Stocks Soar to New Highs
Market Recap:
The key development this morning was the European Central Bank's covert participation in the Portuguese bond auction. With traders concerned that a lack of participation would send yields soaring and the fear that such an event could spread like wildfire throughout the European bond market, the action by the ECB allayed those fears and actually pushed yields lower. At home, the government reported that Import Prices for the month of December rose by +1.1%, which was below the consensus for an increase of +1.2%. The November reading was revised higher to 1.5% from 1.3%. And Export prices rose by +0.7%, below last month’s unrevised +1.5%. Stock futures were strong before the open.
The session began with a small gap higher but the SPX was up seven points in the opening moments. After a very shallow decline the index resumed moving higher. After a steady gentle incline until about 11:15the index stalled and traded within a two point range for four hours. The final hour saw a bit of selling (profit taking?) but it was extremely mild as the index closed just off the session highs.
The only fear currently present in this market is the fear of missing the next rally. There is a constant bid underneath that just won't allow a decline to take root.
Checking our Market Leaders board shows all of the leaders in agreement. This was a strong up day although most of the gains once again came by way of the opening gap. Six of our leaders closed at 52 week closing highs today.
Market Trend: Nine Sectors Report
Turning to our Nine Sectors Report tonight we find many positive changes as would be expected after today's session. But we're going to hold the signal on Sell one more day and see what tomorrow brings us. Four of the nine sectors closed at or outside their upper Bollinger Band and this will often bring a day of decline. But of course, this market is no longer following historical norms. This market is on a one-way mission higher and doesn't seem to care about anything but going higher.
Today was the ninety-second consecutive close above the 50 DMA and the thirtieth above the 20 DMA. We have now gone thirty-four sessions (November 24th) since the last 1% down day. Only three of those thirty-four sessions have been as much as 1/2% down.
Volume & Breadth Indicators
For the SPX Index there were 392 components advancing and 87 components declining. On the NYSE 3,142 issues were traded with 2,187 advancing issues and 876 retreating issues, a ratio of 2.5 to one advancing. There were 310 new highs and 42 new lows. The five day moving average of New Highs is 203 while the five day moving average of New Lows is 16 and the ten day moving average of Net Advancing is 253. The Net Advancing data indicates a bullish trend.
Advancing volume was higher at a ratio of 4.81 to one. The closing TRIN was 0.52 and the final tick was 650. The five day average of TRIN is 1.02 and the ten day average of TRIN is .94. The NYSE Composite Index gained 1.3% today while the SPX gained 0.89%.
For the NYSE, relative to the previous 30 session average, volume was .92% above the average. Of the last 15 sessions 6 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 21 sessions ended on a positive tick, 8 of last 10. For the SPX, the day's volume was 92.5% of the average daily volume for the last year. Volume was 112.3% of the last 10 day average and 103.3% of the previous day’s volume.
Breadth was strong as was advancing volume. The NYSE Composite Index continues to outperform the SPX.
Total tick for the day was 133,000 and the average tick for the day was 86. There were 20 ticks greater than 600 and 19 ticks more extreme than -600. There were no ticks greater than 1000 and no ticks more extreme than -1000.
Volume spiked early today on the up moves but also spiked late day on the mild decline. It is interesting - and unusual - to see the volume decline after 3:30 as the close is most often a period of high volume.
Moving Average and Support/Resistance Indicators:
76.4% of the SPX are above their five day moving average, 70.2% are above their 10 day average, 72% are above their 20 day moving average, 81.4% are above their 50 day moving average, and 88.6% are above their 200 day moving average.
There were no significant moving average crossovers today.
Sectors on the Move:
Sectors stronger than the SPX for Wednesday:
- Basic Materials -- Outperformed the SPX by +8%.
- Energy -- Outperformed the SPX by +43%.
- Financials -- Outperformed the SPX by +75%.
Sectors weaker than the SPX for Wednesday:
- Industrials -- Underperformed the SPX by -8%.
- Technology -- Underperformed the SPX by -0%.
- Consumer Staples -- Underperformed the SPX by -7%.
- Utilities -- Underperformed the SPX by -37%.
- Health Care -- Underperformed the SPX by -46%.
- Consumer Discretionary -- Underperformed the SPX by -63%.
In Late Trading:
228 SPX components moved upward and 104 components downward during the after hours with 139 million shares traded.
Thursday, January 13
Economics
08:30 Initial Claims
08:30 Continuing Claims
08:30 PPI 0.8% cons
08:30 Core PPI 0.1% cons.
08:30 Trade Balance -$39.5 bln
Australia Employment Change
Australia Unemployment
Britain NISER GDP
Britain Industrial Production
Britain Manufacturing Production,
Bank of England Rate Decision
European Central Bank Rate Decision
Earnings
Before: CBSH, CRAI, INFY
After: INTC, ZZ, SHFL
A busy day tomorrow. The Department of Labor releases the weekly jobless claims report in the morning. The number of Americans filing new claims for unemployment is expected to have climbed to 420,000 last week from 409,000 the previous week. Continuing claims is expected to have fallen to 4.07 million from 4.10 million in the previous week. The Producer Price Index, a measure of wholesale inflation, is due out from the Commerce Department at the same time. The index is expected to have edged up 0.7% in December after rising 0.8% in November. The so-called core PPI, which strips out volatile food and energy prices, is expected to have risen 0.2% after increasing by 0.3% in the previous month. The trade balance, also due in the morning from the Commerce Department, is expected to have widened to $40.6 billion in November from $38.7 billion in October. In the afternoon, Federal Reserve Chairman Ben Bernanke will speak at the Federal Deposit Insurance Corporation's forum on small business lending. After the close, Intel is expected to report a quarterly profit of 53 cents per share versus 40 cents a year ago. The chipmaker is also expected to report a 8% rise in quarterly revenue.
Have a good Thursday!
-Mel