S&P 500 Technical Analysis/Recap

Good Morning, the S&P futures are down over 2% (its was just 1.5% when I started writing) this morning, as Japanese stocks were just taken to the woodshed last night (radiation leak was detected at the plants number 2 reactor).  Yesterday there was hydrogen explosion at the Fukushima nuclear site in Japan and the likelihood of an all-out meltdown rising, traders were uneasy. Even the Eurozone's decision to increase the level of the EFSF bailout program, which is helping debt spreads in peripheral European countries, was not enough to get the bulls back into buying mode.

We did not have any economic data scheduled for release today. The flow of data will pick up later in the week. The driving force for today's market was concern about the Japanese disaster and more Mideast turmoil.

If things stand the way they are we will gap down almost 26 points this Tuesday , as I said yesterday I would not short this move but wait for a bounce back to the 50dma and that would fail. Well thats kinda what happened but not really. I'll explain why, this move to state the obvious is due to Japan (third largest economy in the world). With Nuclear Fallout fears no one knows what will happen. But I will update my game plan for the Japanese markets, as I believe they will be much higher a year from today. So I still think there is another bounce back to the 50dma. So if I was short I would take profits (i'm not), if I was thinking about shorting i'd wait for that bounce. 

The week began with a significant gap lower, then traded sideways for an hour before new of further problems in Japanese nuclear facilities hit and the SPX dropped quickly seven points to the 1288 area. But support in that area held and the index consolidated for about ninety minutes before attempting a rally around 1:00 pm. This rally lasted about seventy-five minutes and was good for about eight SPX points before sellers knocked the index back several points. But dip buyers were persistent this afternoon and came back in for the closing hour before minor selling before the close. Once again the index closed at about three quarters of the intraday range to close back just about where we began the day.


Breadth was poor, as would be expected on a down session. But declining volume really wasn’t too bad. New Highs fell-off significantly while the ten day average of Net Advancing moved into bearish territory for the first time since late November.Today's intra-day volume shows the familiar spike during this morning's sell-off along with a very slight increase in volume during the afternoon's bounce-back.Declining volume was higher at a ratio of 2.34 to one. The closing TRIN was 1.13 and the final tick was -178. The five day average of TRIN is 1.04 and the ten day average of TRIN is 1.26. The NYSE Composite Index lost -0.66% today while the SPX lost -0.61%.


For the SPX Index there were 109 components advancing and 373 components declining. On the NYSE 3,123 issues were traded with 973 advancing issues and 2,052 retreating issues, a ratio of 2.11 to one declining. There were 37 new highs and 30 new lows. The five day moving average of New Highs is 122 while the five day moving average of New Lows is 20 and the ten day moving average of Net Advancing is -219. The Net Advancing data indicates a bearish trend.




Sector Performance:
- Basic Materials -- Outperformed the SPX by +26%.
- Energy -- Outperformed the SPX by +117%.
- Technology -- Outperformed the SPX by +14%.
- Health Care -- Outperformed the SPX by +11%.

Sectors weaker than the SPX for Monday:
- Financials -- Underperformed the SPX by -31%.
- Industrials -- Underperformed the SPX by -24%.
- Consumer Staples -- Underperformed the SPX by -10%.
- Utilities -- Underperformed the SPX by -73%.
- Consumer Discretionary -- Underperformed the SPX by -63%.