The Battleground Below 1100
by Jerome "Mel" Hickerson
Stock futures were around the breakeven mark in the early going. The news flow was fairly light with no economic data in the U.S. before the open this morning. Bond yields were falling again this morning and appear to continue to be the key to the action. Futures were on the rise since about 7:30am, moving up about five points but gave almost all of that back just before the session began.
The mid week session opened without a gap and quickly moved down five points to put the low of the day on the chart at 9:46am. The next 75 minutes were tight range whipsaw but around 11am the SPX began a three hour ascent that brought it to the high of the day at 2:01pm. The closing two hours were mild selling as the index closed in the upper 49% of the intraday range.
The Nine Sectors Report tonight shows five sectors moving from Neutral to Buy, so we will continue to hold the Buy signal. Caution is necessary here as so many internals are damaged here by the recent pullback; most short-term moving averages are below longer-term averages and there is a lot of overhead resistance at the 1100 area.
The fact that the SPX painted an inside day is a bit troubling for bulls; this is the kind of pattern more often found near a top rather than on the way higher.
But bears should also be concerned. Despite the late day selling the last couple of days, the prime characteristic of the last three days has been an early morning low. History shows us that this a trait of bullish trends, not a bearish trend.
In a word, a miserable day. Systems run hot and cold and right now it seems that we are constantly fighting the whipsaw. I look for a better day tomorrow.
Thursday, August 19
Economics
08:30 Initial Claims
08:30 Continuing Claims
10:00 Leading Indicators
10:00 Philadelphia Fed
German Producer Prices
Swiss Trade Balance
Great Britain Retail Sales
Earnings
Before: FLWS, BONT, CATO, PLCE, DKS, DLTR, FLO, GME, LANC, MAG, ROST, SHLD, SSI, SPLS, BKE, WSM, TTC, YGE
After: ARO, BCSI, JRJC, DELL, FL, GPS, HPQ, INTU, MRVL, MENT, CRM, WTSLA, ZUMZ
Speeches
James Bullard
Charles Evans
The Department of Labor will release weekly jobless claims figures before the start of trade. The number of Americans filing new claims for unemployment last week is expected to have fallen to 475,000, from 484,000 the previous week. The Leading Economic Indicators (LEI), from the Conference Board, is expected to have risen 0.2% in July after falling by that amount in June. The Philadelphia Fed index, a regional reading on manufacturing, is also due in the late morning.
Mel’s Missives from the Matrix:
- Total tick for the day was 183,000 and the average tick for the day was 119. There were 173 ticks greater than 600 and 50 ticks more extreme than -600. There were 19 ticks greater than 1000 and 1 ticks more extreme than -1000. The tick action suggests institutional accumulation.
- The day's range was 14.01 points. The intraday trading range - 9:35 to the close - was 14.01. The 5 DMA of daily range is 13.34.
- Evidence of the intraday trend: At 10am volume was 89.82% of the 10 day average. By noon the volume was 97.56% of the 10 day average, and by 2pm volume was 101.92% of the 10 day average.
- The day's volume was 76.5% of the average daily volume for the last year. Volume was 101.1% of the last 10 day average and 96.8% of the previous day’s volume.
- Evidence of the intraday trend: The largest increase in relative volume came between 14:00 and 14:15 when relative volume increased 47.0% while the SPX was dropping -0.10%. The largest drop in relative volume came between 13:15 and 13:30 when relative volume dropped -68.2% while the SPX was rising 0.03%.
- 16% of the SPX stocks closed with two day RSI above 90. 41% closed with RSI above 80. 5% closed with RSI below 20 and 2% closed with RSI below 10.
- 80.8% of the SPX are above their five day moving average, 40% are above their 10 day average, 36% are above their 20 day moving average, 52.6% are above their 50 day moving average, 38.4% are above their 100 day moving average, and 43.2% are above their 150 day moving average.
- 24% of the SPX closed above their most recent previous high.
- 9% of the SPX stocks closed below their most recent previous lows.
- 269 SPX issues advanced and 215 issues declined, a net SPX advance/decline of 54.
- Evidence of the intraday trend: At 10am, 46% of the SPX components were in the top half of the range. By noon, 66.8% were in the top half of the range, and by 2pm, 90.4% were in the top half of the range.
- 66.8% of stocks closed in the top half of the day's range. (33% closed in bottom half.)
- 5% of stocks closed in the top 10% of the day's range. 17% of stocks closed in the top 20% of the day's range.
- 3.4% of stocks closed in the bottom 10% of the day's range. 6% of stocks closed in the bottom 20% of the day's range.
- 6.6% of stocks closed within 2% of their 52 week high. 17% of stocks closed within 5% of their 52 week high.
- 84.2% of stocks closed within 50% of their 52 week low. 55% of stocks closed within 25% of their 52 week low.
- 7.2% of stocks closed within ¼% of their high for the day.
- 4.4% of stocks closed within ¼% of their low for the day.
- Evidence of the intraday trend: At 10am, 24% of the SPX components were up since the open. By noon, 47% were up since the open, and by 2pm, 74.2% were up since the open.
- 56.2% of the SPX closed up from the previous close; 61.6% closed higher than the open.
- Sectors stronger than the SPX for Wednesday:
- Basic Materials -- Outperformed the SPX by +22%.
- Financials -- Outperformed the SPX by +20%.
- Industrials -- Outperformed the SPX by +39%.
- Technology -- Outperformed the SPX by +41%.
- Consumer Discretionary -- Outperformed the SPX by +81%.
- Sectors weaker than the SPX for Wednesday:
- Energy -- Underperformed the SPX by -115%.
- Consumer Staples -- Underperformed the SPX by -8%.
- Utilities -- Underperformed the SPX by -70%.
- Health Care -- Underperformed the SPX by -29%.
- The $SOX index strength was stronger relative to the SPX Wednesday by 0.92%.
- The XLF outperformed the SPX by 0.2% Wednesday.
- The 2 Day RSI of the SPX is 80. The Dow RSI is 80, the NASDAQ is 79 and the Russell is 80.
- Over the last four sessions, the average session closed 49.67% of the range above the low. Wednesday closed at 60% of the daily range.
- Upside momentum increased Wednesday, from Tuesday’s -2.51 to today’s 0.8. The ratio of SPX components giving a crossover sell signal compared to buy signals increased slightly to S 7.62 to 1.
- The ISEE Equity 10 day moving average Wednesday was 173.8. The lowest 10 day average in the last 52 weeks was 136.6 on 06/14/10 and the highest 10 day average in the last 52 weeks was 249.3 on 04/15/10.
- 128 SPX components moved upward and 242 components downward during the after hours with 138 million shares traded.
Trade 'em well on Thursday everyone!
-Mel
