The S&P 500 moved up quickly at the open to just below the mid-point of its recent swing highs to lows, and has traded near there since. Internals look mostly positive going into the second half of the day, though trade is getting a bit choppy above the VWAP.
S&P 500 futures rallied impressively off their Sunday/ Asia trade lows, were rejected by their five-day moving average, then catapulted higher back through the recent head and shoulders neckline on what has evolved into very strong cumulative tick and advance - decline action. However, I see the NASDAQ 100 continues to struggle with R2 and we are in the afternoon doldrums momentum-wise.
(Click Image to Enlarge/ Glossary)
A quick look at the Relative Strength charts below highlights the divergence in performance we saw last week between the NASDAQ100 (QQQQ) and S&P500 (SPY). Nevertheless, both ended the week undeniably lower, with the QQQQs down -1.9% and the SPYs off some -2.1% for a fourth week of losses. In spite of the declines, a consolidation process on declining volume really only left Real Estate (IYR) clearly short-term oversold among the tracked sectors.
Week Twenty-Nine of 2009 kicks off the opening of the potentially catalytic second quarter earnings floodgates and includes a very busy economic calendar, as follows:
Note that it is also options expiry, and that the last FOMC meeting minutes will be released. I suspect next week may prove seminal in setting the course of the market's next move -- one way or the other. Have a Terrific Weekend!
Never Investment Advice
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After filling the opening gap down, the NASDAQ100 (QQQQ) was predictably rejected by its declining five-day moving average. However, after re-probing those am lows at support just above the Wednesday lows, we saw some covering action against the easy trade and the Nas relative strength is bringing all the majors back up to their flattish volume weighted averages. Cumulative Tick and Advance Decline lines all look to be supportive of a healthier afternoon session, but keep any eye on action around that VWAP (& SPY S1)!
Never Investment Advice
We have seen a positive range between the opening highs and the daily Pivot. While cumulative tick, up volume and the AD line all look positive and I'm liking the leadership, we are testing the top end of that range now and momentum has been slow to build. Therefore, while still optimistic for a more positive close today, I am trailing stops on my long positions that have already reached their profit targets.
After a weak and uneven opening bounce, the market turned sharply and has gone nowhere but south with momentum continuing to build to the downside. The market "should have" bounced by now, but there are no buyers to be found and we are clearly back to a day trader's bear market.
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