Broad Market Update

You may recall that prior to Q1 ending March 31st, I had made mention several times that the returns must be kept as high as possible for Q2 prospectuses and to avoid redemptions, even if it is done in an artificial manner. Since Q1 has ended, we have seen momentum fall off a cliff and internals deteriorate.

Manipulation of the market, especially at qtr/year end is not uncommon, but it can't last too long, eventually the realities of the market trump any short term attempts to keep prices artificially high.

The last 6 days of Q1 returned an average of +% with the Dow only a fraction lower at +1.28% (this is also a good representation of how the market's move together). The last 6 days (including today thus far) since the start of Q2 on April 1st have broken down like this: The S&P +.01%, the Dow +.21% and the NASDAQ 100 -.56%. This set of returns is also notable, not only for the complete lack of momentum, but also for the divergence between the averages, this is usually a short term effect, but one seen at transitionary periods.

 DIA's April performance +.21% an -83% decline from the previous 6 day period.

 Today's DIA intraday support

 The Stoch/RSI setup I mentioned a few nights ago that has given pretty reliable and consistent results, which also shows an RSI divergence that is worse then the 2007 top. For calling reversals, Stochastics (for me) is just about useless without adding the RSI component, then it becomes much more effective, rarely giving a signal, but the success rate for the signals is much higher and tend to mark major tops, not just swing corrections.

 The QQQ performance since April 1 @ -.56% compared to +1.29 in the previous 6 day period at the end of Q1.

 Today's QQQ intraday support, which is at an important level on a daily chart.

 This is the same level of support for the Q's we are seeing intraday, just on a daily chart. You can see it's been an important level on a closing basis.

 The 60 min. Bollinger Bands for the QQQ shows momentum has died and volatility is starting to narrow which is typically an indication of a highly directional move.

The SPY's April performance at +.01% for the 6 day period vs 1.29% for the previous Q1 6 day period.

 Today's SPY intraday support, also an important level on the daily chart, note the uptick in red volume on the slightest breach.

 The same SPY support level on a daily chart has shown 4 closes just barely holding the level and 1 with a hammer which found support exactly at the trendline, today we are vert close to that support after an initial gap higher that could not hold.

 Here's today's TICK chart with 3 areas in red breaking the -1000 level. This shows the TICK for al NYSE stocks each minute, it's derived by taking advancing ticks and subtracting declining ticks, a reading below -1000 is extreme and until recently has been quite rare. In orange we have a sub -1250 tick which is at the bottom of the useful scale, meaning it's an extreme rarely seen.

 Looking at the Tick chart since 3/31, you can see an increasing bulk of ticks below the "0" line and the deterioration of the Tick Index since Q1 closed.

On a daily Tick chart since 4/1, look at the closing tick and the nature of the candlestick bodies as the week has progressed. Starting out at +1000 with the following 2 days showing TICKS ending the day higher then they started (but still declining) to TICK readings that end the day lower then where they started and also declining. Today's data hasn't shown up yet until the close.

I think that should give you a pretty good feel for the end of quarter window dressing/push for returns and the subsequent new quarter's deteriorating price and internal structure.