Thursday Recap: A Look inside the markets, TOPPING?

The futures are up slightly after an explosive up move yesterday. Bloomberg is reporting that the FED favors ending the bond purchases in June but the article goes on to say "they must be confident that the economy is strong enough to endure higher long-term interest rates". Read More

Oil is rising again (as is gold), the news out of Libya isn't good today, as the conflict there seems to be accelerating. Read More

Yesterdays Recap: The markets were pumped up as word of a peace deal for Libya being brokered by Venezuela's Hugo Chavez. While there is no official confirmation, oil was lower and stocks higher. The government reported U.S. Nonfarm Productivity in the fourth quarter rose by +2.6%, which was above the estimates for reading of +2.4%. On the inflation front, Unit Labor Costs were reported to have fallen -0.6% versus the expectations for -0.5%. Q3’s reading was unrevised at -0.6%. Initial Claims for Unemployment Insurance for the week ending 2/26 were reported to have fallen by 20K to 368K. This was well below the consensus estimate for 398K and last week’s total of 388K. Continuing Claims for the week ending 2/19 came in at 3.774M vs. 3.80M and last week’s 3.833M.

A closer look at the numbers reveals the truth about the claims numbers. The truth is that the number of people filing extended benefits increased to 850,372 - or an increase of 88,689 from the previous week. In effect, the number of total jobless claims actually increased by 68,689, the difference between weekly and extended. But the Government and media only report the weekly number in the headline. If you wanna check the math here is the DOL  Link.


The session began with a huge gap higher and continued higher the first half hour before catching a breather. But this was a multi-wave assault by the bulls as the index never really let up. The largest pullback of the day came in the final hour and it amounted to only about three points as the index climbed steadily throughout the session to close near the highs.

If you look back to Tuesday morning we had a gap up to 1332 level and to me its interesting where Thursdays rally ended, you guessed it right at Tuesdays high. Lets see if there is a follow through today, futures are up a little, I'll be wrong for the 4th time in saying this is a topping pattern, if at first you don't succeed, LOL.

All the breadth numbers are bullish without any real sign of a weakness. The weakest thing to be pointed out is that the NYSE slightly underperformed the SPX. The bulls owned this one and if you were short you paid dearly. Ah hum! I Got stopped out at the open taking a 2.5% loss (BGZ).

The intraday volume pattern should be a concern for bears. Notice how the relative volume crept higher throughout the afternoon. Looking at the Breadth Indicators we still have a mixed bag. But it's impossible to not comment on the McClellan Oscillator which has not reached overbought territory.

For the SPX Index there were 452 components advancing and 26 components declining. On the NYSE 3,145 issues were traded with 2,485 advancing issues and 568 retreating issues, a ratio of 4.38 to one advancing. There were 228 new highs and 4 new lows. The five day moving average of New Highs is 188 while the five day moving average of New Lows is 13 and the ten day moving average of Net Advancing is 228. The Net Advancing data was extremely bullish.



Sectors stronger than the SPX for Thursday:
- Basic Materials -- Outperformed the SPX by +13%.
- Financials -- Outperformed the SPX by +22%.
- Industrials -- Outperformed the SPX by +68%.
- Health Care -- Outperformed the SPX by +34%.
- Consumer Discretionary -- Outperformed the SPX by +5%.

Sectors weaker than the SPX for Thursday:
- Energy -- Underperformed the SPX by -2%.
- Technology -- Underperformed the SPX by -16%.
- Consumer Staples -- Underperformed the SPX by -69%.
- Utilities -- Underperformed the SPX by -58%.

In Summary: The market does not care about food inflation, national debt, unemployment, middle east crisis, 100 dollar oil, it just needs more CRACK, I mean QE. Party on Garth!