Pre-Closing NYSE TICK Nearly Closes Over the +1000 Mark

Stock indexes posted solid gains Monday, led by a 1.8% gain for the S&P500.
Advancing issues outnumbered decliners by more than a 3:1 margin on the big
board, the first 3:1 breadth session of 2008. Volume associated with advancing
issues accounted for 87% of total volume. NYSE TICK action was consistently
positive, leading to a solid +47 closing TICKscore.

Unusual to see the S&P post lower highs and lower lows given the lopsided
breadth. There have been a total of one hundred and eleven 3:1 positive
breadth sessions since 1990, almost all of which coincided with ‘higher highs’
for the S&P. Only four times did the S&P fail to rally above the prior day’s
high… today (01/28/08), 08/29/07, 05/11/07 and 05/11/04. In the three prior
cases the S&P was essentially flat the next session but higher three sessions
later, although you can’t infer much from such a small sample.

Notably, the pre-closing TICK came in at a high +996, just shy of the +1000
mark. The pre-closing TICK is the value of the NYSE TICK right before the
closing bell, at 3:59:59pm ET. I’ve found this pre-closing figure a better
indicator than the actual closing TICK, which can vary quite a bit from the
pre-closing level. Historically, a pre-closing figure above +1000 reflects
unusually heavy buying pressure taking place right at the closing bell. It
wasn’t until after the 9/11 terrorist attacks that we saw the first +1000 pre-
closing TICK reading. Since then, however, we’ve seen a number of occurrences
- thirty-four altogether, all of which are noted in the table below, along
with the S&P500′s performance the following session. Note the general theme of
limited downside potential the following session. In only four cases out of 34
was the S&P down more than 0.5% at the next day’s close. While today’s +996
reading doesn’t quite make the cut for inclusion in the table below, it was
very close…

Pre-Closing NYSE TICK Over +1000
09/27/01 TICK +1000… S&P +2.2% next day
02/22/02 TICK +1090… S&P +1.8% next day
03/01/02 TICK +1031… S&P +2.0% next day
07/05/02 TICK +1099… S&P -1.2% next day
07/26/02 TICK +1031… S&P +5.4% next day
10/01/02 TICK +1001… S&P -2.4% next day
01/02/03 TICK +1017… S&P -0.1% next day
05/09/03 TICK +1076… S&P +1.3% next day
06/03/03 TICK +1141… S&P +1.5% next day
06/10/03 TICK +1135… S&P +1.3% next day
05/25/04 TICK +1020… S&P +0.2% next day
05/26/04 TICK +1041… S&P +0.6% next day
06/07/04 TICK +1068… S&P +0.1% next day
06/15/04 TICK +1129… S&P +0.1% next day
08/25/04 TICK +1047… S&P +0.0% next day
08/27/04 TICK +1025… S&P -0.8% next day
08/31/04 TICK +1045… S&P +0.2% next day
12/09/05 TICK +1094… S&P +0.1% next day
06/01/06 TICK +1018… S&P +0.2% next day
12/29/06 TICK +1138… S&P -0.1% next day
01/03/07 TICK +1175… S&P +0.1% next day
03/08/07 TICK +1081… S&P +0.1% next day
03/09/07 TICK +1039… S&P +0.3% next day
03/14/07 TICK +1262… S&P +0.4% next day
03/19/07 TICK +1154… S&P +0.6% next day
03/20/07 TICK +1117… S&P +1.7% next day
03/21/07 TICK +1095… S&P -0.0% next day
03/26/07 TICK +1112… S&P -0.6% next day
03/30/07 TICK +1115… S&P +0.3% next day
04/02/07 TICK +1142… S&P +0.9% next day
04/20/07 TICK +1117… S&P -0.2% next day
05/30/07 TICK +1148… S&P +0.0% next day
06/01/07 TICK +1177… S&P +0.2% next day
07/02/07 TICK +1280… S&P +0.4% next day

Given that we saw the first 3:1 positive breadth session of 2008, it’s worth
noting that if the S&P manages to post a decent gain on Tuesday of more than
0.5%, it would have bullish intermediate-term implications. When the S&P can
post solid gains immediately following a 3:1 positive breadth session, it’s a
sign of a market that is refusing to consolidate. In the past, such action has
invariably led to higher prices over the next three weeks as buyers remain in
firm control. Out of 24 occurrences over the last two decades, only one led to
an S&P down more than 1% three weeks later…

3:1 Pos Breadth & S&P closes up >0.5% next day
09/19/07… S&P +2.2% three weeks later
09/04/07… S&P +1.9% three weeks later
03/20/07… S&P +2.0% three weeks later
08/16/06… S&P -0.1% three weeks later
07/25/06… S&P +1.3% three weeks later
05/26/06… S&P -3.1% three weeks later (*)
07/11/05… S&P +1.3% three weeks later
02/01/05… S&P +0.1% three weeks later
11/04/04… S&P +1.8% three weeks later
10/14/02… S&P +8.0% three weeks later
10/16/98… S&P +8.0% three weeks later
05/01/98… S&P -0.9% three weeks later
05/05/97… S&P +2.4% three weeks later
04/30/97… S&P +4.7% three weeks later
08/02/96… S&P +0.7% three weeks later
02/06/95… S&P +1.3% three weeks later
07/29/92… S&P -1.0% three weeks later
12/26/91… S&P +3.5% three weeks later
12/24/91… S&P +4.7% three weeks later
02/05/91… S&P +4.7% three weeks later
01/18/91… S&P +8.2% three weeks later
05/14/90… S&P +3.4% three weeks later
05/15/89… S&P +2.6% three weeks later
06/01/88… S&P +3.4% three weeks later

Categories : Archived EOD Commentary, End-of-Day Commentary

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