Mixed Indices on a Very Tight Range
by Jerome "Mel" Hickerson
Market Recap:
Jobless claims came in under expectations but futures pointed to a weak open. After the open, the Philadelphia Fed came in with a negative report for the second consecutive month.
The session began with a small gap down, continued down a few more points before trying to bounce before 10 am. But the Philadelphia Fed report took the wind out of the sails and the index quickly moved to put the low of the day on the chart right along with the report's release. After a quick bounce, the SPX worked back down to test the low of the day a little after noon but the indices failed to rollover and rallied during the afternoon to close at the highs.
A tough trading range today as the 6.56 point range was the smallest since April 15th and one of the smallest ranges of the year. The tape is still owned by the bulls until the bears can make a low after the first hour and hold it. Until that occurs, we seem likely to remain in these tight range sessions.
The question in our mind is what kind of catalyst could shake things up enough to wake the bears from their hibernation? Is it possible that tomorrow's options expirations could be enough? That seems unlikely but along with other factors, maybe.
Checking our Market Leaders board, we see a mixed board with more down indices than up. Technology and industrials were strong today while small caps and financials were weak.
Market Trend: Nine Sectors Report
Turning to the Nine Sectors Report, we had one negative move today. Five of the nine sectors are showing a Sell signal yet the index refuses to rollover. While the bulls remain in control of the tape, it is useful to observe that the last two short-term market tops occurred in this area and also took several days to reverse.
While bulls may regain momentum and burst through the overhead resistance, we believe that time is not on their side and momentum is waning. Just as the bears need a catalyst to get things going their way, the bulls also appear to be lacking a catalyst.
The 10 DMA of intraday range hit ten points today. The last time it fell this low was mid April as the market was topping. Until range and volume both expand, it appears to us that time is actually on the side of the bears. For traders, a market time like this is difficult. It's hard to remain patient while the top is formed.
Volume & Breadth Indicators
For the SPX Index there were 181 Advancers/302 Decliners. On the NYSE 3,140 issues were traded with 1,276 advancing issues and 1,741 retreating issues, a ratio of 1.36 to 1 declining. There were 153 new highs and 11 new lows. The 5 day moving average of New Highs is 197 while the 5 day moving average of New Lows is 6 and the 10 day moving average of Net Advancing is 546. The Net Advancing data indicates a bullish trend.
Declining volume was higher at a ratio of 1.14 to 1. The closing TRIN was 0.83 and the final tick was -267. The NYSE Composite Index lost -0.14% today.
For the NYSE, relative to the previous 30 session average, volume was -6.63% 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, 19 sessions ended on a positive tick, 8 of last 10. For the SPX, the day's volume was 71.1% of the average daily volume for the last year. Volume was 95.1% of the last 10 day average and 98.7% of the previous day’s volume.
If you take notice of nothing else in tonight’s report, be sure to take notice of this. The SPX components were declining at almost a 2-to-1 ratio today. On the NYSE, it was 1.36-to-1. The five day moving average of New Highs declined today for the first time since August 30th. And we closed on a negative final tick. Draw your own conclusions but negative breadth in a flat-to-rising market is not a positive.
Further, total tick for the day was -5,000 and the average tick for the day was -3. There were 52 ticks greater than 600 and 51 ticks more extreme than -600. There were no ticks greater than 1000 and no ticks more extreme than -1000.
Negative total tick for the day has been quite rare recently as this is only the second such day this month. Once again the extreme ticks were very balanced and it was quiet on the more extreme than 1000 ticks. Today, simply put, had few sellers and few buyers. A quick review of the nightly indicators shows that many were down that should be up in order to be bullish.
Moving Average Indicators:
82.60% of the SPX components are giving a crossover Buy signal; 2.60% of the SPX components are giving a Sell signal. This is a 31.8 to 1 ratio of Buy signals over Sell signals.
55% of the SPX are above their five day moving average, 74.8% are above their 10 day average, 89.8% are above their 20 day moving average, 76.4% are above their 50 day moving average, 62.4% are above their 100 day moving average, and 54.4% are above their 150 day moving average.
There were no significant moving average crossovers today. The 31-to-1 ratio of components giving a crossover buy signal is rare; this is the highest ratio this year. We continue to hover around the 90% range of components above their 20 DMA; pullbacks commonly occur in this range.
Sectors on the Move:
Sectors stronger than the SPX for Thursday:
- Basic Materials -- Outperformed the SPX by +20%.
- Technology -- Outperformed the SPX by +61%.
- Consumer Staples -- Outperformed the SPX by +13%.
- Consumer Discretionary -- Outperformed the SPX by +2%.
Sectors weaker than the SPX for Thursday:
- Energy -- Underperformed the SPX by -44%.
- Financials -- Underperformed the SPX by -32%.
- Industrials -- Underperformed the SPX by -14%.
- Utilities -- Underperformed the SPX by -33%.
- Health Care -- Underperformed the SPX by -37%.
Stocks on the Move:
Today's SPX component winners and losers:
- Largest one day loser is PHM with -4.09%
- Largest three day loser is TWC with -9.73%
- Largest five day loser is TWC with -7.28%
- Largest ten day loser is WHR with -6.84%
- Largest one day winner is F with 4.89%
- Largest three day winner is JCP with 9.23%
- Largest five day winner is JCP with 17.91%
- Largest ten day winner is JDSU with 26.33%
In Late Trading:
234 SPX components moved upward and 127 components downward during the after hours with 183 million shares traded.
Friday, September 17
Economics
08:30 CPI 0.1% cons.
08:30 Core CPI 0.1% cons.
09:55 Michigan Sentiment 70.5 cons.
Great Britain Nationwide Consumer Confidence
German Producer Prices 3.5% cons.
Eurozone Construction Output
Earnings
No significant releases
A key index of prices paid by consumers is forecast to show a 0.2% rise in August. After three months of declines, consumer prices rose 0.3% in July. Overall, consumer prices -- a key measure of inflation -- are 1.2% higher over the past 12 months, driven by a spike in gasoline prices.
Make it a great Friday!
-Mel
