Daily Market Outlook (7/2/2009):
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Market Performance:


A strong down-day put an abrupt end to the recent upswing. In today's action, the NASDAQ 100 declined 2.37%, the S&P 500 dropped 2.81%, and the Dow lost 2.5%. The final weekly tallies (note that US markets are closed on Friday) are as follows: NASDAQ 100 down 2.29%; S&P 500 off 2.37%; Dow down 1.67%.

Today's volume output on the S&P 500 amounted to 3,161 million shares. This volume production is 33% below the index's average daily volume production over the past three months.

Volume Analysis:
Volume Analysis:

9:30 - 11:45: Today's strongly bearish session on the NASDAQ 100 began with a sizable gap down opening (which accounted for a good part of today's losses). After opening some 17 points below yesterday's close, the index saw immediate and considerable further downside, bottoming out for the session around 10:10. A review of a five-day chart of the index shows how this very weak start to today's session resulted in a large output of bearish volume (as suggested by the predominantly red areas appearing on the SBV oscillator pane during this time). Using the same chart setting, also note the broad-based buying surge that peaked in the morning. Switching back to a one-day chart of the NASDAQ 100, we can see that shortly before mid-day, the market came close to retesting the 10:10 swing low; however, the session's largest bearish volume surge peaking at that time in conjunction with the failure of the index to make a fresh session low was an indication the bears were now exhausting their power to push the market even lower. The large accumulation of bearish volume throughout this first time span ultimately exhausted the downside move, setting the stage for a modest upside reversal.

11:45 - 16:00: On a one-day chart of the index, you can clearly see how timid the ensuing upside recovery was. In spite of the large accumulation of bearish volume in the morning, the index regained only minimal ground throughout the remainder of the session. With roughly half an hour to go, the bears attempted once again to push the market lower; however, we noted a sizable bearish volume surge at this time. Immediately, the bulls regained the upper hand (even if only very briefly). All in all, the index closed very poorly today, generating a surplus of bearish volume (best seen on a five-day chart).

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