Tuesday SPX Recap

Despite a weak bond auction in Spain and disappointing earnings from Best Buy the bulls kept control of the morning session. The Labor Department reported the Producer Price Index (an indication of inflation at the wholesale level) for November rose by +0.8%, which was above the consensus estimate for +0.6% and above October’s +0.4%. When you strip out food and energy, the so-called Core PPI came in up +0.3%, which above the consensus for +0.2% and October’s +-0.6%. The Commerce Department reported that Retail Sales rose in the month of November by +0.8%. This was above the consensus for +0.6%. When you strip out the sales of autos, sales were up nicely at +1.2%, which was double the consensus for an increase of +0.6%. Sales for the month of October were revised higher to show a gain of +1.7% from the initial reading of +1.2%. Excluding autos, October sales were revised higher to +0.8% (from +0.4%). I love that, when you strip out food and energy, makes me laugh every time.

The Fed day session opened with an insignificant gap higher. As is the norm on Fed days, the morning drifted higher but the reality is that the market simply was waiting for the announcement as if something would be revealed. The announcement came and the market reaction was rather muted. The high of the day was quickly painted on the chart during the initial gyration but it quickly gave way to a more lasting move as the second gyration was downward. But everything today was within a tight range so any lasting effect seems questionable.

Looking at our Market Leaders, Industrials, tech, consumer staples, utilities and healthcare. Laggards were Financials, Chips, China, Germany, Materials, and Energy.


For the SPX Index there were 240 Advancers/205 Decliners. On the NYSE 3,158 issues were traded with 1,352 advancing issues and 1,711 retreating issues, a ratio of 1.27 to one declining. There were 179 new highs and 113 new lows. The five day moving average of New Highs is 244 while the five day moving average of New Lows is 60 and the ten day moving average of Net Advancing is 373.

Declining volume was higher at a ratio of 1.35 to one. The closing TRIN was 1.06 and the final tick was -233. The five day average of TRIN is .64 and the ten day average of TRIN is .62. The NYSE Composite Index gained 0.07% today while the SPX gained 0.09%.

For the NYSE, relative to the previous 30 session average, volume was -8.74% 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, 20 sessions ended on a positive tick, 8 of last 10. For the SPX, the day's volume was 89.7% of the average daily volume for the last year. Volume was 95.1% of the last 10 day average and 95.2% of the previous day’s volume.

Negative breadth and negative volume. But the real news here is what’s happening to the New Lows. The two day total of New Lows is 200; we haven’t seen these numbers since late August when the SPX was 200 points lower. This is a powerful clue that something is out of whack. (This is the Hindenburg Omen again.)

Total tick for the day was -95,000 and the average tick for the day was -61. There were 7 ticks greater than 600 and 72 ticks more extreme than -600. There were no ticks greater than 1000 and 9 ticks more extreme than -1000. The tick action suggests institutional distribution.

There's no real significance to today's intraday volume pattern as we see the typical Fed day pattern of low volume just before the announcement and then the spike along with the gyrations. The real significance on this graphic is when we check the nightly breadth indicators. The first three lines of that data when taken together are quite bearish looking. The Absolute Breadth Index is strongly suggesting that we are topping. The Cumulative Volume Index dropped on an up day; a significant bearish signal.