Friday, March 19, 2010

Morning Briefing for March 19th: Hovering Around Highs

9:38 AM CT - I've added the top chart to show how we've seen expanded volume and volatility this morning, with distinctly negative NYSE TICK, selling across risk assets, and continued weakness among small caps. That has led to our taking out, first the overnight lows, then yesterday's lows, as the failed upside breakout continues the consolidation of the recent market strength.

Note how we've broken above Thursday's high in the NASDAQ 100 (NQ) futures (bottom chart) and are hovering near the highs in the ES futures (top chart). I'll be watching closely to see how small caps behave if we can break to new highs in ES; while they've been rally leaders, they underperformed yesterday. The TICK distribution and intraday advance-decline figures should provide a useful indication of the relative breadth of participation in any upside break.

I'll be updating this post later in the morning; stay tuned...