The Borg Market Continues - Resistance is Futile
by Jerome "Mel" Hickerson
Before the open. the Commerce Department reported that Retail Sales rose in the month of March by +1.6%. This was above the consensus for an increase of +1.2%. Regarding inflation, the Consumer Price Index for March rose by +0.1%, which was in line with the consensus for +0.1% and a tenth higher February’s reading of +0.0%. The major overseas markets were higher. Futures were pointing to a strong open.
The regular session opened with a pop upward of almost five points. The opening hour was choppy trade setting the low of the day at 10:15. The gap was not filled and from there onward the session worked its way upward with only very minor pullbacks along the way. Volume today seemed supportive of the breakout as today's volume was relatively high.
My systems make their money on volatility; this market is providing very little of that. If you blindly go long every session, you're making money. The rest of us are looking for a pullback in order to stir some volatility into the mix. This is a tough market to trade if you look for volatility to trigger entries.
An oddity in the NYSE data is worthy of noticing: The New Highs were the highest in years while the New Lows were the highest since March 29th. When both New Highs and New Lows are on the rise, it's usually a caution sign for bulls.
The euphoria of the market is the greatest enemy for bulls here; when traders omit spending money to hedge their bullish positions it often means they have to liquidate quicker on any downturn. The problem for the bears is that all news is good news and the bears need a catalyst to get some kind of down move to begin the process of selling.
The model says Friday's close should be lower than Thursday's open. But in this bullish market, it's getting difficult to envision a pullback longer than an hour. Shorting this market is brutal; resistance is futile.
Day Trade Systems Update: (Signals today)
* Scalp Short at: 10:43
* Pullback Alert at: 11:33
SPX Summary for Wednesday, April 14, 2010
387 Advancers/105 Decliners
Today's SPX component winners and losers:
• Largest one day loser is GWW with -4.00%
• Largest three day loser is CI with -5.32%
• Largest five day loser is FRX with -12.57%
• Largest ten day loser is MEE with -14.46%
• Largest one day winner is TER with 7.53%
• Largest three day winner is TER with 10.93%
• Largest five day winner is EK with 16.57%
• Largest ten day winner is EK with 32.60%
*** 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 64.
The greatest positive five day momentum component is EK; the greatest negative five day momentum component is FRX. The average five day momentum of all 500 components is 2.43.
64.80% of the SPX components are giving a crossover Buy signal; 11.60% of the SPX components are giving a Sell signal. This is a 5.6 to 1 ratio of Buy signals over Sell signals.
SPX component signal changes today (evidence of trend):
• From Sell to Neutral: 13 components.
• From Buy to Neutral: 3 components.
• From Neutral to Sell: 8 components.
• From Neutral to Buy: 29 components.
The moving averages:
Close 1210.65
9 EMA 1200.08 Rising
5 DMA 1197.05 Rising
10 DMA 1189.21 Rising
20 DMA 1178.53 Rising
50 DMA 1136.49 Rising
100 DMA 1124.92 Rising
200 DMA 1072.55 Rising
10 Wk MA 1148.57 Rising
NYSE Summary
On the NYSE 3191 issues were traded with 2383 advancing issues and 716 retreating issues, a ratio of 3.33 to 1 advancing. There were 611 new highs and 8 new lows.
Advancing volume was higher at a ratio of 4.80 to 1. The closing TRIN was 0.69 and the final tick was 702.
Evidence of trend:
Relative to the previous 30 session average, volume was 10.05% above the average. Of the last 15 sessions 5 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 375 while the 5 day moving average of new lows is 6 and the 10 day moving average of Net Advancing is 546. The Net Advancing data indicates a bullish trend.
Remember: Breadth leads, indices follow. Today, the NYSE Advance/Decline line increased from 208267 to 209934. This 0.79% increase came while the SPX was gaining 1.1%. The 10 day moving ratio of positive volume is 1.59 and the 10 day moving Advance/Decline ratio is 1.43. The 10 day moving ratio of positive volume has trended 0.1 over the last three days and the 10 day moving Advance/Decline ratio has trended 0.05 over the last three days.
The NYSE Composite Index gained 1.19% today.
NYSE Statistics:
Absolute Breadth Index: 36.04 up from previous day of 31.08
Cumulative Volume Index: 86,274.72 up from previous day of 81,856.90
High Low Logic Index: 0.93 up from previous day of 0.80
McClellan Oscillator: 96.60 up from previous day of 25.86
McClellan 10 DMA: 53.37 up from previous day of 28.19
McClellan Summation Index: 3,635.67 up from previous day of 3,539.07
% Stocks Above 200 DMA: 88.24 up from previous day of 87.24
% Stocks Above 40 DMA: 84.84 up from previous day of 83.11
New High / New Low Ratio: 94.32 down from previous day of 94.70
26wk New High/Low Ratio: 94.54 up from previous day of 94.35
13wk New High/Low Ratio: 94.45 up from previous day of 92.89
4wk New High/Low Ratio: 91.75 up from previous day of 85.36
Cumulative 4-Week New Hi-Low: 441,139 up from previous day of 439,943
Nasdaq Adv/Decline: 1,781 up from previous day of 1,723
Russell 1000 Advance/ Decline Line: 2,737 up from previous day of 2,676
Russell 2000 Advance/ Decline Line: (1,564) up from previous day of (1,644)
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).
Thursday, April 15
Economics
08:30 Initial Claims
08:30 Continuing Claims
09:00 Net Long-Term TIC Flows
09:15 Capacity Utilization
09:15 Industrial Production
10:00 Philadelphia Fed
04:30 Fed Balance Sheet
04:30 Janet Yellen
04:00 Italy Merchandise Trade
06:00 European Union Merchandise Trade
Earnings
Before: SCHW, CBSH, FCS, PPG, TITN
After: AMD, AMLN, ATR, CBK, GOOG, ISRG, CVBF, PBCT
Speeches
10:30 Jeffrey Lacker
12:15 James Bullard
01:40 Dennis Lockhart
08:30 Janet Yellen
Weekly initial jobless claims hit the Street on Tax Day, followed by the Philadelphia Fed's manufacturing index and March's capacity utilization and industrial production reports. Fairchild Semiconductor International (FCS), Advanced Micro Devices Inc. (AMD), Google Inc. (GOOG), and Intuitive Surgical Inc. (ISRG) are scheduled to report earnings.
Approximately 440,000 Americans are expected to have filed new claims for unemployment last week versus 460,000 in the previous week. Continuing claims, a measure of those who have been receiving benefits for a year or more, are expected to have risen to 4,600,000 from 4,550,000 in the previous week.
Mel’s Missives from the Matrix:
• Total tick for the day was 331,000. There were 91 ticks greater than 600 and 3 ticks more extreme than -600. There was 1 tick greater than 1000 and no ticks more extreme than -1000.
• The day's range was 11.92 points. The 5 DMA of daily range is 8.55.
• Evidence of the intraday trend: At 10am volume was 149.31% of the 10 day average. By noon the volume was 140.51% of the 10 day average, and by 2pm volume was 145.72% of the 10 day average.
• The day's volume was 114.4% of the average daily volume for the last year. Volume was 143.8% of the last 10 day average and 129.2% of the previous day’s volume.
• Evidence of the intraday trend: The largest increase in relative volume came between 1:15 and 1:30 when relative volume increased 38.4% while the SPX was rising 0.08%. The largest drop in relative volume came between 1:00 and 1:15 when relative volume dropped -67.7% while the SPX was rising 0.01%.
• 39% of the SPX stocks closed with two day RSI above 90. 59% closed with RSI above 80. 6% closed with RSI below 20 and 4% closed with RSI below 10.
• 81% of the SPX are above their five day moving average, 81.6% are above their 10 day average, and 83.4% are above their 20 day moving average.
• 65% of the SPX closed above their most recent previous high.
• 5% of the SPX stocks closed below their most recent previous lows.
• 387 SPX issues advanced and 105 issues declined, a net SPX advance/decline of 282.
• Evidence of the intraday trend: At 10am, 48.6% of the SPX components were in the top half of the range. By noon, 58.2% were in the top half of the range, and by 2pm, 64.4% were in the top half of the range.
• 83.8% of stocks closed in the top half of the day's range. (16% closed in bottom half.)
• 42% of stocks closed in the top 10% of the day's range. 62% of stocks closed in the top 20% of the day's range.
• 1% of stocks closed in the bottom 10% of the day's range. 3.6% of stocks closed in the bottom 20% of the day's range.
• 50.4% of stocks closed within 2% of their 52 week high. 68.4% of stocks closed within 5% of their 52 week high.
• 100% of stocks closed within 50% of their 52 week low. 100% of stocks closed within 25% of their 52 week low.
• 51.6% of stocks closed within ¼% of their high for the day.
• 2% of stocks closed within ¼% of their low for the day.
• Evidence of the intraday trend: At 10am, 59.8% of the SPX components were up since the open. By noon, 60% were up since the open, and by 2pm, 64% were up since the open.
• 77.4% of the SPX closed up from the previous close; 74.4% closed higher than the open.
• Sectors stronger than the SPX for Wednesday:
- Financials -- Outperformed the SPX by +145%.
- Industrials -- Outperformed the SPX by +7%.
- Technology -- Outperformed the SPX by +23%.
- Consumer Discretionary -- Outperformed the SPX by +52%.
• Sectors weaker than the SPX for Wednesday:
- Basic Materials -- Underperformed the SPX by -36%.
- Energy -- Underperformed the SPX by -24%.
- Consumer Staples -- Underperformed the SPX by -97%.
- Utilities -- Underperformed the SPX by -101%.
- Health Care -- Underperformed the SPX by -145%.
• The $SOX index strength was stronger relative to the SPX Wednesday by 3.09%.
• The XLF outperformed the SPX by 1.45% Wednesday.
• The 2 Day RSI of the SPX is 98. The Dow RSI is 97, the NASDAQ is 99 and the Russell is 99.
• Over the last four sessions, the average session closed 79.63% of the range above the low. Wednesday closed at 100% of the daily range.
• Upside momentum increased Wednesday, from Tuesday’s 0.54 to today’s 2.43. The ratio of SPX components giving a crossover buy signal compared to sell signals also increased to B 5.59 to 1.
• The ISEE Equity 10 day moving average Wednesday was 235.9. 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 237.5 on 04/12/10.
• 209 SPX components moved upward and 137 components downward during the after hours with 164 million shares traded.
Good trading on Thursday everyone!
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"Mel"
