving average.
• 53% of the SPX closed above their most recent previous high.
• 9% of the SPX stocks closed below their most recent previous lows.
• 403 SPX issues advanced and 91 issues declined, a net SPX advance/decline of 312.
• Evidence of the intraday trend: At 10am, 42.8% of the SPX components were in the top half of the range. By noon, 72.4% were in the top half of the range, and by 2pm, 75.8% were in the top half of the range.
• 69.2% of stocks closed in the top half of the day's range. (30.6% closed in bottom half.)
• 18.8% of stocks closed in the top 10% of the day's range. 35% of stocks closed in the top 20% of the day's range.
• 3.2% of stocks closed in the bottom 10% of the day's range. 8.6% of stocks closed in the bottom 20% of the day's range.
• 24.8% of stocks closed within 2% of their 52 week high. 54.6% of stocks closed within 5% of their 52 week high.
• 40.2% of stocks closed within 50% of their 52 week low. 10.6% of stocks closed within 25% of their 52 week low.
• 21.2% of stocks closed within ¼% of their high for the day.
• 4.8% of stocks closed within ¼% of their low for the day.
• Evidence of the intraday trend: At 10am, 81.8% of the SPX components were up since the open. By noon, 84% were up since the open, and by 2pm, 83.6% were up since the open.
• 81.6% of the SPX closed up from the previous close; 72.2% closed higher than the open.
• Sectors stronger than the SPX for Thursday:
- Financials -- Outperformed the SPX by +115%.
- Industrials -- Outperformed the SPX by +69%.
- Consumer Discretionary -- Outperformed the SPX by +114%.
• Sectors weaker than the SPX for Thursday:
- Basic Materials -- Underperformed the SPX by -48%.
- Energy -- Underperformed the SPX by -124%.
- Technology -- Underperformed the SPX by -28%.
- Consumer Staples -- Underperformed the SPX by -97%.
- Utilities -- Underperformed the SPX by -119%.
- Health Care -- Underperformed the SPX by -10%.
• The $SOX index strength was stronger relative to the SPX Thursday by 0.09%.
• The XLF outperformed the SPX by 1.15% Thursday.
• The 2 Day RSI of the SPX is 72. The Dow RSI is 73, the NASDAQ is 75 and the Russell is 77.
• Over the last four sessions, the average session closed 43.58% of the range above the low. Thursday closed at 75% of the daily range.
• Upside momentum increased Thursday, from Wednesday’s -0.87 to today’s -0.32. The ratio of SPX components giving a crossover buy signal compared to sell signals decreased to B 2.05 to 1.
• The ISEE Equity 10 day moving average Thursday was 210.1. 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 249.3 on 04/15/10.
• 198 SPX components moved upward and 185 components downward during the after hours with 185 million shares traded.
Trade 'em well on Friday everyone!
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"Mel"
