Once Again, No Fun for Bears
by Jerome "Mel" Hickerson
Initial claims for unemployment for the week ending March 6th fell by 6,000 to 462K, which was a bit above the expectations for a reading of 460K. Continuing Claims for unemployment for the week ending February 27th were also above consensus at 4.558M vs. expectations for 4.5M and last week's revised total of 4.521M (from 4.5M). As a result, futures had selling pressure on the indices at the open of the regular session. As it was, bears enjoyed their finest 20 minutes in quite some time as the index gave up six points with promises of more before putting the low of the session on the chart at 9:52. From there, it was a bullish bounce until 11am before the indices teased the bears again by giving back more than half of the bounce. But around 12:30, the bulls A team showed up and carried the ball into the close as the indices closed at the highs of the day, and the SPX managed to close just a tiny fraction under the 52 week low.
Once again, the financials, led by Citi, continued to lead the way upward. Approximately 1.2 Billion shares of Citi traded today, again blowing the SPX volume stats out of perspective as one quarter of the SPX shares traded today were Citi shares.
Bears remain frustrated. Any expected pullback begins to appear almost hopeless. But the internals today began showing weakness. Breadth has been leading higher by outperforming the indices; but today breadth did not outperform. Small caps have been leading higher; today they underperformed. The market is beginning to show internal signs of exhaustion; but whether it takes days to surface with a pullback is impossible to know at this point.
Oscillators and indicators remain at extreme levels of overbought in the short-term, but I’ll admit to being uncomfortable being bearish here. A break above 1150 seems likely to cause a short squeeze rally; it just seems possible that many traders who are short have their stop set just above the high of the year. There are rallies that at times defy all expectations; Friday seems to have possibilities for a blow-off top if the index breaks higher explosively and causes a cascade of shorts to give up. We have to respect this possibility.
SPX Summary for Thursday, March 11, 2010
324 Advancers/164 Decliners
Today's SPX component winners and losers:
• Largest one day loser is ZMH with -3.14%
• Largest three day loser is EQT with -6.99%
• Largest five day loser is CF with -7.23%
• Largest ten day loser is SPLS with -10.59%
• Largest one day winner is GME with 5.69%
• Largest three day winner is AIG with 20.87%
• Largest five day winner is AIG with 31.89%
• Largest ten day winner is AIG with 27.77%
*** SPX Technical Summary ***
The average 14 day RSI of all 500 components is 65.
The greatest positive five day momentum component is AIG; the greatest negative five day momentum component is CF. The average five day momentum of all 500 components is 2.75.
84.40% of the SPX components are giving a crossover Buy signal; 3.20% of the SPX components are giving a Sell signal. This is a 26.4 to 1 ratio of Buy signals over Sell signals.
SPX component signal changes today (evidence of trend):
• From Sell to Neutral: 3 components.
• From Buy to Neutral: 11 components.
• From Neutral to Sell: 2 components.
• From Neutral to Buy: 11 components.
Friday, March 12
Economics
08:30 Retail Sales 0.1% cons.
08:30 Retail Sales ex-auto 0.2% cons.
09:55 Michigan Sentiment 73.7cons.
10:00 Business Inventories 0.1% cons.
Earnings
Before: ANN, CTRN, HIBB, KIRK, PEI
Events
EVBN, HSKA at Wall Street Analyst Forum Institutional Investor Conference
BTE at FirstEnergy and Societe Generale Canadian Energy Conference
PETD Analyst Day
UTX Analyst Meeting
INT Analyst Day
February retail sales are expected to have risen 0.2% after rising 0.5% in the previous month. The Commerce Department report is due out shortly before the start of trading. Sales excluding autos are expected to hold steady after rising 0.6% in the previous month. The University of Michigan's consumer sentiment index for March is due after the start of trading. The index is expected to have risen to 73.7 from 73.6 in the previous month.
January business inventories are expected to have risen 0.1% after falling 0.2% in December. The Census Bureau report is due out after the start of trading.
Mel’s Random Hits:
• Total tick for the day was +137,000. This was the lowest total in five sessions. The first hour was negative; the rest of the day had three brief negative periods: at 11:45, 12:30, and 2:15.
• The day's range was 11.25 points. Traders continue to be plagued by low range sluggish days.
• The day's volume was 89.1% of the average daily volume for the last year. Volume was 111.0% of the last 10 day average and 82.6% of Tuesday’s volume. Citi volume was again 900,000,000 beyond the average; if you adjust today’s volume to discount that difference then today would have been only 72% of the yearly average. Volume was really light today other than Citi.
• 30% of the SPX stocks closed with two day RSI above 90. 45% closed with RSI above 80. 7% closed with RSI below 20 and 4% closed with RSI below 10.
• 68.8% of the SPX are above their five day moving average, 84.8% are above their 10 day average, and 91.6% are above their 20 day moving average.
• 10% of the SPX stocks closed below their most recent previous lows.
• 32% of the SPX closed above their most recent previous high.
• 88.2% of stocks closed in the top half of the day's range. (11.8% closed in bottom half.)
• 2.4% of stocks closed in the bottom 20% of the day's range.
• 49.4% of stocks closed in the top 10% of the day's range. The late day surge carried a wide breadth of stocks higher.
• 34.2% of stocks closed within 2% of their 52 week high. 52.8% of stocks closed within 5% of their 52 week high. These numbers really reflect that the index is at the 52 week high.
• 29.0% of stocks closed within 50% of their 52 week low. 8.6% of stocks closed within 25% of their 52 week low. The oddity is that the number of stocks within 50% of their low increased today.
• 58.0% of stocks closed within ¼% of their high for the day. Wow.
• 1.6% of stocks closed within ¼% of their low for the day.
• 64.6% of the SPX closed up from the previous close; 76.6% closed higher than the open.
• Sectors weaker than the SPX for the day: Technology, Energy, Consumer Staples, Utilities, and Industrials.
• Sectors stronger than the SPX for the day: Basic Materials, Health Care, Consumer Discretionary, and Financials.
• The $SOX index strength was weaker than the SPX today.
• The 2 Day RSI of the SPX is 99. The Dow RSI is 98, NASDAQ is 99 and Russell 99.
• Over the last four sessions, the average session closed 65.2% of the range above the low.
• Upside momentum froze today, from Wednesday’s 2.76 to today’s 2.75. The ratio of SPX components giving a crossover buy signal compared to sell signals has edged upward again to 26.4 to 1.
• 222 SPX components moved upward and 133 components downward during the after hours with 152 million shares traded. Volume was heavy.
Have a great Friday everyone!
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"Mel"
ETF’s we trade:
Ultra S&P500 ProShares (NYSE: SSO)
Ultra Dow30 ProShares (NYSE: DDM)
Ultra QQQ ProShares (NYSE: QLD)
PS UTLRSHRT QQQ (NYSE: QID)
UltraShort S&P500 ProShares (NYSE: SDS)
UltraShort Dow30 ProShares (NYSE: DXD)
PowerShares QQQ Trust (NASDAQ: QQQQ)
Direxion Daily Small Cp Bear 3X (NYSE:TZA)
Direxion Daily Small Cp Bull 3X (NYSE:TNA)
