STTG Market Recap January 18, 2013

In yesterday’s recap we mentioned that now that the S&P 500 has cleared recent resistance levels: “resistance becomes support”.  That was shown picture perfect by the action today.  Friday morning the market’s showed modest levels of selling.  Where did buyers step in? S&P 1475 level.  What level did the S&P 500 break out over? S&P 1474.  It need not be that precise – i.e. the market could have fallen below 1474 intraday for a while as long as it closed back over, but in this case it was almost machine like.  A late day flurry of buying took stocks near their highs of the days with the S&P 500 adding 0.34% while the NASDAQ continues to be a laggard falling 0.04%; both Google and Apple were in the red today.

The S&P 500 had an almost perfect check back to the breakout level (and also April 2012 highs) before buyers showed up…

The NASDAQ continues to be the laggard as it played hide and seek with its March 2012 highs.

The lack of any real selling in 2013 has created a near constant level of overbought – but there are degrees.  Any substantial move Tuesday will face headwinds as the NYSE McClellan Oscillator is substantially overbought once more.

Crude oil not only held yesterday’s breakout but built on it…

And now we are seeing a sector rotation into the energy space as the SPDR Energy ETF has pushed up nicely the past two sessions.

Industrials also have had a strong week, which was topped off by a favorable earnings report by General Electric (GE) Friday.  This is an impressive rotation as we see some groups take a rest (this week technology and financials) while other groups take the lead.


Fun fact, via SentimenTrader:

The S&P 500 has managed to last the first two weeks of January without coming within 2% of December’s close.  That impressive feat of early momentum has been seen only three other times since 1928:  1931, 1975 and 2003.  In ’31, the S&P peaked two months later then went into a tailspin.  In ’75, it rocketed higher for another six months.  In ’03, it topped out immediately, dropped for two months, then roared higher.


Remember the markets are closed Monday for the MLK holiday so we’ll see you back here Tuesday.  Next week will be another chock full of earnings including the one everyone is waiting for, Apple (Jan 23rd).

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