Wednesday Recap: A Look Inside the market

In the pre-market traders digested the rate increase in China, the sovereign debt concerns in Europe, and the improving jobless claims report. The Labor Department reported that initial claims for unemployment insurance for the week ending November 6 fell by 24,000 to 435K. The week’s total was 15K below the Reuters consensus for a reading of 450K. Continuing Claims for unemployment for the week ending October 30 were below consensus at 4.301M vs. expectations for 4.343M. The government also reported that Import Prices for the month of October rose by +0.9%, which was lower than the consensus for an increase of +1.3%. Export prices rose by +0.8%, above expectations for +0.5%, and above last month’s unrevised +0.6%.

The session began without a significant gap and quickly moved a couple of points higher before sharply selling off for 30 minutes to put the low of the day on the chart at 10:06 am. But then dip buyers arrived and after about an hour of choppy trade the index began a relentless intraday climb higher. After several very minor pullbacks the session closed at the highs of the day.

Despite the bulls owning the tape throughout most of the session, there were no clear winners today. Bulls managed to regain slightly more than half of yesterday’s losses; each side may claim victory but in reality it was pretty much a standoff.


Last night after market close Cisco Systems reported and their guidance was weak, it sold off 11%. It will be important to watch tomorrow to see if this can follow through. 

For the SPX Index there were 327 Advancers/156 Decliners. On the NYSE 3,126 issues were traded with 1,879 advancing issues and 1,159 retreating issues, a ratio of 1.62 to one advancing. There were 117 new highs and 16 new lows. The five day moving average of New Highs is 275 while the five day moving average of New Lows is 11 and the ten day moving average of Net Advancing is 432. The Net Advancing data indicates a bullish trend.

Advancing volume was higher at a ratio of 2.33 to one. The closing TRIN was 0.7 and the final tick was 643. The NYSE Composite Index gained 0.59% today while the SPX gained 0.44%.

For the NYSE, relative to the previous 30 session average, volume was 5.5% 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, 8 of last 10. For the SPX, the day's volume was 99.2% of the average daily volume for the last year. Volume was 100.5% of the last 10 day average and 98.2% of the previous day’s volume.

Today’s breadth stats are pretty much what would be expected after a five point rally with the exception of the New Highs and New Lows. Only twice since the end of August has New Lows exceeded today’s number. And similarly, only three times since the end of August has the New Highs been lower than today. This seems significant but as always, follow-through is the key.

Total tick for the day was 164,000 and the average tick for the day was 107. There were 144 ticks greater than 600 and 64 ticks more extreme than -600. There were 4 ticks greater than 1000 and 5 ticks more extreme than -1000. The tick action suggests institutional accumulation.

Intraday volume tailed off mid afternoon as the index was climbing. Looking at the nightly breadth indicators we find a mixed bag but we find the fact that the McClellan Oscillator remained negative on a positive SPX day somewhat interesting.


No Change in positions Long, BGZ (short-term Hedge), Long SLV, CCJ, URZ, UEC, TBT, GDXJ