Tuesday, October 18, 2011

Market Performance

The broad market advanced today. The Russell 2000 outperformed other indexes by climbing up 2.98% while the NASDAQ 100 gained only 1.31%. Of the last 11 sessions, the S&P 500 has closed green 8 times. The DJI is also up on 7 of the last 11 sessions. On the NASDAQ 100, we saw the 9th up-close in the last 11 sessions. The Russell 2000 are now up on 8 of the last 11 sessions as well. The S&P 500 saw its highest close in ten weeks today.

The S&P 500 saw volume of 3,769 million shares on this session. This was close to the average daily volume of the last 3 months.

Short-Term Market Outlook

15-day charts (1 bar = 15 minutes) with a 16-period SBV are showing flat SBV readings. On the other hand, 30-day charts (1 bar = 30 minutes) with a 13-period SBV are showing advancing SBV. Positive money flow on this chart would suggest the possibility of positive trading tomorrow.

It is worth mentioning about strong bullish volume output at the end of today's session which may negatively affect tomorrow's trading session. Yet, we do not expect to see negative trading unless we see decline in Money Flow readings on the 30-day charts.

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: plus 15% on the S&P 500, plus 5% on the DJI, plus 8% on the NASDAQ 100 and plus 10% on the Russell 2000. Flat SBV readings suggest possibility of changes in trend, however, SBV readings are at high positive levels. Furthermore the odds are on the bullish side. We will continue to monitor this chart setting in order to determine at which point SBV oscillator readings start to decline; this might then suggest increased odds for a coming move to the downside.

1.5-year charts with a 10-period SBV are showing advancing SBV oscillator readings. Advancing SBV readings are bullish. The positive SBV values seen on this chart are also bullish. This chart setting suggests a bullish longer-term sentiment.

Coming Economic Reports

Financial Press

From Reuters:

The perceived financial hardship created by the storm clouds hovering over the world economy may be as much a figment of consumer imagination as they are due to real money concerns, the chief executive of Harley-Davidson said on Tuesday.

U.S. wholesale prices rose at their fastest pace in five months in September as the cost of gasoline surged, but a small gain in core prices suggested the price pressure was unlikely to be sustained.

Homebuilder sentiment perked up in October to its highest level in a year and a half, though ongoing challenges still kept confidence historically low, the National Association of Home Builders said on Tuesday.

Congress does not have enough time to revamp the tax code as part of its effort to find at least $1.2 trillion in budget savings by year end, U.S. Treasury Secretary Timothy Geithner said on Tuesday.