SPX Continues to Hold 1400 in a Sideways Crawl
Market Recap:
Our Market Leaders Board is mixed and clearly suggesting a stall pattern.
SPX big winners were Alpha Natural Resources (ANR) 15.01%, E Trade Financial Corp (ETFC) 6.59%, and Consol Energy Inc (CNX) 6.39%. SPX big losers were Monster Beverage Corporation (MNST) -10.47%, Windstream Corp (WIN) -7.74%, and Dean Foods Company (DF) -4.35%.
SPX five day big winners are Dean Foods Company (DF) 39.95%, Fossil Inc (FOSL) 30.11%, and Computer Sciences Corp (CSC) 26.34%. SPX five day big losers are priceline.com Inc (PCLN) -13.37%, Firstenergy Corp (FE) -7.38%, and Windstream Corp (WIN) -6.72%.
New Ten Day Highs: ADBE, A, APD, ARG, AKS, AA, ATI, AEP, AIG, AMAT, AVP, BHI, BMC, BSX, COG, CFN, CAT, CTL, CF, CHK, CVX, CME, CI, CSCO, CSC, CPWR, COP, CNX, SAI, DELL, XRAY, DVN, DO, DOV, ETFC, ETN, EOG, EL, ESRX, FITB, FSLR, FLS, FLR, F, FCX, FTR, GCI, HAL, HRS, HAS, ITW, INTC, ISRG, IVZ, IRM, JNS, JDSU, JNPR, CLF, K, KLAC, KSS, LEN, LUK, LXK, LIFE, LNC, MRO, MAT, MET, MSFT, MS, NBR, NSM, NEM, NWSA, JWN, NOC, NUE, NVDA, OMC, OI, PCAR, BTU, PBCT, PPG, PPL, PX, PCP, PG, PRU, PHM, QCOM, DGX, RRC, RTN, RHI, ROK, R, SWY, SLB, SNI, SHW, SIAL, S, STT, THC, TDC, TXN, BK, TIF, TWX, TRV, X, JASO, KBH, MBI, VRSN, WPO, WLP, WDC, WU
New Ten Day Lows: AMT, AIV, AZO, AVB, BMY, BF/B, CMS, ED, EQR, FDO, FE, TEG, ODP, PSA, SRE, SPG, VXX, VTR, VNO
Volume & Breadth Indicators
For the SPX Index there were 255 components advancing and 234 components declining. On the NYSE 3,145 issues were traded with 1,682 advancing issues and 1,342 retreating issues, a ratio of 1.25 to one advancing. There were 153 new highs and 7 new lows. The five day moving average of New Highs is 184 while the five day moving average of New Lows is 13 and the ten day moving average of Net Advancing is 400. The Net Advancing data indicates a bullish trend.
Advancing volume was higher at a ratio of 1.59 to one. The closing TRIN was 0.68 and the final tick was -72. The five day average of TRIN is .72 and the ten day average of TRIN is .99. The NYSE Composite Index gained 0.08% today while the SPX gained 0.04%.
For the NYSE, relative to the previous 30 session average, volume was -23.98% below the average. Of the last 15 sessions 7 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 13 sessions ended on a positive tick, 5 of last 10. For the SPX, the day's volume was 93.8% of the average daily volume for the last year. Volume was 90.6% of the last 10 day average and 106% of the previous day’s volume.
Looking at the NYSE 15-second tick data, the total tick for the day was 72,000 and the average tick for the day was 46. There were 5 ticks greater than 600 and 1 ticks more extreme than -600. There were no ticks greater than 1000 and no ticks more extreme than -1000.
Moving Average and Support/Resistance Indicators:
71.6% of the SPX are above their five day moving average, 77.6% are above their 10 day average, 74.8% are above their 20 day moving average, 74.4% are above their 50 day moving average, and 61% are above their 200 day moving average.
There was one significant moving average crossover today as the NYSE Composite Index had the 20 DMA cross above the 100 DMA. Our moving average Power Rating is 76 of a possible 100.
Sectors on the Move:
Sectors stronger than the SPX for Thursday:
- Basic Materials -- Outperformed the SPX by +49%.
- Energy -- Outperformed the SPX by +58%.
- Financials -- Outperformed the SPX by +3%.
- Industrials -- Outperformed the SPX by +4%.
- Technology -- Outperformed the SPX by +33%.
- Utilities -- Outperformed the SPX by +12%.
Sectors weaker than the SPX for Thursday:
- Consumer Staples -- Underperformed the SPX by -40%.
- Health Care -- Underperformed the SPX by -9%.
- Consumer Discretionary -- Underperformed the SPX by -15%.
Checking the sectors of the SPX tonight: (The sector Buy and Sell signals come from a mechanical trend trading system; there will be some whipsaw but the signal will never be on the wrong side for long.)
The Basic Materials sector advancing issues (23) totaled 670,146 shares traded (29,137 average per stock) and declining issues (7) totaled 138,237 shares traded (19,748 average per stock.) 23 components are on an uptrend (no new uptrends today) and 7 components are on a downtrend (1 new downtrends today.) There were 2 New Highs and no New Lows. The sector is on a Buy signal and closed above the daily pivot. The sector 5-Day average closed 1.8% above the 20-Day average.
The Energy sector advancing issues (32) totaled 1,685,885 shares traded (52,684 average per stock) and declining issues (13) totaled 535,522 shares traded (41,194 average per stock.) 42 components are on an uptrend (5 new uptrends today) and 3 components are on a downtrend (no new downtrends today.) There were 1 New Highs and no New Lows. The sector is on a Buy signal and closed above the daily pivot. The sector 5-Day average closed 3.34% above the 20-Day average.
The Financials sector advancing issues (44) totaled 2,195,347 shares traded (49,894 average per stock) and declining issues (34) totaled 958,907 shares traded (28,203 average per stock.) 60 components are on an uptrend (6 new uptrends today) and 21 components are on a downtrend (2 new downtrends today.) There were no New Highs and no New Lows. The sector is on a Buy signal and closed above the daily pivot. The sector 5-Day average closed 2.02% above the 20-Day average.
The Industrials sector advancing issues (29) totaled 812,508 shares traded (28,018 average per stock) and declining issues (30) totaled 521,051 shares traded (17,368 average per stock.) 48 components are on an uptrend (3 new uptrends today) and 12 components are on a downtrend (2 new downtrends today.) There were 3 New Highs and no New Lows. The sector is on a Buy signal and closed above the daily pivot. The sector 5-Day average closed 2.63% above the 20-Day average.
The four 'risk sectors' totaled 128 advancing issues and 84 declining issues today with 14 new uptrends and 5 new downtrends. 80.1% of Risk Sector components are uptrending.
The Technology sector advancing issues (48) totaled 4,896,605 shares traded (102,013 average per stock) and declining issues (25) totaled 1,852,745 shares traded (74,110 average per stock.) 72 components are on an uptrend (2 new uptrends today) and 7 components are on a downtrend (1 new downtrends today.) There were 4 New Highs and no New Lows. The sector is on a Buy signal and closed above the daily pivot. The sector 5-Day average closed 3.07% above the 20-Day average.
The Consumer Staples sector advancing issues (15) totaled 468,799 shares traded (31,253 average per stock) and declining issues (25) totaled 934,566 shares traded (37,383 average per stock.) 26 components are on an uptrend (no new uptrends today) and 15 components are on a downtrend (2 new downtrends today.) There were 1 New Highs and no New Lows. The sector is on a Buy signal and closed above the daily pivot. The sector 5-Day average closed 1.1% above the 20-Day average.
The Utilities sector advancing issues (12) totaled 454,816 shares traded (37,901 average per stock) and declining issues (19) totaled 250,837 shares traded (13,202 average per stock.) 9 components are on an uptrend (1 new uptrends today) and 22 components are on a downtrend (2 new downtrends today.) There were 1 New Highs and no New Lows. The sector is on a Sell signal and closed below the daily pivot. The sector 5-Day average closed .22% above the 20-Day average.
The Health Care sector advancing issues (20) totaled 983,336 shares traded (49,167 average per stock) and declining issues (32) totaled 710,140 shares traded (22,192 average per stock.) 30 components are on an uptrend (3 new uptrends today) and 22 components are on a downtrend (1 new downtrends today.) There were 1 New Highs and no New Lows. The sector is on a Buy signal and closed above the daily pivot. The sector 5-Day average closed .81% above the 20-Day average.
The Consumer Discretionary sector advancing issues (32) totaled 1,497,043 shares traded (46,783 average per stock) and declining issues (49) totaled 1,886,208 shares traded (38,494 average per stock.) 64 components are on an uptrend (4 new uptrends today) and 17 components are on a downtrend (2 new downtrends today.) There were 6 New Highs and no New Lows. The sector is on a Buy signal and closed above the daily pivot. The sector 5-Day average closed 1.85% above the 20-Day average.
Based on the SPX sector data, we are on a Buy for the SPX and the Russell 2000.
What We Learned from Thursday's Action:
Thursday was session 5 to close above the 5 DMA, session 11 to close above the 10 DMA, session 11 to close above the 20 DMA, and session 20 to close above the 50 DMA. This was also session 9 for the 5 DMA to close above the 20 DMA. One early sign of a sustainable rally or pullback is often a close above or below the 10 DMA. The SPX closed 14.55 points above the 10 DMA.
The SPX 5 DMA is 1398.32, 10 DMA is 1388.25, 20 DMA is 1372.76, 50 DMA is 1347.81, 100 DMA is 1360.21, and 200 DMA is 1325.8.
On Thursday the SPX traded both below and above the opening range. 50.2% of the SPX closed up from the previous close; 59.8% closed higher than the open. During Thursday's session the SPX gained .54 points from open to close. The SPX intraday trading range was 7.08 points. The 5-Day average intraday trading range is 7.67 points, the 10-Day average is 10.99 points, and the 20-Day average is 12.42 points. The trading range is contracting. The session was an NR7 day (Narrowest Range last 7 days). The 5-Day SPX gain is 2.77%, the 10-Day gain is 3.15%, and the 15-Day gain is 1.91%.
Note: The Opening Range Breakout is one of the simplest day trading set-ups to understand. The first hour of the trading day is the most volatile. Bears and bulls are battling it out in the stock market, trying to show you who’s going to be in charge for the day. If we break out of that trading range, it's telling us that new buying or selling is impacting traders' assessments of value. Looking back at today’s breakouts also helps us grasp sentiment going forward because when a clear trend is established it often carries through for several sessions.
Looking Ahead:
The Market Environment for Friday is -3. Greater than three is bullish and less than negative three is bearish. The short-term trend appears to be sideways. Mel's 5-Day Oscillator is 66 and Mel's 10-Day Oscillator is 52 (below 35 is oversold and above 65 is overbought.) Based solely on the technicals, our bias is slightly bearish for Friday's session. Note the Mel’s 5-Day oscillator. The last time it was above 65 was at the close of July 19th.
It becomes difficult to write anything useful after consecutive sessions in which the SPX moves less than a point. Nothing has changed in our outlook; topping processes are often slow and the characteristics here match the profiles. Of course, we could be building for a move higher. But breadth still hasn't given us a reason to believe so.
The data yesterday and today do contain some peculiar data. The extreme ticks (>600) have just disappeared. We use this data to attempt to determine what institutional buying and selling is doing because the institutions are what really move the tick (and the market.) So the data right now strongly suggests that institutions are simply sitting out and taking a wait-and-see approach. We have only seen this happen once since the market bottomed in March of 2009. That time was mid-February of 2011. Only the one occurrence, but the SPX closed at 1332 on February 14th, 2011 and hit an intra-session low on March 16th at 1249.
We're looking for a down session on Friday. Of course, it is difficult to see what could trigger a down session here, but there are some quirks in the matrix that certainly match the characteristics ahead of a down session so we will call it as we see it: Possibly 1% down.
Friday, August 10
Economics
08:30 Import Price Index MoM – consensus 0.2%, prior -2.7%
08:30 Import Price Index YoY – consensus -2.7%, prior -2.6%
02:00 Monthly Budget Statement – consensus -$103.0B
11:00 Fed to sell $7b-$8b notes in 1-2 year range
04:30 JPY Industrial Production
06:00 EUR German CPI
08:30 GBP PPI
12:30 CAD Unemployment Rate
11:10 UK to sell bills
Earnings
Before:
JC Penney (JCP) EPS -23c
The trade deficit was $42.9 billion. This was less than the projected $47.5 billion. Initial claims were 361,000, less than the expected 367,000. There are no significant economic releases on Friday.
Thank you for reading. Think on it, trade on it, and be well.
-Mel