NYSE Cumulative TICK Hits a Two-Month High, a Bullish Sign for the Intermediate-term

Wednesday marked the third 3:1 positive breadth session on the NASDAQ exchange
this year. Typically, the Nasdaq has traded sideways to down the day after
such a lopsided session. There have been nineteen 3:1 positive breadth
sessions on the NASDAQ over the last decade, each of which is listed in the
table below. Note that only one case led to a gain of more than 0.5% the
following day, indicating a session like Wednesday often relates to a short-
term ‘buying climax’…

Nasdaq Breadth 3:1 Positive
07/16/08… NDX ??? next day
04/01/08… NDX -0.4% next day
03/18/08… NDX -2.6% next day
11/28/07… NDX +0.3% next day
11/23/07… NDX -2.0% next day
09/18/07… NDX +0.3% next day
08/29/07… NDX +0.5% next day
03/06/07… NDX -0.4% next day
10/12/06… NDX +0.5% next day
08/15/06… NDX +2.3% next day (*)
07/19/06… NDX -1.6% next day
06/29/06… NDX -0.7% next day
06/15/06… NDX -0.7% next day
03/12/04… NDX -2.2% next day
11/27/02… NDX -0.9% next day
10/15/02… NDX -4.2% next day
04/05/01… NDX -4.7% next day
01/03/01… NDX -2.7% next day
06/02/00… NDX -0.7% next day
04/18/00… NDX -3.6% next day

Noteworthy that Wednesday’s session produced the highest Cumulative TICK
reading in over two months at +81,000. That’s a positive sign for the
intermediate-term. The table below highlights the last thirty instances in
which the cumulative TICK closed at its highest level of the last forty
trading days…

NYSE Cumulative TICK Hits a Two-Month High
07/16/08… S&P500 ??? two weeks later
04/16/08… S&P500 +1.5% two weeks later
03/18/08… S&P500 +2.8% two weeks later
11/28/07… S&P500 +1.2% two weeks later
06/27/07… S&P500 +2.8% two weeks later
05/02/07… S&P500 +1.2% two weeks later
04/05/07… S&P500 +2.8% two weeks later
03/20/07… S&P500 +1.9% two weeks later
10/12/06… S&P500 +1.9% two weeks later
10/04/06… S&P500 +1.2% two weeks later
07/19/06… S&P500 +1.5% two weeks later
06/01/06… S&P500 -2.3% two weeks later
04/18/06… S&P500 +0.4% two weeks later
01/03/06… S&P500 +0.7% two weeks later
11/02/05… S&P500 +1.4% two weeks later
05/18/05… S&P500 +1.6% two weeks later
02/04/05… S&P500 -0.1% two weeks later
01/31/05… S&P500 +2.1% two weeks later
11/04/04… S&P500 +1.9% two weeks later
05/25/04… S&P500 +1.6% two weeks later
05/11/04… S&P500 +1.6% two weeks later
02/06/04… S&P500 -0.2% two weeks later
12/29/03… S&P500 +1.1% two weeks later
10/01/03… S&P500 +2.8% two weeks later
08/28/03… S&P500 +1.6% two weeks later
07/02/03… S&P500 -1.2% two weeks later
04/22/03… S&P500 +2.5% two weeks later
04/17/03… S&P500 +4.1% two weeks later
04/14/03… S&P500 +3.7% two weeks later
01/06/03… S&P500 -4.5% two weeks later
01/02/03… S&P500 +0.6% two weeks later

Note that in 25 out of 30 cases, or 83% of the time, the S&P was trading
higher two weeks later, significantly better than the 54% at-any-time odds for
a higher S&P two weeks (ten trading days) later. In general, very positive
NYSE TICK action typically leads to further price strength over the
intermediate-term.

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

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