Yesterday’s rally was sparked by a statement from Bill Miller, chairman and chief investment officer of Baltimore-based Legg Mason Inc.'s (LM) Legg Mason Capital Management Inc. It looks as if the bottom was made in the stock market earlier this year, both from a psychology standpoint and from what we've seen in the credit markets. Let’s assume for a moment that he is right.  What is leading so far?

Since the closing low was November 20, 2008 and as of yesterday the S&P 500 advanced 15.77%. I screened my database of optionable stocks (~3,200 stocks) for stocks that had advanced a minimum of 15.77% since the November low.  More than half the list advanced an amount equal to or greater than the S&P:

I immediately noticed Jones Apparel Group for two reasons; first it’s sector and secondly it’s year to date performance +15.76%. I decided to resort the data of +15.77% advances or greater from November 20 (a total of 1,697 stocks) by change year to date. Of the 1,694 issues 294 or 17% are up on the year in one of the worst bear years ever.

I have set up a Google Spreadsheet, the screen sorted by change YTD.  If you have a free Google account and wish to access it Click Here!

The Bank of England and the ECB both cut interest rates this morning by 1% and 0.75% respectively.  This is the lowest level in England since 1951. Dow component Merck (MRK) this morning reaffirmed 2008 guidance but lowered 2009 guidance, the stock is offered down a point as I write this. Executives of GM, Ford, and Chrysler will be back in the capital today in what is seen as a crucial hearing.

Jobless Claims came in at 529K vs. a consensus of: 529K. 10 AM brings Factory orders with a consensus forecast of: -2.8%.

At 11:15 AM: Federal Reserve Chairman Ben Bernanke will speak on housing and housing finance in Washington D.C.

Overseas markets are mixed this morning: Nikkei 225 -1.00%, Hang Seng -0.58%, Shanghai Composite +1.84%, DAX +2.26%, and the FTSE 100 +0.67%.

As of about 8:35 AM just after the Jobless Claims the futures are: Dow -147, S&P -17.7, Naz -29, Oil -$1.12, and Gold -$5.10.

Have A Great Day!

Yesterday I looked at several volume indicators on the S&P 500.  Today I’ll extend that study to advance decline data on the NYSE.

Four advance/decline indicators appear below the price chart. First is the advance/decline line a cumulative running total of advancing issues minus declining issues.  The downtrend is obvious. Next indicator chart is the number of advancing issues on the NYSE and as you can see a rather difficult graph to interpret.  I’ve added a 21 day (approximately one month of trading) moving average to the chart and a possible divergence has developed as the moving average made a slight new high during the November decline.

Final two A/D studies are the McClellan Oscillator and the McClellan Summation Index, both are ratio adjusted calculations.  Take notice how last June the summation index crossed below the zero line and has virtually stayed below zero since, keeping you out of the market. To learn more about the McClellan indicators go to the source: HERE!

Combining yesterday’s study with today’s it looks like there is no safe intermediate term bottom just yet.  The intermediate term bottom if it is to be will probably be of a complex type and not a V shaped one. In terms of price we are still in the lower highs and lower lows pattern and until that along with A/D data and volume change the trend remains down.