Nothing Unusually Uncertain Today
by Jerome "Mel" Hickerson
Good evening tonight from San Francisco where the temperatures are 70ish, skies are cloudless, and it’s just a gorgeous evening.
Markets traded higher overnight on the back of strong economic data out of Europe and optimism surrounding the results of bank stress tests due out tomorrow. On the economic front, the Labor Department reported that initial claims for unemployment insurance for the week ending July 17th rose by 37,000 to 464K. The week’s total was well above the Reuters consensus for a reading of 446K. Continuing Claims for unemployment for the week ending July 10 were below consensus at 4.487M vs. expectations for 4.607M and last week’s 4.681M. The futures shrugged off any bad news before the open with just a slight dip then back to ramping higher.
The session opened with a 13 point gap higher, surged higher another 12 points before 10am, then consolidated the rest of the session with the only excitement coming in the final hour as the SPX pulled back about seven points then quickly recovered about half of that before the close. Bulls ran the tape today and the bears were basically shut out. Breadth was extremely strong as were all of the internal indicators.
Stepping back and looking forward, the market appears to be heading higher yet. But significant resistance remains just overhead and a struggle is likely; another day such as today is not likely to be seen in the near-term. Many traders will continue to sell as we approach 1100; breaking above is not a certainty by any stretch of the imagination. A breather; consolidation and pullback Friday seems more likely than not.
But as we continue assaulting the 1100 area, internals are strengthening, not weakening. A break above does appear more likely today than at any recent time.
It is difficult to trade a day such as today; jumping long side after a huge gap upward feels dangerous. And trading the short side can be hazardous as the intraday trend can crush you. So trading days such as this require a cautious approach and taking whatever the market will allow.
Friday, July 23
Economics
02:45France Manufacture Goods
04:00German IFO Survey
04:00Italy Retail Sales
04:30Great Britain GDP
07:00Canadian CPI
Earnings
Before: ALV, DLR, HON, IR, JCI, KMB, ERIC, MCD, MHP, SLB, SXT, SPAR, TROW, VZ, WIT, WL
Mel’s Missives from the Matrix:
- Total tick for the day was 354,000 and the average tick for the day was 230. There were 258 ticks greater than 600 and 17 ticks more extreme than -600. There were 26 ticks greater than 1000 and 1 ticks more extreme than -1000. The tick action suggests institutional accumulation.
- The day's range was 25.36 points. The intraday trading range - 9:35 to the close - was 14.32. The 5 DMA of daily range is 22.43.
- Evidence of the intraday trend: At 10am volume was 100.79% of the 10 day average. By noon the volume was 116.53% of the 10 day average, and by 2pm volume was 110.8% of the 10 day average.
- The day's volume was 94.7% of the average daily volume for the last year. Volume was 109.3% of the last 10 day average and 97.9% of the previous day’s volume.
- Evidence of the intraday trend: The largest increase in relative volume came between 3:30 and 3:45 when relative volume increased 36.5% while the SPX was dropping -0.42%. The largest drop in relative volume came between 12:00 and 12:15 when relative volume dropped -46.2% while the SPX was rising 0.09%.
- 17% of the SPX stocks closed with two day RSI above 90. 38% closed with RSI above 80. 5% closed with RSI below 20 and 3% closed with RSI below 10.
- 84.6% of the SPX are above their five day moving average, 74.6% are above their 10 day average, 78.8% are above their 20 day moving average, 56.8% are above their 50 day moving average, 35.4% are above their 100 day moving average, and 44.6% are above their 150 day moving average.
- 51% of the SPX closed above their most recent previous high.
- 4% of the SPX stocks closed below their most recent previous lows.
- 452 SPX issues advanced and 36 issues declined, a net SPX advance/decline of 416.
- Evidence of the intraday trend: At 10am, 82.6% of the SPX components were in the top half of the range. By noon, 70.2% were in the top half of the range, and by 2pm, 75.6% were in the top half of the range.
- 75.6% of stocks closed in the top half of the day's range. (24.2% closed in bottom half.)
- 10.4% of stocks closed in the top 10% of the day's range. 31.6% of stocks closed in the top 20% of the day's range.
- 2.2% of stocks closed in the bottom 10% of the day's range. 5.8% of stocks closed in the bottom 20% of the day's range.
- 9% of stocks closed within 2% of their 52 week high. 16.2% of stocks closed within 5% of their 52 week high.
- 76.2% of stocks closed within 50% of their 52 week low. 44.8% of stocks closed within 25% of their 52 week low.
- 9.2% of stocks closed within ¼% of their high for the day.
- 0.8% of stocks closed within ¼% of their low for the day.
- Evidence of the intraday trend: At 10am, 93.2% of the SPX components were up since the open. By noon, 90.6% were up since the open, and by 2pm, 91.2% were up since the open.
- 90.4% of the SPX closed up from the previous close; 83.4% closed higher than the open.
- Sectors stronger than the SPX for Thursday:
- Basic Materials -- Outperformed the SPX by +1%.
- Financials -- Outperformed the SPX by +60%.
- Industrials -- Outperformed the SPX by +82%.
- Technology -- Outperformed the SPX by +45%.
- Consumer Discretionary -- Outperformed the SPX by +93%.
- Sectors weaker than the SPX for Thursday:
- Energy -- Underperformed the SPX by -3%.
- Consumer Staples -- Underperformed the SPX by -114%.
- Utilities -- Underperformed the SPX by -63%.
- Health Care -- Underperformed the SPX by -159%.
- The $SOX index strength was stronger relative to the SPX Thursday by 1.03%.
- The XLF outperformed the SPX by 0.6% Thursday.
- The 2 Day RSI of the SPX is 75. The Dow RSI is 76, the NASDAQ is 75 and the Russell is 77.
- Over the last four sessions, the average session closed 69% of the range above the low. Thursday closed at 71.2% of the daily range.
- Upside momentum increased Thursday, from Wednesday’s -2.38 to today’s 0.03. The ratio of SPX components giving a crossover sell signal compared to buy signals moved downward just slightly to B 1.89 to 1.
- The ISEE Equity 10 day moving average Thursday was 166.8. 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.
- 248 SPX components moved upward and 124 components downward during the after hours with 151 million shares traded.
Trade 'em well on Friday everyone!
-Mel
