S&P Recap and A Look Inside the Markets

There was a massive earthquake in Japan last over night 8.9, I was a couple of hundred miles away from a 7.2 once and that was really scary, I can't imagine an 8.9. There are also Tsunami,  warnings across New Zealand, the Philippines, Indonesia, Papua New Guinea, Hawaii, and the continued problems in the Middle East and North Africa.

They are raiding Silver again this morning, I said i would buy it back at 33, and its 60 cents away from that target (on the SLV). i'm usually a little early but I think its a great day to re-enter, my next short-term target is 41. So bring the pain "JP Morgue".

SPX weekly Chart. Look at the slow stochastics (much more reliable than on daily charts for timing) they have a long long way to go, if there is no talk of QE we will most likely crash to the 150dma , not in one day of course. Remember I talked about investor psychology and denial, well I think we are still in first phase of that, all you have to do is listen to the morons on CNBC. Where the heck do they find these people (their reporters, and the mutual fund whores prostituting crappy products to destroy the wealth of hard working Americans. (My not so humble opinion)

The S&P is going to gap down this morning through the 50dma which had been good support for a really long time. Time to say bye bye to that. If I was going to short it would not be this move, it would be the bounce back to the 50dma after sometime below it, the fall off of that bounce is usually the most profitable. 

SPX Daily chart. The Stochastics not seen here, cause I don't use them on the daily charts show short term oversold, but if you look at the MACD its not yet at the level it was in Dec 10 and we had a great rally after that but the 50dma held on that occasion, its going to fail today and I think we are headed to MACD level not seen last September. 

Yesterday, a downgrade of Spain, more fighting in Libya and concerns about China's growth created large pullbacks in the foreign markets, which also carried over to the U.S. futures.  Initial Claims for Unemployment Insurance for the week ending March 5th rose by 18K to 397K. This was above the consensus estimate for 379K and last week’s total of 371K. Continuing Claims for the week ending 2/26 came in at 3.771M vs. 3.753M. The U.S. Trade Deficit also rose in January to $46.3 billion, which was worse than the consensus estimate for a deficit of $41.4 billion.

Thursday's session began under intense pressure from the futures and responded with a significant gap lower. But follow-through lower was minimal as the support level at 1295 was tested and retested but support held. A steady rally attempt appeared to have been progressing when news broke that Saudi police fired on protesters a bit after 1:00 pm. The market reaction was sharp and quickly downhill for another test of the 1295 area, followed by another but much weaker bounce, leading to a fourth intraday test of support. Multiple tests generally weaken and fail so we confess to being surprised to see the fourth test today hold. And when the closing bell rang, the index was sitting on 1295 for the fifth time of the day.

New Lows outnumbered New Highs today; this has been exceptionally rare for the last two years, last happening on November 16th and before that on August 25th. Breadth was abysmal today however, the ten day average of New Advancing remains in positive (slightly).

Volume today was heavier than the ten day average but not as heavy as might be expected on a plunge like we saw today. The intraday volume pattern is quite interesting. We had a volume spike with the index moving higher just after 1:00 pm then when the Saudi news hit the market, a huge volume spike while the index was selling. Checking the Breadth Indicators reveals still a mixed bag but the McClellan Oscillator has moved into oversold territory while the Summation Index hasn't gotten anywhere close to negative ground.

For the SPX Index there were 27 components advancing and 456 components declining. On the NYSE 3,120 issues were traded with 487 advancing issues and 2,557 retreating issues, a ratio of 5.25 to one declining. There were 27 new highs and 31 new lows. The five day moving average of New Highs is 154 while the five day moving average of New Lows is 17 and the ten day moving average of Net Advancing is 97.

Declining volume was higher at a ratio of 9.07 to one. The closing TRIN was 1.84 and the final tick was -695. The five day average of TRIN is 1.36 and the ten day average of TRIN is 1.28. The NYSE Composite Index lost -2.14% today while the SPX lost -1.92%.

For the NYSE, relative to the previous 30 session average, volume was 8.78% above the average. Of the last 15 sessions 8 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 23 sessions ended on a positive tick, 8 of last 10. For the SPX, the day's volume was 111.4% of the average daily volume for the last year. Volume was 113.4% of the last 10 day average and 123.2% of the previous day’s volume.

Sector Performance:
- Consumer Staples -- Outperformed the SPX by +122%.
- Utilities -- Outperformed the SPX by +75%.
- Health Care -- Outperformed the SPX by +31%.
- Consumer Discretionary -- Outperformed the SPX by +60%.

Sectors weaker than the SPX for Thursday:
- Basic Materials -- Underperformed the SPX by -26%.
- Energy -- Underperformed the SPX by -180%.
- Financials -- Underperformed the SPX by -20%.
- Industrials -- Underperformed the SPX by -15%.
- Technology -- Underperformed the SPX by -8%.