Last Hour Indicator Pushes into a One-Month High
By
Rennie on Tuesday, January 15th, 2008 at 11:30 pm
Institutional selling pressure remained conspicuously light Tuesday. Despite a
2%+ down day for the S&P500 and a close at session lows, NYSE TICK action
reflected only modest selling. Our TICKscore indicator staged an intraday
reversal to settle at +5, its fifth consecutive close in positive territory.
Cumulative Adjusted TICK closed at a relatively neutral -108. Breadth closed
roughly 3:1 in favor of decliners, however it’s noteworthy that we still have
a positive divergence working between the S&P and cumulative breadth line.
NYSE TRIN closed over 4.0 Tuesday, reflecting very lopsided market conditions.
As I discussed in my January 6th commentary, one-day TRIN readings over 3.0
have a decent track record at calling for a higher close the following
session. S&P futures are sharply lower in overnight trading, so this will be
put to the test Wednesday. Also keep an eye on the number of new 52-week lows,
which settled at only half the level of January 9th, creating the potential
for a positive divergence.
Volume associated with declining issues accounted for over 90% of total big
board volume Tuesday. This doesn’t mean as much as it once did, however, given
the market’s repeated failure to rally in the months following recent 90% down
volume sessions. See my January 7th column for a discussion.
The combination of Tuesday’s weak first hour and relatively flat last hour
sent the Last Hour indicator surging to a fresh one-month high. As I noted in
my August 12th column, “that’s a red flag from a long-term perspective. In
general it’s a bad sign to see the Last Hour start ticking steadily higher
after a prolonged downdraft. Note from the long-term chart that the
retracement period after a big decline in the Last Hour often relates to some
of the most severe selloffs of the last 30+ years. Typically, the market isn’t
out of the woods until the Last Hour retraces the entire move down, at which
point stocks could be trading significantly lower than current levels. This is
‘big picture’ stuff that could take a year or two to unfold, but it’s
definitely something to consider…”
Last Hour Indicator Pushes into a One-Month High
By Rennie on Tuesday, January 15th, 2008 at 11:30 pmInstitutional selling pressure remained conspicuously light Tuesday. Despite a
2%+ down day for the S&P500 and a close at session lows, NYSE TICK action
reflected only modest selling. Our TICKscore indicator staged an intraday
reversal to settle at +5, its fifth consecutive close in positive territory.
Cumulative Adjusted TICK closed at a relatively neutral -108. Breadth closed
roughly 3:1 in favor of decliners, however it’s noteworthy that we still have
a positive divergence working between the S&P and cumulative breadth line.
NYSE TRIN closed over 4.0 Tuesday, reflecting very lopsided market conditions.
As I discussed in my January 6th commentary, one-day TRIN readings over 3.0
have a decent track record at calling for a higher close the following
session. S&P futures are sharply lower in overnight trading, so this will be
put to the test Wednesday. Also keep an eye on the number of new 52-week lows,
which settled at only half the level of January 9th, creating the potential
for a positive divergence.
Volume associated with declining issues accounted for over 90% of total big
board volume Tuesday. This doesn’t mean as much as it once did, however, given
the market’s repeated failure to rally in the months following recent 90% down
volume sessions. See my January 7th column for a discussion.
The combination of Tuesday’s weak first hour and relatively flat last hour
sent the Last Hour indicator surging to a fresh one-month high. As I noted in
my August 12th column, “that’s a red flag from a long-term perspective. In
general it’s a bad sign to see the Last Hour start ticking steadily higher
after a prolonged downdraft. Note from the long-term chart that the
retracement period after a big decline in the Last Hour often relates to some
of the most severe selloffs of the last 30+ years. Typically, the market isn’t
out of the woods until the Last Hour retraces the entire move down, at which
point stocks could be trading significantly lower than current levels. This is
‘big picture’ stuff that could take a year or two to unfold, but it’s
definitely something to consider…”