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Market Sentiment, Thursday, 09/18/2003

Another Round of New Highs, Please.
By J. Brown

The bullish locomotive running rampant on Wall Street has yet to slow down as the NASDAQ marked an 18-month high above the 1900 level and the INDU traced a 15-month high above the 9650 mark. It's becoming a common cliche these days that the path of least resistance is up.

Today's rally was boosted by a better than expected drop in jobless claims. Economists had been hoping for a move down to the 410,000 level. Instead we got a drop of 29,000 to 399,000. Add another drop in mortgage rates and investors were flocking into equities.

Advancing stocks beat decliners 18 to 9 on the NYSE and 19 to 11 on the NASDAQ. Up volume was almost three times down volume on the NASDAQ and more than four times down volume on the NYSE.

August and September are seasonally the worst two months of the year for the equity markets. This last August bucked that trend and so far September is right on track to do the same. The recent move seems pretty convincing and bears may choose to hibernate until Q3 earnings come out. However, I have to caution our readers. Seasonal trends may not have held up very well lately but we are still approaching one of the most perilous 2- to-3 week periods the markets typically witness. This danger zone runs from September's option expiration into the first week of Q3 earnings announcements.

Play the trend but keep a good eye on your risk.


Market Averages

DJIA ($INDU)

52-week High:  9662
52-week Low :  7197
Current     :  9659


Moving Averages:
(Simple)

 10-dma: 9516
 50-dma: 9307
200-dma: 8667



	
S&P 500 ($SPX)

52-week High: 1040
52-week Low :  768
Current     : 1039


	
Moving Averages:
(Simple)

  10-dma: 1023
 50-dma:  998
200-dma:  927



		
Nasdaq-100 ($NDX)

52-week High: 1401
52-week Low :  795
Current     : 1400



Moving Averages:
(Simple)

 10-dma: 1366
 50-dma: 1296
200-dma: 1135


		


The NASDAQ VXN has rolled back under the 30 level while the older
VIX continues to sleep towards new one-year lows as the markets 
rally.

CBOE Market Volatility Index (VIX) = 19.30 -0.32
Nasdaq Volatility Index (VXN)      = 29.75 -2.00



Put/Call Ratio Call Volume Put Volume Total 0.51 1,058,699 542,582 Equity Only 0.47 700,389 325,880 OEX 1.13 58,584 66,447 QQQ 1.69 42,616 72,061
Bullish Percent Data Current Change Status NYSE 73.5 + 0 Bull Confirmed NASDAQ-100 80.0 + 2 Bear Correction Dow Indust. 83.3 + 0 Bull Confirmed S&P 500 83.2 + 1 Bull Confirmed S&P 100 88.0 + 0 Bull Confirmed 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-Day Arms Index 0.92 10-Day Arms Index 1.13 21-Day Arms Index 1.02 55-Day Arms Index 1.01 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 1876 1907 Decliners 935 1176 New Highs 264 376 New Lows 7 3 Up Volume 1394M 1424M Down Vol. 413M 507M Total Vol. 1826M 1995M M = millions
Commitments Of Traders Report: 09/09/03 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 No change in sentiment for the commercial traders here. Meanwhile small traders forked out a little more cash to increase both their long and short positions. Commercials Long Short Net % Of OI 08/19/03 404,665 455,381 (50,716) (5.9%) 08/26/03 410,378 472,987 (62,609) (7.1%) 09/02/03 417,973 482,392 (64,419) (7.2%) 09/09/03 418,958 486,209 (67,251) (7.4%) Most bearish reading of the year: (111,956) - 3/06/02 Most bullish reading of the year: 18,486 - 6/17/03 Small Traders Long Short Net % of OI 08/19/03 162,034 87,064 74,970 30.1% 08/26/03 170,424 76,967 93,457 37.8% 09/02/03 169,030 75,748 93,282 38.1% 09/09/03 176,401 81,444 94,957 36.8% 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 Commercial traders in the e-minis continue to pump up their long positions. The last numbers show the most bullish posture in quote sometime. Meanwhile the small trader has rotated a little bit of money from short back to long. Commercials Long Short Net % Of OI 08/19/03 296,971 235,779 61,192 11.5% 08/26/03 338,766 234,841 103,925 18.1% 09/02/03 347,724 224,011 123,713 21.6% 09/09/03 370,909 237,610 133,299 21.9% 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 08/19/03 90,428 125,980 (35,552) (16.4%) 08/26/03 52,131 120,853 (68,722) (39.3%) 09/02/03 56,709 134,094 (77,385) (40.6%) 09/09/03 59,692 130,270 (70,578) (37.1%) 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 increasing their bets on the NDX but they're still beating more heavily on a move lower. Small Traders are also active with larger net positions but they're still beating on the bulls. Commercials Long Short Net % of OI 08/19/03 32,107 53,665 (21,558) (25.1%) 08/26/03 33,991 55,849 (21,858) (24.3%) 09/02/03 37,002 55,379 (18,377) (19.9%) 09/09/03 44,677 62,369 (17,692) (16.5%) Most bearish reading of the year: (21,858) - 08/26/03 Most bullish reading of the year: 9,068 - 06/11/02 Small Traders Long Short Net % of OI 08/19/03 25,607 10,134 15,473 43.3% 08/26/03 26,108 8,864 17,244 49.3% 09/02/03 23,168 10,561 12,607 37.4% 09/09/03 28,788 13,370 15,418 36.6% 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 No change in investor sentiment for the professional traders here. There is little change for the small trader but they have bumped up their long positions a tad. Commercials Long Short Net % of OI 08/19/03 21,088 18,984 2,104 5.3% 08/26/03 24,586 10,386 14,200 40.6% 09/02/03 25,462 10,447 15,015 41.8% 09/09/03 25,807 10,756 15,051 41.2% 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 08/19/03 15,717 9,143 6,574 26.4% 08/26/03 14,115 5,592 8,523 43.2% 09/02/03 6,629 13,402 (6,773) (33.8%) 09/09/03 7,429 13,796 (6,367) (30.0%) Most bearish reading of the year: (8,777) - 10/12/01 Most bullish reading of the year: 8,523 - 8/26/03


 

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