Monday, January 30, 2012

Market Performance

The broad market declined today. The strongest decline was noted on the Russell 2000 (0.76% loss) while NASDAQ 100 gained 0.14%. Of the last 6 sessions, the DJI has closed red 5 times. On the NASDAQ 100, we saw the 20th up-close in the last 26 sessions. The S&P 500 saw its lowest close in one weeks today.

2,523 million shares traded this session on the S&P 500. This was 9% down from the daily average volume of the past 3 months.

Short-Term Market Outlook

15-day charts (1 bar = 15 minutes) with a 16-period SBV are showing declining SBV readings. Negative money flow on this chart would suggest the possibility of negative trading tomorrow after the market open. On the other hand, 30-day charts are showing advancing money flow (SBV Oscillator) readings which suggests that overall odds for tomorrow's trading session are on the side of the Bulls: even if we see negative trading tomorrow at the market open, it could be short-lived, unless we see a change in the sentiment on the 30-day charts (decline in Money flow readings).

Longer-Term Market Outlook

60-day charts with a 20-period SBV are now showing flat SBV oscillator readings. The following SBV values were recorded at session's end: minus 20% on the S&P 500, minus 16% on the DJI, minus 5% on the NASDAQ 100 and minus 1% on the Russell 2000. Flat SBV readings suggest possibility of changes in trend, however, SBV readings are at low negative levels. Furthermore the odds are on the bearish side. We will continue to monitor this chart setting in order to determine at which point SBV oscillator readings start to advance; this might then suggest increased odds for a coming move to the upside.

1.5-year charts with a 10-period SBV are showing declining SBV Oscillator readings on the S&P 500 index, flat readings on the DJI and on the NASDAQ 100 indexes and a small decline in readings on the Russell 2000 index. While declining SBV readings suggest a possible bearish change in market sentiment, positive SBV values suggest the bulls still dominate over the longer-term. Yet, if SBV readings continue to decline this could suggest increasing odds for a developing market correction.

Coming Economic Reports

Financial Press

From Reuters:

U.S. consumer spending was flat in December as households put the largest rise in income in nine months into their savings, potentially signaling slower consumption early in 2012.

A top Federal Reserve official on Monday said he would have preferred a more optimistic statement on the U.S. economy, after the central bank last week painted a grim picture of the recovery and forecast ultra-low interest rates until late 2014.

Small business payrolls grew at a slower rate in January and wages fell, an independent survey showed on Monday, suggesting the pace of overall job growth moderated after December's sturdy gain.