Wednesday Recap: A Look Inside the market

Weekly chart holding support above 1220

The combination of Moody's placing Spain on review for a future downgrade and Portugal's miserable bond auction put stocks on the defensive before the open. The Consumer Price Index for November rose by +0.1%, which was below the consensus for +0.2% and October’s reading of +0.1%. When you strip out food and energy, the so-called Core CPI came in with a gain of +0.1%, which was in line with expectations and above October’s unchanged reading. The Empire Manufacturing Index for November rose to 10.57, which was above the consensus expectations for a reading of 3.80 and    above the October reading of -11.14.

Intraday, 5min Chart

This was a pretty ho hum session, not much to speak about but the general trend of higher futures, higher  first hour followed by high volume selling and a late day drift higher seems to be ending. Something to keep an eye on for the short term traders. Looking at the leading sectors today we find the Healthcare and Consumer Staples outperforming significantly relative to the SPX, slight out-performance by Tech, Industrials, while materials, energy, financials and utilities were the laggards. 


The SPX had 127 Advancers/319 Decliners. NYSE 1,040 advancing issues and 2,004 declining issues, a ratio of 1.93 to one declining. There were 156 new highs and 89 new lows. The five day moving average of New Highs is 233 while the five day moving average of New Lows is 73 and the ten day moving average of Net Advancing is 104.

Declining volume was higher at a ratio of 3.06 to one. The closing TRIN was 1.59 and the final tick was -851. The five day average of TRIN is .87 and the ten day average of TRIN is .75. The NYSE Composite Index lost -0.72% today while the SPX lost -0.51%.

For the NYSE, relative to the previous 30 session average, volume was 6.13% above 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, 19 sessions ended on a positive tick, 7 of last 10. For the SPX, the day's volume was 95.8% of the average daily volume for the last year. Volume was 92.6% of the last 10 day average and 98.2% of the previous day’s volume.

Breadth was negative and declining volume was even more negative. This was the first really large negative final tick since September 21^st. The broad NYSE Composite Index performed even worst than the SPX; this is often a bearish clue. Watch for the ten day average of Net Advancing to drop below zero; that may be a signal that the market is in retreat.

Total tick for the day was -68,000 and the average tick for the day was -44. There were 44 ticks greater than 600 and 90 ticks more extreme than -600. There were 1 ticks greater than 1000 and 7 ticks more extreme than -1000. The tick action suggests institutional distribution.

The intraday volume pattern very clearly shows the volume spiked today with each down move; this is not a bullish pattern. Looking at the nightly breadth indicators, things are even more bearish looking than they were the previous night. 


On 12/16/10 am the futures are slightly higher, we see Europe slightly higher along with the Euro against the dollar ahead of an EU summit.The euro bought $1.3232 in morning European trading Thursday, up slightly from $1.3213 the night before in New York.The British pound is up to $1.5566 from $1.5539 while the dollar is down to 84.18 Japanese yen from 84.43 late Wednesday.

The meeting is said to have representatives from EU's 27 states who will be getting together Thursday and Friday amid pressure to find ways out of the smoldering debt crisis.The summit is not expected to make any take new radical decisions, but will likely focus on a change to EU treaties to set up a new crisis mechanism to replace the current euro750 billion bailout fund beyond 2013.