S&P 500 Recap and A Look Inside the Markets

Good morning. Global stocks a bit higher today and are now higher than when Japan's earthquake and tsunami struck, buoyed by confidence that the world economic recovery remains on track. The euro has also recovered early losses to trade a touch higher despite negative signs from banking and politics in Portugal and Spain, the two countries now at the center of Europe's continuing debt crisis.Crude is over 106, Silver is at a 30+ year high at 37.8 and Gold is at 1440. The S&P futures are up over 6 points so far.

Yesterday morning there were reports of a spike in radioactive iodine levels found in Tokyo's tap water, another jump in crude, and talk of Portugal needing a bailout if the government doesn't approve austerity measures today put the market in a somewhat defensive position. There was no economic data to review before the open but New Housing Sales at 10 am clearly were disappointing.

The session began with a small gap lower but continued to sell for most of the first forty-five minutes. The S&P attempted a bounce then quickly retested the session lows before sharply rebounding. The ascent lasted the rest of the session with a few periods of consolidation along the way. The S&P closed three points off the highs in the top 20% of the intraday range.

So what now, I still think despite the strong move up to 1300 it was a negative we couldn't breakthrough it. All my BGZ profits went out the window but i still am in it. If the futures stay the way they are or highest we will push right through resistance and lets see if I get stopped out today. 

Something to take note of in the last few sessions is that the volume in declining issues is greater than in advancing issues. there were 271 components advancing and 200 components declining. On the NYSE 3,128 issues were traded with 1,644 advancing issues and 1,368 retreating issues, a ratio of 1.2 to one advancing. There were 91 new highs and 18 new lows. The five day moving average of New Highs is 80 while the five day moving average of New Lows is 17 and the ten day moving average of Net Advancing is -112. The Tick data is bullish and is suggesting institutional accumulation. 

***On the bearish side the 20dma has crossed below the 50dma. I am aware that the time frame is very short and most technicians warn that there is no benefit in the 20/50 day cross and while I agree statistically I feel that we have not had this cross in months, and it may or may not be significant. The more important thing is that the Primary trend (up) which is set by the 200dma or as I like to use the 150 (based on Stan Weinstein) is in tact. The short-term set by price above or below 50dma is (bearish). So that is my primary focus.

Now lets look at the sector performance:

Sectors stronger than the SPX for Wednesday:
- Basic Materials -- Outperformed the SPX by +116%.
- Industrials -- Outperformed the SPX by +6%.
- Technology -- Outperformed the SPX by +27%.
- Consumer Discretionary -- Outperformed the SPX by +59%.

Sectors weaker than the SPX for Wednesday:
- Energy -- Underperformed the SPX by -3%.
- Financials -- Underperformed the SPX by -53%.
- Consumer Staples -- Underperformed the SPX by -8%.
- Utilities -- Underperformed the SPX by -34%.
- Health Care -- Underperformed the SPX by -44%.