The Friday Reversal Reverses
by Jerome "Mel" Hickerson, MarketsPath.com
The Sunday night futures had a deer in the headlights look as most of the night saw things frozen in place. The week’s first regular session then open without a gap, moved downward until shortly before 10am before spending most of the morning working upward, setting the high of the day at 11:13. The rest of the session was spent on a gentle multi-wave slide downward until the final half hour saw the bears rush in to pound the indices down.
This was most certainly not the bullish follow through after Friday’s big reversal day. The low volume on the way up during the morning showed a lack of conviction by buyers and the ensuing sell down later in the day resulted.
On the daily chart the SPX painted a higher high and a higher low, but it was in the most unconvincing fashion. Bulls have little to hang their hats on after the close at the low of the day. The DOW painted an inside day on the chart reflecting the general weakness of that index.
One curiosity to note is low volume of the day. While buyers showed a lack of enthusiasm, sellers were not panicking, either. Today’s volume was the lowest since the holidays.
For Tuesday, our model is still calling for a meaningful bounce. But during a stretch like this, it must be kept in mind that the path of least resistance remains downward.
SPX Summary for Monday, February 08, 2010
120 Advancers/373 Decliners
Today's SPX component winners and losers:
• Largest one day loser is NDAQ with -3.99%
• Largest three day loser is EK with -15.50%
• Largest five day loser is WU with -12.98%
• Largest ten day loser is X with -21.47%
• Largest one day winner is HAS with 13.06%
• Largest three day winner is ARG with 36.81%
• Largest five day winner is ARG with 35.28%
• Largest ten day winner is EK with 31.36%
*** SPX Technical Summary ***
The lowest 14 day RSI component is BSX; the highest 14 day RSI component is JAVA. The average 14 day RSI of all 500 components is 31.
The greatest positive five day momentum component is ARG; the greatest negative five day momentum component is WU. The average five day momentum of all 500 components is -2.98.
6.20% of the SPX components are giving a crossover Buy signal; 64.80% of the SPX components are giving a Sell signal. This is a 10.5 to 1 ratio of Sell signals over Buy signals.
SPX component signal changes today (evidence of trend):
• From Sell to Neutral: 9 components.
• From Buy to Neutral: 13 components.
• From Neutral to Sell: 62 components.
• From Neutral to Buy: 1 component.
Tuesday, February 9
Economics
10:00 Wholesale Inventories 0.6% cons.
Earnings
Before: AGU, ANR, BIIB, BKS, CAM, CHD, KO, CYNO, ENER, MLM, TAP, NYX, PHM, WMG
After: ASEI, BIDU, BOBE, CERN, DIOD, EOG, GIL, LTRE, NTGR, OPEN, PEET, ULTI, DIS, VCLK, XL
Auctions
01:00 3-Yr Note Auction
Mel’s Random Hits:
• Total tick for the day was +19,000. The bulls had control of the tape until late morning but after 1pm the bears regained control and forced the tape down.
• The day's range was 14.69 points.
• The day's volume was 74.59% of the average daily volume for the last year. Volume was 77.53% of the last 10 day average and only 63% of Friday.
• 1% of the SPX stocks closed with two day RSI above 90. 14% closed with RSI above 80. 48% closed with RSI below 20 and 25% closed with RSI below 10.
• 6.4% of the SPX are above their five day moving average, 9.8% are above their 10 day average, and 8.4% are above their 20 day moving average.
• 7% of the SPX stocks closed below their most recent previous lows.
• 9% of the SPX closed above their most recent previous high.
• 14.2% of stocks closed in the top half of the day's range. (85.8% closed in bottom half.)
• 53.2 of stocks closed in the bottom 20% of the day's range.
• 0.4% of stocks closed in the top 10% of the day's range.
• 1.2% of stocks closed within 2% of their 52 week high. 5.4% of stocks closed within 5% of their 52 week high.
• 32.2% of stocks closed within 50% of their 52 week low. 10.4% of stocks closed within 25% of their 52 week low.
• 1.0% of stocks closed within ¼% of their high for the day.
• 39.8% of stocks closed within ¼% of their low for the day.
• 20.6% of the SPX closed up from the previous close; 22.0% closed higher than the open.
• Sectors weaker than the SPX for the day: Basic Materials, Financials, Industrials, and Utilities.
• Sectors stronger than the SPX for the day: Energy, Consumer Staples, Health Care, Technology, and Consumer Discretionary.
• The $SOX index strength was stronger than the SPX today.
• The 2 Day RSI of the SPX is 11. The Dow RSI is 7, NASDAQ is 22 and Russell 13.
• Over the last five sessions, the average session closed 46% of the range above the low.
• Downside momentum increased from Friday’s -0.64 to today’s -2.98. The ratio of SPX components giving a crossover sell signal compared to buy signals has jumped to 10.5 to 1. This threatens to get really ugly unless the bulls manage a comeback quickly.
• 106 SPX components moved upward and 183 components downward during the after hours with 59 million shares traded. Volume after hours was very light.
Have a great Tuesday everyone.
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"Mel"
Today we closed out of:
Ultra S&P 500 ProShares (SSO) -0.57%
