Friday Recap "A look inside the market"

Daily taking out the 20dma, support at 1250 next target!
Then resume uptrend as long as we print and spend

Problems in Egypt caused turmoil in the overseas markets. The US government’s released estimate of the fourth quarter GDP which showed the economy grew at an annualized rate of 3.2% in the quarter and was below the consensus expectations for a growth rate of 3.6% but above the Q3 rate of 2.6%. (Recall that the final Q2 rate was +1.7% and Q1 was +3.7%). For the year 2010, GDP grew by 2.9%, which is the best level since 2005. On the inflation front, the Deflator came in at 0.3% vs. 1.6%. In addition, the Employment Cost Index was reported at +0.4% vs. +0.5% and last quarter’s +0.4%. Futures as the open approached were choppy, moving a bit lower after a steady uptrend since 3:30.

The Friday session began without a significant gap and tried to move higher and was up three points to put the high of the day on the chart at 9:48.  Internals were showing weakness early even as the market was trying to move higher. From 9:48 through noon sellers hit the tape hard as the SPX gave up 26 points. The rest of the day was choppy consolidation but the session closed at the lows of the day.

The SPX lost 7.01 points during the week. The range for the week was 27.57 points, 2.15%. The four week RSI of the four indices (SPX, Dow, NASDAQ, and Russell 2000) is 61. Pullbacks often occur as this RSI reaches 80 and bounces near 20.

Total tick for the week was 377,000. On the NYSE, the advance/decline line increased during the week by 947 and the 10 day average of Net Advancing decreased from -24 to -60. There were 880 New Highs and 75 New Lows.

The week ended near even on the extreme ticks, 390 positive and 380 negative. But the more extreme than 1000 ticks heavily favors the bears as the count was eight positive and 29 negative. Friday's session accounted for all 29 of the negative 1000 ticks.

For the SPX Index there were 33 components advancing and 452 components declining. On the NYSE 3,149 issues were traded with 498 advancing issues and 2,590 retreating issues, a ratio of 5.2 to one declining. There were 148 new highs and 19 new lows. The five day moving average of New Highs is 173 while the five day moving average of New Lows is 15 and the ten day moving average of Net Advancing is -60.
 
Declining volume was higher at a ratio of 7 to one. The closing TRIN was 1.35 and the final tick was -712. The five day average of TRIN is 1.34 and the ten day average of TRIN is 1.28. The NYSE Composite Index lost -1.76% today while the SPX lost -1.82%.
 
For the NYSE, relative to the previous 30 session average, volume was 38.75% above the average. Of the last 15 sessions 12 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, 5 of last 10. For the SPX, the day's volume was 123.4% of the average daily volume for the last year. Volume was 121.8% of the last 10 day average and 136.3% of the previous day’s volume.
 
** Hugely negative market breadth but New Highs didn't really plummet nor did New Lows rocket higher. At this point this appears to be a normal but substantial market reaction to world events. 
Total tick for the day was -353,000 and the average tick for the day was -228. There were 15 ticks greater than 600 and 281 ticks more extreme than -600. There were no ticks greater than 1000 and 29 ticks more extreme than -1000. The tick action suggests institutional distribution.
 
The intraday volume pattern shows a huge spike in volume during the late morning sell-off as well as a second smaller spike of volume with a mid-afternoon down move. Looking at the Nightly Breadth Indicators we see more mixed results than would be expected. We're particularly surprised that the McClellan Oscillator didn't plunge lower.

Sector Performance: 
 
Sectors stronger than the SPX for Friday:
- Basic Materials -- Outperformed the SPX by +27%.
- Energy -- Outperformed the SPX by +142%.
- Financials -- Outperformed the SPX by +4%.
- Consumer Staples -- Outperformed the SPX by +83%.
- Utilities -- Outperformed the SPX by +44%.
 
Sectors weaker than the SPX for Friday:
- Industrials -- Underperformed the SPX by -14%.
- Technology -- Underperformed the SPX by -48%.
- Health Care -- Underperformed the SPX by -11%.
- Consumer Discretionary -- Underperformed the SPX by -150%.