S&P 500 Recap and A Look Inside the Markets

Good Morning! Looking at some of the news this morning I found an article where Timmy G is asking the congress to raise the debt ceiling so the govt can keep borrowing and spending, that just makes me itch! It was a small article that just kind went unnoticed once again WTF people? On my twitter feed I follow professional traders and money manager, most of these guys are on TV from time to time and some everyday, not so I can piggy back on their trades but just to see what they think and talk about. I usual do say this but none of these guys cares abut the debt. Not a single one. NOT ONE. Maybe they don't care about what is to happen just what is happening, I guess thats what you are supposed to do as a trader, so I'll give them the benefit of the doubt. I seriously doubt so many intelligent people out there have blinders on regarding the state of this nation. Oh UK inflation grew at a faster pace than expected as we as Portugal is in big trouble, possible government collapse is immanent because they are running out of money.

In any case we had a big move up yesterday in the pre-market the major foreign markets were higher and Japanese markets were closed for a holiday but the rest of the world markets were strong as the global markets looked to continue the rebound from last week's lows.

The week began with a huge upward spike at the open then continued higher steadily until a bit after 10:00 am. But that was followed by several hours of trading within a three point range as 1300 provided resistance and the entire session traded within a six point range after the first four minutes.

For the SPX Index there were 439 components advancing and 45 components declining. On the NYSE 3,123 issues were traded with 2,476 advancing issues and 579 retreating issues, a ratio of 4.28 to one advancing. There were 123 new highs and 9 new lows. The five day moving average of New Highs is 53 while the five day moving average of New Lows is 35 and the ten day moving average of Net Advancing is 46.

Advancing volume was higher at a ratio of 4.07 to one. The closing TRIN was 2.49 and the final tick was 644. The five day average of TRIN is 1.7 and the ten day average of TRIN is 1.37. The NYSE Composite Index gained 1.72% today while the SPX gained 1.48%.

For the NYSE, relative to the previous 30 session average, volume was -17.23% below the average. Of the last 15 sessions 6 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 22 sessions ended on a positive tick, 7 of last 10. For the SPX, the day's volume was 110.5% of the average daily volume for the last year. Volume was 104.1% of the last 10 day average and 97.8% of the previous day’s volume.

Breadth was good today while the advancing volume was a bit weak. It is a bit odd to see such a closing TRIN after a large gaining session. The ten day average of Net Advancing has sprinted back into positive territory and the NYSE Composite Index outperformed the SPX. All-in-all, the data suggests that this rally could have more room to run.

Total tick for the day was 202,000 and the average tick for the day was 130. There were 99 ticks greater than 600 and 6 ticks more extreme than -600. There were 1 ticks greater than 1000 and no ticks more extreme than -1000. The tick action suggests institutional accumulation.

We saw decreasing relative volume throughout the session. It seemed as though interest was waning in buying as the SPX challenged 1300 but there really was no interesting in selling either. Checking the Breadth Indicators we see a complete reversal from last week. The Bulls seem to have resumed command.

We may get another 2-3 percent rally in the SPX over this week but I think we will be challenging the recent lows and slowly bleeding to reach the 150dma as the next Fed meeting approaches. Another bearish sign is the collapse of the 20dma, it has been very strong the last time it crossed below the 50dma was last fall, so keep an eye on that as well. Staying above the 50dma is very bullish in my view.

Things to watch for that theory to change, QE3 talk starts earlier than I expect, and technically the SPX holds the 50dma once it recaptures it. No cross of 20 below 50dma. 

 Sectors stronger than the SPX for Monday:
- Basic Materials -- Outperformed the SPX by +22%.
- Energy -- Outperformed the SPX by +148%.
- Industrials -- Outperformed the SPX by +64%.
- Technology -- Outperformed the SPX by +25%.
- Consumer Discretionary -- Outperformed the SPX by +3%.

Sectors weaker than the SPX for Monday:
- Financials -- Underperformed the SPX by -100%.
- Consumer Staples -- Underperformed the SPX by -26%.
- Utilities -- Underperformed the SPX by -32%.
- Health Care -- Underperformed the SPX by -67%.