Thursday's Recap: A look inside the market

Stock futures continued to work higher Thursday morning as most of the foreign markets were up and expectations for a strong Nonfarm Payroll number today. The Labor Department reported that initial claims for unemployment insurance for the week ending January 1 rose by 18,000 to 409K. The week’s total was just above the consensus for a reading of 406K. Continuing Claims for unemployment for the week ending December 25 were above consensus at 4.103M vs. expectations for 4.057M and last week’s revised (higher) 4.115M. These unemployment numbers took a lot of steam out of the futures.

The session began without any significant gap and traded sideways in a two point range for 45 minutes before making a four point move higher and putting the high of the day on the chart at 10:39. For about half an hour bears (remember them?) took control of the tape and moved the index down eight points putting the low of the day on the chart at 11:08. That ended the excitement as the index then proceeded to trade within tight two point range for a couple of hours before gently ramping higher before 2pm. But sellers again appeared and took the index down five points during the 2pm hour. The final hour was a bit bumpy but as we have seen so often recently, dip buyers were on the scene to hold the index from falling.

For the SPX Index there were 200 components advancing and 283 components declining. On the NYSE 3,136 issues were traded with 1,211 advancing issues and 1,837 retreating issues, a ratio of 1.52 to one declining. There were 199 new highs and 6 new lows. The five day moving average of New Highs is 178 while the five day moving average of New Lows is 6 and the ten day moving average of Net Advancing is 189.
 
Declining volume was higher at a ratio of 2.04 to one. The closing TRIN was 1.34 and the final tick was 328. The five day average of TRIN is .89 and the ten day average of TRIN is 1.01. The NYSE Composite Index lost -0.48% today while the SPX lost -0.21%.
 
For the NYSE, relative to the previous 30 session average, volume was 15.52% above 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, 5 of last 10. For the SPX, the day's volume was 105.9% of the average daily volume for the last year. Volume was 174.2% of the last 10 day average and 102.9% of the previous day’s volume.
 
We see this pattern yet again: Today’s market breadth was more negative than yesterday’s was positive yet yesterday gained more than twice as many points as today lost. This is a symptom of a market ready to decline. And look at the broad NYSE Composite index losing more than double what the SPX lost today.
 
Total tick for the day was -121,000 and the average tick for the day was -78. There were 15 ticks greater than 600 and 96 ticks more extreme than -600. There were no ticks greater than 1000 and 7 ticks more extreme than -1000. The tick action suggests institutional distribution.
 
Volume today dropped significantly midday after a spike upward during the late morning selling spree. Volume then spiked again with the 3pm selling. Looking at the Nightly Breadth indicators its interesting because the McClellan Oscillator quickly fell below zero. Remember how long it took to climb above zero early in December?