One More Dance for the Bears
by Jerome "Mel" Hickerson
Friday's session opened with mild selling pressure from the futures, moved down a few points and stabilized. At 10:00 another wave of selling struck but support held in the 1105 area and the SPX bounced setting the trading high of the day at 11:03. At this point of the day, a green close looked likely. The index then slid sideways with a downward bias for a couple of hours before the bias increased. The index proceeded to lose an additional eight points in the final hour of the session as the week closed out as the worst week for the indices since the rally began.
Outlook for Monday and the rest of the week: The market internals are weakening but oscillators are extremely oversold. The SPX sits precariously close to a last major line of defense; a failure to bounce from here will cause great joy for the bears. I think we bounce; this market has been resilient. But I’ll be watching the 1085 area with great interest; I think a failure to bounce by Tuesday is really bearish.
Monday, January 25
Economics
10:00 Existing Home Sales 6.00M cons.
Earnings
Before: AKS, CNH, ETN, HAL, ERIC, DGX, SEE
After: ALGT, AMGN, AAPL, ATHR, JEC, MSPD, PRXL, SLG, TXN, VMW, VLTR, ZION
Auctions
11:30 3-Month Bill Auction
11:30 6-Month Bill Auction
SPX Summary for Friday, January 22, 2010
36 Advancers/462 Decliners
Today's SPX component winners and losers:
• Largest one day loser is COF with -12.44%
• Largest three day loser is CLF with -17.86%
• Largest five day loser is AKS with -18.52%
• Largest ten day loser is PCS with -21.94%
• Largest one day winner is ISRG with 11.92%
• Largest three day winner is HBAN with 9.79%
• Largest five day winner is ISRG with 10.65%
• Largest ten day winner is SVU with 19.86%
*** SPX Technical Summary ***
The lowest 14 day RSI component is EXPE; the highest 14 day RSI component is AOC. The average 14 day RSI of all 500 components is 46.
Yesterday's lowest RSI EXPE earned -2.20% today.
Yesterday's highest RSI AOC earned 0.00% today.
The greatest positive five day momentum component is ISRG; the greatest negative five day momentum component is AKS. The average five day momentum of all 500 components is -4.75.
21.60% of the SPX components are giving a crossover Buy signal; 32.80% of the SPX components are giving a Sell signal. This is a 1.5 to 1 ratio of Sell signals over Buy signals.
SPX component signal changes today (evidence of trend):
• From Sell to Neutral: 1 component.
• From Buy to Neutral: 62 components.
• From Neutral to Sell: 48 components.
• From Neutral to Buy: 4 components.
*** SPX Component Swing Trade Ideas ***
New Crossover Buy Signals:
TEG ISRG PCG LUV
New Crossover Sell Signals:
APD ETR JNPR SLM AA EQR LSI TSO AEE EXPD MU TRV
BMS FE MSFT VRSN CAM FTI MON WY CBG FRX MS YHOO
CTL GME NI AAPL CME HOG PAYX C CEG HCP PG GS
CSX HNZ PGR DVN HPQ SLE DFS ITW SCG RRD JBL SCHW
High Positive Momentum:
ISRG SVU HBAN EL SWY HUM CFN KEY ZION KR CMA EP
High Negative Momentum:
MMM AKS CLF THC MEE MU AA EK TSS X GT
Mel’s Random Hits:
• Total tick for the day was -213,000. Breadth was negative from the open, but the middle two hours of the day gave bulls false hopes as the end of the week turned sharply negative. Total tick for the week was -197,000. The last negative week was late October. The following week had five positive sessions.
• The day's range was 25.31 points. The weekly range was 5.31%. The last week with a larger (5.4%) range was the last week of October.
• The day's volume was 112.4% of the average daily volume for the last year. Volume was 125.3% of the last 10 day average.
• 1% of the SPX stocks closed with two day RSI above 90. 2% closed with RSI above 80. 82% closed with RSI below 20 and 66% closed with RSI below 10. Calling for a bounce. Screaming. But sometimes numbers this weak are a sign that a bounce will be slow coming.
• 8% of the SPX are above their five day moving average, 11% are above their 10 day average, and 18% are above their 20 day moving average.
• 83% of the SPX stocks closed below their most recent previous lows.
• 1% of the SPX closed above their most recent previous high.
• 4.6% of stocks closed in the top half of the day's range. (95.4% closed in bottom half.)
• 79.6 of stocks closed in the bottom 20% of the day's range.
• 0.4% of stocks closed in the top 10% of the day's range.
• 1.8% of stocks closed within 2% of their 52 week high.
• 27.6% of stocks closed within 50% of their 52 week low.
• 0.6% of stocks closed within ¼% of their high for the day.
• 48.0% of stocks closed within ¼% of their low for the day.
• 8.0% of the SPX closed up from the previous close; 8.8% closed higher than the open.
• Sectors weaker than the SPX for the day: Financials, and Technology.
• Sectors stronger than the SPX for the day: Basic Materials, Energy, Consumer Discretionary, Industrials, Consumer Staples, Utilities, and Health Care.
• The $SOX index strength was stronger than the SPX again Friday for the fourth consecutive day.
• The 2 Day RSI of the SPX is 4. The Dow RSI is 4, NASDAQ is 5 and Russell 7.
• Over the last five sessions, the average session closed 37% of the range above the low. This is near the lowest five day average of the rally. Slightly lower were occasions in mid and late May, July 8th/9th, late October, and December 8th/9th/10th. Typically you see a significant bounce when this number falls below 40%. All of the instances above bounced more than 25 points within days.
• 165 SPX components moved upward and 211 components downward during the after hours with 124 million shares traded.
• Trade suggestion: Go Long at Monday’s open using SPX 1082 as your stop loss and SPX 1109 as your target. Sell before Tuesday’s close.
Have a great Sunday.
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"Mel"
