Stock futures were lifted by better than expected manufacturing data in China and the UK. Personal Incomes fell by -0.1% in September, which was a below the consensus expectations for an increase of +0.3%. The August reading was revised lower to +0.4% from +0.5%. Personal Spending for the month rose by +0.2%, which also below the expectations of +0.4% and the August revised reading of +0.5%. On the inflation front, the PCE Core was unchanged in September, below the consensus for +0.1%. The ISM manufacturing number was 56.9, better than the expected 54.5. Construction spending gained 0.5% while the consensus was for a drop of 0.5%. Yes, personal income dropped 0.1%, worse than the expected rise of 0.3% but he news flow today was good and the market could hold significant gains.
The market has shown a recent tendency to struggle to hold early gains and sell on good news. This is a recent shift in psychology. Maybe the market thinks if the economy is improving then the size of stimulus wont be large enough to cause inflated equity prices. We saw the bonds rally and metals fall after the release of data. Another factor holding this market down is the 200wk ma I have been talking about for a few days now. We tested it again and failed miserably.
In the SPX Index there were 230 Advancers/252 Decliners. On the NYSE 3,128 issues were traded with 1,550 advancing issues and 1,458 retreating issues, a ratio of 1.06 to one advancing. There were 211 new highs and 17 new lows. The five day moving average of New Highs is 167 while the five day moving average of New Lows is 13 and the ten day moving average of Net Advancing is 40.
Declining volume was higher at a ratio of 1.1 to one. The closing TRIN was 1.17 and the final tick was 907. The NYSE Composite Index lost -0.06% today while the SPX gained 0.09%.
For the NYSE, relative to the previous 30 session average, volume was -7.36% below the average. Of the last 15 sessions 7 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 21 sessions ended on a positive tick, 6 of last 10. For the SPX, the day's volume was 89.6% of the average daily volume for the last year. Volume was 81.4% of the last 10 day average and 103% of the previous day’s volume.
SPX breadth was negative while the NYSE breadth was positive but the advancing volume ratio was negative again. The 17 New Lows is the highest since September 23rd. The final tick was strong yet the NYSE Composite Index underperformed today.
Total tick for the day was -59,000 and the average tick for the day was -38. There were 75 ticks greater than 600 and 163 ticks more extreme than -600. There was one tick greater than 1000 and 19 ticks more extreme than -1000. The tick action suggests institutional distribution.
The recent pattern of more extreme negative ticks than positive ticks continues. This strongly suggests that institutional activity is off-loading equities ahead of the FOMC announcement.
The intraday volume was light today but the pattern of volume surges on the down moves continued, most notably during the 3pm sell-off. Looking at the nightly breadth indicators, the Absolute Breadth Index continues to slide downward suggesting a topping process and the McClellan Oscillator remains in negative territory.
The election results, the Fed QE2 details, and the all-important jobs data on Friday. So this week its all about the news, if you are long you want a big stimulus package and a bad jobs report. You want the 200wk ma to be taken out with volume.
No change in my positions, except that I decreased UNG by another 25%. Have a great day everyone.
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