SPX Recap

All moving averages on the daily in up mode, weak support at 1220 was looking like a top was forming here last week as I wrote on Monday based on the data presented. We keep sweeping the dirt under the rug in terms of debt, spending and taxes, its all going to end badly but keep dancing while the band plays. (Click chart to enlarge)

Things were quiet in the early going but the mood remained upbeat. Overseas markets were higher across the board as traders were pleased that China decided to raise only the bank reserve requirements as opposed to raising interest rates. There wasn't a single entry on the economic calendar today either here at home or in Europe so a slow trading day was anticipated.

The week opened with a two point gap up and quickly surged two more points. The SPX traded gently higher in a very tight trading range until the high of the day was put on the chart at 2:48 pm. But the final seventy minutes saw some selling as the index gave up six points. After the recent action, a six point sell off felt much larger than life.


Market Leaders Metals, Other Materials, Energy Issues, Healthcare and Utilities were mostly higher, yet some interesting divergences downward as some key leaders struggled today. The Russell 2000 (small caps), the Financials (XLF), and the SOX (chip makers) all closed lower today and they have been leading this new leg up so this change lead a pullback in the markets.


I continue to anticipate something of a pullback, my technical calls for a top are being proved wrong day after day, but with all the money thats being printed its gonna find its way into ETF's, Commodity Stocks etc. Tomorrow's FED announcement might possibly be the catalyst needed and is certain to dominate the afternoon. But the possibility that pre-holiday low volume allows the market to drift higher can not be ignored, either. There is plenty of risk on both sides here.




For the SPX Index there were 201 Advancers/239 Decliners. On the NYSE 3,150 issues were traded with 1,443 advancing issues and 1,608 retreating issues, a ratio of 1.11 to one declining. There were 271 new highs and 87 new lows. The five day moving average of New Highs is 233 while the five day moving average of New Lows is 41 and the ten day moving average of Net Advancing is 310. The Net Advancing data indicates a bullish trend.

Advancing volume was higher at a ratio of 1.35 to one. The closing TRIN was 0.67 and the final tick was 147. The five day average of TRIN is .53 and the ten day average of TRIN is .60. The NYSE Composite Index gained 0.34% today while the SPX lost 0%.

For the NYSE, relative to the previous 30 session average, volume was -8.23% below the average. Of the last 15 sessions 5 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, 9 of last 10. For the SPX, the day's volume was 94.7% of the average daily volume for the last year. Volume was 102.1% of the last 10 day average and 100.2% of the previous day’s volume.

Breadth was negative yet advancing volume was positive. New Highs rebounded. The broad NYSE Composite Index outperformed the SPX. Kind of a mixed bag on the NYSE but look at the TRIN. That ten day average of the TRIN is almost unheard of.

Total tick for the day was -79,000 and the average tick for the day was -51. There were 4 ticks greater than 600 and 28 ticks more extreme than -600. There were no ticks greater than 1000 and no ticks more extreme than -1000. The tick action suggests institutional distribution.

Intraday volume patterns today are clearly a bit worrisome for bears. Volume surged on up moves and really did not surge much during the closing hour sell-off (this is a complete reversal of what I wrote yesterday (about last week). The nightly breadth indicators are a bit more encouraging for the bears as the overall look of the indicators really suggests a topping process. The Absolute Breadth Indicator is moving lower while the High Low Logic Index has jumped to 1.51. Notice also that the McClellan ten day average still has just now managed to cross above zero.


No Change in Long-term out look. Bull market inside a secular bear continues! Waiting for the big bear to rear its ugly head.