Sluggish Bullish Consolidation
by Jerome "Mel" Hickerson
Note: Due to travel plans, the Thursday report, Weekend report, and Monday reports may be missing or abbreviated.
The futures were up overnight as the euphoria continues. It seems that the market is quite happy with the suggestion of sovereign bailouts. So the session opened with buying pressure but didn’t really respond upward until shortly after 10:00. The SPX gave a little pop upward and set the high for the session at 10:35. The next 45 minutes were met with sellers and the low of the session was painted at 11:34. The rest of the day was choppy low volatility trading taking the index upward into the close, managing a close near the high of the day.
The bulls were in control of the tape today in spite of the Dollar showing strength. The inverse relationship between the equities and the dollar almost certainly kept a lid on things today; otherwise we’d have likely soared much higher.
As we look at the daily chart, we see a very narrow range day reaching right up into the area of resistance around 1100. More resistance is up around the 1106 area, if the SPX should manage to get that far. Stochastics look like the SPX has room to run; 2 day RSI is oversold, and DMI is bullish with decreasing momentum.
For Thursday, I am still expecting to see some weakness. I have to believe that the strength in the dollar eventually catches up with the equities. But we have to be prepared for more strength in the equities; breadth is telling us that the markets want higher. This shouldn’t be ignored. Regardless of whether we get any brief pause/pullback, I think we are headed to 1120 or higher, but not likely immediately.
SPX Summary for Wednesday, February 17, 2010
328 Advancers/167 Decliners
Today's SPX component winners and losers:
• Largest one day loser is FTI with -4.61%
• Largest three day loser is AYE with -3.83%
• Largest five day loser is DF with -15.92%
• Largest ten day loser is DF with -18.37%
• Largest one day winner is WFMI with 12.61%
• Largest three day winner is WFMI with 17.67%
• Largest five day winner is WFMI with 21.45%
• Largest ten day winner is ARG with 41.06%
*** SPX Technical Summary ***
The lowest 14 day RSI component is FE; the highest 14 day RSI component is TSN. The average 14 day RSI of all 500 components is 52.
The greatest positive five day momentum component is WFMI; the greatest negative five day momentum component is DF. The average five day momentum of all 500 components is 3.25.
24.40% of the SPX components are giving a crossover Buy signal; 22.00% of the SPX components are giving a Sell signal. This is a 1.1 to 1 ratio of Buy signals over Sell signals.
SPX component signal changes today (evidence of trend):
• From Sell to Neutral: 104 components.
• From Buy to Neutral: 3 components.
• From Neutral to Sell: 4 components.
• From Neutral to Buy: 36 components.
Thursday, February 18
Economics
08:30 Initial Claims
08:30 Continuing Claims
08:30 Core PPI
08:30 PPI
10:00 Leading Indicators
10:00 Philadelphia Fed
Earnings
Before: AEE, APA, ARB, ABX, BBW, CAB, CFX, DTV, DRYS, EVVV, GLG, GT, KWSW, MGM, NBL, RS, SPAR, TRA, TTC, VDSI, WMT, WMB
After: ACTG, ANAD, ARUN, BUCY, CPKI, CBS, CEC, DELL, ETP, FSLR, GFIG, HITT, INTU, JCOM, MORN, NANO, RRGB, WOOF, WBMD, WMGI
Speeches
05:00 Elizabeth Duke
07:00 Dennis Lockhart
09:00 James Bullard
Mel’s Random Hits:
• Total tick for the day was +225,000. The only negative time period was around 11:30; this one belonged to the bulls at all other times.
• The day's range was 6.31 points. The smallest range day since December 30th.
• The day's volume was 74.86% of the average daily volume for the last year. Volume was 90.93% of the last 10 day average but 95.9% of Tuesday.
• 46% of the SPX stocks closed with two day RSI above 90. 63% closed with RSI above 80. 2% closed with RSI below 20 and 1% closed with RSI below 10. Short-term is overbought.
• 92.4% of the SPX are above their five day moving average, 89.4% are above their 10 day average, and 71.6% are above their 20 day moving average.
• 6% of the SPX stocks closed below their most recent previous lows.
• 48% of the SPX closed above their most recent previous high.
• 60.0% of stocks closed in the top half of the day's range. (40.0% closed in bottom half.) These numbers surprised me in light of the fact that we closed so near the high of the day.
• 7.8% of stocks closed in the bottom 20% of the day's range.
• 11.2% of stocks closed in the top 10% of the day's range.
• 8.8% of stocks closed within 2% of their 52 week high. 25.4% of stocks closed within 5% of their 52 week high.
• 27.4% of stocks closed within 50% of their 52 week low. 8.0% of stocks closed within 25% of their 52 week low.
• 19.8% of stocks closed within ¼% of their high for the day.
• 3.8% of stocks closed within ¼% of their low for the day.
• 64.8% of the SPX closed up from the previous close; 53.6% closed higher than the open.
• Sectors weaker than the SPX for the day: Financials, Energy, Basic Materials, Technology, and Utilities.
• Sectors stronger than the SPX for the day: Consumer Staples, Health Care, Consumer Discretionary, and Industrials.
• The $SOX index strength was weaker than the SPX today.
• The 2 Day RSI of the SPX is 92. The Dow RSI is 89, NASDAQ is 98 and Russell 98. These numbers are short-term overbought and suggest a pullback.
• Over the last four sessions, the average session closed 87% of the range above the low. This overbought indicator is often bearish for the next day’s session.
• Upside momentum moderated from Tuesday’s 4.19 to today’s 3.25. The ratio of SPX components giving a crossover buy signal compared to sells signals has flipped from negative to positive at 1.1 to 1.
• 171 SPX components moved upward and 194 components downward during the after hours with 138 million shares traded.
• My most trusted and slowest swing signal went from Long to Neutral after today’s session. This signal has been Long since the open of February 1st. It was a wild ride but the signal generated 26 SPX points.
Have a great Thursday everyone.
-----------
"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)
