SPX Recap: Character Change

This markets behavior is changing, for a long time now dips were bought and would take out the losses of two or three sessions and now, two days of gains getting wiped out quickly. Little support 1295, looking to test 50dma. I put on a short (SPX) into after the 20dma was breached,holding loosely. 

The futures are stable at the moment after yesterday drubbing, Saudi market was down, and there economic reports pending. 


Yesterday morning it looked as though the bulls were going to try and keep things going on the back of solid manufacturing data (PMI's) out of Europe. However, with oil prices rising and word that Saudi Arabia is sending tanks to Bahrain(note that Saudi Arabia's stock market fell -7%), the early excitement tapered off as the open approached. We didn't have any big economic data to review before the open but we received reports on Construction Spending and the U.S. ISM Manufacturing Index at 10:00 am.

The session began with a significant gap higher but quickly put the high of the day on the chart just three minutes after the opening bell. There were significant bounces around 10:30 and 12:30 but the tape this day belonged to the bears as buyers just never showed up to rescue the tape.

Since February 22nd we've seen a character change within the market. Five of those six sessions had an early morning highs followed by lows in the afternoon. This is markedly different than the weeks prior when the lows were in the morning and closes were near the highs. The early morning highs are a bearish characteristic just as the late afternoon highs were a bullish characteristic.


For the SPX Index there were 36 components advancing and 448 components declining. On the NYSE 3,151 issues were traded with 741 advancing issues and 2,339 retreating issues, a ratio of 3.16 to one declining. There were 190 new highs and 17 new lows. The five day moving average of New Highs is 213 while the five day moving average of New Lows is 18 and the ten day moving average of Net Advancing is 37.


The largest spike in volume came today on the mid-afternoon down move. Rally attempts generated almost nothing of a volume spike. Checking the Breadth Indicators shows mostly pretty bearish looking indicators. But McClellan's Oscillator has a lot of room to go before reaching oversold, suggesting we could easily have another day of selling before seeing much of a bounce attempt.


The negative breadth was stunning. Days such as this often lead to a bounce but this one may go lower before bouncing. Looks like were probably going to test the 50dma or the recent low 1295.


Sectors on the Move:
Sectors stronger than the SPX for Tuesday:
- Consumer Staples -- Outperformed the SPX by +81%.
- Utilities -- Outperformed the SPX by +57%.
- Health Care -- Outperformed the SPX by +76%.

Sectors weaker than the SPX for Tuesday:
- Basic Materials -- Underperformed the SPX by -91%.
- Energy -- Underperformed the SPX by -30%.
- Financials -- Underperformed the SPX by -49%.
- Industrials -- Underperformed the SPX by -53%.
- Technology -- Underperformed the SPX by -33%.
- Consumer Discretionary -- Underperformed the SPX by -32%.