Wednesday, August 28, 2013

S&P 500 Price/Volume Heat for 8/27 Reflects Market Weakness

The weakness seen in the price/volume heat map came to full fruition in yesterday's trading with the market falling more than 150 basis points. The weakness was across the board with the more cyclical sectors leading the charge to the downside. Utilities outperformed the rest in part due to traders moving into the group for proverbial protection and as long-term rates begin to retrace a portion of the rally that has been place for months. The move in rates may have legs here, as expectation based on my belief that the S&P 500 will test the 1,600 level.

As you would expect, the supply/demand dynamics in yesterday's trading characterize the price action. The strongest, at least on relative terms, demand dynamics occurred in the utilities. Even then, the strong was only neutral on the price/volume heat map. The remainder of the sectors saw a lot of downside volume.

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