S&P 500 Recap and A Look Inside the Markets

Not much news out this morning, futures are flat, I found this article from Bloomberg June 23rd, supports what I have been thinking in terms of QE3.

Former Federal Reserve Bank of Richmond President Alfred Broaddus talks about necessary conditions for the central bank to consider another round of asset purchases and the ability of the Fed to reverse its policy of quantitative easing and remain ahead of inflation trends. Broaddus speaks with Tom Keene on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg) 00:00 Bernanke's second news conference 00:49 Necessary conditions for QE3 02:17 Structural unemployment and policy 03:32 Challenge of unwinding Fed balance sheet 04:58 Ability of Fed to stay ahead of inflation 06:07 Debt needs "credible long-term strategy."

Yesterday, the Greek parliament was debating a fresh austerity package but the government is fragile and analysts believe that it may not pass. Consumer spending was largely unchanged in May for the first time in almost a year, according to the Commerce Department. The flat reading in consumer spending came after 10 straight months of gains and followed a downwardly revised 0.3 percent gain in April. Economists had expected spending to gain 0.1 percent. When adjusted for inflation, spending fell 0.1 percent in May, declining for a second straight month. Spending on durable goods fell 1.5 percent after being flat in April. Futures were flat as the opening approached as traders remained cautious about Greece's future.

Monday's session opened without a significant gap and a dip quickly put the low of the day on the chart in the opening minutes. There were four distinct surges higher throughout the day, putting the high on the chart just before 3:00 pm. But the closing hour saw a modest four point give-back as the SPX closed in the upper 30% of the intraday range.



For the SPX Index there were 400 components advancing and 73 components declining. On the NYSE 3,145 issues were traded with 2,089 advancing issues and 969 retreating issues, a ratio of 2.16 to one advancing. There were 52 new highs and 39 new lows. The five day moving average of New Highs is 53 while the five day moving average of New Lows is 35 and the ten day moving average of Net Advancing is 288. The Net Advancing data is indicating a bullish trend. Powerful market breadth today with the ten day Net Advancing finally indicating a bullish trend. This is the first time in June that this has been true. Volume was light and the NYSE Composite was relatively weak, so there are warning flags visible.


Monday’s volume was less than 80% of Friday's volume (which was less than 75% of Thursday’s volume.) There is certainly a lack of enthusiasm within the market but the largest volume surges today came on market up moves. The Breadth Indicators are mixed but more bullish than we have seen lately. The McClellan Oscillator barely ticked into positive ground today, suggesting that the market could have a lot of room to run higher.