Wednesday, December 4, 2013

Start of Something More?- S&P 500 Price/Volume Heat Map for Dec. 3

Strangely and mixed dynamics underlying the market moves in yesterday's trading. Although the market sold off by about 30 basis points, the selling pressure (either on a price basis or a supply/demand basis) was not ubiquitous. Additionally, total volume accelerated a bit as equity prices pulled back. The benckmark here on the previous comment was versus Monday's trading volumes. We will have to see if this indicates something more than mere profit taking. However, the expansion may be indicating a drawdown to about the 50-day moving average on the S&P 500.


Looking at the supply/demand balance in yesterday's trading, I would characterize the dynamics as strange. Strange in that this was the first move in a long while where sector supply and demand balances were uneven. I am unsure if there is a message in this or if it is just noise, but you should note the strong demand in staples versus the increased supply in more cyclical sectors.




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