Tuesday, November 17, 2009

Midday Briefing for November 17th: Range Bound Consolidation

Here we see a Market Delta chart in which each bar represents 100,000 contracts in the ES futures. What we see is that we have oscillated around the volume-weighted average price (VWAP; red line) around 1104 in a range trade. Once the market could not take out the day session lows from Monday, we moved back into the preopening range, with the 1107/1108 area important near-term resistance.

Among the stocks in my basket, I show 27 up from the open, 13 down, but nearly 700 more stocks are declining than advancing on the NYSE relative to Monday's close. New 20-day highs thus far handily outnumber lows, but we're seeing less than half of the new highs registered yesterday. All told, thus far, we're seeing a range day and consolidation of Monday's strength. If we're going to continue that strength, I would expect to see this morning's lows hold on selling.