Stock Market Early Morning Insights – March 16, 2016

TECH TALK… This is the 3nd webinar on the HGSI Volume Price Analysis Suite of Indicators. “HGSI VPA Float Turnover & Float Turnover Channel” Wed, Mar 16, 2016 4:30 PM – 5:45 PM EDT  REGISTER HERE

Yesterday was another slow trading day, with volume falling off once again for many of the stock indexes. The NASDAQ composite did manage to eke out a small gain on slightly heavier volume over, but it did so with negative internals which were slightly more than 3 to 1, decliners over advancers. The NYSE internals were not quite as bad coming in at -2.72 to 1. The internal suggests that there was a distribution day for the NASDAQ, but the candle closed at 71.55% of its daily trading range giving mixed signals.

The Canary stocks, especially Apple and Tesla helped prop tech stocks up. Tesla showed some early-morning weakness, but by the end of the day closed up 1.48% at 91.57% of its daily range. Apple was strong from the open on a brokerage upgrade to close 2.01% higher on heavier volume. Day traders who got in early took some profits at the end of the day as Apple only managed to close it 54.89% of its daily range. I am always amazed at the traders who jump into a stock on a broker’s upgrade. This one may work out for them, but there is a great deal of overhead resistance to overcome to the left of the chart. Besides, HGSI has given numerous VPA signals for Apple at much lower levels.

The Gold Miners ETF was up 2.1% yesterday even though gold futures were down slightly. I am seeing multiple tests for supply in the gold and mining stocks this morning. What look like serious distribution on Monday for these stocks has eased. These are mining stocks in the stocks in groups moving up SmartGroup generating bullish flags from yesterday’s price action.

Other than the mining stocks I am seeing most of the buying in conservative stocks like REITs and Integrated Utilities. Semiconductor Devices and Apparel stocks were well represented on the positive side although the Semiconductors seem to be making little headway. If this market breaks higher today after the Fed’s announcement later today, I expect some of the leading Semiconductor Devices to break out of their congestion areas. Even though oil prices fell slightly yesterday, volume was light, and a low-volume test for supply was generated. Several Exploration and Production stocks were up yesterday in spite of the falling oil prices. Crude light is up slightly more than 2% this morning.

On the negative side, Biotech and Specialty Pharma stocks were hit hard yesterday with the XPH SPDR S&P Pharmaceuticals down 6.2%. VRX was the main culprit.

Today will probably be like every other Fed announcement day. Trading should be light during the morning hours and then we will see the usual gyrations in stock index futures after the announcement before a direction is confirmed. The bias for stocks has to remain to the upside because even though we have seen consolidation over the past three days on light volume, Monday and Tuesday saw the S&P E-mini futures close in the upper part of their daily trading ranges. To me, it looks like a flag is forming, but on Fed announcement day, anything can happen.

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