Wed Recap SPX

Although Asian markets followed Wall Street higher, European markets were mixed as our open approached and stock futures in the U.S. were slightly lower after S&P downgraded Ireland. Challenger, Gray and Christmas reported that there were 38,519 planned job cuts announced in January which was up 20% from December’s 32,004 but down 46% from year ago levels. The planned job cut total for the month of January was the lowest seen in the month since Challenger started keeping records in 1993. ADP reported that the private sector job market expanded again during the month of January. The report shows that private sector jobs rose by 187K jobs during the month, which was above the consensus expectations for a gain of about 147K. December’s report was revised lower to a gain of 247K jobs from the initial report of 297K.

Today's session began with a small gap lower and quickly moved to put the low of the day on the chart just twelve minutes into the day. The SPX traded very choppy before moving to the high of the day at 10:32 just five points off the low. The rest of this very forgettable session traded listlessly in a very tight two point range.

Today's chart painted a narrow-range doji. There was a time when a narrow range inside day suggested a coming reversal of a short-term trend. But over the last two years, everything simply seems to suggest more upside coming.

For the SPX Index there were 159 components advancing and 323 components declining. On the NYSE 3,125 issues were traded with 1,413 advancing issues and 1,609 retreating issues, a ratio of 1.14 to one declining. There were 261 new highs and 9 new lows. The five day moving average of New Highs is 172 while the five day moving average of New Lows is 13 and the ten day moving average of Net Advancing is 333. The Net Advancing data indicates a bullish trend.

 

Declining volume was higher at a ratio of 1.84 to one. The closing TRIN was 1.62 and the final tick was 467. The five day average of TRIN is 1.1 and the ten day average of TRIN is 1.15. The NYSE Composite Index lost -0.21% today while the SPX lost -0.27%.

 

For the NYSE, relative to the previous 30 session average, volume was -1.76% below the average. Of the last 15 sessions 13 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 20 sessions ended on a positive tick, 7 of last 10. For the SPX, the day's volume was 89.9% of the average daily volume for the last year. Volume was 87.3% of the last 10 day average and 86.1% of the previous day’s volume.

 

If you’re a bear, today should concern you. Today was very normal action following the rally yesterday. The ten day average of Net Advancing has moved into bullish territory. New Highs were quite strong today despite the lifeless market. The breadth data really looks like the prelude to the market going higher.

 

Total tick for the day was 114,000 and the average tick for the day was 74. There were 26 ticks greater than 600 and 5 ticks more extreme than -600. There were no ticks greater than 1000 and no ticks more extreme than -1000. The tick action suggests institutional accumulation.

 

Volume today was just as lifeless as the market; making sense of any volume patterns is impossible. Checking the Nightly Breadth Indicators is almost as useless as well as the indicators show the effects of the big down day followed by big up day with a couple of small range inside days sandwiched in. In other words, the indicators are mixed and choppy and suggesting that we see at least another choppy small range day.

Sectors stronger than the SPX for Wednesday:

- Basic Materials -- Outperformed the SPX by +11%.

- Energy -- Outperformed the SPX by +33%.

- Technology -- Outperformed the SPX by +46%.

 

Sectors weaker than the SPX for Wednesday:

- Financials -- Underperformed the SPX by -56%.

- Industrials -- Underperformed the SPX by -4%.

- Consumer Staples -- Underperformed the SPX by -10%.

- Utilities -- Underperformed the SPX by -27%.

- Health Care -- Underperformed the SPX by -6%.

- Consumer Discretionary -- Underperformed the SPX by -2%.