More Greek Worries but Sluggish Trading
by Jerome "Mel" Hickerson
Market Recap:
Stock index futures dipped overnight, tracking losses in Europe amid concerns over whether Greece can avoid a messy default. Greece failed to meet another deadline Monday to strike a deal to secure the 130 billion euro ($170 billion) rescue, pushing the debt-ridden nation closer to a default, which could threaten other eurozone nations.
The week opening session began with a small gap lower and very briefly traded lower to put the low of the day on the chart after just four minutes of trading. This was a tight range session in which many indices drifted in opposite directions as the SPX drifted slightly higher throughout the day. The SPX closed at the highs of the day.
Our Market Leaders Board shows that only the Russell Technology Index managed a positive close today (barely) while the SOX was the weakest on our board of leaders.
SPX big winners were Abercrombie & Fitch Co (ANF) 9.51%, Sprint Nextel Corp (S) 6.06%, and Alpha Natural Resources (ANR) 3.44%. SPX big losers were Medco Health Solutions (MHS) -8.13%, Humana Inc (HUM) -5.58%, and Express Scripts Inc (ESRX) -4.63%.
SPX five day big winners are Whirlpool Corp (WHR) 31.61%, Marathon Petroleum Corp (MPC) 18.52%, and Genworth Financial (GNW) 16.86%. SPX five day big losers are Ryder Systems Inc (R) -7.77%, Edwards Life Sciences (EW) -7.35%, and C.H. Robinson Worldwide (CHRW) -5.73%.
New Ten Day Highs: ADBE, AKAM, ALL, APA, BHI, BAC, BAX, BDX, CAM, CPB, CBS, CF, CME, COH, CMA, CPWR, CMI, DRI, DFS, ETN, EP, EMR, EOG, FAST, FDX, FHN, FSLR, FLS, GILD, GR, GT, HAS, HST, ITW, TEG, IPG, IVZ, ITT, JCI, KSS, LTD, LMT, MRO, MA, MAT, MHS, MDT, WFR, MS, NBR, NOV, NBL, NTRS, OXY, PH, BTU, PM, PXD, RL, PRU, PHM, RRC, CVG, SLB, SIAL, SNA, S, STJ, SWK, HOT, SYK, SUN, THC, TSO, TXT, DRYS, UNM, VLO, VNO, WAG, DIS, WM, WDC, WHR, AAPL, GS, GOOG, ICE
New Ten Day Lows: AKS, APOL, CI, EXPD, ESRX, HUM, IGT, IRM, JDSU, MHS, PFE, PFG, SWY, SYY, TJX, VXX, DYN
Volume & Breadth Indicators
For the SPX Index there were 171 components advancing and 294 components declining. On the NYSE 3,131 issues were traded with 1,255 advancing issues and 1,788 retreating issues, a ratio of 1.42 to one declining. There were 117 new highs and 2 new lows. The five day moving average of New Highs is 226 while the five day moving average of New Lows is 7 and the ten day moving average of Net Advancing is 602. The Net Advancing data indicates a bullish trend.
Declining volume was higher at a ratio of 1.15 to one. The closing TRIN was 0.73 and the final tick was -37. The five day average of TRIN is .9 and the ten day average of TRIN is 1.14. The NYSE Composite Index lost -0.15% today while the SPX lost -0.04%.
For the NYSE, relative to the previous 30 session average, volume was -10.01% below the average. Of the last 15 sessions 8 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 21 sessions ended on a positive tick, 6 of last 10. For the SPX, the day's volume was 75.3% of the average daily volume for the last year. Volume was 78.3% of the last 10 day average and 79.3% of the previous day’s volume.
Pretty harsh market breadth for a day that the SPX lost less than a point.
Looking at the NYSE 15-second tick data, the total tick for the day was 42,000 and the average tick for the day was 27. There were 8 ticks greater than 600 and 8 ticks more extreme than -600. There were no ticks greater than 1000 and 2 ticks more extreme than -1000.
Looking at the one-minute tick data, there were 37 ticks greater than 500 and 21 ticks more extreme than -500. 52.3% one-minute ticks were positive. There were no ticks greater than 900 and no ticks more extreme than -900.
The tick data today suggests a total lack of participation by institutions as the tick hovered around zero most of the session.
The intraday volume pattern shows a volume spike mid-morning and declining volume the rest of the day. The Nightly Breadth Indicators remain overbought but less so today.
Moving Average and Support/Resistance Indicators:
83.6% of the SPX are above their five day moving average, 83.2% are above their 10 day average, 84.6% are above their 20 day moving average, 90.4% are above their 50 day moving average, and 73% are above their 200 day moving average.
There were no significant moving average crossovers today. Our moving average Power Rating is 88 of a possible 100.
Sectors on the Move:
Sectors stronger than the SPX for Monday:
- Energy -- Outperformed the SPX by +122%.
- Technology -- Outperformed the SPX by +11%.
Sectors weaker than the SPX for Monday:
- Basic Materials -- Underperformed the SPX by -48%.
- Financials -- Underperformed the SPX by -42%.
- Industrials -- Underperformed the SPX by -19%.
- Consumer Staples -- Underperformed the SPX by -4%.
- Utilities -- Underperformed the SPX by -41%.
- Health Care -- Underperformed the SPX by -47%.
- Consumer Discretionary -- Underperformed the SPX by -16%.
In Late Trading:
208 SPX components moved upward and 112 components downward during the after hours with 104.6 million shares traded.
What We Learned from Monday's Action:
Monday was session 4 to close above the 5 DMA, session 4 to close above the 10 DMA, session 32 to close above the 20 DMA, and session 32 to close above the 50 DMA. This was also session 30 for the 5 DMA to close above the 20 DMA. One early sign of a sustainable rally or pullback is often a close above or below the 10 DMA. The SPX closed 20.36 points above the 10 DMA.
The SPX 5 DMA is 1330.25, 10 DMA is 1323.97, 20 DMA is 1311.86, 50 DMA is 1268.31, 100 DMA is 1238.01, and 200 DMA is 1257.54.
On Monday the SPX traded above the opening range but did not trade below the opening range. 34.4% of the SPX closed up from the previous close; 57.8% closed higher than the open. During Monday's session the SPX gained .01 points from open to close. The SPX intraday trading range was 6.84 points. The 5-Day average intraday trading range is 9.41 points, the 10-Day average is 11.82 points, and the 20-Day average is 10.9 points. The trading range is contracting. The daily bar painted an Inside day. The session was an NR7 day (Narrowest Range last 7 days).
Note: The Opening Range Breakout is one of the simplest day trading set-ups to understand. The first hour of the trading day is the most volatile. Bears and bulls are battling it out in the stock market, trying to show you who’s going to be in charge for the day. If we break out of that trading range, it's telling us that new buying or selling is impacting traders' assessments of value. Looking back at today’s breakouts also helps us grasp sentiment going forward because when a clear trend is established it often carries through for several sessions.
Looking Ahead:
The Market Environment for Tuesday is -3. Greater than three is bullish and less than negative three is bearish. The short-term trend appears to be higher. Mel's 10 Day Oscillator is 64 (below 35 is oversold and above 65 is overbought.) Based solely on the technicals, our bias is slightly bearish for Tuesday's session.
This will be brief tonight as sessions like today's session leave very little that can be analyzed and written about.
For bears, the problem with days such as today is that overbought conditions are burned off while the indices hardly move, creating a sideways "correction." But inside days (such as today) are most often seen at market turning points. Today was the smallest volume and tightest trading range of the year.
The SPX's biggest down day all year remains just -0.57% on January 26th. Today was the 26th consecutive session without so much as a 1% decline, the longest such stretch in more than a year. The 20-day intraday trading range is well under 1%; this is a characteristic of a topping process.
Note: Our multi-day swing signal has given a fresh short signal again tonight. This signal is quite effective when the trend is weak. The question is, are we still in a strong uptrend? We don't believe so.
Tuesday, February 7
Economics
10:00 IBD/TIPP Economic Optimism – consensus 47.1
10:00 JOLTS Job Openings
3:00 Consumer Credit – consensus $7.00B
11:00 Fed to purchase $4.25b-$5b in 6 to 7-year notes
11:30 U.S. to sell 4-week bills, $26b 52-week bills
1:00 U.S. to sell $32b 3-yr notes
03:30 AUD Reserve Bank of Australia Rate Decision
05:00 JPY Leading Index
11:00 EUR German Industrial Production
23:50 JPY Trade Balance
6:00 Greece to sell EU625m 182-day bills
Earnings
Before: AGCO, AMRI, ALLT, MT, BDX, BLC, BP, BR, CNC, CHD, KO, CFX, CVG, DST, EMR, IT, GET, GTIV, GLT, HAR, LRN, KNL, LIOX, LFUS, LPX, MMP, MMYT, MLM, MNI, MLI, NJR, CHUX, OHI, PTRY, PRGO, PIKE, RTI, SMG, SWI, STE, SSYS, TM, TDG, UBS, VSH
After: ARE, ASYS, ATO, AVNR, AVID, AXS, BBCN, BWLD, CALX, CBG, CERN, CDXS, CMP, EXBD, CSGS, DEI, ETM, ENV, ESE, FORM, FWRD, GLUU, GUID, HIG, HCSG, ONE, HIW, HNI, HMN, HRZN, IMI, JIVE, KFRC, LTRE, LIFE, LNC, LPLA, MXL, NTGR, OPEN, OPNT, OPXT, PACB, PNRA, PTP, POWL, PRI, PULS, QUIK, RAH, RNR, RENT, MKTG, RICK, SGI, SVM, SLH, SNCR, TMH, TTMI, ULTI, USNA, VCLK, WNC, DIS, WCN, WU
There were no significant economic releases on Monday. And there will be none on Tuesday.
Good trading!
Thank you for reading. Think on it, trade on it, and be well.
-Mel
