Wednesday Recap: A Look Inside the market

NEW BREAKOUT FOR SPX

There was a key development yesterday morning and that was the European Central Bank's participation in the Portuguese bond auction. With traders concerned that a lack of participation would lead to market collapse, they all had to cover their hedges and that pushed the markets higher. The US government reported that Import Prices for the month of December rose by +1.1%, which was below the consensus for an increase of +1.2%. The November reading was revised higher to 1.5% from 1.3%. And Export prices rose by +0.7%, below last month’s unrevised +1.5%. Stock futures were strong before the open.

The session began with a small gap higher but the SPX was up seven points in the opening moments. After a very shallow decline the index resumed moving higher. After a steady gentle incline until about 11:15the index stalled and traded within a two point range for four hours. The final hour saw a small amount of profit taking but it was extremely mild as the index closed just off the session highs.

Right now fund managers and retail investors have a strong fear of missing the next leg up in this rally. Its all going to end badly, just don't know when. But it seems I have been saying that for the past 6months so I give up. As long as there is QE and bailouts, markets are going to keep going higher.


For the SPX Index there were 392 components advancing and 87 components declining. On the NYSE 3,142 issues were traded with 2,187 advancing issues and 876 retreating issues, a ratio of 2.5 to one advancing. There were 310 new highs and 42 new lows. The five day moving average of New Highs is 203 while the five day moving average of New Lows is 16 and the ten day moving average of Net Advancing is 253. The Net Advancing data indicates a bullish trend.
 
Advancing volume was higher at a ratio of 4.81 to one. The closing TRIN was 0.52 and the final tick was 650. The five day average of TRIN is 1.02 and the ten day average of TRIN is .94. The NYSE Composite Index gained 1.3% today while the SPX gained 0.89%.
 
For the NYSE, relative to the previous 30 session average, volume was .92% above 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, 21 sessions ended on a positive tick, 8 of last 10. For the SPX, the day's volume was 92.5% of the average daily volume for the last year. Volume was 112.3% of the last 10 day average and 103.3% of the previous day’s volume.
 
Breadth was strong as was advancing volume. The NYSE Composite Index continues to outperform the SPX.
 
Total tick for the day was 133,000 and the average tick for the day was 86. There were 20 ticks greater than 600 and 19 ticks more extreme than -600. There were no ticks greater than 1000 and no ticks more extreme than -1000.
 
Volume spiked early today on the up moves but also spiked late day on the mild decline. It is interesting - and unusual - to see the volume decline after 3:30 as the close is most often a period of high volume.


Financials and energy issues significantly out performed the SPX, and basic materials were strong as well on a relative basis. Under-performers were consumer discretionary, utilities and healthcare.