Relentless Upward Drift
by Jerome "Mel" Hickerson
This morning we had news that Greece was complaining about the rates it is being asked to pay and the Labor Department reported that initial claims for unemployment insurance for the week ending April 3rd rose by 18,000 to 460,000, which was above the expectations for a reading of 435K. Continuing Claims for unemployment for the week ending March 27th were below consensus at 4.55M vs. expectations for 4.63M. During the session we received the same-store-sales results from the nation's retailers.
Futures were again pointing to a lower open. The session opened under pressure and the first 15 minutes were jammed with sellers. The low of the day came just 11 minutes in as the dip was once again seen as a buying opportunity. Trading was choppy until about 10:15 after which bulls took charge and the market steadily drifted upward without any significant pullbacks the rest of the session.
Today seemed bullish in many ways. But I'll remind readers that I mentioned last night that a bounce today was expected, even within a bearish scenario. Today's SPX chart painted a third successive lower high and lower low. On the other hand, closing near the high of the day certainly qualifies as bullish. The next several days will tell us a lot about the future direction.
Today was more difficult to day trade as volatility is the lifeblood of a day trader and today lacked volatility. One trade that has repeatedly worked recently is getting long for the 3:15 to 3:40 timeframe.
I'm attaching one chart of possible interest tonight, showing the relentless climb of the Advance/Decline line throughout today. The Advance/Decline was down almost -2000 at the start of the day and worked its way back to close in positive territory.
Day Trade Systems Update: (Signals today)
* Scalp Short SPX at: 10:34
* Scalp Short SPX at: 12:54
* UYM Long at: 3:19
SPX Summary for Thursday, April 08, 2010
121 Advancers/366 Decliners
Today's SPX component winners and losers:
• Largest one day loser is FRX with -13.71%
• Largest three day loser is MEE with -15.62%
• Largest five day loser is MEE with -11.76%
• Largest ten day loser is MEE with -12.53%
• Largest one day winner is EK with 14.33%
• Largest three day winner is EK with 12.65%
• Largest five day winner is EK with 32.13%
• Largest ten day winner is EK with 26.82%
*** 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.
61.20% of the SPX components are giving a crossover Buy signal; 10.00% of the SPX components are giving a Sell signal. This is a 6.1 to 1 ratio of Buy signals over Sell signals.
SPX component signal changes today (evidence of trend):
• From Sell to Neutral: 16 components.
• From Buy to Neutral: 12 components.
• From Neutral to Sell: 10 components.
• From Neutral to Buy: 24 components.
The moving averages:
Close 1186.44
9 EMA 1179.04 Rising
10 DMA 1176.90 Rising
20 DMA 1168.86 Rising
50 DMA 1127.32 Rising
100 DMA 1120.90 Rising
200 DMA 1066.62 Rising
10 Wk MA 1133.41 Rising
NYSE Summary
On the NYSE 3184 issues were traded with 1603 advancing issues and 1463 retreating issues, a ratio of 1.10 to 1 advancing. There were 220 new highs and 7 new lows.
Advancing volume was higher at a ratio of 1.69 to 1. The closing TRIN was 0.65 and the final tick was 673.
Evidence of trend:
Relative to the previous 30 session average, volume was -0.43% below 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, 8 of last 10.
Remember: Breadth leads, indices follow. Today, the NYSE Advance/Decline line increased from 206499 to 206639. This 0.07% increase came while the SPX was gaining 0.34%. The 10 day moving ratio of positive volume is 1.3 and the 10 day moving Advance/Decline ratio is 1.21. The 10 day moving ratio of positive volume has trended -0.12 over the last three days and the 10 day moving Advance/Decline ratio has trended -0.1 over the last three days.
The NYSE Composite Index gained 0.25% today.
Friday, April 9
Economics
10:00 Wholesale Inventories
02:00 German Merchandise Trade
04:30 Great Britain Producer Price Index
Earnings
Before: BTH, STZ
Wholesale inventories are expected to have risen 0.3% in February after falling 0.1% in the previous month. The Commerce Department report is due in the morning. Constellation Brands Inc. (STZ) is slated to release its quarterly report.
Mel’s Missives from the Matrix:
• Total tick for the day was 167,000. There were 108 ticks greater than 600 and 32 ticks more extreme than -600. There were 3 ticks greater than 1000 and no ticks more extreme than -1000. The tick action suggests institutional accumulation.
• The day's range was 13.43 points. The 5 DMA of daily range is 10.96.
• Evidence of the intraday trend: At 10am volume was 102.55% of the 10 day average. By noon the volume was 99.03% of the 10 day average, and by 2pm volume was 106.85% of the 10 day average.
• The day's volume was 93.3% of the average daily volume for the last year. Volume was 103.7% of the last 10 day average and 91.5% of the previous day’s volume.
• Evidence of the intraday trend: The largest increase in relative volume came between 11:45 and 12:00 when relative volume increased 43.2% while the SPX was rising 0.13%. The largest drop in relative volume came between 12:30 and 12:45 when relative volume dropped -37.6% while the SPX was dropping -0.02%.
• 15% of the SPX stocks closed with two day RSI above 90. 23% closed with RSI above 80. 15% closed with RSI below 20 and 6% closed with RSI below 10.
• 46% of the SPX are above their five day moving average, 67% are above their 10 day average, and 71.2% are above their 20 day moving average.
• 18% of the SPX closed above their most recent previous high.
• 21% of the SPX stocks closed below their most recent previous lows.
• 249 SPX issues advanced and 237 issues declined, a net SPX advance/decline of 12.
• Evidence of the intraday trend: At 10am, 36.8% of the SPX components were in the top half of the range. By noon, 66.6% were in the top half of the range, and by 2pm, 74.8% were in the top half of the range.
• 78.2% of stocks closed in the top half of the day's range. (21.6% closed in bottom half.)
• 20.8% of stocks closed in the top 10% of the day's range. 44.4% 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. 5.4% of stocks closed in the bottom 20% of the day's range.
• 30% of stocks closed within 2% of their 52 week high. 62.8% of stocks closed within 5% of their 52 week high.
• 39.8% of stocks closed within 50% of their 52 week low. 10.2% of stocks closed within 25% of their 52 week low.
• 31.8% of stocks closed within ¼% of their high for the day.
• 7.4% of stocks closed within ¼% of their low for the day.
• Evidence of the intraday trend: At 10am, 13.2% of the SPX components were up since the open. By noon, 34.6% were up since the open, and by 2pm, 43.4% were up since the open.
• 51.2% of the SPX closed up from the previous close; 66.4% closed higher than the open.
• Sectors stronger than the SPX for Thursday:
- Financials -- Outperformed the SPX by +39%.
- Consumer Discretionary -- Outperformed the SPX by +59%.
• Sectors weaker than the SPX for Thursday:
- Basic Materials -- Underperformed the SPX by -11%.
- Energy -- Underperformed the SPX by -2%.
- Industrials -- Underperformed the SPX by -2%.
- Technology -- Underperformed the SPX by -17%.
- Consumer Staples -- Underperformed the SPX by -16%.
- Utilities -- Underperformed the SPX by -94%.
- Health Care -- Underperformed the SPX by -72%.
• The $SOX index strength was weaker relative to the SPX Thursday by -1.77%.
• The XLF outperformed the SPX by 0.39% Thursday.
• The 2 Day RSI of the SPX is 65. The Dow RSI is 56, the NASDAQ is 77 and the Russell is 76.
• Over the last four sessions, the average session closed 74.26% of the range above the low. Thursday closed at 84.8% of the daily range.
• Upside momentum was flat Thursday, from Wednesday’s 1.35 to today’s 1.35. The ratio of SPX components giving a crossover buy signal compared to sell signals increased to B 6.12 to 1.
• The ISEE Equity 10 day moving average Thursday was 221.5. 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 221.5 on 04/08/10.
• 170 SPX components moved upward and 168 components downward during the after hours with 107 million shares traded.
Good trading on Friday everyone!
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"Mel"
