S&P 500 Recap and A Look Inside the Markets

Good morning. S&P futures are up up very slightly, there isn't much different this morning in commodities are selling of as Feds Bullard said policy makers should review whether to curtail a plan to buy $600 billion in Treasury securities, noting that the U.S. recovery may not need that much stimulus.

“The economy is looking pretty good,” Bullard said to reporters in Marseille, France, on March 26. “It is still reasonable to review QE2 in the coming meetings, especially this April meeting, and see if we want to decide to finish the program or to stop a little bit short,” he said, referring to the second round of so-called quantitative easing.  

On Friday, in the pre-market there was news steam/smoke/radiation coming out of reactors at Dai-ichi, along with word that Portugal will need an 80 billion Euro bailout, and reports that Ireland's banks need 27.5 billion Euro as early as next week, earnings from Oracle and perhaps some momentum from the recent sessions had the futures pointing modestly higher in the early going. The government’s final revision of the nation’s fourth quarter GDP shows the economy grew at an annualized rate of +3.1% during the quarter, which was above the consensus expectations for a growth rate of +2.8%.

The final session of the week began with a gap higher, continued higher for a few minutes, and then pulled back briefly to put the low of the day on the chart at the end of the first quarter hour. The following forty-five minutes were choppy trading but the S&P exploded higher after that, gaining a quick eight points. But by 11:00 am things calmed down and the index went into sideways gear and traded in less than a four point range for three hours before sellers provided a little excitement for bears a bit after 2:00 pm. This excitement was somewhat short-lived as the index kept bouncing after each downward move but moving back and looking at the big picture makes it clear that the highs shortly after noon were not accepted well by traders as the afternoon trend clearly turned downward. But we'll have to wait until Monday to see if there is any follow through.

Advancing volume once again appears to be very unenthusiastic about this rally, as it has been most sessions recently but the index keeps going higher regardless. Friday, the NYSE Composite significantly underperformed the SPX as well.

Friday's volume was light but the intraday pattern is visible. Volume moved upward with the index and then as the index fell off in the afternoon, so did volume. Some of this was undoubtedly just a typical Friday afternoon volume pattern.

Advancing volume was higher at a ratio of 1.86 to one. The closing TRIN was 0.97 and the final tick was 9. The five day average of TRIN is 1.39 and the ten day average of TRIN is 1.41. The NYSE Composite Index gained 0.12% today while the SPX gained 0.32%.

For the NYSE, relative to the previous 30 session average, volume was -22.66% below the average. Of the last 15 sessions 4 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, 6 of last 10. For the SPX, the day's volume was 82.1% of the average daily volume for the last year. Volume was 78.8% of the last 10 day average and 88.4% of the previous day’s volume.

For the SPX Index there were 305 components advancing and 173 components declining. On the NYSE 3,141 issues were traded with 1,966 advancing issues and 1,071 retreating issues, a ratio of 1.84 to one advancing. There were 204 new highs and 8 new lows. The five day moving average of New Highs is 131 while the five day moving average of New Lows is 12 and the ten day moving average of Net Advancing is 193.

Sectors stronger than the SPX for Friday:
- Basic Materials -- Outperformed the SPX by +22%.
- Energy -- Outperformed the SPX by +52%.
- Industrials -- Outperformed the SPX by +4%.

Sectors weaker than the SPX for Friday:
- Financials -- Underperformed the SPX by -10%.
- Technology -- Underperformed the SPX by -7%.
- Consumer Staples -- Underperformed the SPX by -31%.
- Utilities -- Underperformed the SPX by -35%.
- Health Care -- Underperformed the SPX by -22%.
- Consumer Discretionary -- Underperformed the SPX by -13%.

S&P is above the 50dma (1305) which is obviously bullish, and the 20dma is beginning to turn up. Great entry point for those wanting to go long with exit at 1305. Don't think we can push up through the 1332 level though, may be swing trading for a while. Its bizarre how we didn't retest the march lows but the new paradigm of QE so we are in unchartered territory.