Yesterday I pointed out the weak support at 1214-1215 range, that broke. So now I am looking for major support at 1193 and medium support at 1200 for the SPX.
Stock futures were moving a little higher in the early going as a result of improving European markets, a lower dollar, and some M&A activity. The NFIB Small Business Optimism index for October rose +2.7 to 91.7 from 89.0 in September.
The Tuesday session began with a small gap higher before quickly retreating briefly into negative territory. But buyers then quickly bid the SPX up five points to put in the high of the day on the chart at 10:22 am. Then the selling started, and buying was countered by selling and the sell volume was heavy, could this be a trend reversal. I have been talking about a top for the SPX for a long time now and have been wrong but this sure feels like one.
For the SPX Index there were 80 Advancers/407 Decliners. On the NYSE 3,133 issues were traded with 825 advancing issues and 2,214 retreating issues, a ratio of 2.68 to one declining. There were 300 new highs and 12 new lows. The five day moving average of New Highs is 271 while the five day moving average of New Lows is 9 and the ten day moving average of Net Advancing is 268. The Net Advancing data indicates a bullish trend.
Declining volume was higher at a ratio of 4.19 to one. The closing TRIN was 1.56 and the final tick was -416. The NYSE Composite Index lost -1.03% today while the SPX lost -0.81%.
For the NYSE, relative to the previous 30 session average, volume was 5.04% above 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, 24 sessions ended on a positive tick, 7 of last 10. For the SPX, the day's volume was 105.5% of the average daily volume for the last year. Volume was 102.5% of the last 10 day average and 116.7% of the previous day’s volume.
Breadth was quite negative and declining volume was even more negative than breadth. But New Highs remains strong. The broad NYSE Composite Index underperformed the SPX and the final tick was negative for the first time since October 29th.
Total tick for the day was -192,000 and the average tick for the day was -125. There were 21 ticks greater than 600 and 172 ticks more extreme than -600. There were no ticks greater than 1000 and 21 ticks more extreme than -1000. The tick action suggests institutional distribution.
The tick data was very quiet early in the day buy by noon it was beginning to build on the bearish side. 21 -1000 ticks is uncommon but we have been seeing a lot of large negative ticks the last two weeks even on up days; someone large is distributing shares.
The intraday volume pattern continues to show heavy selling on down moves and light volume on up moves.
The breadth indicators are now bearish.
Commodities especially silver were hammered yesterday (Charts up in a bit), the reversal was expected and I had lightened up and raised cash in anticipation. Greed may be good for Gordon but not for me!
Long BGZ (SPX 3x short), 25% cash, long TBT, SLV, GLD, Uranium Miners basket.
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