Cumulative TICK Trending Higher, Plus New Lows Drop Despite the S&P Closing in New Lows for 2008

Cumulative TICK closed at -15,500 Tuesday, a relatively tame number
considering the S&P’s sharp decline. Note that the 20-day moving average of
the cumulative TICK has begun moving steadily higher, and it will continue to
do so barring another round of sharply negative TICK action. Some big negative
readings from mid-June will soon no longer be included in the 20-day average,
meaning even neutral closing figures will result in a positive slope for the
20-day average. This tends to support the notion that the market is in the
process of putting in an intermediate-term bottom.

Despite the S&P500 plunging to a fresh 52-week closing low, big board volume
was relatively light, coming in well below Tuesday’s level and just above the
20-day average. The fact that volume declined from the previous session on a
new 52-week low triggers a two-week buy setup, the same setup that was also
triggered back on July 2nd and which remains in effect until the 17th. This
latest signal remains in effect until the 23rd. (See my July 2nd column for
this setup’s track record).

Also noteworthy that new 52-week lows declined sharply Wednesday, from over
400 to less than 200, even as the S&P closed in new lows for the year. Looking
back at times when the S&P closed at a new annual low and new 52-week lows
declined from the previous session, we find the market has a definitive
tendency to reverse course over the short-term. In 26 out of the last 30
occurrences, or 87% of the time, the S&P posted a subsequently higher close 2-
3 sessions later. That’s significantly better than the 65% ‘at any time’ odds
of a higher S&P close 2-3 sessions later…

S&P500 Closes at One-Month Low, New 52-week Lows Drop
07/09/08… ???
07/02/08… Higher S&P close three sessions later
11/21/07… Higher S&P close three sessions later
11/09/07… Higher S&P close two sessions later
08/03/07… Higher S&P close two sessions later
07/31/07… Higher S&P close two sessions later
07/27/07… Higher S&P close three sessions later
03/02/07… Higher S&P close two sessions later
07/17/06… Higher S&P close two sessions later
06/09/06… No higher close 2-3 sessions later
06/07/06… No higher close 2-3 sessions later
05/23/06… Higher S&P close two sessions later
05/18/06… Higher S&P close two sessions later
12/29/05… Higher S&P close two sessions later
08/24/05… Higher S&P close three sessions later
03/24/05… Higher S&P close three sessions later
01/21/05… Higher S&P close two sessions later
07/23/04… Higher S&P close two sessions later
07/15/04… Higher S&P close three sessions later
05/17/04… Higher S&P close two sessions later
04/30/04… Higher S&P close two sessions later
03/23/04… Higher S&P close two sessions later
09/30/03… Higher S&P close two sessions later
09/26/03… Higher S&P close three sessions later
08/05/03… Higher S&P close two sessions later
02/11/03… Higher S&P close three sessions later
02/05/03… No higher close 2-3 sessions later
01/30/03… Higher S&P close two sessions later
07/16/02… No higher close 2-3 sessions later
06/25/02… Higher S&P close two sessions later
06/13/02… Higher S&P close two sessions later

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

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