Tuesday Recap: A look inside the market

Possible Triple Top (tops nearly impossible to call)

In the early morning, rising bond yields, a downgrade in Ireland, weak data out of the UK, and rising unemployment in the Eurozone didn't effect the futures as they were up. The Labor Department reported that initial claims for unemployment insurance for the week ending December 4 fell by 17,000 to 421K. The week’s total was 4K below the Reuters consensus for a reading of 425K. Continuing Claims for unemployment for the week ending November 27 were below consensus at 4.086M vs. expectations for 4.247M and last week’s revised (higher) 4.277M. Futures were pointing to a positive open.

Yesterday's session began with a two point gap higher but quickly moved up six points in the opening minutes. The high of the day was printed at 9:58 and then we saw the recent pattern continue, as sellers took the index down putting the low of the day on the chart just before lunchtime. But as its been happening over the past few days the bears couldn't get the market to close lower. We seem to be witnessing a dance where the bulls take two steps forward overnight, the bears push back a step early in the session but the bulls recover before the close. 


For the SPX Index there were 276 Advancers/163 Decliners. On the NYSE 3,134 issues were traded with 1,692 advancing issues and 1,355 retreating issues, a ratio of 1.25 to one advancing. There were 152 new highs and 25 new lows. The five day moving average of New Highs is 199 while the five day moving average of New Lows is 18 and the ten day moving average of Net Advancing is 90.

Advancing volume was higher at a ratio of 2.51 to one. The closing TRIN was 0.5 and the final tick was 1047. The NYSE Composite Index gained 0.41% today while the SPX gained 0.38%.

For the NYSE, relative to the previous 30 session average, volume was -4.09% below 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, 20 sessions ended on a positive tick, 7 of last 10. For the SPX, the day's volume was 98.3% of the average daily volume for the last year. Volume was 106.5% of the last 10 day average and 100.7% of the previous day’s volume.

Market breadth was good and advancing volume was even better. New Highs was lower than the ten day average and New Lows exceeded the ten day average. The ten day average of Net Advancing has fallen to 90; this is a neutral zone value that suggests that the recent rally is either in the process of completion or that this is simply a pause to gather strength for another push higher.



Total tick for the day was -43,000 and the average tick for the day was -28. There were 30 ticks greater than 600 and 51 ticks more extreme than -600. There were no ticks greater than 1000 and no ticks more extreme than -1000. The tick action suggests institutional distribution.

Intraday volume recently has one distinctive feature: High volume at the open which dries up after the first hour. Checking the nightly breadth indicators they continue to show mixed set of data suggesting more choppy trade. The McClellan Oscillator finally peaked into positive territory today, but just barely. These small changes on the oscillator are often witnessed by a wide range session, but usually a down day.

In the precious metals there was quite a bit of volatility yesterday but nothing abnormal in terms of volume. Silver chart looks better than Gold and HUI but no by much. Were are in the consolidation phase in the metals and for SLV for the moment and the 27.34 level seems to be important it has held multiple times on the minute charts over the week. Gold is also hold above its 20dma but the Ma has turned down, some thing to keep an eye on, especially if it crosses below the 50dma, very bearish. A similar picture is seen in the HUI and with all metals the primary trend is still up.


Have a great day!

Long Metals, Uranium, TBT, RES, AIB and IRE

Wed Recap

Things were fairly quiet in the early morning. Concerns over European debt continue as there was a lack of any EU quantitative action today. Also on the debt front, both Fitch and Moody's commented on the potential deterioration of the U.S. fiscal position given the extension of the tax cuts without any offsetting measures. Bond yields were rising, commodities under pressure. There was no economic data to review before the open.

The midweek session began without a significant gap. Choppy trade at the open quickly put the high of the day on the chart just fifteen minutes in. But sellers quickly arrived and the index thrilled the bears with a sharp move lower that established the low of the day at 10:42 am. The rest of the session was choppy but upward as the intraday high was tested just before the close.

For the SPX Index there were 240 Advancers/207 Decliners. On the NYSE 3,134 issues were traded with 1,181 advancing issues and 1,860 retreating issues, a ratio of 1.57 to one declining. There were 125 new highs and 28 new lows. The five day moving average of New Highs is 199 while the five day moving average of New Lows is 15 and the ten day moving average of Net Advancing is 257. The Net Advancing data indicates a bullish trend.

Advancing volume was higher at a ratio of 1.53 to one. The closing TRIN was 0.41 and the final tick was -357. The NYSE Composite Index gained 0.14% today while the SPX gained 0.37%.

For the NYSE, relative to the previous 30 session average, volume was 5.08% 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, 19 sessions ended on a positive tick, 7 of last 10. For the SPX, the day's volume was 100.1% of the average daily volume for the last year. Volume was 106.9% of the last 10 day average and 59.8% of the previous day’s volume.

Breadth was negative on the NYSE but advancing volume was stronger than breadth. New Highs were extremely weak for a session which had the 52 week closing high. Overall, the NYSE breadth is not what you’d expect to see from a market at 52 week highs.
Total tick for the day was -119,000 and the average tick for the day was -77. There were 27 ticks greater than 600 and 104 ticks more extreme than -600. There were no ticks greater than 1000 and 2 ticks more extreme than -1000. The tick action suggests institutional distribution.

The intraday volume patterns leave us without any comment tonight. Looking at the nightly breadth indicators we find them pretty mixed as well, suggesting choppy waters ahead. But we do find it curious that the McClellan Oscillator was negative today, on an up day.

In the precious metals some short term technical damage was done to the gold chart but the primary long term uptrend remains intact. Traders with a short term perspective will act accordingly while longer term oriented investors will also take note and look to establish positions in the direction of the primary trend. 

The HUI experienced a bearish engulfing pattern on its daily chart yesterday and that is leading to follow through selling today in the mining shares. Watch the support levels closely and see how the shares act as they move into this region especially if you are acquiring for the long term. The HUI has remained above the 40 and 50 day moving averages since August of this year on an end of trading session basis. Should it move down into this region again and refuse to breakdown, you will know what to do.

There is a band of congestion support in silver coming in near the 26.75 – 26.45 level. From a technical perspective we would not want to see it violate 25 to the downside.

Good technical action in Silver would be for it to hold above the recent breakout level near 27.90 and work sideways for a  while.

The trend is your friend in the metals.

The bond market has gotten beaten up (long TBT). I am sure that is not making the Fed officials very happy especially considering the huge sums of money that they have spent in artificially trying to push rates lower on the long end of the curve.

SLV Intraday

Needs to hold this short-term support or i'm selling the new position from this am!

Tuesday Recap: A look inside the market

With the White House and the Republicans reaching an agreement on the extension of the tax cuts for a period of two years, it would appear that one of the bears' favorite arguments - an anti-business administration - could be going by the wayside. Futures were strong before the open.

SPX gapped higher eight points and continued onward another four points higher to put the high of the day on the chart just three minutes into the day. From there the index stair-stepped lower until just after noon when a rally attempt over a couple of hours bounced the index six points. But just before 3:00 pm sellers arrived to rescue the bears from their pain. The index closed near break even for the day but more than seven points below the open.

This was not the bullish session that it started out to be. Several indices touched two year highs just after the open but could not hold the gains. As I mentioned yesterday markets are trying to break above long-term resistance while overbought is not a method that is often successful. Backing off, burning off the overbought conditions, and approaching the resistance on a more measured pace is usually the way resistance is successfully surmounted.

For the SPX Index there were 226 Advancers/213 Decliners. On the NYSE 3,157 issues were traded with 1,522 advancing issues and 1,516 retreating issues, a ratio of 1.0 to one advancing. There were 431 new highs and 18 new lows. The five day moving average of New Highs is 190 while the five day moving average of New Lows is 11 and the ten day moving average of Net Advancing is 155.

Advancing volume was higher at a ratio of 1.94 to one. The closing TRIN was 0.52 and the final tick was 540. The NYSE Composite Index lost -0.01% today while the SPX gained 0.05%.

Volume was impressive at the open; the first quarter hour saw three times the normal volume. While volume remained relatively strong throughout the day, it fell off dramatically after the open. Looking at the nightly breadth indicators tonight we find a pretty mixed bag of indicators. But worth mentioning are the High Low Logic Index which has reached its highest value since November 9th and the McClellan Oscillator which dropped today on an up day. Both of these suggest downside ahead.

For the NYSE, relative to the previous 30 session average, volume was 55.08% 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, 20 sessions ended on a positive tick, 7 of last 10. For the SPX, the day's volume was 151.5% of the average daily volume for the last year. Volume was 195.5% of the last 10 day average and 220.6% of the previous day’s volume. Note: Volume today was the heaviest since May 20^th.
Market breadth was flat today while advancing volume was strong. But the ten day average of Net Advancing continues to weaken. Market breadth is showing a divergence from the Price action and while Price is the Ultimate Indicator, Breadth often eventually wins when they diverge.

Total tick for the day was -58,000 and the average tick for the day was -37. There were 24 ticks greater than 600 and 86 ticks more extreme than -600. There were no ticks greater than 1000 and 4 ticks more extreme than -1000. The tick action suggests institutional distribution. 

As I mentioned last week, and a rare correct prediction for me, we rally into early next week and drop to re-test support, see previous posts.  

IRE and AIB are up really big for the last couple sessions, up 10% this am after 20+% move yesterday. My metals and uraniums have given back quite a bit but technically look good to re--test support. I got stops hit yesterday in miners, gold and silver so I have so cash to add at 50dma in Gold and 20dma in SLV. Good luck to all