One For The Bears
by Jerome "Mel" Hickerson
There was no economic data to before the open this morning and the earnings news is light in front of the start of earnings season. The major overseas markets were mixed with Europe moving lower. Futures pointed to a lower open.
What turned out to be a most interesting session began quite dully with about a three point downward gap. The SPX traded choppily until around 10:45 when a wave of selling took the index down another four points before apparently bottoming. From 11am until about 1:30 the indices marched bullishly upward with the SPX putting the high of the day on the chart at 1:26. And then it felt as though the credit data to be released at 3pm may have been leaked out early. The index began what is (by current standards) a sharp decline, giving up 12 points before setting the low of the day at 3:15. The last 45 minutes of the day saw the customary bullish bounce into the close.
We've been looking for a multi-day pullback on the order of 5%-10%. Was today the start? It is certainly possible that it starts like this; but my gut feeling is that Thursday bounces and that the expected pullback frustrates the bears yet again. The most common pattern before a pullback is for the market to swing back and forth a bit for a few days before the downturn begins in earnest. Today's seven point decline is the largest decline in six weeks; history suggests that we have a couple days like this mixed in with some bounces before a pullback really gets underway.
Day Trade Systems Update: (Signals today)
* Scalp UYM Long at: 10:53
* Scalp SPX Short at: 11:33
* Scalp SPX Short at: 1:09
* Scalp UYM Long at: 2:20
* Scalp UYM Long at: 3:13
SPX Summary for Wednesday, April 07, 2010
121 Advancers/366 Decliners
Today's SPX component winners and losers:
• Largest one day loser is MEE with -6.38%
• Largest three day loser is MEE with -14.76%
• Largest five day loser is MEE with -14.66%
• Largest ten day loser is GENZ with -12.27%
• Largest one day winner is AIG with 10.99%
• Largest three day winner is AIG with 17.02%
• Largest five day winner is AIG with 16.51%
• Largest ten day winner is AIG with 19.84%
*** SPX Technical Summary ***
The lowest 14 day RSI component is SAI; the highest 14 day RSI component is BDK. The average 14 day RSI of all 500 components is 56.
The greatest positive five day momentum component is AIG; the greatest negative five day momentum component is MEE. The average five day momentum of all 500 components is 1.35.
58.80% of the SPX components are giving a crossover Buy signal; 11.20% of the SPX components are giving a Sell signal. This is a 5.3 to 1 ratio of Buy signals over Sell signals.
SPX component signal changes today (evidence of trend):
• From Sell to Neutral: 14 components.
• From Buy to Neutral: 20 components.
• From Neutral to Sell: 13 components.
• From Neutral to Buy: 18 components.
The moving averages:
Close 1182.45
9 EMA 1177.10 Rising
10 DMA 1175.02 Rising
20 DMA 1166.83 Rising
50 DMA 1125.44 Rising
100 DMA 1120.02 Rising
200 DMA 1065.15 Rising
10 Wk MA 1132.92 Falling
NYSE Summary
On the NYSE 3190 issues were traded with 1102 advancing issues and 1974 retreating issues, a ratio of 1.79 to 1 declining. There were 329 new highs and 3 new lows.
Declining volume was higher at a ratio of 1.65 to 1. The closing TRIN was 0.92 and the final tick was 685.
Evidence of trend:
Relative to the previous 30 session average, volume was 9.96% above 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, 25 sessions ended on a positive tick, 7 of last 10.
Remember: Breadth leads, indices follow. Today, the NYSE Advance/Decline line decreased from 207371 to 206499. This -0.42% decrease came while the SPX was losing -0.59%. The 10 day moving ratio of positive volume is 1.19 and the 10 day moving Advance/Decline ratio is 1.13. The 10 day moving ratio of positive volume has trended -0.28 over the last three days and the 10 day moving Advance/Decline ratio has trended -0.23 over the last three days.
The NYSE Composite Index lost -0.77% today.
Thursday, April 8
Economics
08:30 Initial Claims
08:30 Continuing Claims
02:45 France Merchandise Trade
04:30 Great Britain Industrial Production
07:00 BOE Announcement
07:45 European Union Announcement
Earnings
Before: ISCA, PIR, RPM
After: CBK, DRWI, MG, SMSC, NCTY
Speeches
01:00 Naryana Kocherlakota
Auctions
01:00 30 Yr Bond Auction
Thursday brings the weekly report on initial jobless claims in the morning. Claims are expected to have fallen to 433,000 last week from 439,000 in the previous week. Continuing claims, a measure of Americans who have been receiving benefits for a week or more, are expected to have fallen to 4,650,000 from 4,662,000 in the previous week. March sales from the nation's retailers are due throughout the morning. Last month, sales jumped a bigger-than-expected 4%, rising for the sixth month in a row. Investors will be looking to see if consumers can continue the trend for another month. Pier 1 Imports Inc. (PIR) is scheduled to report earnings.
Mel’s Missives from the Matrix:
• Total tick for the day was 7,000. There were 54 ticks greater than 600 and 102 ticks more extreme than -600. There were no ticks greater than 1000 and 14 ticks more extreme than -1000. The tick action suggests institutional distribution.
• The day's range was 12.35 points. The 5 DMA of daily range is 10.29.
• Evidence of the intraday trend: At 10am volume was 110.98% of the 10 day average. By noon the volume was 105.77% of the 10 day average, and by 2pm volume was 105.29% of the 10 day average.
• The day's volume was 100.7% of the average daily volume for the last year (YES, that really is 100%). Volume was 114.9% of the last 10 day average and 128% of the previous day’s volume.
• Evidence of the intraday trend: The largest increase in relative volume came between 1:00 and 1:15 when relative volume increased 87.7% while the SPX was rising 0.14%. The largest drop in relative volume came between 3:15 and 3:30 when relative volume dropped -93.0% while the SPX was rising 0.12%.
• 17% of the SPX stocks closed with two day RSI above 90. 25% closed with RSI above 80. 15% closed with RSI below 20 and 6% closed with RSI below 10.
• 55.2% of the SPX are above their five day moving average, 67% are above their 10 day average, and 74% are above their 20 day moving average.
• 17% of the SPX closed above their most recent previous high.
• 31% of the SPX stocks closed below their most recent previous lows.
• 121 SPX issues advanced and 366 issues declined, a net SPX advance/decline of -245.
• Evidence of the intraday trend: At 10am, 44.2% of the SPX components were in the top half of the range. By noon, 45% were in the top half of the range, and by 2pm, 55% were in the top half of the range.
• 31.4% of stocks closed in the top half of the day's range. (68.4% closed in bottom half.)
• 3.4% of stocks closed in the top 10% of the day's range. 7.8% of stocks closed in the top 20% of the day's range.
• 4.6% of stocks closed in the bottom 10% of the day's range. 16.8% of stocks closed in the bottom 20% of the day's range.
• 29.2% of stocks closed within 2% of their 52 week high. 61% of stocks closed within 5% of their 52 week high.
• 39.6% of stocks closed within 50% of their 52 week low. 9.8% of stocks closed within 25% of their 52 week low.
• 7% of stocks closed within ¼% of their high for the day.
• 9% of stocks closed within ¼% of their low for the day.
• Evidence of the intraday trend: At 10am, 28.6% of the SPX components were up since the open. By noon, 30.8% were up since the open, and by 2pm, 36.2% were up since the open.
• 23.6% of the SPX closed up from the previous close; 30.2% closed higher than the open.
• Sectors stronger than the SPX for Wednesday:
- Financials -- Outperformed the SPX by +15%.
- Industrials -- Outperformed the SPX by +1%.
- Technology -- Outperformed the SPX by +2%.
- Consumer Discretionary -- Outperformed the SPX by +10%.
• Sectors weaker than the SPX for Wednesday:
- Basic Materials -- Underperformed the SPX by -5%.
- Energy -- Underperformed the SPX by -37%.
- Consumer Staples -- Underperformed the SPX by -7%.
- Utilities -- Underperformed the SPX by -31%.
- Health Care -- Underperformed the SPX by -1%.
• The $SOX index strength was stronger relative to the SPX Wednesday by 0.93%.
• The XLF outperformed the SPX by 0.15% Wednesday.
• The 2 Day RSI of the SPX is 38. The Dow RSI is 20, the NASDAQ is 59 and the Russell is 70.
• Over the last four sessions, the average session closed 70.44% of the range above the low. Wednesday closed at 43.2% of the daily range.
• Upside momentum decreased Wednesday, from Tuesday’s 2.09 to today’s 1.35. The ratio of SPX components giving a crossover buy signal compared to sell signals also decreased to B 5.25 to 1.
• The ISEE Equity 10 day moving average Wednesday was 217.4. 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 221.3 on 04/06/10.
• 171 SPX components moved upward and 200 components downward during the after hours with 128 million shares traded.
Good trading on Thursday everyone!
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"Mel"
