Yet Another Bullish Monday
by Jerome "Mel" Hickerson, MarketsPath.com
The week began, as usual, with the Sunday night futures moving upward. As the regular session opened the futures had moderated somewhat but the SPX responded with a gap upward at the open, pulled back a bit by 10am, then legged out another upward surge. At about 10:10 a significant wave of selling hit the market and the index gave back four points before bouncing strongly at 10:30 recovering the four points plus a couple. From then into the close was mostly a boring sideways consolidating drift.
For the first of the month and a Monday, today’s session seemed to lack conviction. Rumors of merger activity and pension fund buying drove investors to purchase today, but volume continued to be light. After the gap upward, today’s trading range was only about four points. Successfully day trading such a tight range requires perfection and luck.
This was the third consecutive session with a higher high and a higher low; breadth continues to be powerful and suggesting higher highs ahead. March has already assured that this month’s bar on the chart will have a higher high than February; this is technically significant. The SPX, Dow, NASDAQ and Russell all moved above the previous peak from Feb. 19 giving us another high above a previous high on the daily charts.
We have managed to climb above and close above our 1084-1114 trading range, but only by a point. Tuesday’s session will be important to see if the upward momentum can push through or whether it will be rejected.
It is my thought that the first test of breaking above the range will likely be rejected, throwing us back below 1100 at least briefly. In November and early December it took several attempts to successfully punch through this range; to do so this time on the first attempt would be surprising.
For Tuesday, our model is suggesting a struggle for the SPX and we will enter the session with a mildly bearish bias.
SPX Summary for Monday, March 01, 2010
442 Advancers/49 Decliners
Today's SPX component winners and losers:
• Largest one day loser is AES with -4.37%
• Largest three day loser is GME with -7.17%
• Largest five day loser is HRB with -14.59%
• Largest ten day loser is HRB with -17.50%
• Largest one day winner is SNDK with 11.83%
• Largest three day winner is CCE with 33.47%
• Largest five day winner is CCE with 30.68%
• Largest ten day winner is MIL with 51.77%
*** SPX Technical Summary ***
The lowest 14 day RSI component is HRB; the highest 14 day RSI component is MIL. The average 14 day RSI of all 500 components is 70.
The greatest positive five day momentum component is CCE; the greatest negative five day momentum component is HRB. The average five day momentum of all 500 components is 1.18.
52.60% of the SPX components are giving a crossover Buy signal; 10.60% of the SPX components are giving a Sell signal. This is a 5.0 to 1 ratio of Buy signals over Sell signals.
SPX component signal changes today (evidence of trend):
• From Sell to Neutral: 8 components.
• From Buy to Neutral: 46 components.
• From Neutral to Sell: 13 components.
• From Neutral to Buy: 21 components.
Tuesday, March 2
Economics
Nothing significant on the agenda.
Earnings
Before: AZO, BYD, CRIC, CTB, DPZ, FDP, HERO, UNFI
After: ALJ, BGFV, HOV, JAKK, MATK, URS, PAY
Events
09:00 Bank of Canada Announcement
01:00 Eric Roesengren Speaks
02:00 Naranyana Kocherlakota Speaks
February auto and truck sales are due through the afternoon, with Toyota Motor expected to take a hit. Toyota is expected to report that market share fell to a five-year low. Sales are expected to have fallen 10% from a year ago. General Motors and Ford Motor are among the companies expected to post sales increases from a year ago.
Mel’s Random Hits:
• Total tick for the day was +230,000. Breadth continues to lead the market and breadth continues to suggest upward. Today, breadth was negative briefly around 10:30, 12:45 and again around 2:45. The rest of the session was positive.
• The day's range was 10.75 points. Much of that range was in the gap upward at the open.
• The day's volume was 71.97% of the average daily volume for the last year. Volume was 88.6% of the last 10 day average and 102% of Friday’s volume.
• 35% of the SPX stocks closed with two day RSI above 90. 56% closed with RSI above 80. 5% closed with RSI below 20 and 3% closed with RSI below 10. These numbers are approaching overbought.
• 86.8% of the SPX are above their five day moving average, 77.4% are above their 10 day average, and 84.8% are above their 20 day moving average. These numbers are overbought.
• 4% of the SPX stocks closed below their most recent previous lows.
• 60% of the SPX closed above their most recent previous high.
• 76.7% of stocks closed in the top half of the day's range. (23.4% closed in bottom half.)
• 5.6% of stocks closed in the bottom 20% of the day's range.
• 20.4% of stocks closed in the top 10% of the day's range.
• 19.2% of stocks closed within 2% of their 52 week high. 38.6% of stocks closed within 5% of their 52 week high.
• 26.2% of stocks closed within 50% of their 52 week low. 8.4% of stocks closed within 25% of their 52 week low.
• 27.6% of stocks closed within ¼% of their high for the day.
• 4.2% of stocks closed within ¼% of their low for the day.
• 87.8% of the SPX closed up from the previous close; 77.4% closed higher than the open.
• Sectors weaker than the SPX for the day: Energy, Financials, Consumer Staples, and Health Care.
• Sectors stronger than the SPX for the day: Basic Materials, Industrials, Technology, Utilities, and Consumer Discretionary.
• The $SOX index strength was stronger than the SPX today.
• The 2 Day RSI of the SPX is 89. The Dow RSI is 79, NASDAQ is 93 and Russell 95. The NASDAQ and Russell are again leading.
• Over the last four sessions, the average session closed 88.5% of the range above the low. This is an overbought condition.
• Upside momentum rebounded back upward from Friday’s -0.28 to today’s 1.18. The ratio of SPX components giving a crossover buy signal compared to sell signals has decreased again to 5 to 1.
• 192 SPX components moved upward and 178 components downward during the after hours with 92 million shares traded. Volume was light.
Have a great Tuesday everyone!
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"Mel"
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