There Are No Bears
by Jerome "Mel" Hickerson
Futures were down overnight but had struggled back to nearly even by the open. Overseas markets were mixed but hovering around breakeven.
The session began with a quick three point move downward, recovered and then quickly gave it back all before 10am. The SPX then began a steep six point decline and set the low of the day on the chart at 10:37. From then into the close it was nothing but bulls as the index gently ascended with very little on the downside all the way into the close. The market is obviously euphoric with the state of peace and tranquility that we find in the world.
But there remain cracks in the facade. Breadth was negative today. In the stats posted below you will see several key indicators were moving downward today.
Oddly enough, today's market action triggered the rare VIX market sell signal. In the last few years, this signal has triggered only four times: September 18th, 2007; February 27th, 2008; May 15th, 2008; and January 12th, 2010. This signal has been eerily accurate and it bears watching.
On the lighter side, the market often has Arithmophobia when it comes to large round numbers. There appears to be psychological resistance at certain levels simply caused by the numbers. So I'll throw this out to you: The DOW is at 11,000, the SPX is at 1200, the Russell is at 700 and the NASDAQ is within shouting distance of 2500. This does look like a spot for the markets to have some phobia.
This ongoing constant upward movement by the indices is not simply unusual; we have long passed the point where this is normal market action. There are no historical precedents for the last eight weeks going back at least to 1950.
After hours today, INTC released their earnings report and added to the euphoria of the markets. But keep in mind that blowout earnings by INTC often have no lasting impact; sometimes it marks a high-water level for the SPX.
Day Trade Systems Update: (Signals today)
* Bounce alert at: 10:28
* Short scalp at: 1:22
SPX Summary for Tuesday, April 13, 2010
254 Advancers/233 Decliners
Today's SPX component winners and losers:
• Largest one day loser is AVP with -8.16%
• Largest three day loser is AVP with -5.47%
• Largest five day loser is AKS with -9.60%
• Largest ten day loser is MEE with -16.80%
• Largest one day winner is DV with 10.29%
• Largest three day winner is DV with 11.12%
• Largest five day winner is EK with 14.18%
• Largest ten day winner is EK with 27.50%
*** 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 58.
The greatest positive five day momentum component is EK; the greatest negative five day momentum component is AKS. The average five day momentum of all 500 components is 0.54.
59.60% of the SPX components are giving a crossover Buy signal; 12.60% of the SPX components are giving a Sell signal. This is a 4.7 to 1 ratio of Buy signals over Sell signals.
SPX component signal changes today (evidence of trend):
• From Sell to Neutral: 12 components.
• From Buy to Neutral: 35 components.
• From Neutral to Sell: 13 components.
• From Neutral to Buy: 23 components.
The moving averages:
Close 1197.30
9 EMA 1196.76 Rising
5 DMA 1191.41 Rising
10 DMA 1185.47 Rising
20 DMA 1175.97 Rising
50 DMA 1134.06 Rising
100 DMA 1123.91 Rising
200 DMA 1071.09 Rising
10 Wk MA 1147.25 Rising
NYSE Summary
On the NYSE 3203 issues were traded with 1604 advancing issues and 1501 retreating issues, a ratio of 1.07 to 1 advancing. There were 326 new highs and 5 new lows.
Declining volume was higher at a ratio of 1.48 to 1. The closing TRIN was 1.58 and the final tick was 526.
Evidence of trend:
Relative to the previous 30 session average, volume was 1.33% above the average. Of the last 15 sessions 4 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 336 while the 5 day moving average of new lows is 5 and the 10 day moving average of Net Advancing is 386. The Net Advancing data indicates a bullish trend.
Remember: Breadth leads, indices follow. Today, the NYSE Advance/Decline line increased from 208164 to 208267. This 0.05% increase came while the SPX was gaining 0.07%. The 10 day moving ratio of positive volume is 1.34 and the 10 day moving Advance/Decline ratio is 1.29. The 10 day moving ratio of positive volume has trended -0.13 over the last three days and the 10 day moving Advance/Decline ratio has trended -0.06 over the last three days.
The NYSE Composite Index lost -0.04% today.
NYSE Statistics:
Absolute Breadth Index: 31.08 up from previous day of 30.25
Cumulative Volume Index: 81,856.90 down from previous day of 83,582.14
High Low Logic Index: 0.80 down from previous day of 0.81
McClellan Oscillator: 25.86 down from previous day of 50.04
McClellan 10 DMA: 28.19 up from previous day of 25.61
McClellan Summation Index: 3,539.07 up from previous day of 3,513.31
% Stocks Above 200 DMA: 87.24 down from previous day of 87.27
% Stocks Above 40 DMA: 83.11 down from previous day of 83.51
New High / New Low Ratio: 94.70 up from previous day of 93.60
26wk New High/Low Ratio: 94.35 up from previous day of 93.21
13wk New High/Low Ratio: 92.89 up from previous day of 92.72
4wk New High/Low Ratio: 85.36 down from previous day of 90.64
Cumulative 4-Week New Hi-Low: 439,943 up from previous day of 439,403
Nasdaq Adv/Decline: 1,723 up from previous day of 1,719
Russell 1000 Advance/ Decline Line: 2,676 up from previous day of 2,674
Russell 2000 Advance/ Decline Line: (1,644) up from previous day of (1,652)
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).
Wednesday, April 14
Economics
08:30 Core CPI
08:30 CPI
08:30 Retail Sales ex-auto
08:30 Business Inventories
10:30 Crude Inventories
02:00 Fed’s Beige Book
06:00 European Union Industrial Production
Earnings
Before: IGTE, JPM, MTOX, GWW, PGR
After: JBHT, LSTR, STLY, YUM
Speeches
09:30 Sandra Pianalto
11:00 Jeffrey Lacker
12:15 Kevin Warsh
01:00 Richard Fisher
07:00 Brian Sack
Wednesday brings a busy day for economic news: the March consumer price index (CPI), the core CPI, March retail sales, February's business inventories, weekly U.S. petroleum supplies, and the Fed's Beige Book.
The March retail sales report from the Commerce Department leads. Sales are expected to have risen 1.1% after growing 0.3% in February. Sales excluding autos are expected to have risen 0.5% after rising 0.8% in February. The Consumer Price Index (CPI), a measure of consumer inflation, is expected to have risen 0.1% in March versus a flat reading in February. Core CPI, which excludes volatile food and energy prices, is expected to have risen 0.1% after moving up 0.1% in February. The government also releases the weekly crude oil inventories report and February business inventories report in the morning. The Fed's periodic "beige book" reading on the economy is due in the afternoon.
Earnings are highlighted by JPMorgan Chase & Co. (JPM) and Yum! Brands Inc. (YUM).
Mel’s Missives from the Matrix:
• Total tick for the day was 97,000. There were 65 ticks greater than 600 and 35 ticks more extreme than -600. There were no ticks greater than 1000 and no ticks more extreme than -1000. The tick action suggests institutional accumulation.
• The day's range was 10.22 points. The 5 DMA of daily range is 8.91.
• Evidence of the intraday trend: At 10am volume was 97.43% of the 10 day average. By noon the volume was 110.66% of the 10 day average, and by 2pm volume was 111.41% of the 10 day average.
• The day's volume was 107.2% of the average daily volume for the last year. Volume was 111.9% of the last 10 day average and 123.4% of the previous day’s volume.
• Evidence of the intraday trend: The largest increase in relative volume came between 10:15 and 10:30 when relative volume increased 61.7% while the SPX was dropping -0.31%. The largest drop in relative volume came between 10:45 and 11:00 when relative volume dropped -50.4% while the SPX was rising 0.04%.
• 17% of the SPX stocks closed with two day RSI above 90. 31% closed with RSI above 80. 13% closed with RSI below 20 and 7% closed with RSI below 10.
• 67.2% of the SPX are above their five day moving average, 72.8% are above their 10 day average, and 78.2% are above their 20 day moving average.
• 24% of the SPX closed above their most recent previous high.
• 23% of the SPX stocks closed below their most recent previous lows.
• 254 SPX issues advanced and 233 issues declined, a net SPX advance/decline of 21.
• Evidence of the intraday trend: At 10am, 47.8% of the SPX components were in the top half of the range. By noon, 35.6% were in the top half of the range, and by 2pm, 66.8% were in the top half of the range.
• 71.2% of stocks closed in the top half of the day's range. (28.6% closed in bottom half.)
• 11.6% of stocks closed in the top 10% of the day's range. 35.6% of stocks closed in the top 20% of the day's range.
• 3.2% of stocks closed in the bottom 10% of the day's range. 9% of stocks closed in the bottom 20% of the day's range.
• 39% of stocks closed within 2% of their 52 week high. 64.4% of stocks closed within 5% of their 52 week high.
• 39.2% of stocks closed within 50% of their 52 week low. 10.2% of stocks closed within 25% of their 52 week low.
• 25.2% of stocks closed within ¼% of their high for the day.
• 6.2% of stocks closed within ¼% of their low for the day.
• Evidence of the intraday trend: At 10am, 38.8% of the SPX components were up since the open. By noon, 30.4% were up since the open, and by 2pm, 46% were up since the open.
• 51.6% of the SPX closed up from the previous close; 57.4% closed higher than the open.
• Sectors stronger than the SPX for Tuesday:
- Financials -- Outperformed the SPX by +6%.
- Industrials -- Outperformed the SPX by +22%.
- Technology -- Outperformed the SPX by +24%.
- Consumer Discretionary -- Outperformed the SPX by +47%.
• Sectors weaker than the SPX for Tuesday:
- Basic Materials -- Underperformed the SPX by -44%.
- Energy -- Underperformed the SPX by -46%.
- Consumer Staples -- Underperformed the SPX by -24%.
- Utilities -- Underperformed the SPX by -59%.
- Health Care -- Underperformed the SPX by -0%.
• The $SOX index strength was stronger relative to the SPX Tuesday by 0.55%.
• The XLF outperformed the SPX by 0.06% Tuesday.
• The 2 Day RSI of the SPX is 90. The Dow RSI is 89, the NASDAQ is 96 and the Russell is 96.
• Over the last four sessions, the average session closed 75.71% of the range above the low. Tuesday closed at 82.3% of the daily range.
• Upside momentum decreased Tuesday, from Monday’s 0.7 to today’s 0.54. The ratio of SPX components giving a crossover buy signal compared to sell signals also decreased to B 4.73 to 1.
• The ISEE Equity 10 day moving average Tuesday was 231.2. 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.
• 242 SPX components moved upward and 119 components downward during the after hours with 99 million shares traded.
Good trading on Wednesday everyone!
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"Mel"
