S&P Recap and A Look Inside the Markets

News for the week: 
1. China's PMI came in above expectations.
2.  European PMI reports was weak, but showed economy growing.
3.  U.S. The Labor Department reported that Nonfarm Payrolls rose in the month of March by 216,000. 
4. The private sector showed gains of 230K jobs, which again was above the estimates. 

The first session of the quarter began with a significant gap higher, moved higher for a few minutes then quickly sold off several points. But before 10:00 am the S&P began to climb higher and moved about eight points upward putting the high of the day on the chart at 11:36. Most of the next three hours traded sideways with a slight negative bias but before 3:00 pm sellers arrived and took the index down sharply seven points. The final forty-five minutes of the session bounced but it wasn't a particularly strong bounce. The index closed just above one third of the intraday trading range.



Weeks Highlights: Market Topping


early session highs and late session lows
Only once this week was the high in the afternoon 
All five days the low came later than the high
Three times the high came in the opening minutes and then sold off. 
Type of action is typically seen during a topping process

• Friday's volume was light but we can see one huge spike in volume late in the day when the indices sold off sharply. This is a bearish, lets see a trend develop first before we get too excited.

• No Panic in this market: Breadth was even weaker than the small losses would have suggested. There is a lack of new lows and new highs still doing nicely. 

• 29.4% of the SPX are above their five day moving average, 47.3% are above their 10 day average, 73.4% are above their 20 day moving average (we got as high as 82 last week), 65% are above their 50 day moving average, and 86.2% are above their 200 day moving average.

Sectors stronger than the S&P for Friday:
- Energy -- Outperformed by +76%.
- Consumer Staples -- Outperformed by +21%.
- Utilities -- Outperformed +7%.
- Health Care -- Outperformed by +41%.

Sectors weaker than the S&P for Friday:
- Basic Materials -- Underperformed by -28%.
- Financials -- Underperformed -49%.
- Industrials -- Underperformed by -67%.
- Technology -- Underperformed by -17%.
- Consumer Discretionary -- Underperformed by -17%.

Fundamentally, I am bearish on this market, but its going to keep going higher as cheap money is finding a home in stocks. And as always, you have to trade the market you see in front of you and not make predictions and I have been guilty of not following my own advice. I have tried to step in front of this market a few times and have been run over. Right now, I am neutral, but if we break out above 1340's, will go long. I hope we can pullback to recent lows but Mr. Market usually doesn't give you gifts.  Here is a link to my favorite book on making money in the stock market. Its also very easy to read if you are new to markets.