Wednesday Recap: A Look Inside the market

The third quarter GDP showed the economy grew at an annualized rate of 2.6% in the quarter. This was below the consensus expectations for a growth rate of 2.8% but above the first revision of 2.5%. (Recall that the final Q2 rate was +1.7% and Q1 was +3.7%). Looking at the all-important consumer activity, the Personal Consumption component of the report came in slightly below expectations with a gain of 2.4% vs. the consensus for 2.5% and the first revision’s +2.8%. (Last quarter was 2.2%.) Stock futures in the U.S. pointed to a flat open.


The sluggish pre-holiday session opened without a gap and began the habitual relentless grind slowly higher. After several hours of slow creep the high of the day was put on the chart at 12:32 and the afternoon consisted of a three point decline before a mild bounce into the close. But everything was mild on this day as this was a typical pre-holiday session with the smallest trading range in nine months. The banks really rallied on Wed  on solid volume but the overall volume was very low but seasonal.

For the SPX Index there were 273 Advancers/168 Decliners. On the NYSE 3,160 issues were traded with 1,876 advancing issues and 1,182 retreating issues, a ratio of 1.59 to one advancing. There were 215 new highs and 15 new lows. The five day moving average of New Highs is 194 while the five day moving average of New Lows is 24 and the ten day moving average of Net Advancing is 303.


Advancing volume was higher at a ratio of 1.48 to one. The closing TRIN was 1.07 and the final tick was 88. The five day average of TRIN is .76 and the ten day average of TRIN is .82. The NYSE Composite Index gained 0.32% today while the SPX gained 0.34%.

For the NYSE, relative to the previous 30 session average, volume was -25.03% 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, 19 sessions ended on a positive tick, 7 of last 10. For the SPX, the day's volume was 28.1% of the average daily volume for the last year. Volume was 82.1% of the last 10 day average and 100.5% of the previous day’s volume.
 
Total tick for the day was 142,000 and the average tick for the day was 92. There were 27 ticks greater than 600 and 0 ticks more extreme than -600. There were no ticks greater than 1000 and no ticks more extreme than -1000.


I don't expect my much for the rest of the year. I suspect the dollar index will rise to 81.50 and then continue back down. The precious metals will suffer at the hands of the dollar strength. No changes in long-term view. 

Monday Market Recap: A Look Ahead

Uncle Kim (http://www.youtube.com/watch?v=xh_9QhRzJEs) said he wouldn't retaliate against S. Korea for military drills and that kept the futures up in the early morning session. When the S&P opened there was  there was a two point gap higher, then over the next hour and a half we found the SPX at +4 and then the bears came in pushed the market down 7 points from the high of the day.  But as we have seen it before there was a painfully slow 4 hour climb to close of the session, so one could say if there was anything exciting going on it happened very early. On the day there were 263 Advancers/182 Decliners. On the NYSE  1,516 advancing issues and     1,553 retreating issues, a ratio of 1.02 to one declining. There were 206 new highs and 21 new lows. The five day moving average of New Highs is 202 while the five day moving average of New Lows is 54 and the ten day moving average of Net Advancing is 47. The the outperforming sectors were Materials, precious metals, consumer discretionary and energy but everything else pretty much was flat to down.

The dollar index which was weak most of the day finished in the upper part of the days trading range, albeit down slightly.


Advancing volume was higher at a ratio of 1.72 to one. The closing TRIN was 0.57 and the final tick was -583. The five day average of TRIN is .96 and the ten day average of TRIN is .75. The NYSE Composite Index gained 0.15% today while the SPX gained 0.25%.
 
For the NYSE, relative to the previous 30 session average, volume was -21.75% 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, 18 sessions ended on a positive tick, 6 of last 10. For the SPX, the day's volume was 77.5% of the average daily volume for the last year. Volume was 75.3% of the last 10 day average and 73.5% of the previous day’s volume.
 
NYSE breadth was negative today although advancing volume was positive. The ten day average of New Advancing is near zero. The NYSE Composite underperformed the SPX. Market breadth continues to suggest an imminent pullback but Price continues to creep higher. 
Total tick for the day was -43,000 and the average tick for the day was -28. There were 41 ticks greater than 600 and 56 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 breadth indicators continue to scream, "a top" but also suggest that this could go on a while longer. The McClellan Oscillator has been hanging around zero for quite some time.

Friday Recap, A look ahead

Weekly Chart

On Friday decent economic news, and better than expected earnings from Oracle and RIMM as well as the German IFO Business Climate Index increase for the seventh straight month was offset by the fact that Moody's downgraded Ireland, so stock futures were basically flat as the open leading to the quadruple-witch expiration session. 


For the week the SPX gained 3.5 point. The four week RSI of the four indices (SPX, Dow, NASDAQ, and Russell 200) is 83. Pullbacks often occur as this RSI reaches 80 and bounces near 20.
During the week there were 274 advancing and 175 declining stocks. Total tick for the week was 90,000. The number of components with their 5 DMA above their 20 DMA decreased during the week from 70.6% to 56%.

 On the NYSE, the advance/decline line decreased slightly during the week by -32 and the 10 DMA of Net Advancing dropped from 279 to 50. The Semiconductors (SMH) have been really outperforming this market since August and lately the Financial sector (XLF) has been very strong. Its 150dma has started to climb as well and this sector should lead the next leg up.

The weekly range was a mere 14 points, 1.12%. This is the smallest weekly range in years. This year has seen ten weeks with a range less than 2% whereas 2009 only had two such weeks and both were the holiday weeks at the end of the year. Such tight range weeks often lead to pullbacks but we have seen since the end of August that these tight range weeks are the pullback.

For Friday, in the  SPX there were 262 Advancers/187 Decliners.  On the NYSE 3,145 issues were traded with 1,706 advancing issues and 1,357 declining issues, a ratio of 1.26 to one advancing. There were 176 new highs and 22 new lows.  The five day moving average of New Highs is 207 while the five day moving average of New Lows is 67 and the ten day moving average of Net Advancing is 50.

Advancing volume was higher at a ratio of 1.52 to one. The closing TRIN was 0.83 and the final tick was 248. The five day average of TRIN is .98 and the ten day average of TRIN is .8. The NYSE Composite Index lost -0.07% today while the SPX gained 0.08%.

For the NYSE, relative to the previous 30 session average, volume was 87.18% 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, 19 sessions ended on a positive tick, 7 of last 10. For the SPX, the day's volume was 100.9% of the average daily volume for the last year. Volume was 105.1% of the last 10 day average and 109.7% of the previous day’s volume.

Breadth was decent for such a small range day. But bulls should find troubling the dropping ten day average of Net Advancing.

Total tick for the day was 184,000 and the average tick for the day was 119. There were 37 ticks greater than 600 and 11 ticks more extreme than -600. There were no ticks greater than 1000 and no ticks more extreme than -1000.

Looking at Friday's intraday volume pattern tells us little but it may be worthwhile to mention that this was the lowest option expiration volume of the year. Checking the nightly breadth indicators also is a bit unenlightening but it should be noted that the Absolute Breadth Index has fallen off the planet, strongly suggesting that we are topping.
For the SPX Index there were 262 Advancers/187 Decliners.  On the NYSE 3,145 issues were traded with 1,706 advancing issues and 1,357 retreating issues, a ratio of 1.26 to one advancing. There were 176 new highs and 22 new lows.  The five day moving average of New Highs is 207 while the five day moving average of New Lows is 67 and the ten day moving average of Net Advancing is 50.

Advancing volume was higher at a ratio of 1.52 to one. The closing TRIN was 0.83 and the final tick was 248. The five day average of TRIN is .98 and the ten day average of TRIN is .8. The NYSE Composite Index lost -0.07% today while the SPX gained 0.08%.

For the NYSE, relative to the previous 30 session average, volume was 87.18% 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, 19 sessions ended on a positive tick, 7 of last 10. For the SPX, the day's volume was 100.9% of the average daily volume for the last year. Volume was 105.1% of the last 10 day average and 109.7% of the previous day’s volume.

Breadth was decent for such a small range day. But bulls should find troubling the dropping ten day average of Net Advancing.

Total tick for the day was 184,000 and the average tick for the day was 119. There were 37 ticks greater than 600 and 11 ticks more extreme than -600. There were no ticks greater than 1000 and no ticks more extreme than -1000.

Looking at Friday's intraday volume pattern tells us little but it may be worthwhile to mention that this was the lowest option expiration volume of the year. Checking the nightly breadth indicators also is a bit unenlightening but it should be noted that the Absolute Breadth Index has fallen off the cliff, this strongly suggesting that we are topping.


So the chart pattern tells me that that we are going to breakout of this weekly cup and handle pattern, the move could be substantial possibly 75 to a 100 points, but the stochastics and the internals are saying otherwise. This market has ignored the technicals since the rumors of second QE started in August and with more problems in Europe and here in the US cheap money is finding a home in stocks or ETF's. 


Long: RES 1/2 position, CRUS, AIB, IRE, TBT, GLD, GDXJ, SLV, UEC, URZ, CCJ.