View From The Hill: December-9-2015

Posted on Posted in Views From The Hill

An Exhausted Market…

bulls-and-bears4

It’s becoming harder to find a scapegoat for the market’s decline. Stocks have suffered four out of six losing sessions and three consecutive down days. There were no important economic data releases today. This market is falling due to its own exhaustion.

It was not a good day for stocks, especially the Nasdaq-100 and Nasdaq Composite. It’s as simple as that. As a sidebar note, weakness in transportation stocks is causing sleepless nights for many portfolio managers as the index literally represents a driving force within the U.S. economy, delivering goods and people.

In currencies, the U.S. Dollar endured another day of losses and made a new 5-day low. Fighting a battle on several fronts, it stood no chance of winning against:

  • Japan’s stronger than expected Core Machine Orders for October-2015 (+10.3% yr/yr vs. consensus @ 1.4% and +10.7% mth/mth vs. consensus @ -1.5%) boosted the Yen.
  • Germany’s trade surplus balance surged to 20.8bn vs. consensus @ 20.0bn and prior @ 19.2bn and the EUR/USD exploded to the upside.
  • The Canadian dollar advanced as crude oil prices closed @ 38.72, which is two dollars more than yesterday’s low @ 36.64.

Demand for treasury notes and bonds is a reliable indicator of risk aversion. Panic induced buying of conservative fixed income has yet to emerge. Yellen’s forewarning to raise interest rates has plenty of street credibility. At best, bond prices are stabilizing while treasury rates are receding mildly.

In Real Estate, the Home Construction Builders Index was the day’s worst performer in our capital markets summary, while VIX (volatility) topped the list with a gain of more than 11%.

 


Performance Summary

*Trends: ST = short-term; MT = Intermediate-term; LT = long-term

vfth-performance-12-9-2015
Click to enlarge

 


Market Condition

The SP-500 is undergoing death by a thousand cuts. A pattern of lower highs and lower lows during daily and intraday timeframes is not exactly a recipe for a bull market. The key support level at 2040 was temporarily violated today. Although bulls managed to stage some semblance of a rally during the final two hours of trading, today’s relative price strength performance of 25 belied weakness. Bearish momentum is accelerating and, with the exception of a few mega-cap technology companies,  the heavier weighted market-cap components are either testing or surrendering their 50-day moving average. The bears are in control.

Hillbent on the Market Direction…

 

Daily Chart Technical Analysis
sp500-daily-12-9-2015
Click to enlarge

 

Market Breadth
Advancers 116 Decliners 387
New 5-day highs 70 New 5-day lows 212
New 52-week highs 25 New 52-week lows 43
Bullish reversals 33 Bearish reversals 170

 

Market Momentum
% > 20 M.A. % > 50 M.A. % > 100 M.A. % > 200 M.A.
30% ↓ 44% ↓
43% ↓
42% ↓
↑ = positive momentum; ↓ = negative momentum; and ↔ = neutral momentum

 


Volume Radar Alerts

  • Vol % = volume percentage greater than average volume
  • SIR = short interest ratio or days to cover
vfth-volume-radar-12-9-2015
Click to enlarge

 


Disclaimer

Hillbent does not provide individualized market advice. The information we publish regards securities in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification. Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements. Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.

 

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