Friday Recap "A look inside the market"

It was an options expiration event without any economic news to deal with. In the early going, the futures were down in response to a report that French and German officials are pressing Ireland to increase taxes in return for a bailout. The market also found reason to retreat on the news that China had increased its banking reserve requirement.

It was a pretty boring day inside the SPX except for the first hour or so. We saw a three point gap down with a lower volume sell down another six points followed by a slow and steady higher highs throughout the day. Volume was very low especially given that it was options expiration. 


The SPX gained 0.52 points during the week.  The weekly range was 34.43 points, 3%. 

The four week RSI of the four indices (SPX, Dow, NASDAQ, and Russell 200) is 65. Pullbacks often occur as this RSI reaches 80 and bounces near 20.

For the SPX, there were 265 components advancing and 223 declining. Total tick for the week was 112,000. The number of components with their 5 DMA above their 20 DMA decreased during the week from a ratio of 1.65 to one to a ratio of 3.75 to one with their 5 DMA below their 20 DMA.

On the NYSE, the advance/decline line increased during the week 602 and the 10 DMA of Net Advancing dropped from 77 to -319. The last week that closed with the ten day average Net Advancing this low was in early July.For the SPX Index there were 315 Advancers/164 Decliners. On the NYSE 3,142 issues were traded with 1,794 advancing issues and 1,240 retreating issues, a ratio of 1.45 to one advancing. There were 85 new highs and 21 new lows. The five day moving average of New Highs is 116 while the five day moving average of New Lows is 48 and the ten day moving average of Net Advancing is -319. The Net Advancing data indicates a bearish trend.

Advancing volume was higher at a ratio of 1.44 to one. The closing TRIN was 1.01 and the final tick was 825. The NYSE Composite Index gained 0.28% today while the SPX gained 0.25%.

For the NYSE, relative to the previous 30 session average, volume was 3.74% above the average. Of the last 15 sessions 8 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 22 sessions ended on a positive tick, 6 of last 10. For the SPX, the day's volume was 79.9% of the average daily volume for the last year. Volume was 83.6% of the last 10 day average and 84.2% of the previous day’s volume.

Total tick for the day was 184,000 and the average tick for the day was 119. There were 100 ticks greater than 600 and 29 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.

Extremely weak volume after the typical options expiration heavy volume at the open; no intraday pattern is discernable. The nightly breadth indicators were unimpressive and do not show strength nor weakness. 

The weekly chart painted an almost perfect wide-range doji with the close in the upper quadrant of the range. This is a typical chart pattern of a short-term bottom. But i have two major problems with this one is that the ten day net  Advancing Issues continue to decline and and the tick action was not suggestive a bottom formation.


Again in-terms of bottom I am referring to this recently leg down off of the 1225 high. So what I expect to see is sideways choppy action in the SPX but the real action is happening elsewhere (comodity stock)

As for commodity stocks Silver was on fire again but gold and other issues lagged. Gold is forming a base and pattern looks ripe for entry and a test of the recent highs.