While the war is certainly far from over, the bulls won the battle
today, staging a late afternoon rally, after what had been a day of
distributional action and indecisiveness. Retail sales rose in September
by the most in seven months, however, consumer confidence cast doubt
as to whether gains in spending could be sustained, as shoppers’
confidence waned. The market rallied briefly after the news, making new
highs, but a short term overbought market, was unable to overcome the
sell-the-new-high algorithms.The market then traded in a narrow range,
under the session VWAP,
unable to get above it’s opening range for most of the day. However,
the market languished in a territory that was well above the previous
day’s value and never below the RTH session R1, as capital flowed into risk assets and out of treasuries and the dollar.
While market breadth continued to swing wildly back and forth with the market’s volatile movements, the past few sessions has seen breadth expand to the point where breadth indicators began to elicit buy signals. According to Bespoke,“77% of S&P 500 stocks are now above their 50-day moving averages, which is the highest level seen since the April highs. Bulls have been waiting for a nice expansion in underlying breadth for confirmation of a rally, and now they seem to have it.” Today’s internals confirmed, as the NYSE put in an 83% day, with advancing shares leading the way, by almost 5-1. New highs blew away new lows on the NYSE and NASDAQ, 49-15 as techs took charge, once again. For the week, the Dow Jones Industrial Average rose 541 points, or +4.9%. The S&P 500 Index gained 69 points, or +6.0%, its best week since July 2009. The Nasdaq was up 188 points, or +7.6%.
Volatility continued to be drained, as the $VIX finally broke below it’s support @ 30.00, signalling that it is now safe for any reluctant bulls, to buy. According to Rennie Yang, the $VIX has fallen 7 straight days, 37 times since 1990, and 91% of the time, the SPX was higher 2 months later. The ES has now retraced 50% of it’s move from it’s 52 week high-low, yet unlike the NQ, it has yet to trade above it’s 200DEMA at 1232.00. And while those in the bulls' camp would prefer to see a more decisive "confirmation day", with market acceptance above the 200MA as a sign of renewed institutional demand, the bulls appear to have the upper hand, holding the door open for a move to 1260.00 - which certainly suggests that a modestly bullish discretionary bias is warranted in the short term.
While market breadth continued to swing wildly back and forth with the market’s volatile movements, the past few sessions has seen breadth expand to the point where breadth indicators began to elicit buy signals. According to Bespoke,“77% of S&P 500 stocks are now above their 50-day moving averages, which is the highest level seen since the April highs. Bulls have been waiting for a nice expansion in underlying breadth for confirmation of a rally, and now they seem to have it.” Today’s internals confirmed, as the NYSE put in an 83% day, with advancing shares leading the way, by almost 5-1. New highs blew away new lows on the NYSE and NASDAQ, 49-15 as techs took charge, once again. For the week, the Dow Jones Industrial Average rose 541 points, or +4.9%. The S&P 500 Index gained 69 points, or +6.0%, its best week since July 2009. The Nasdaq was up 188 points, or +7.6%.
Volatility continued to be drained, as the $VIX finally broke below it’s support @ 30.00, signalling that it is now safe for any reluctant bulls, to buy. According to Rennie Yang, the $VIX has fallen 7 straight days, 37 times since 1990, and 91% of the time, the SPX was higher 2 months later. The ES has now retraced 50% of it’s move from it’s 52 week high-low, yet unlike the NQ, it has yet to trade above it’s 200DEMA at 1232.00. And while those in the bulls' camp would prefer to see a more decisive "confirmation day", with market acceptance above the 200MA as a sign of renewed institutional demand, the bulls appear to have the upper hand, holding the door open for a move to 1260.00 - which certainly suggests that a modestly bullish discretionary bias is warranted in the short term.
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