The Year Begins Bullishly
by Jerome "Mel" Hickerson
The year opened with the typical Monday morning strength, and then continued with follow-through setting a new 52 week high and the high for the day at 11:44. The low for the day was at the open, but there really wasn’t a significant pullback at any time during the day. The action was all upward and when not upward, then sideways. The SPX set a new 52 week closing high as well today, closing within a point of the high for the day.
Volume was not heavy today but certainly was much heavier than we’ve seen recently. The last 15 minutes volume today was almost double the volume we saw in the final 15 minute sell-off Thursday.
There was one item from our Friday message (http://www.advicetrade.com/nightlyreport/1/2010/1/) that was affected by today’s action: “The Santa period this year has seen a 1% losing session without (yet) a 1% gaining session. Our 59 year sample of data shows that 71% of the time this leads to a negative January versus the 62% positive bias for all Januarys.” We now have the offsetting 1% gain to nullify that stat.
Another stat worth noting: Since 1990, the first session of the year has closed positive nine times. Eight times the SPX closed upward the following day; the one loss was -0.12%. From strictly a seasonality viewpoint, the second session of the year rates as the second most positive session of the year at 74% positive. So stats suggest that tomorrow will also be a positive day.
For Tuesday, it’s the second half of our “Tuesday’s close should be higher than Monday’s open” signal. Lately, the second day of these signals has been listless and sometimes down trending. Our model is generating negative signals; seasonality is suggesting higher. We might see some choppy trade as dueling forces battle it out. A gap up followed by a slow downward trend creating a doji candle would fit the model well.
Tuesday, January 5
Economics
10:00 Factory Orders 0.5% cons.
10:00 Pending Home Sales -3.1% cons.
Earnings
After: ANGO, LNDC, MOS, SONC
Auctions
11:30 4-Week Bill Auction
Mel’s Random Hits:
• Total tick for the day was +292,000. The entire day was positive except for a brief stretch just after 2pm. Almost 82% of the entire day’s ticks were positive ticks.
• The day's range was 17.31 points. We managed to get the wide range bar that our model suggested but it was a large gap up that continued running. A pullback to allow entry would have been nice.
• The day's volume was 71.65% of the average daily volume for the last year. The volume was 103% of the last 10 day average. This was the heaviest volume since December 18th.
• 10% of the SPX stocks closed with two day RSI above 90. 31% closed with RSI above 80. 16% closed with RSI below 20 and 11% closed with RSI below 10. I was mildly surprised to not see the RSI numbers even higher after today’s ramp upward.
• 65% of the SPX are above their five day moving average, 69% are above their 10 day average, and 79% are above their 20 day moving average. These numbers were 13%-39%-67% at the close Thursday. The large gap upward this morning prevented many sell signals from generating at the open.
• 15% of the SPX stocks closed below their most recent previous lows.
• 49% of the SPX closed above their most recent previous high.
• 62.4% of stocks closed in the top half of the day's range. (37.6% closed in bottom half.)
• 13.0% of stocks closed in the bottom 20% of the day's range.
• 19.6% of stocks closed in the top 10% of the day's range.
• 26.8% of stocks closed within 2% of their 52 week high.
• 23.4% of stocks closed within 50% of their 52 week low.
• 23.2% of stocks closed within ¼% of their high for the day.
• 7.6% of stocks closed within ¼% of their low for the day.
• 84.6% of the SPX closed up from the previous close; 62.8% closed higher than the open.
• Sectors weaker than the SPX for the day: Technology, Consumer Staples, Utilities, and Consumer Discretionary
• Sectors stronger than the SPX for the day: Energy, Industrials, Basic Materials, Financials, and Health Care
• The $SOX index strength was again stronger than the SPX today.
• The 2 Day RSI of the SPX is 76. The Dow RSI is 72, NASDAQ is 79 and Russell 80.
• SPX components moved sideways during the after hours with more than 100 million shares traded.
Have a great Tuesday!
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"Mel"
Today we closed out of:
Proshares Ultrashort S&P500 (SDS) -0.18%
