Today’s session began un with about a ten point gap down. The low of the day was quickly put on the chart just fifteen minutes into the session as once again the dip was used as a buy signal. The high of the day was at 2:37, more than ten points off the low. The rest of the session was choppy with somewhat of a bearish bias.
When you consider the pummeling that Cisco received after their earning report yesterday, today’s market actually held up pretty well. What could easily have been a twenty point decline turned into only five.
Looking at what was moving and holding up Chinese stocks and ETF's and The Russell were higher and the tech stocks were lower but not as badly beaten up as once would have been off of what CSCO said.
China being higher isn’t a great surprise but finding the Russell Technology unaffected by the Cisco inspired sell-off today is a bit surprising and puzzling.
Looking at the daily SPX chart we see another lower high painted on the chart but today’s low bounced right at the 1205 area of yesterday’s low. This 1205 level is becoming more important with each bounce from there; any break below 1205 seems almost certain to quickly bring us to the 1196 area.
For the SPX Index there were 223 Advancers/259 Decliners. On the NYSE 3,100 issues were traded with 1,058 advancing issues and 1,941 retreating issues, a ratio of 1.83 to one declining. There were 126 new highs and 20 new lows. The five day moving average of New Highs is 272 while the five day moving average of New Lows is 14 and the ten day moving average of Net Advancing is 337. The Net Advancing data indicates a bullish trend.
Declining volume was higher at a ratio of 1.63 to one. The closing TRIN was 0.89 and the final tick was -286. The NYSE Composite Index lost -0.31% today while the SPX lost -0.43%.
For the NYSE, relative to the previous 30 session average, volume was -9.36% below the average. Of the last 15 sessions 6 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 23 sessions ended on a positive tick, 7 of last 10. For the SPX, the day's volume was 85.5% of the average daily volume for the last year. Volume was 109.1% of the last 10 day average and 108.4% of the previous day’s volume.
The New Highs continue to take a hit while the New Lows are building. But as long as the ten day average of Net Advancing remains above 200, the uptrend continues. Notice that the ratio of declining volume was lower than the ration of declining issues; this can’t be construed as bearish. And the NYSE Composite Index outperformed the SPX today as well.
Total tick for the day was 55,000 and the average tick for the day was 36. There were 74 ticks greater than 600 and 49 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 significant thing to observe with the intraday volume pattern is that the volume dried up after the sell-off at the open. We once again see the index creep higher on low volume. The nightly breadth indicators have a bearish appearance about them, as would be expected on a down day. We are keeping our eye on the McClellan Oscillator and the Summation Index. As long as the Oscillator remains negative we are vulnerable to a pullback. And until the Summation Index turns negative, any pullback is going to remain shallow.
I am keeping by BGZ position, and will add to it once the 5dma crosses below the 20dma, which I have been anticipating happening for a month now, and took hit albeit small ones as the market either did nothing or crept slightly higher.
Metals are getting walloped this am. I would have given up all my gains for the two weeks if I had not hedged and or taken profits. I'm look to add to positions in silver gold and uranium this morning and put some stops in place, the new hot money needs flushing out and we can get back to focus on the why these things are gonna keep going up.
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