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Market Stage
(7/28/2010)
On Tuesday, we suggested that 'Flat SBV readings are a reflection of market uncertainty. We are seeing a growing accumulation of bullish volume on this chart setting. We will continue to monitor the 60-day charts to see if SBV readings continue to decline; if so, this could suggest increasing odds for a coming down-move in the market.' - In today's action, the major indexes closed lower, concurrent with a decline in SBV oscillator readings.
60-day charts with a 20-period SBV are showing declining SBV oscillator readings with the following SBV values registered at day's end: Plus 3% on the Nasdaq 100; plus 4% on the S&P 500; plus 13% on the Dow. Declining SBV values are bearish and would suggest the possibility of a further market decline.
1.5-year charts with a 10-period SBV are showing flat SBV oscillator readings. Currently, these SBV readings suggest a weak market.
Market Status
(7/28/2010)
Market Performance:
| Last | Change | Volume | A/D Ratio | | S&P 500 | 1,106.11 |  | 7.66 (0.69%) |
| 3,255,025 | 0.27 | | NASDAQ 100 | 1,872.62 | | | 16.19 (0.86%) |
| 718,297 | 0.39 | | DJI | 10,498.56 | | | 39.28 (0.37%) |
| 627,022 | 0.38 |
The recent upswing has now stalled on all of the major indexes, including the Dow which snapped a four-session winning steak today. Overall losses were relatively modest, with the Dow seeing the least downside and the Nasdaq 100 outperforming to the downside (see table above for details).
On the S&P 500 , the trend to low overall daily volume production continues; today, a mere 3.36 billion shares changed hands on the index.
NASDAQ 100 - 7/28/2010.
1-day Intraday, Modulated Volume.
Volume Analysis:
The Nasdaq 100 spent most of today's session mired in a modest downtrend that resulted in a loss of almost 0.9% for the day. Until 10 o'clock, it appeared the index might avoid such losses, as it had traded mostly sideways to slightly higher. The Nasdaq 100 then put in a slightly lower intraday swing high at 10:00 (as compared to its peak level a few minutes into the session), and after that, the bears came out in earnest, taking the market steadily lower until the late afternoon. During the decline, the index accumulated predominantly bearish volume (seen in red on the SBV oscillator pane), particularly after 13:30. Note the series of bearish volume surges that peaked at roughly 13:30, 14:25, and 15:15. By late afternoon, the index had accumulated sufficient bearish volume to exhaust the earlier intraday downtrend and to initiate some late-day upside on the index. A strong buildup of bearish volume that takes place as the market pushes lower is often a sign that bearish momentum can no longer be sustained - this was the case late today, giving the bulls a chance to push the market modestly higher. In retrospect, a five-day chart of the index shows that a surplus of bearish volume was accumulated today, although on an overall very modest volume output for the day.
Short Term (lasts a few hours to a few days): The major indexes stalled and retreated from their recent upside run today, thus confirming our short-term outlook from Monday's report where we had suggested we could now see some market weakness.
While today's session brought a surplus of bearish volume (as discussed in the Volume Analysis section above for the Nasdaq 100), we do not think this output of bearish volume would be sufficient to drive the market immediately back into a resumption of the recent upswing. Instead, we see greater odds that any intraday advances (for instance to retest Tuesday's highs) would be sold down. On balance, we believe the bears will have the upper hand for the short term.
Analyst's Daily Tip:
Charts: Scroll history
At the very bottom of the chart, on the the both sides of the line where a date appears, you can find scrolling buttons that allow you to scroll back and forth in history. The history available goes back to June 1997 that includes 1-min intraday data.
Volume surges
Volume surges are evaluated according to their magnitude and duration. It is vital to appraise each particular volume surge before attempting to predict how it might impact future market direction. We categorize volume surges as short-, mid-, or long-term. We also classify intraday surges.
Financial Press Overview:
Among today's economic data releases, June durable goods orders showed what economist called a 'surprising' decline of one percent (consensus estimate: a rise of one percent). Excluding transportation, durable goods orders were off 0.6% (consensus estimate: a rise of 0.6%). Furthermore, last month's durable goods order (both total and excluding the transportation component) were revised downward, now showing a 0.8% decline and a 1.2% increase, respectively. In essence, new orders for long-lasting US manufactured goods were thus down for a second consecutive month. Market observers say this could be an indication that the US economic recovery has slowed.
Equally uninspiring was the data contained in the Fed's latest Beige Book (which is a government summary of national economic conditions), as it did not provide any new insight into the US economic recovery. Rather, it simply reflected the comments recently made by Fed Chairman Bernanke - revealing that US economic growth had lost steam in some Fed districts.
Market observers comment there continues to be a discrepancy between largely positive corporate earnings and economic reports. According to Thomson Reuters Proprietary Research, just under half of S&P 500 companies have now reported earnings and roughly three quarters have beaten Wall Street's expectations.
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