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Market Sentiment, Tuesday, 03/23/2004

Demoralizing
By J. Brown

Ouch! After two days of heavy losses the markets were hoping for an oversold bounce from support and we got it but it failed to last. By the close nearly every index large and small was painting a failed rally pattern suggesting more weakness in store for us tomorrow. The good news is that the Dow Industrials and the NASDAQ are still above key support levels but they'll probably be challenging them again tomorrow.

Looking through the list of major indices several of them have joined the NASDAQ in the fight to hold their 200-dma's. The Dow Transports, the GHA hardware index and the GSO software index are all hovering just above their 200-dma's. The SOX has closed for the second day under this technical level but is still holding support at the 450 mark.

Sectors that have seen a lot less profit taking are hitting their own support levels. The BTK biotech index, the RLX retail index and the IUX Insurance index are all trading under their 50-dma's. Today's decline adds the OIX oil index and the OSX oil services index to the under-the-50-dma list.

Overall market internals were mixed. Advancing stocks stumbled past decliners 16 to 11 on the NYSE but just barely edged past losers 1570 to 1500 on the NASDAQ. Up volume did outweigh down volume on the NYSE but it was mirrored by a jump in down volume on the NASDAQ.

Hopefully tomorrow's durable goods orders and new home sales numbers will offer Wall Street some positive news to focus on.


Market Averages

DJIA ($INDU)

52-week High: 10753
52-week Low :  7929
Current     : 10063

Moving Averages:
(Simple)

 10-dma: 10186
 50-dma: 10501
200-dma:  9804

	
S&P 500 ($SPX)

52-week High: 1163
52-week Low :  843
Current     : 1093

Moving Averages:
(Simple)

 10-dma: 1111
 50-dma: 1136
200-dma: 1055

		
Nasdaq-100 ($NDX)

52-week High: 1559
52-week Low : 1014
Current     : 1370

Moving Averages:
(Simple)

 10-dma: 1405
 50-dma: 1478
200-dma: 1379

		


These volatility indices all hit new relative highs on Monday and
this morning's bounce in the market pulled them all back but the 
trend appears to be up.

CBOE Market Volatility Index (VIX) = 20.67 -0.91
CBOE Mkt Volatility old VIX  (VXO) = 20.45 -0.95
Nasdaq Volatility Index (VXN)      = 26.84 -0.31



Put/Call Ratio Call Volume Put Volume Total 0.68 819,911 554,977 Equity Only 0.57 641,833 366,452 OEX 0.94 29,159 27,484 QQQ 1.29 74,206 95,709
Bullish Percent Data Current Change Status NYSE 70.1 - 2 Bull Correction NASDAQ-100 38.0 - 6 Bear Confirmed Dow Indust. 80.0 + 0 Bull Correction S&P 500 73.8 - 4 Bull Correction S&P 100 82.0 - 3 Bull Correction Bullish percent measures the number of stocks in an index currently trading on a buy signal on their point and figure chart. Readings above 70 are considered overbought, and readings below 30 are considered oversold. Bull Confirmed - Aggressively long Bull Alert - Cautiously long Bull Correction - Pause or pullback in upward trend Bear Alert - Take defensive action if long Bear Confirmed - High risk if long, good conditions for shorting Bear Correction - Pause or rebound in downtrend
5-dma: 1.67 10-dma: 1.71 21-dma: 1.66 55-dma: 1.19 Extreme readings above 1.5 are bullish, and readings below .85 are bearish. These signals don't occur often and tend be early, but when they do, they can signal significant market turning points.
Market Internals -NYSE- -NASDAQ- Advancers 1633 1570 Decliners 1179 1500 New Highs 76 66 New Lows 19 30 Up Volume 935M 818M Down Vol. 799M 964M Total Vol. 1763M 1800M M = millions
Commitments Of Traders Report: 03/16/04 Weekly COT report discloses positions held by small specs and commercial traders of index futures contracts at the Chicago Mercantile Exchange and Chicago Board of Trade. COT data can be found at www.cftc.gov. Small specs are the general trading public with commercials being financial institutions. Commercials are historically on the correct side of future trend changes while small specs tend to be wrong. S&P 500 Hmm... there's been a lot of action in the commercial traders' positions the last few weeks. It's almost like they can't decide what direction to go. The latest data shows them switching from net bearish to net bullish again. Small traders are more consistent and remain net bullish although less so than recent weeks. Commercials Long Short Net % Of OI 02/24/04 417,490 416,502 988 0.0% 03/02/04 411,932 418,936 (7,004) (0.1%) 03/09/04 418,394 433,237 (14,843) (1.7%) 03/16/04 454,635 449,505 5,130 0.6% Most bearish reading of the year: (111,956) - 3/06/02 Most bullish reading of the year: 23,977 - 12/09/03 Small Traders Long Short Net % of OI 02/24/04 141,559 85,171 56,388 24.9% 03/02/04 148,383 84,135 64,248 27.6% 03/09/04 155,947 88,317 67,630 27.7% 03/16/04 159,054 115,023 44,031 25.3% Most bearish reading of the year: (1,657)- 5/27/03 Most bullish reading of the year: 114,510 - 3/26/02 E-MINI S&P 500 Whoa! Commercial traders have turned very bearish on the S&P e-mini's. Contract volume in both longs and shorts have soared but they bought almost 90K new shorts pushing bearish sentiment to new levels not seen in weeks. Small traders also increased their positions but remain bullish. Commercials Long Short Net % Of OI 02/24/04 320,425 387,255 (66,830) ( 9.4%) 03/02/04 344,805 395,112 (50,307) ( 6.8%) 03/09/04 431,623 485,268 (53,645) ( 5.9%) 03/16/04 472,809 574,241 (101,432) ( 9.7%) Most bearish reading of the year: (354,835) - 06/17/03 Most bullish reading of the year: 133,299 - 09/02/03 Small Traders Long Short Net % of OI 02/24/04 129,894 63,524 66,370 34.3% 03/02/04 119,382 67,453 51,929 27.8% 03/09/04 135,233 76,558 58,675 27.7% 03/16/04 192,136 96,691 95,445 33.0% Most bearish reading of the year: (77,385) - 09/02/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 Commercial traders are continuing this bullish trend and hit another new high in bullish sentiment. Is everyone just buying the dip? Small traders may have taken notice as they nearly doubled their number of long contracts but then the more than doubled their short contracts. At least the brokers are making some money on commissions. Commercials Long Short Net % of OI 02/24/04 47,266 40,452 6,814 7.8% 03/02/04 49,959 41,059 8,900 9.8% 03/09/04 57,368 46,082 11,286 10.9% 03/16/04 68,285 54,899 13,386 10.9% Most bearish reading of the year: (21,858) - 08/26/03 Most bullish reading of the year: 11,286 - 03/12/04 Small Traders Long Short Net % of OI 02/24/04 12,388 7,310 5,078 25.8% 03/02/04 11,605 7,128 4,477 23.9% 03/09/04 15,533 8,070 7,463 31.6% 03/16/04 27,859 18,333 9,526 20.6% Most bearish reading of the year: (10,769) - 06/11/02 Most bullish reading of the year: 19,088 - 01/21/02 DOW JONES INDUSTRIAL Not too much change here for the commercial traders although they've become significantly less bullish than recent weeks. Small traders are moving the other direction and becoming less bearish! Commercials Long Short Net % of OI 02/24/04 27,176 13,918 13,258 32.3% 03/02/04 27,594 14,166 13,428 32.2% 03/09/04 26,867 12,845 14,022 35.3% 03/16/04 32,317 17,514 14,803 29.7% Most bearish reading of the year: (8,322) - 1/16/01 Most bullish reading of the year: 15,135 - 10/16/01 Small Traders Long Short Net % of OI 02/24/04 6,509 14,919 (8,410) (39.2%) 03/02/04 6,898 15,874 (8,976) (39.4%) 03/09/04 7,053 19,159 (12,106) (46.2%) 03/16/04 10,002 20,970 (10,968) (35.4%) Most bearish reading of the year: (12,106) - 3/09/04 Most bullish reading of the year: 8,523 - 8/26/03


 

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