S&P Recap and A Look Inside the Markets

Good morning, S&P futures are up 3.5 points, the big news this morning is that Japan's nuclear regulator said one reactor core at the quake-damaged Fukushima Dai-Ichi power plant may be cracked and leaking radiation.

I was stopped out of my BGZ (Large cap 3x short) with a 3.93% loss.

Looking at what happened yesterday the headlines  weren't all that good and the market took off. First Moody's downgraded 30 Spanish banks, Portuguese 2-year bonds yields soared to their highest level since 1999 in response to the austerity measures failing and the PM resigning, there was again steam coming out of a couple of reactor buildings at Dai-ichi, and the mess in the Middle East continued. But Initial Claims for Unemployment Insurance for the week ending 3/19 fell by 5,000 to 382,000. This was a bit above the consensus estimate for 380,000 but below last week’s total of 387,000. Continuing Claims for the week ending 3/12 came in at 3.723M vs. 3.700M and last week’s 3.706M. And the Commerce Department reported that Durable Goods orders declined by -0.9% during the month, which was well below the consensus expectations for an increase of +1.1%. When you strip out volatile orders for transportation, orders fell by -0.6%, which was markedly below the consensus for +1.7%. The January reading was -3.0%. Despite the news the futures were pointing to a  modestly strong open.

The session began with a small gap higher and continued higher for a few minutes before starting to work lower. By 10:15 am the low of the day was on the chart and buyers came in to buy the dip. The index moved sharply higher for forty-five minutes adding nine points. By 11:00 am most of the move higher was in as well as much of the volume for the day. The index moved sideways with choppy trading and a slight upward bias for the rest of the session to close near the highs.


We finally see strong advancing volume and the ten day average of New Advancing is moving towards bullish territory.


Today's volume was once again light today but the most noticeable spike in volume came just before 11:00 am as the index was ramping higher


or the SPX Index there were 409 components advancing and 73 components declining. On the NYSE 3,135 issues were traded with 2,004 advancing issues and 1,020 retreating issues, a ratio of 1.96 to one advancing. There were 135 new highs and 14 new lows. The five day moving average of New Highs is 101 while the five day moving average of New Lows is 14 and the ten day moving average of Net Advancing is 193.

Advancing volume was higher at a ratio of 3.57 to one. The closing TRIN was 0.56 and the final tick was -111. The five day average of TRIN is 1.38 and the ten day average of TRIN is 1.36. The NYSE Composite Index gained 0.76% today while the SPX gained 0.93%.

For the NYSE, relative to the previous 30 session average, volume was -18.94% 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 92.8% of the average daily volume for the last year. Volume was 87.6% of the last 10 day average and 101.3% of the previous day’s volume.


Clearly Tech was the big story today, the Nasdaq 100 has been the leader in this rally that began late last summer and had been lagging recently underperformed the Dow and S&P but today it doubled the output of both those indexes. Once again, I'm at a loss in terms of TA and its rules, oh well new paradigm, new rules I guess. Whats the book for trading QE. It could be titled every dip is a tasty buying opportunity. 


We gapped up four times, never retraced or filled a gap, didn't retest the recent low and now back above 50 and rising. Don't get me wrong, I'm not whining (only lost 4% on that trade), I'm a little confused. 


Sectors stronger than the SPX for Thursday:
- Industrials -- Outperformed the SPX by +10%.
- Technology -- Outperformed the SPX by +62%.
- Health Care -- Outperformed the SPX by +12%.
- Consumer Discretionary -- Outperformed the SPX by +52%.

Sectors weaker than the SPX for Thursday:
- Basic Materials -- Underperformed the SPX by -50%.
- Energy -- Underperformed the SPX by -59%.
- Financials -- Underperformed the SPX by -33%.
- Consumer Staples -- Underperformed the SPX by -2%.
- Utilities -- Underperformed the SPX by -52%.