The Beat Goes On
by Jerome "Mel" Hickerson
We awoke to suggestions of a rate hike in China. Before the open, the Labor Department reported that initial claims for unemployment insurance for the week ending April 10th rose by 24,000 to 484K, which was above the expectations for a reading of 440K. Last week’s total was unrevised at 460K. Continuing Claims for unemployment for the week ending April 3rd were above consensus at 4.639M vs. expectations for 4.58M. The Empire Manufacturing Index for April was reported at 31.86, which was well above consensus expectations for a reading of 24.0. The major overseas markets were mixed and futures pointed to a slightly lower open.
The regular session opened with a small gap down. The first half hour was choppy sideways trade with the low of the morning at 10:02. The SPX then ascended five points putting the high of the day on the chart at 11:04. The next hour descended to a double bottom with the low of the session at 12:11. Much of the rest of the day was upward bias choppy low range trade.
Meanwhile, the beat goes on. This market just keeps on going upward. Yes, I still look for a pullback. People keep asking me when it will begin. My best answer is "soon." I can't be more specific than that because for this market a pullback is on the order of fifteen minutes. The last several weeks have defied reason; the only valid strategies have been to either day trade or simply hold your nose and go long.
Having said that, at the risk of repeating myself I want to make it clear that there are cracks in the facade. Breadth is slipping. Traders are far too giddy. Rallies are supposed to "climb a wall of worry", not a wall of giddiness. Beware being too bullish here. But being bearish requires patience (and deep pockets.)
One chart to share this evening. The familiar pattern of falling volume on rising prices returned today. Observe the chart; each time the SPX made an up move, the relative volume corresponded with a downward move. This is not considered a bullish trait for the market.
Day Trade Systems Update: (Signals today)
* GDX Short at: 1:35
SPX Summary for Thursday, April 15, 2010
246 Advancers/243 Decliners
Today's SPX component winners and losers:
• Largest one day loser is DTV with -6.28%
• Largest three day loser is GWW with -5.64%
• Largest five day loser is AET with -6.68%
• Largest ten day loser is MEE with -16.12%
• Largest one day winner is UPS with 5.27%
• Largest three day winner is GT with 13.20%
• Largest five day winner is ISRG with 13.86%
• Largest ten day winner is EK with 32.82%
*** SPX Technical Summary ***
The lowest 14 day RSI component is BIIB; the highest 14 day RSI component is BDK. The average 14 day RSI of all 500 components is 66.
The greatest positive five day momentum component is ISRG; the greatest negative five day momentum component is AET. The average five day momentum of all 500 components is 2.3.
69.60% of the SPX components are giving a crossover Buy signal; 10.20% of the SPX components are giving a Sell signal. This is a 6.8 to 1 ratio of Buy signals over Sell signals.
SPX component signal changes today (evidence of trend):
• From Sell to Neutral: 11 components.
• From Buy to Neutral: 11 components.
• From Neutral to Sell: 6 components.
• From Neutral to Buy: 35 components.
The moving averages:
Close 1211.67
9 EMA 1212.97 Rising
5 DMA 1202.09 Rising
10 DMA 1193.43 Rising
20 DMA 1180.80 Rising
50 DMA 1138.66 Rising
100 DMA 1125.94 Rising
200 DMA 1073.97 Rising
10 Wk MA 1148.75 Rising
NYSE Summary
On the NYSE 3197 issues were traded with 1487 advancing issues and 1582 retreating issues, a ratio of 1.06 to 1 declining. There were 510 new highs and 4 new lows.
Declining volume was higher at a ratio of 1.37 to 1. The closing TRIN was 1.29 and the final tick was -66.
Evidence of trend:
Relative to the previous 30 session average, volume was 14.22% 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, 25 sessions ended on a positive tick, 9 of last 10.
The 5 day moving average of New Highs is 408 while the 5 day moving average of new lows is 5 and the 10 day moving average of Net Advancing is 597. The Net Advancing data indicates a bullish trend.
Remember: Breadth leads, indices follow. Today, the NYSE Advance/Decline line decreased from 209934 to 209839. This -0.05% decrease came while the SPX was gaining 0.08%. The 10 day moving ratio of positive volume is 1.66 and the 10 day moving Advance/Decline ratio is 1.48. The 10 day moving ratio of positive volume has trended 0.32 over the last three days and the 10 day moving Advance/Decline ratio has trended 0.19 over the last three days.
The NYSE Composite Index lost -0.12% today.
NYSE Statistics:
Absolute Breadth Index: 36.82 up from previous day of 36.04
Cumulative Volume Index: 84,810.43 down from previous day of 86,274.72
High Low Logic Index: 0.98 up from previous day of 0.93
McClellan Oscillator: 61.63 down from previous day of 96.60
McClellan 10 DMA: 49.97 down from previous day of 53.37
McClellan Summation Index: 3,697.40 up from previous day of 3,635.67
% Stocks Above 200 DMA: 88.43 up from previous day of 88.24
% Stocks Above 40 DMA: 82.94 down from previous day of 84.84
New High / New Low Ratio: 94.65 up from previous day of 94.32
26wk New High/Low Ratio: 94.82 up from previous day of 94.54
13wk New High/Low Ratio: 94.99 up from previous day of 94.45
4wk New High/Low Ratio: 90.36 down from previous day of 91.75
Cumulative 4-Week New Hi-Low: 442,175 up from previous day of 441,139
Nasdaq Adv/Decline: 1,794 up from previous day of 1,781
Russell 1000 Advance/ Decline Line: 2,734 down from previous day of 2,737
Russell 2000 Advance/ Decline Line: (1,546) up from previous day of (1,564)
Notes:
Absolute Breadth Index: Low numbers suggest a topping process and high numbers suggest a bottoming process.
Cumulative Volume Index: If this begins to trend down while the averages are trending up, it is a bearish sign. If this begins to trend up while the averages are trending down, it is a bullish sign.
High Low Logic Index: High readings are bearish; low readings are bullish.
McClellan Oscillator: -100 is oversold and +100 is overbought. Also watch for crosses above and below zero.
McClellan Summation Index: Interpreted as bullish or bearish when it crosses over the zero line.
Cumulative 4-Week New Hi-Low: The difference between the number of issues reaching new highs (during a 4-week period) and the number of issues reaching new lows (during the same 4-week period).
Friday, April 16
Economics
09:00 Wholesale Inventories
04:00 Italian CPI
05:00 European Union HICP
08:30 Canada Manufacturing Sales
Earnings
Before: BAC, FHN, GCI, GE, GPC, KNL, MAT
Speeches
09:00 Kevin Warsh
Friday finishes the week with March's building permits, March's housing starts (due out in the morning from the Census Bureau and are likely to move markets), and the University of Michigan's consumer sentiment index for April. Housing starts are expected to have risen to a 610,000 unit annual rate in March from a 575,000 unit annual rate. Building permits, a measure of builder confidence, are expected to have fallen to an annualized rate of 626,000 units from a 637,000 rate of units in the previous month. The April Consumer Sentiment index from the University of Michigan is due after the start of trading. Sentiment is expected to have improved to a reading of 75.0 from 73.6 in March. Closing out the week's earnings reports are Bank of America Corp. (BAC), General Electric Company (GE), and Mattel Inc. (MAT).
Mel’s Missives from the Matrix:
• Total tick for the day was 114,000. There were 36 ticks greater than 600 and 18 ticks more extreme than -600. There were no ticks greater than 1000 and no ticks more extreme than -1000.
• The day's range was 5.42 points. The 5 DMA of daily range is 8.02.
• Evidence of the intraday trend: At 10am volume was 124.11% of the 10 day average. By noon the volume was 156.06% of the 10 day average, and by 2pm volume was 148.1% of the 10 day average.
• The day's volume was 119.1% of the average daily volume for the last year. Volume was 144.5% of the last 10 day average and 105.1% of the previous day’s volume. NOTE: Citi (C) was responsible for more than 20% of today's volume.
• Evidence of the intraday trend: The largest increase in relative volume came between 3:15 and 3:30 when relative volume increased 71.5% while the SPX was dropping -0.12%. The largest drop in relative volume came between 12:00 and 12:15 when relative volume dropped -67.4% while the SPX was rising 0.05%.
• 30% of the SPX stocks closed with two day RSI above 90. 44% closed with RSI above 80. 12% closed with RSI below 20 and 6% closed with RSI below 10.
• 70.6% of the SPX are above their five day moving average, 76% are above their 10 day average, and 80.2% are above their 20 day moving average.
• 33% of the SPX closed above their most recent previous high.
• 17% of the SPX stocks closed below their most recent previous lows.
• 246 SPX issues advanced and 243 issues declined, a net SPX advance/decline of 3.
• Evidence of the intraday trend: At 10am, 52.8% of the SPX components were in the top half of the range. By noon, 43.6% were in the top half of the range, and by 2pm, 63.2% were in the top half of the range.
• 57% of stocks closed in the top half of the day's range. (42.8% closed in bottom half.)
• 12% of stocks closed in the top 10% of the day's range. 24.8% of stocks closed in the top 20% of the day's range.
• 6.8% of stocks closed in the bottom 10% of the day's range. 16% of stocks closed in the bottom 20% of the day's range.
• 43.8% of stocks closed within 2% of their 52 week high. 67% of stocks closed within 5% of their 52 week high.
• 37.6% of stocks closed within 50% of their 52 week low. 9.2% of stocks closed within 25% of their 52 week low.
• 22% of stocks closed within ¼% of their high for the day.
• 12.2% of stocks closed within ¼% of their low for the day.
• Evidence of the intraday trend: At 10am, 31.8% of the SPX components were up since the open. By noon, 36.4% were up since the open, and by 2pm, 50.6% were up since the open.
• 48.4% of the SPX closed up from the previous close; 58.8% closed higher than the open.
• Sectors stronger than the SPX for Thursday:
- Industrials -- Outperformed the SPX by +93%.
- Technology -- Outperformed the SPX by +36%.
- Consumer Discretionary -- Outperformed the SPX by +31%.
• Sectors weaker than the SPX for Thursday:
- Basic Materials -- Underperformed the SPX by -29%.
- Energy -- Underperformed the SPX by -14%.
- Financials -- Underperformed the SPX by -39%.
- Consumer Staples -- Underperformed the SPX by -27%.
- Utilities -- Underperformed the SPX by -13%.
- Health Care -- Underperformed the SPX by -34%.
• The $SOX index strength was stronger relative to the SPX Thursday by 0.19%.
• The XLF underperformed the SPX by -0.39% Thursday.
• The 2 Day RSI of the SPX is 98. The Dow RSI is 98, the NASDAQ is 99 and the Russell is 99.
• Over the last four sessions, the average session closed 70.22% of the range above the low. Thursday closed at 60.7% of the daily range.
• Upside momentum decreased Thursday, from Wednesday’s 2.43 to today’s 2.3. The ratio of SPX components giving a crossover buy signal compared to sell signals increased to B 6.82 to 1.
• The ISEE Equity 10 day moving average Thursday was 249.3. 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 249.3 on 04/15/10.
• 127 SPX components moved upward and 264 components downward during the after hours with 123 million shares traded.
Trade 'em well on Friday everyone!
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"Mel"
