Daily Market Outlook (11/27/2009):
(Click here to read complete current Market Outlook)

Market Performance:


In the wake of Dubai's credit troubles, the major indexes suffered losses today (during a holiday-shortened session), but they were off considerably less than overseas markets. The NASDAQ 100 closed down 1.57%, the S&P 500 lost 1.71%, and the Dow tumbled 1.46%. Today's losses have wiped out most of the prior gains for the week: The NASDAQ 100 index gained a mere 0.06%, the S&P 500 salvaged a slim 0.01% gain, and the Dow lost 0.07% for the week.

In spite of today's abbreviated trading session, volume output on the S&P 500 exceeded the index's average daily volume generated over the past three months by 55%. 1,781 million shares were traded today.

Volume Analysis:
9:30 - 11:10: Trading on the NASDAQ 100 started with a very sizable gap down opening of some 50 points this morning. As you can see from a one-day chart, the index immediately started to recover from this initially very strong loss. The same chart setting shows that the initial gap-down opening was associated with a very pronounced bearish volume surge, a signal that the bears' efforts to drive the market lower might be exhausted, and that we could consequently anticipate (at least a temporary) upside reversal. (Note that bearish volume appears in red on the SBV oscillator pane). Catalyzed by the strong output of bearish volume, the index staged a sizable upswing, recovering more than 50% of the initial losses; the market managed to trend higher until shortly after 11 o'clock. During the time it was rising, the index output a surplus of bullish volume (as evidenced by the predominantly green areas appearing on the SBV oscillator pane during this time). The production of bullish volume was most pronounced between 10:50 and 11:10, during which time the index generated the session's largest bullish volume spike; it was nearly as large as the initial bearish volume surge. The appearance of this bullish volume spike however signaled that the bulls might now be close to exhausting their run to the upside.

11:10 - 13:00: Shortly after 11 o'clock, the market started to consolidate from its strong recovery run, beginning a bearish reaction to the earlier output of bullish volume. For most of the remainder of this abbreviated session, the bears however remained powerless to drive the index into more than just a shallow retracement; however, around 12:50, a somewhat more forceful push into the close was achieved. For the session as a whole, today's one-day chart reveals that a modest surplus of bearish volume was accumulated: The bullish volume spike that peaked around 11 o'clock offset much of the earlier bearish volume associated with the opening (downside) gap.

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