SPX and NDX Both Hit New Lows for the Month, yet New 52-week Lows Decline

NYSE TICK action remained neutral-to-negative even during Thursday's morning
rally attempt. TICKscore closed at -18, cumulative TICK -37,000. Institutions
remain better sellers, which suggests a short-term bounce will most likely not
represent the beginning of a sustainable move higher.

With the S&P and NASDAQ both falling to their lowest levels in over a month
Thursday, it's noteworthy that new 52-week lows declined on both exchanges. As
I noted June 3rd... "Consider that over the last eight and a half years, there
have been a total of 261 separate sessions in which the S&P500 hit a one-month
low. Only 33 of those 261 occurrences coincided with a contraction in new 52-
week lows on both exchanges. Each instance is listed in the table below, along
with the S&P's performance over the next 2-3 sessions. Note that in 28 out of
33 cases, the drop in new lows ultimately led to a higher S&P two or three
sessions later. That 85% win rate is significantly better than the 63% at-any-
time odds of a higher SPX close 2-3 sessions later."

That setup was triggered Thursday, as was a more unusual setup given that both
the SPX and NDX hit their lowest levels of the past month despite the drop in
52-week lows. Since the inception of the Nasdaq100 in 1985, we've seen this
occur a total of 29 times, all of which are listed in the table below. Note
that in 27 out of 29 cases, or 93% of the time, the S&P closed at a
subsequently higher level 2-4 trading days later, significantly greater than
the 70% at-any-time odds of a higher S&P 2-4 days later...

NDX & SPX Hit One-Month Lows, New 52-week Lows Decline
06/12/08... ???
01/23/08... Higher SPX close three sessions later
01/07/08... Higher SPX close three sessions later
11/12/07... Higher SPX close two sessions later
11/09/07... Higher SPX close two sessions later
07/31/07... Higher SPX close two sessions later
05/18/06... Higher SPX close two sessions later
01/03/06... Higher SPX close two sessions later
08/24/05... Higher SPX close three sessions later
04/18/05... Higher SPX close three sessions later
08/13/04... Higher SPX close two sessions later
07/23/04... Higher SPX close two sessions later
09/29/03... Higher SPX close two sessions later
08/05/03... Higher SPX close two sessions later
12/31/02... Higher SPX close two sessions later
10/08/02... Higher SPX close two sessions later
09/20/02... Higher SPX close four sessions later
09/18/01... No higher SPX close 2-4 sessions later
03/20/01... Higher SPX close four sessions later
12/21/00... Higher SPX close two sessions later
10/13/00... Higher SPX close four sessions later
10/18/99... Higher SPX close two sessions later
09/01/98... Higher SPX close four sessions later
08/28/98... No higher SPX close 2-4 sessions later
06/24/93... Higher SPX close two sessions later
02/17/93... Higher SPX close two sessions later
06/18/92... Higher SPX close two sessions later
06/26/90... Higher SPX close two sessions later
11/11/88... Higher SPX close two sessions later
01/21/88... Higher SPX close two sessions later

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

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