Before the open the Labor Department reported that initial claims for unemployment insurance for the week ending November 20 fell by 37,000 to 407K. The week’s total was 20K below the Reuters consensus for a reading of 437K. Continuing Claims for unemployment for the week ending November 13 were below consensus at 4.182M vs. expectations for 4.278M and last week’s revised (higher) 4.324M. Orders for long-lasting goods rose in October. The Commerce Department reported that Durable Goods orders fell by -3.3% during the month, which was below the consensus expectations for -0.4%. When you strip out the volatile orders for transportation, orders fell by -2.7%, which was below the consensus for +0.5%. The September reading was revised higher to+1.3% from -0.4. Personal Incomes rose by +0.5% in October, which was above the consensus expectations for an increase of +0.4% and the September level of -0.1%. Personal Spending for the month rose by +0.4%, which was below the expectations of +0.5% and the September reading of +0.3%. Futures were much higher pointing to a strong open.
The Pre-turkey day rally started by climbing ten points within five minutes of the open. But the most the move began just after 10:15 am. From 10:14 through 10:50 there were zero ticks as the index began a powerful advance as buyers simply overwhelmed sellers in the pre-holiday low volume. The remainder of the session consolidated higher with the high of the day in the last moments of the session.
Looking at the market Leaders we see the all the leaders closed higher. There are a couple of conflicts in the leaders that are noteworthy. First, the Financial Sector (XLF) continues to stand out by being more than 14% off the 52 week highs. It is a rare rally that can continue without the full participation of the financials. Yet, on the other hand, the chip makers (SOX) and small caps (Russell 2000) are less than 1% off their 52 week highs. The SOX, small caps, and financials are often the strongest market leaders and this conflict among the leaders would seem to suggest ongoing choppy tug-of-war range-bound trading until this sorts itself out.
Market breadth has begun to suggest that we test the highs again before year end. The action of the moving averages suggests that the pullback here will be shallow. The possibility of a quick early December test of the 1165 area seems likely before moving back upward.
For the SPX Index there were 453 Advancers/33 Decliners. On the NYSE 3,139 issues were traded with 2,527 advancing issues and 520 retreating issues, a ratio of 4.86 to one advancing. There were 144 new highs and 10 new lows. The five day moving average of New Highs is 75 while the five day moving average of New Lows is 19 and the ten day moving average of Net Advancing is -193.
Advancing volume was higher at a ratio of 10.2 to one. The closing TRIN was 0.48 and the final tick was 760. The NYSE Composite Index gained 1.45% today while the SPX gained 1.47%.
For the NYSE, relative to the previous 30 session average, volume was -21.62% 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, 20 sessions ended on a positive tick, 5 of last 10. For the SPX, the day's volume was 73.6% of the average daily volume for the last year. Volume was 75.7% of the last 10 day average and 79.6% of the previous day’s volume.
Powerful market breadth was even more positive than Tuesday was negative. The ten day average of Net Advancing moved above -200 which might suggest that this pullback is ending; it bears watching.
Total tick for the day was 282,000 and the average tick for the day was 182. There were 149 ticks greater than 600 and 10 ticks more extreme than -600. There were 7 ticks greater than 1000 and no ticks more extreme than -1000. The tick action suggests institutional accumulation.
The Tick action on Wednesday was very positive if you are a bull. Large upward session but from 10:15 through 10:50 in those 35 minutes there wasn't a single negative tick, which isn't all that rare, but the tick averaged over 600 during that time. was rare tick action; the type of action that occurs only a few times per year. This most frequently leads to a longer-term rally. But it is worthwhile to notice that this ramp occurred on falling relative volume which is also as bit unusual. Still, if you are bearish, you must take note of such unusual activity.
And as I stated Tuesday the dollar is right up against its 200wk move, and now closed up above it. There is a lot of room in this move as the stochastics are near the bottom of this range. I don't think the technicals matter so much as the news does. This has been a strange market if you are a technician like me. Its been hard to trade. Anyway, I am picking my spots. I have been right lately in picking when to short lately and I feel more in tune with the markets.
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| Above 200wkMa but below the 30wkMa, this would be more bullish for the dollar if the 200Wk was above the 30wk, I think we test the 30wk and pullback |
Looking at the futures, it appears its going to be a dismal day if you are bullish as the SPX futures are down 1%. Oil and Gold are also down due to dollar strength. There is more bad news out of Europe, the Euro is down one percent. Yes of course banking troubles, national debt, bad loans, big spending governments, oh and whats this Portugal is denying it will need a bailout (that is funny). European markets are down and the Asian markets closed lower. Dollar is up against the Euro, GBP, and the Yen. Oh and North Korea reportedly warned that further naval exercises by the U.S. and South Korea will bring the region closer to war.
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