S&P Recap and A Look Inside the Market

The Tuesday session opened with a significant gap lower and quickly bounced a few points before taking a nine point ride to put the low of the day on the chart just before 11:00 am. The middle part of the session was a sluggish slow creep higher that accelerated a bit to the upside mid afternoon but the final ninety minutes volume increased and sellers pushed the index down until a modest bounce during the final half hour. The trading range was barely more than nine points today and the SPX closed right in the middle of that range.

SPX found support at the 20dma, and if that breaks we will most likely test the recent lows. S&P futures are up 8 points as of this morning, its see if the open is faded. I didn't short yesterday, but I will if we take out yesterdays low. 

Declining volume was not particularly bearish but New Highs plunged. The ten day average of Net Advancing moved into negative territory while the NYSE Composite was weaker than the SPX. The TRIN is not yet calling for a bounce.Today's volume ticked higher. 

The intraday pattern clearly shows a volume spike along with the morning sell-off, as well as a volume spike late afternoon with the sell-off. Checking the Nightly Indicators we see that the McClellan Oscillator has surged into oversold territory while the Summation Index has made the expected move lower. The Indicators look pretty bearish.

15.4% of the SPX are above their five day moving average, 22.6% are above their 10 day average, 48.2% (it was 80% plus a few days ago) are above their 20 day moving average, 52% are above their 50 day moving average, and 84.4% are above their 200 day moving average.

This is amazing that we have only lost a few points on the averages yet individual stocks are acting very poorly. This isn't good folks. 

Action: Do nothing, too much downside risk, upper band of resistance 1340's. If you have profits protect them, hedge, take some off the table.