Mixed Messages Short-term

NYSE TICK action was decidedly negative Wednesday. Our TICKscore indicator
settled at -26, its lowest reading in over a month and a sign of heavy
institutional selling. The market managed to hold its own, but the negative
TICK action isn't a positive sign from an intermediate-term perspective. Note
that the 20-day moving average of the cumulative TICK continues to trend
lower.

Despite the NASDAQ posting a solid rally day Wednesday, new 52-week highs
failed to expand on either the NASDAQ or NYSE, while new 52-week lows did
expand. That typically means a lower NASDAQ close is in store within the next
three sessions - see my April 21st column for details.

On the positive side short-term, today's solid gain for the NASDAQ and flat
S&P leaves the NDX more than 1% above its three-week ago close while the S&P
is well below its three-week ago close. As I noted the last time this occurred
on May 27th, "this type of relative outperformance by the Nasdaq has been a
short-term positive sign for the S&P. Of the last thirty separate occurrences
in which the S&P was down 1% or more over a three week period and the Nasdaq
gained, all but two led to a subsequently higher S&P close within the next
three sessions. That 93% win rate is significantly above the 72% 'at-any-time'
odds of a higher S&P close within the next three days."

The mixed messages suggests the potential for choppy activity short-term,
given the likelihood of a close both above and below today's settlement over
the next few sessions.

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

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