Friday Market Recap

50dma has been defended nicely by bulls!

Prior to Friday’s open, foreign markets were up for the most part after the Saudi's said they would boosting oil production to nine million barrels/day. The oil futures were higher still, but they had been up $5 more over the past 24 hours. The market was primed to open higher. The government’s first revision of the nation’s fourth quarter GDP showed the economy grew at an annualized rate of +2.8% during the quarter. This was below the consensus expectations for a growth rate of +3.3% as well as the first estimate of +3.2% but still above the Q3 rate of 2.6%. Consumer spending came in at a rate of +4.1%, which was 0.3% below the first estimate’s level. 

Intra-day

The Friday session began with a significant gap higher. There were several waves upward but the only real pullback came just before noon as the SPX pulled back a bit more than three points. But for the bears, that was really the only play of the day as the rest of the session belonged to the bulls. The session closed near the highs for the day but the fourteen point rally for the SPX seemed rather tame after the three down days. Still, small caps and financials rallied hard on Friday.

The SPX lost 23.13 points during the week. The range for the week was 44.65 points, 3.33%. 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 -53,000. On the NYSE, the advance/decline line declined during the week by 1,177 and the 10 day average of Net Advancing decreased from 528 to 268. There were 411 New Highs and 71 New Lows.

Despite three down days out of four the ten day Net Advancing remains bullish and New Highs outnumbered New Lows six to one.




For the SPX Index there were 432 components advancing and 52 components declining. On the NYSE 3,132 issues were traded with 2,478 advancing issues and 587 retreating issues, a ratio of 4.22 to one advancing. There were 135 new highs and 12 new lows. The five day moving average of New Highs is 235 while the five day moving average of New Lows is 16 and the ten day moving average of Net Advancing is 268. The Net Advancing data indicates a bullish trend.

Advancing volume was higher at a ratio of 6.16 to one. The closing TRIN was 0.69 and the final tick was 277. The five day average of TRIN is 1.21 and the ten day average of TRIN is 1.07. The NYSE Composite Index gained 1.23% today while the SPX gained 1.04%.

For the NYSE, relative to the previous 30 session average, volume was -9.62% 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, 21 sessions ended on a positive tick, 6 of last 10. For the SPX, the day's volume was 85.2% of the average daily volume for the last year. Volume was 82.9% of the last 10 day averageand 72.9% of the previous day’s volume.

Breadth was outstanding on Friday but volume was light. In a normal market this is not too encouraging for the bulls but as I have written before RULES HAVE CHANGED FOR NOW, ONLY QE TO INFINITY MATTERS, UNTIL IT WON'T.

Sectors stronger than the SPX for Friday:
- Basic Materials -- Outperformed the SPX by +41%.
- Energy -- Outperformed the SPX by +41%.
- Financials -- Outperformed the SPX by +38%.
- Technology -- Outperformed the SPX by +19%.

Sectors weaker than the SPX for Friday:
- Industrials -- Underperformed the SPX by -16%.
- Consumer Staples -- Underperformed the SPX by -55%.
- Utilities -- Underperformed the SPX by -50%.
- Health Care -- Underperformed the SPX by -28%.
- Consumer Discretionary -- Underperformed the SPX by -3%.


Week of February 28 - March 04 OverviewDate/Time Release/Consensus02/28/11 8:30 Personal Income/0.003
02/28/11 8:30 Personal Spending/0.004
02/28/11 8:30 PCE Prices - Core/0.001
02/28/11 9:45 Chicago PMI/67.5
02/28/11 10:00 Pending Home Sales/-0.032
03/01/11 10:00 Construction Spending/-0.006
03/01/11 10:00 ISM Index
03/01/11 15:00 Auto Sales/NA
03/01/11 15:00 Truck Sales/NA
03/02/11 7:00 MBA Mortgage Index/NA
03/02/11 7:30 Challenger Job Cuts/NA
03/02/11 8:15 ADP Employment Change/163K
03/02/11 10:30 Crude Inventories/NA
03/02/11 14:00 Fed's Beige Book
03/03/11 8:30 Initial Claims/400K
03/03/11 8:30 Continuing Claims/3800K
03/03/11 8:30 Productivity-Rev./0.023
03/03/11 8:30 Unit Labor Costs - Revised/-0.003
03/03/11 10:00 ISM Services/59
03/04/11 8:30 Nonfarm Payrolls/180K
03/04/11 8:30 Nonfarm Private Payrolls/193K
03/04/11 8:30 Unemployment Rate/0.091
03/04/11 8:30 Average Workweek/34.3
03/04/11 8:30 Hourly Earnings/0.002
03/04/11 10:00 Factory Orders/0.021