View From The Hill: October 21, 2015

Commentary and Performance

Stocks are hitting some air pockets of resistance. All three major indexes were down: SP-500 @ 2018.84 (-11.83 / -0.58%); Nasdaq-100 @ 4413.52 (-24.66 / -0.56%); and Russell-2000 @ 1144.95 (-18.32 / -157%). The VIX has bottomed for now and put in a bullish reversal by surpassing yesterday’s high to finish @ 16.70 (+0.95 / +6.03%).

Treasury rates moved down to lift bond prices. The 10-Yr rate closed @ 20.30 (-0.41 / -1.98%) and the 30-Yr dipped @ 28.71 (-0.52 / -1.78%).

The US Dollar Index continues to rise from its support levels and finished the day @ 95.06 (+0.19 / +0.20%).

In commodities, Gold retreated to close @ 1166.80 (-9.00 / -0.77%). WTI Crude Oil also pulled back @ 45.26 (-0.66 / -1.44%) .

Results were mixed in real estate assets. The Dow Jones Real Estate Index closed @ 296.80 (-1.05 / -0.35%) while the Dow Jones Home Construction Index was the strongest capital market theme today @ 599.76 (+3.61 / +0.61%).

Signing off at Hillbent…

Daily Chart Analysis

The overextended rally is encountering some minor resistance. However, given the market’s reclamation of support above its 55 day moving average, the probability for a move to 2044-2045 resistance levels becomes higher. This will be an important test for the bulls and, if successful, could send the benchmark index back towards the 2100 levels.

 

Market Breadth

• Advancers (483) vs. Decliners (2431).
• New 5-day highs (929) significantly lagged the number of New 5-day lows (747)
• New 52-week highs (166) also trailed new 52-week lows (85)
• Bullish reversals (139) lagged Bearish reversals (935)

Volume Radar Alerts

Stock prices increasing on high volume

• KLA-Tencor Corp (KLAC) @ 63.98 (+18.79%) on 1213% volume surge
• Solarwinds Inc (SWI) @ 58.31 (+16.16%) on 565% volume surge
• Sandisk Corp (SNDK) @ 76.78 (+2.11%) on 552% volume surge
• Tupperware Brands Corp (TUP) @ 59.81 (+8.35%) on 289% volume surge
• Owens Corning (OC) @ 45.94 (+2.23%) on 277% volume surge

Stock prices declining on high volume

• VMWare Inc (VMW) @ 55.42 (-19.40%) on 871% volume surge
• Endo International PLC (ENDP) @ 54.46 (-13.32%) on 699% volume surge
• Polaris Industries Inc (PII) @ 107.83 (-10.22%) on 693% volume surge
• Carlisle Companies Inc (CSL) @ 84.11 (-7.97%) on 541% volume surge
• Western Digital Corp (WDC) @ 71.44 (-4.57%) on 436% volume surge

Market Moving Events

Bullish

• Central Banks / Monetary Policy / Japan: Rumors of Japan expanding its Quantitative Easing are being given more credence as the latest release of export data shows that it grew at is slowest pace in over a year.

Bearish

• Commodities / Energy / Crude Oil: The EIA’s latest report for Oct-16-2015 indicated another rise in U.S. crude oil supplies which came in @ 8mm/bbl vs. estimates @ 3.9mm and previous @ 7.6mm. The decline in demand from refineries combined with higher exports continues to pressure oil prices downward.

Neutral

• Central Banks / Monetary Policy / Canada: As expected, the Bank of Canada left rates unchanged @ 0.5% and does not foresee the economy returning to full capacity until mid-2017.