Friday Recap "A look inside the market"

Friday morning found futures moving higher on the back of earnings from Google and General Electric as well as news that Spain is taking steps to restructure the banking system and would be willing to invest directly in the banks. There was no U.S. economic news scheduled for release Friday.

With the tailwind from the futures, the SPX opened with a five point gap higher and was up eleven points to put the high of the day on the chart at 10:01. But the bulls struggled to hold onto gains and by noon eight points had been given back. The afternoon traded within a four point range and essentially was a wash as neither bulls nor bears could force a large move into the weekly close.

But this session was different. Last week we saw down days that felt like up days; hours were spent moving higher after morning lows. But on Friday it felt like a down day despite the index gaining several points. The highs were early in the day and hours were spent giving back the gains. The tone of the market seems to have changed.

The SPX lost 9.89 points during the week. The range for the week was 24.80 points, 1.92%. The four week RSI of the four indices (SPX, Dow, NASDAQ, and Russell 2000) is 67. Pullbacks often occur as this RSI reaches 80 and bounces near 20.

Total tick for the week was -116,000. On the NYSE, the advance/decline line decreased during the week by 2,000 and the 10 day average of Net Advancing decreased from 239 to -24. There were 613 New Highs and 105 New Lows.

This holiday-shortened week was ruled by sellers as the extreme ticks were doubled on the negative side (135 positive and 272 negative) and the ultimate extreme ticks (greater than 1000) were twelve negative, zero for the bulls.

We have now gone 98 sessions since the last 2% range day. Since 1990, the average is one 2% range session every 5.25 days. The last similar such extended period without a 2% range session occurred in 2007 leading up to the all-time market top. The lack of intraday range certainly puts the damper on day trading the indices.

Market breadth was not strong on Friday, although it remained positive on the NYSE. New Highs were low despite the up session. Closing a Friday session with a negative tick has been unusual for months.
 
Total tick for the day was 23,000 and the average tick for the day was 15. There were 25 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 intraday volume pattern was driven by options expiration; high volume at the open followed by low volume the rest of the session. This was typical but the volume was notably low. Looking at the Nightly Breadth Indicators continues to suggest that we have had a significant interim top but today's indicators are quite mixed. We're following the McClellan Summation Index closely. It hasn't been in negative territory since very early in September.

Sectors Performance 
 
Sectors stronger than the SPX for Friday:
- Energy -- Outperformed the SPX by +25%.
- Financials -- Outperformed the SPX by +55%.
- Industrials -- Outperformed the SPX by +57%.
- Health Care -- Outperformed the SPX by +4%.
 
Sectors weaker than the SPX for Friday:
- Basic Materials -- Underperformed the SPX by -48%.
- Technology -- Underperformed the SPX by -81%.
- Consumer Staples -- Underperformed the SPX by -7%.
- Utilities -- Underperformed the SPX by -32%.
- Consumer Discretionary -- Underperformed the SPX by -13%.