Monday, December 3, 2012

Breadth performance

It will be interesting to see how breadth performs, so far the EUR/USD is just barely above the pre-market highs, however the market is MUCH less enthusiastic with the SPY, QQQ, IWM and DIA no where near their opening highs and of the 4 major averages, the IWM is the only one that even seems to be acknowledging that something in currencies is going on, although far from tracking it.

The NYSE TICK chart has been enlightening this morning, the opening trade saw most stocks gap up with a strong opening TICK, from there it went downhill.

 The opening print of the TICK (number of NYSE advancing issues less the number of declining issues) was at an extreme at +1500 on the open this morning which we haven't seen anything approaching extremes the last couple of days, then the same very limp trade in to the morning with +500 capping the high-end of the range and -850 (a bit more extreme than what we saw last week) on the low end of the range until we hit another extreme in the -1250 area. This tells us intraday market breadth is following the price indications, lots of stocks gapping up and then lots of stocks losing that gap and moving down.

 When looking at the TICK vs the SPY (red) this morning, everything pretty much makes sense, the lows at -1250 almost seems like a short term capitulation, but the overall TICK seems to confirm trade well rather.

Here's the 3C chart of the EUR/USD with the early pre-market high with a negative divergence in to it and the recent move in the Euro just mentioned in the last update also seeing a negative divergence. Perhaps the market senses this move in the Euro wasn't going to hold or isn't likely to hold?

In any case, so far the 3C charts and the TICK (breadth) all seem to confirm trade very well so far.

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