Good morning SPX futures are up slightly after a really nice follow through day yesterday. We have claims data at 830 and chi PMI at 945am. Yesterday' session opened with a nice gap higher over the down trendline before pulling back to put the low of the day on the chart during the opening hour. But buyers kept coming in at a good pace albeit into the light volume summer trading and pushed the SPX up ten points before trading settled into a three point range for three hours. Just before 2 pm the market began a sharp nine point downward move but news that was bullish for banks propped the SPX back up and the index closed at the highs of the day.
367 components advancing and 104 components declining. On the NYSE 3,147 issues were traded with 2,121 advancing issues and 926 retreating issues, a ratio of 2.29 to one advancing. There were 81 new highs and 14 new lows. The five day moving average of New Highs is 57 while the five day moving average of New Lows is 33 and the ten day moving average of Net Advancing is 601. The Net Advancing data indicates a bullish trend.
Powerful breadth again, along with a strong advancing volume ratio. The TRIN is just starting to call for a pullback while the NYSE Composite Index was stronger than the SPX, and that my friends is very bullish
Wednesday’s volume was a heavier than Tuesday's volume but still lighter than even the typical summer volume. One of the largest surges of volume came on the mid afternoon sell-off. Breadth Indicators remain bullish looking but the McClellan Oscillator remains firmly in overbought territory at the highest level since May 2nd when the correction was just beginning. So why this rally, I think its all about bonds, as long as money is coming out of bonds the risk trade is back on!
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