S&P Recap and A Look Inside the Markets

Yesterday:

• earthquake rocked Japan and shook buildings overnight. European markets opened mixed to slightly lower. 

• concerns about rising metal prices 

• mixed corporate results were pitted against continuing merger and acquisition activity 

• Libyan leader Gaddafi had agreed to a ceasefire proposal from the African-Union. 

• Stock futures were pointing to a modestly higher open. 

Intra-day action:The session began without a significant gap and moved higher for twenty minute but yet again put the high of the day on the chart very early in the session. We continue to see a pattern of early morning highs. This is a characteristic of pullbacks, not rallies. But in spite of that, the market continues to close off the lows as well although today's close barely finished above one quarter of the intraday range. Bounces were weak the entire session but the indices continue to be resilient.

losers today were the chip makers (SOX) and the small caps (Russell 2000.) The broad NYSE Composite underperformed the S&P as well. This continues to appear like the beginning of a pullback, but as you know I have been proved wrong a many times, as QE trumps TA.

For the S&P Index there were 197 components advancing and 280 components declining. On the NYSE 3,156 issues were traded with 904 advancing issues and 2,141 retreating issues, a ratio of 2.37 to one declining. There were 110 new highs and 16 new lows.

Declining volume still remains unconvincing. But the repeated early morning highs followed by selling are a clear pattern of discontent with this level.

Today's volume was lighter than Friday's volume. Bears really need to get some volume going in order to be convincing; there simply is no panic. But the intraday volume pattern clearly shows spikes in volume with each S&P down move and drops in volume with each up move today; this is a bearish pattern. Checking our Breadth Indicators we see even more bearish consistency among the data tonight. We will be watching the McClellan Summation Index closely over the next several days, watching for it to fall to the 1000 area.

21.4% of the S&P are above their five day moving average, 35% are above their 10 day average, 63.8% are above their 20 day moving average (dropping steadily), 62% are above their 50 day moving average, and 85% are above their 200 day moving average.

Sectors stronger than the S&P for Monday:
- Financials -- Outperformed by +22%.
- Industrials -- Outperformed by +20%.
- Technology -- Outperformed by +13%.
- Consumer Staples -- Outperformed by +81%.
- Health Care -- Outperformed the by +85%.
- Consumer Discretionary -- Outperformed by +31%.

Sectors weaker than the S&P for Monday:
- Basic Materials -- Underperformed by -83%.
- Energy -- Underperformed by -174%.
- Utilities -- Underperformed by -116%.


Range bound market. I'm going long over 1340, short if 1320 breaks. We are right at support. Good entry if you want to go long (if thats your bias) you can put in a stop a couple percent below, and if we make it to 1340 you can take a profit there. This is a very small range though so depends on the need to trade or having some patience. 




edit: Stock index futures pointed to a lower open on Tuesday, with futures for the S&P 500, Dow Jones and Nasdaq down 0.4 to 0.6 percent at 0903 GMT.

* Investors are likely to be cautious after Japan raised the severity of the nuclear accident to the highest level, putting it on par with the Chernobyl 1986 disaster.