S&P 500 Recap and A Look Inside the Markets

Good Morning, the S&P futures are up 1% this morning (for now), there is a lot of data to come at 830 so anything can happen. Gold is up $14A and Silver is up 80 cents and Oil is up a $1.40. More workers are being sent to fix/control the mess at the Fukushima Plant, there were reports yesterday that only 50 people were there for days working day and night to fix the problem. There are also reports that the reactors were to be retired next month and that they were 40 years old, and they weren't working right so someone decided we could maybe get a couple extra days out of them and then...

Patients are like that, well mostly male patients, their shoulder starts to hurt and they will put off going to the Doc till the arms about to fall off and they haven't slept in a week.

Anyway, yesterday Japanese stocks had rebounded strongly (Nikkei 225 +5.68%), but during our session there was a deterioration in the situation at the Fukushima nuclear power plant as well as an escalation in the clashes in Bahrain limited the upside in the European markets. The Labor Department reported the Producer Price Index for February rose by +1.6%, which was above the consensus estimate for +0.6% and above January’s +0.8%. When you strip out food and energy, the so-called Core PPI came in up +0.2%, which was in line with the consensus for +0.2% and below January’s +0.5%. Housing Starts fell by 22.5%% in February to an annualized rate of 479K. This was below the consensus for 564K. Building Permits for February fell 8% to 517K. This was also below the consensus of 569K and last month’s reading of 563K.

The Wednesday session began with a gap lower and continued lower for several minutes before starting an hour long rally attempt. Then the EU energy chief said things were "out of control" at the Fukushima Plant and within moments the Dow dropped 160 points. The Dow quickly (within three minutes!) recovered 100 points but the damage was done and any enthusiasm in the market was gone; today's party was all for the bears as the SPX crashed through main support. The index bounced off a weaker level of support but quickly sold off eight points after the bounce to close the session at the low end of the intra-day range.

For the SPX Index there were 30 components advancing and 452 components declining. On the NYSE 3,122 issues were traded with 704 advancing issues and 2,355 retreating issues, a ratio of 3.35 to one declining. There were 32 new highs and 40 new lows. The five day moving average of New Highs is 101 while the five day moving average of New Lows is 40 and the ten day moving average of Net Advancing is -476. The Net Advancing data indicates a bearish trend.

Declining volume was higher at a ratio of 10.17 to one. The closing TRIN was 3.12 and the final tick was -874. The five day average of TRIN is 1.58 and the ten day average of TRIN is 1.34. The NYSE Composite Index lost -2% today while the SPX lost -1.99%.

For the NYSE, relative to the previous 30 session average, volume was 39.6% above the average. Of the last 15 sessions 7 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, 6 of last 10. For the SPX, the day's volume was 141.3% of the average daily volume for the last year. Volume was 140.9% of the last 10 day average and 113.9% of the previous day’s volume.

New Lows fell from 70 yesterday to 40 today while New Highs ticked upward slightly. This is a bullish divergence in the breadth data. And the TRIN is calling for a bounce back.

Total tick for the day was -132,000 and the average tick for the day was -85. There were 90 ticks greater than 600 and 216 ticks more extreme than -600. There were 2 ticks greater than 1000 and 35 ticks more extreme than -1000. The tick action suggests institutional distribution.

The intraday volume shows a large spike around 11:00 am when the EU news broke about their opinion of the Japanese crisis. A second, smaller volume spike came with the afternoon SPX downward move. There is nothing at all bullish about this volume pattern except that it often signifies a short-term bottoming process. Looking at McClellan's Oscillator I see it has reach a level not seen since May 21st and the Summation Index was in negative territory. That in itself is screaming for a bounce but the like in rock paper scissors, the news is dominant now and it does not matter what the technicals are telling you. And that goes against everything I have have read, I'm supposed to ignore the news and listen my indicators.

Sectors stronger than the SPX for Wednesday:
- Energy -- Outperformed the SPX by +34%.
- Financials -- Outperformed the SPX by +10%.
- Industrials -- Outperformed the SPX by +9%.
- Consumer Staples -- Outperformed the SPX by +53%.
- Utilities -- Outperformed the SPX by +37%.
- Health Care -- Outperformed the SPX by +20%.
- Consumer Discretionary -- Outperformed the SPX by +35%.

Sectors weaker than the SPX for Wednesday:
- Basic Materials -- Underperformed the SPX by -25%.
- Technology -- Underperformed the SPX by -51%.




I'm having charting software problems, for some reason my Index charts are off so I will have to use SPY (ETF) to demonstrate SPX for now.