Tuesday Recap: A look inside the market

We need another day or two of selling, that should get us to near term target 1160, then we turn around and retest the highs.

 If we don't hold 1160 we go to 1120 next.

This was a day that was ruled by the bears; they appear to have reclaimed dominance. But can they keep it up?

For the SPX Index there were 23 Advancers/466 Decliners. On the NYSE 3,145 issues were traded with 424 advancing issues and 2,666 retreating issues, a ratio of 6.29 to one declining. There were 20 new highs and 139 new lows. The five day moving average of New Highs is 224 while the five day moving average of New Lows is 48 and the ten day moving average of Net Advancing is -321. The Net Advancing data indicates a bearish trend.

Declining volume was higher at a ratio of 14.27 to one. The closing TRIN was 2.27 and the final tick was -190. The NYSE Composite Index lost -1.9% today while the SPX lost -1.65%.

For the NYSE, relative to the previous 30 session average, volume was 28.92% above the average. Of the last 15 sessions 7 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 22 sessions ended on a positive tick, 6 of last 10. For the SPX, the day's volume was 111.3% of the average daily volume for the last year. Volume was 110.8% of the last 10 day average and 135.4% of the previous day’s volume.

Really negative breadth as would be expected on a day that lost more than 1.5%. New Lows blew away New Highs today; that hasn’t happened since the end of August. The ten day average of Net Advancing moved below -200; it hasn’t been there since September 1^st. The NYSE Composite underperformed the SPX today; often a bearish sign. And volume increased today.

Total tick for the day was -301,000 and the average tick for the day was -196. There were 42 ticks greater than 600 and 271 ticks more extreme than -600. There were 2 ticks greater than 1000 and 44 ticks more extreme than -1000. The tick action suggests institutional distribution.

Volume surged in the morning right at the fall off the cliff for prices. Looking at the breadth indicators, they’re all bearish.  McClellan Oscillator is below -300 last time that happened was May 24^th.

TBT was down big yesterday as I think the TLT will try and dead cat bounce to 200dma. TBT holding steady for now with that position.

Action: Sold half of BGZ, yesterday for a 12% gain. will add below 1160. Added a little SLV and GLD,  CCJ, URZ, waiting on UEC. 

Uranium Miners Follow Up

Nothing has changed in terms of my long term view of these miners. They were just on fire and of course nothing goes straight up just look at GOOG and AAPL and so many other high flying stocks. I think patients and buy and selling at key points will be rewarded over the next five years in these stocks. Aging plants, high oil prices and a government that can't cut spending and warring, inflation is running rampant but you will never see it reported by the Government who manufacture the very same number (CPI, PPI) to suit their policies.

Commodity stocks got too hot, they needed to get beat down, the easy money has been made here but the trend is in tact for years to come. Short term pain, long term gain! 

See yellow trendlines, these will be re-entry points for me with stops 5% below.

Monday Market Recap: A Look Ahead

Futures were pointing to an early bounce on the back of retail sales climbing for the fourth consecutive month and as a result of merger and acquisition action.

The opening session of the week began with a three point gap higher and followed through for a few more points. The choppy session continued with a sharp and quick five point decline before recovering and putting the high of the day on the chart at 11:49 am. After a couple of hours of sideways tight range trading that lulled some traders to sleep, the bear once again awoke and the last two hours saw a nine point decline. If the bear keeps this up, we will decide there is more than one and add back the “s”.

Today’s late afternoon sell-off was blamed on treasury prices tanking; this may have well been the catalyst. But if the market isn’t ready to sell, it won’t. This market shows signs of being ready to sell. Bad news has once again become bad news.

The Dow closed higher but that’s an index that can often be disregarded. But it is interesting to note that the Financials (XLF) and small caps (Russell 2000) were both higher. 

I do expect the current down trend to continue and expect 1196 to fail. But the  real question is whether this happens through a gap down tomorrow morning or whether we see yet another failed bounce attempt. This market rode gaps over resistance on the way higher so a gap below support makes sense on the way down.

Breadth was a little more negative than the closing indices might suggest. The ten day average of Net Advancing is approaching zero and may turn negative.

For much of today, volume was increasing as the market was moving higher; this is most often bullish. But volume then spiked on the late session sell-off as well. So the jury remains out on this.

The nightly breadth indicators are mixed after today’s mixed close. But on balance, the indicators remain somewhat bearish. Check out the action of the McClellan Oscillator and the Summation Index. Also notice the move higher in the High Low Logic Index.

Silver has taken a big hit and the chart seems to be breaking down big time. To me it looks like 20dma has been support previously but there is a lot of new, or hot scared money running for the hills so I don't really know. If yo are long SLV the only encouraging thing i see is that the volume has declined since the blow off top and perhaps the sellers may be drying up.

The gap has been filled with that out of the way maybe we go back up?? On the other hand it hasn't respected its 20 dma and looks to test 129-130 area so I will wait to come in until then. But I cant see SLV holding 20 dma and GLD falling so I don't think that bodes well for SLV. 

See my previous take on this matter I have a nice gain on TBT (double short long bond), The TLT has reached my short term target will take a little off and wait for a bounce in TLT before I buy it (TBT) back. 

Friday Recap; The Week Ahead

JUST TOO BULLISH!

The AAII Investor Sentiment Survey measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market for the next six months; individuals are polled from the ranks of the AAII membership on a weekly basis. Only one vote per member is accepted in each weekly voting period.

Last Week's Results

Sentiment Survey
ResultsWeek ending 11/10/2010  Bullish  57.6%

up 9.3 Neutral  14.0%

down 8.0 Bearish  28.5%

down 1.3  

Change from last week:

Bullish: +9.3

Neutral: -8.0

Bearish: -1.3

Long-Term Average:

Bullish: 39%

Neutral: 31%

Bearish: 30%

Stock futures were pointing to a lower open on Wall Street as a result of concerns about the mounting debt problems in Ireland and expectations that China will continue to tighten rates. Futures sold heavily overnight but were quite a bit off their lows. There was no economic data to review before the open, but we received the University of Michigan's Confidence index at 9:55 am eastern.

A most interesting final session of the week began with about a five point gap lower. After working a bit lower for the first quarter hour the SPX tried to find a bottom and bounce about five points to put the high of the day on the chart at 9:58. Bulls attempted a brief come back about 15 minutes later before leaving for the weekend. Bears took the tape down sharply to put the low of the day on the chart at 1:00 pm. The rest of the session was choppy consolidation with the index closing about four points off the low.

This session was unique for the last several weeks in that the bulls didn’t make a sustained ramp higher at the close. Closing a Friday red has been a tough chore for the bears for the last twelve Fridays so this feels like a significant accomplishment.

Looking at the Market Leaders board we find every market leader down but the chip makers (SOX). The SOX is on our Leaders board for a good reason: The SOX can often give a good clue as to strength and weaknesses within the market. Bears should find it a bit troubling to find the SOX up on a down day such as Friday.

The SPX gained 26.64 points during the week. The four week RSI of the four indices (SPX, Dow, NASDAQ, and Russell 200) is 64. Pullbacks often occur as this RSI reaches 80 and bounces near 20.

For the SPX, there were 77 components advancing and 410 declining. Total tick for the week was -89,000. The number of components with their 5 DMA above their 20 DMA decreased during the week from a ratio of 3.6 to one to 2.72 to one.

On the NYSE, the advance/decline line decreased during the week more than 3700 and the 10 DMA of Net Advancing dropped from 468 to 77.

This was the first Friday to lose more than a point in three months. The weekly chart painted an inside week; the first inside week since the early July short-term bottom. Inside weeks often, but certainly not always, mark pivots on the chart.

Volume on the week was significantly lower than the volume on last week’s surge. This might suggest a lack of panic this week. Yet -1000 ticks outnumbered +1000 ticks by a wide margin, 61 negative to 5 positive.

For the SPX Index there were 35 Advancers/453 Decliners. On the NYSE 3,111 issues were traded with 521 advancing issues and 2,509 retreating issues, a ratio of 4.82 to one declining. There were 49 new highs and 18 new lows. The five day moving average of New Highs is 262 while the five day moving average of New Lows is 16 and the ten day moving average of Net Advancing is 77.

Declining volume was higher at a ratio of 8.64 to one. The closing TRIN was 1.79 and the final tick was -628. The NYSE Composite Index lost -1.29% today while the SPX lost -1.19%.

For the NYSE, relative to the previous 30 session average, volume was -3.41% below the average. Of the last 15 sessions 6 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 22 sessions ended on a positive tick, 7 of last 10. For the SPX, the day's volume was 91.7% of the average daily volume for the last year. Volume was 104.8% of the last 10 day average and 97.2% of the previous day’s volume.

Breadth was harshly negative and declining volume was even more so. The broad NYSE Composite Index underperformed the SPX. A large negative final tick and the ten day average of Net Advancing plummeted.

But what gets our attention is the New Highs. Friday had the lowest number of New Highs since July 2^nd. Consider this a moment: We are about 20 points off the 52 week high and the New Highs have fallen to levels last seen when we were 200 points off the highs. This seems significant.

Total tick for the day was -220,000 and the average tick for the day was -143. There were 49 ticks greater than 600 and 224 ticks more extreme than -600. There was one tick greater than 1000 and 19 ticks more extreme than -1000. The tick action suggests institutional distribution.

While this pullback is only a few days old, the greater than 1000 ticks have favored the bears each of the last five weeks. It certainly appears that institutions have been taking advantage of this rally to sell. We did not see this pattern within the ticks prior to the late April sell-off.

The intraday volume pattern clearly shows the surge of volume with each wave of selling Friday but overall volume was not extraordinary.

Within the nightly breadth indicators we can see a clear bearish presence. The McClellan Oscillator has exploded to almost -200, a level last seen on August 27^th. It rarely goes much lower without a market bounce occurring.


Holding My positions, Silver below 25 and I'm out wait for lower prices, Hold my BGZ. Expecting a short lived bounce.