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Market Direction Summary (01-19-2010)

Tuesday saw the SPY, IWM, and QQQQ ace their technical exams with flying colors since the long holiday weekend and options expiration. All three major equity indexes re-established the support of their short-term uptrends while volume relative to average daily volume remained flat on both the NYSE and Nasdaq exchanges.

In terms of overall breadth, the market condition for stocks is not extremely overbought. Stochastics analysis of the broad market confirms overbought readings for just 24.79% of the Hillbent 3000 stock universe and only 24.88% of a 214 industry group universe. Typically, significant market corrections are preceded by much higher percentages.

Another factor working against bears is the high short interest ratios (SIR) for the Russell 3000 components. For example, @ 61% of its components have an SIR >= 5 and @ 27% have an SIR >= 10. The successive batterings of new 5-day and new 52-week highs are stinging the backsides of bears like an angry hive of bees and proving to be not quite the honey they may have desired.

As P/E ratios are indiputably high, valuation standards are shifting to free cash flow metrics. Bloomberg news reports that based on comparative historical cash flow ratios, the S&P 500 index trades @ 37% below its 12 year average and 50% below 2007 valuations.

Despite the above positives, the dominant distribution pattern displayed in the trading session’s price volume relationships was somewhat disappointing and justifies some skeptic caution. Almost 54% of stocks traded up on down volume.

Market moving events in Tuesday’s trading were driven by anticipated changes in the outlook for healthcare reform and earnings releases for financial and technology bellwethers:

1) Financials: Citigroup (C) met earnings expectations with a reported loss @ ($0.33) per share. The results stabilized the financial sector as the XLF closed up +1.26%.

2) Healthcare: Speculation that Republicans could win the Massachusetts Senate election and derail the Democrat’s proposed health care reform propelled healthcare stocks' leading sector status. The [[XLV]] increased +2.36%. (Note in after-hours market news, Republican candidate Brown is reported to have won the Massachusetts Senate seat.)

3) Technology: Dow component [[IBM climbed]] +1.79% in advance of its earnings report after the close. (In after-market hours, IBM declined -1.85% after reporting EPS results @ $3.59 vs. consensus estimates @ $3.47.) The technology sector was the second best performing group as the XLK advanced +1.69%.

4) Bond Market: The 3 month ($23bn) and 6 month ($25bn) treasury bill auctions drew respectively strong bid-to-cover ratios @ 4.52 and 4.11.

5) Real Estate: January’s Housing Market Index report issued by the NAHB slipped to 15 vs. December’s reading of 16. The contraction is attributed to a weak job market and competition from residential foreclosures. In lieu of this, the XHB was resilient and increased +1.47%.

ETF New Highs and New Lows

ETF 5 Day New Highs: (Note * denotes 250 day new high)

  • U.S. Equities (DIA*, IW, QQQQ*, XLE, XLU, XLV*, XLY, BBH, FDN, IG, IGN*, IHI*, NLR, PPH*, SEA*, SWH*)
  • International Equities (ISI*, EQWU, RSX*, EWM*, EWS, EWY*, IF, IFN, EEM, EWX, GMF, GUR*)
  • Commodities (COW, JJC, PTM, SLV)
  • Forex (FXB, FXM, UUP)
  • Bonds (MBB, MUB)
  • Real Estate (FIO, ICF, IYR, REZ, RTL)

ETF 5 Day New Lows: (Note * denotes 250 day new low)

  • U.S. Equities (VXX, VXZ, XLF, CRBQ, FAN, RKH, RTH, SWH, TAN)
  • International Equities (EWQ*, VNM)
  • Commodities (DBC, JJG, UGA, USO)
  • Forex (BZF, CEW, CYB, FXE, FXF, ICN)
  • Bonds (BWX, HYG, WIP)
  • Real Estate (RTL, XHB)

No further comments this evening from Hillbent on the Market Direction…

ETF Market Trends Monitor (01-19-2010)

U.S. Equity ETFs
Equity Indexes Price %Chg Vol% PMI ST MT LT
DIA (DJ Industrials) 107.16 1.08% 41.29% 95 up up up
SPY (S&P 500) 115.06 1.25% 5.55% 95 up up up
QQQQ (Nasdaq 100) 46.59 1.61% 12.67% 93 up up up
IWM (Russell 2000) 64.85 1.84% -7.39% 98 up up up
VXX (VIX Futures) 27.82 -5.73% 126.17% 6 down down down
Major Sectors Price %Chg Vol% PMI ST MT LT
IYZ (Telecom) 19.59 0.77% 6.48% 72 down up up
XLB (Materials) 34.34 1.60% -16.70% 98 up up up
XLE (Energy) 59.81 0.93% -8.78% 90 up up up
XLF (Financials) 15.13 1.27% 8.70% 97 up up up
XLI (Industrials) 29.39 1.10% 61.96% 92 up up up
XLK (Technology) 23.03 1.63% -8.18% 94 up up up
XLP (Consumer Staples) 26.92 0.56% 63.79% 80 up up up
XLU (Utilities) 31.30 1.26% -37.70% 100 up up up
XLV (Health Care) 33.00 2.42% 180.96% 99 up up up
XLY (Consumer Discrtn) 30.38 1.33% -11.38% 100 up up up
Key Industries Price %Chg Vol% PMI ST MT LT
BBH (Biotech) 101.42 1.93% 203.65% 90 up up up
CRBQ (Global Commodities) 44.91 1.61% -51.02% 100 up up n/a
CUT (Global Timber) 18.65 1.25% -64.05% 100 up up up
FAA (Airlines) 32.54 0.59% -57.46% 42 up up n/a
Fan (Global Wind Energy) 15.37 0.00% 4.17% 88 down down up
FDN (DJ Internet Index) 25.03 1.25% -19.38% 100 down up up
GDX (Gold Miners) 47.69 0.57% -35.66% 98 down down up
HAP (Hard Assets Producers) 35.18 1.09% 11.26% 100 up up up
IAI (Broker-Dealers) 28.49 0.99% -53.60% 98 down up up
IGF (Global Infrastructure) 35.77 1.46% -43.98% 99 up up up
IGN (GSTI Networking) 27.96 1.41% -70.79% 100 up up up
IHI (Medical Devices) 55.94 2.02% 328.70% 99 up up up
ITA (Aerospace & Defense) 54.20 0.84% -33.81% 78 up up up
IYT (Transportation) 75.34 0.36% -28.93% 38 up up up
KIE (Insurance) 37.04 1.76% -11.77% 96 up up up
KOL (Coal) 39.51 1.75% 39.20% 94 up up up
MOO (Agribusiness) 46.27 1.38% 19.56% 100 up up up
NLR (Nuclear Energy) 23.92 0.89% 323.29% 100 up up up
OIH (Oil Services) 131.47 0.98% -2.06% 89 up up up
PHO (Water Resources) 17.46 1.04% 1.59% 82 up up up
PPH (Pharmaceuticals) 69.63 2.16% 54.04% 87 up up up
PXR (Emerg Mkts Infrastructure) 45.50 1.49% -2.27% 100 up up up
RKH (Regional Banks) 81.44 0.28% 24.29% 85 up up up
RTH (Retail) 94.24 1.12% -7.34% 99 up up up
SEA (Global Shipping) 15.32 0.79% 55.32% 70 up up up
SLX (Steel) 66.69 2.60% 27.77% 100 up up up
SMH (Semiconductor) 27.32 1.45% 21.41% 80 down up up
SWH (Software) 43.31 1.71% 10.00% 100 up up up
TAN (Global Solar Energy) 10.05 -0.10% 44.90% 95 down up up
XME (Metals & Mining) 56.45 1.93% -19.64% 98 up up up
International Equity ETFs
Americas Price %Chg Vol% PMI ST MT LT
EWC (MSCI Canada) 26.75 0.11% 6.28% 58 down up up
EWW (MSCI Mexico) 50.89 1.60% 12.28% 100 up up up
EWZ( MSCI Brazil) 74.62 1.47% -7.56% 78 down down up
ILF (Latin America 40) 48.31 1.75% -26.92% 100 down up up
ISI (S&P 1500) 51.80 1.21% 191.51% 100 up up up
Europe Price %Chg Vol% PMI ST MT LT
EWG (MSCI Germany) 22.59 0.67% 68.92% 78 down up up
EWQ (MSCI France) 26.71 0.72% -40.86% 100 down up up
EWU (United Kingdom) 16.93 1.44% 0.20% 74 up up up
IEV (S&P Europe 350) 40.22 1.06% 94.83% 86 up up up
RSX (Russia) 34.77 2.84% 15.54% 88 up up up
VGK (Vanguard Europe) 50.57 2.08% 7.30% 100 up up up
Asian-Pacific Price %Chg Vol% PMI ST MT LT
EWA (MSCI Australia) 23.96 1.35% -29.63% 86 up up up
EWH (MSCI Hong Kong) 15.91 1.27% 55.77% 65 down down up
EWJ (MSCI Japan) 10.46 -0.10% -35.76% 73 up up up
EWM (MSCI Malaysia) 11.23 1.17% -41.17% 36 up up up
EWS (MSCI Singapore) 11.82 1.90% 65.37% 75 up up up
EWT (MSCI Taiwan) 13.26 0.30% 39.51% 79 up up up
EWY (MSCI South Korea) 50.42 2.06% 36.52% 86 up up up
FXI (FSTE China) 42.77 3.18% 28.14% 96 down down up
IF (Indonesia Fund) 10.33 1.47% 123.25% 46 up up up
IFN (India Fund) 32.60 2.74% 19.93% 96 up up up
VNM (Vietnam) 26.57 0.04% 108.79% 100 down down down
Emerging Markets Price %Chg Vol% PMI ST MT LT
EEM (MSCI Emerging Mkts) 42.80 2.03% 7.08% 100 up up up
EWX (Emerging Small Caps) 49.86 1.44% 6.66% 71 up up up
GAF (Middle East & Africa) 63.97 1.62% -56.96% 65 up up up
GMF (Emerging Asia Pacific) 76.45 1.27% 261.06% 86 up up up
GML (Emerging Latin America) 80.99 1.39% -54.60% 91 down up up
GUR (Emerging Europe) 47.35 2.62% -16.01% 89 up up up
Alternative Assets
Commodities Price %Chg Vol% PMI ST MT LT
COW (Livestock) 29.10 0.90% 2.09% 89 up up up
DBA (Agriculture) 26.27 0.65% 3.63% 60 down up up
DBB (Base Metals) 22.91 1.78% 21.80% 100 up up up
DBC (Commodities) 24.53 0.66% 14.28% 100 down up up
GLD (Gold) 111.50 0.58% -55.02% 73 up up up
JJC (Copper) 47.27 2.32% -14.60% 96 up up up
JJG (Grains) 37.09 -1.16% 87.38% 15 down down down
PTM (Platinum) 19.73 2.12% 26.56% 65 up up up
SLV (Silver) 18.45 2.22% -32.35% 100 up up up
UGA (Gasoline) 36.65 0.94% 53.34% 99 down up up
UNG (Natural Gas) 10.09 -1.46% -1.59% 56 down up down
USO (Oil) 38.93 1.38% -31.57% 98 down down up
Forex Price %Chg Vol% PMI ST MT LT
BZF (Brazilian Real) 26.28 0.23% 13.59% 75 down down up
CEW (Emerging Currency) 22.34 -0.04% -55.16% 89 up up up
CYB (Chinese Yuan) 25.31 -0.04% -36.47% 60 up lateral lateral
DBV (G10 Currencies) 23.84 0.25% -26.49% 88 up up up
FXA (Australian Dollar) 92.65 0.22% -23.09% 98 up up up
FXB (British Pound) 163.33 0.74% -38.53% 82 up up up
FXC (Canadian Dollar) 96.71 -0.11% -2.06% 87 up up up
FXE (Euro) 142.78 -0.54% 8.77% 94 down down up
FXF (Swiss Franc) 96.44 -0.52% 20.03% 80 down down up
FXM (Mexican Peso) 79.16 0.44% -36.77% 70 up up up
FXY (Japanese Yen) 108.87 -0.28% -30.78% 31 up down up
ICN (Indian Rupee) 25.48 -0.23% 1.00% 38 down up up
UUP (U.S. Dollar) 22.84 0.31% -46.75% 13 down up down
XRU (Russian Ruble) 33.78 1.61% -96.81% 100 up down up
Bonds Price %Chg Vol% PMI ST MT LT
AGG (Investment Grade) 104.10 -0.16% 1.58% 38 up down up
BWX (Int’l Tsy Bonds) 57.53 -0.42% -44.99% 60 up down up
EMB (Emerging Markets Bonds) 102.41 0.16% 37.81% 52 up up up
HYG (Hi Yld Corp) 89.12 0.04% 34.16% 65 up up up
IEF (7-10 Yr Tsy) 89.89 -0.18% -19.88% 72 up down down
JNK (Hi Yld Bonds) 39.87 0.25% -23.32% 100 up up up
MBB (Mortgage Bonds) 107.23 0.15% -6.67% 84 up up up
MUB (Nat’l Muni Bond) 103.20 -0.10% -29.94% 26 up up up
SHY (1-3 Yr Tsy) 83.45 0.02% 52.44% 100 up down down
TIP (Tsy Inflation Protect) 104.93 -0.08% 33.90% 70 up up up
TLT (20 Yr+ Tsy) 90.82 -0.29% -24.91% 57 up down down
WIP (Int’l Inflation Protect) 56.93 -0.12% -55.91% 68 up down up
Real Estate Price %Chg Vol% PMI ST MT LT
FIO (Industrial Office) 24.20 1.78% -61.75% 84 up up up
ICF (Cohen & Steers) 53.39 2.22% 21.80% 94 up up up
ITB (Home Construction) 12.96 1.17% -74.08% 100 up up up
IYR (DJ US Real Estate) 46.65 2.06% 6.43% 92 up up up
REM (Mortgage Reits) 14.89 0.68% -26.91% 83 up up up
REZ (Residential Index) 31.31 2.35% 64.34% 100 up up up
RTL (Retail Index) 21.67 1.79% 626.00% 87 up up up
XHB (Homebuilders) 15.90 1.73% 0.86% 100 up up up

*PMI measures strength of % daily trading range on scale of 0 to 100

**ST = Short-Term Trend; MT = Intermediate Trend; LT = Long-Term or Primary Trend

***Vol% measures % change in daily volume vs. average daily volume

Market Momentum Diary: 01-19-2010

% Stocks > Mov Avg 20-Day MA 50-Day MA 200-Day MA
Today 74.65% 83.27% 87.07%
Yesterday 66.88% 78.98% 86.08%
Last Week 78.94% 84.94% 87.31%
Last Month 59.01% 59.91% 83.20%
Daily Market Stats NYSE NASDAQ
Advancers 2369 1872
Decliners 717 826
Advancing Shares 3972316100 1600673100
Declining Shares 790037200 436251200
52 Week New Highs 420 172
52 Week New Lows 3 25

Hillbent Market Direction Resources

*Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies 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.

Source: ETF Market Trends: A Change of Health Does the Market Good