Dow Utilities Index Bucks the Trend of the S&P500 for the Second Day in a Row

Stocks closed lower Tuesday on light institutional participation. TICKscore
closed at -3, Cumulative TICK -42,600. Breadth settled better than 2:1
negative on the NYSE, the second day in a row of lopsided negative breadth.
From a short-term perspective, this type of action is usually an indication
that sellers are at or near an 'exhaustion point'. Typically, the S&P bottoms
out and closes higher three or five trading days later. The last thirty
occurrences are listed in the table below. Note that the S&P ended down more
than 0.5% only three times, while it gained more than 0.5% fourteen times...

2:1 negative NYSE breadth two consecutive days
08/19/08... S&P ???
07/14/08... S&P +2.6% three days later
03/17/08... S&P +4.1% three days later
02/29/08... S&P +0.2% three days later
12/17/07... S&P +1.0% three days later
11/12/07... S&P +0.8% three days later
10/16/07... S&P -1.2% five days later (*)
08/28/07... S&P +2.9% three days later
08/15/07... S&P +2.8% three days later
07/27/07... S&P +0.5% three days later
06/25/07... S&P +0.5% three days later
06/06/07... S&P -0.1% five days later
03/05/07... S&P +2.0% three days later
07/13/06... S&P +0.6% five days later
06/13/06... S&P +2.3% three days later
05/12/06... S&P -1.9% five days later (*)
03/07/06... S&P +0.4% three days later
10/27/05... S&P +2.0% three days later
10/06/05... S&P -1.2% five days later (*)
09/20/05... S&P -0.5% five days later
08/05/05... S&P +0.2% three days later
05/13/05... S&P +2.7% three days later
04/14/05... S&P -0.2% five days later
03/22/05... S&P +0.2% three days later
01/04/05... S&P -0.4% five days later
07/26/04... S&P +1.5% three days later
05/07/04... S&P -0.3% five days later
04/29/04... S&P +0.5% three days later
04/14/04... S&P +0.7% three days later
03/11/04... S&P +0.4% three days later
07/17/03... S&P +0.7% three days later

The Dow Utilities Index bucked the trend of the S&P for the second day in a
row, creating an interesting short-term divergence. The table below lists the
last thirty separate occurrences of consecutive higher closes for the Dow
Utilities in the face of lower closes for the S&P500. Note that the S&P's
downside potential is typically limited over the following week. In only three
cases out of thirty was the S&P down 1% or more one week later, while it
gained 1%+ a total of fifteen times...

S&P Closes Down Two, Dow Utilities Close Up Two
08/19/08... S&P500 ??? one week later
04/14/08... S&P500 +4.5% one week later
04/09/08... S&P500 +0.8% one week later
03/27/08... S&P500 +3.3% one week later
12/04/07... S&P500 +1.0% one week later
10/25/07... S&P500 -0.4% one week later
06/29/07... S&P500 +1.9% one week later
05/15/07... S&P500 +1.5% one week later
04/24/07... S&P500 +0.4% one week later
02/23/07... S&P500 -4.4% one week later (*)
02/09/07... S&P500 +1.2% one week later
08/09/06... S&P500 +2.3% one week later
07/21/06... S&P500 +3.1% one week later
07/17/06... S&P500 +2.1% one week later
06/12/06... S&P500 +0.3% one week later
04/24/06... S&P500 -0.2% one week later
02/21/06... S&P500 -0.2% one week later
06/21/05... S&P500 -1.0% one week later (*)
06/08/05... S&P500 +1.0% one week later
04/01/05... S&P500 +0.7% one week later
12/17/04... S&P500 +0.9% one week later
10/25/04... S&P500 +3.3% one week later
08/04/04... S&P500 -2.1% one week later (*)
07/15/04... S&P500 -0.9% one week later
05/14/04... S&P500 -0.2% one week later
03/24/04... S&P500 +3.2% one week later
09/26/03... S&P500 +3.3% one week later
06/19/03... S&P500 -0.9% one week later
03/28/03... S&P500 +1.8% one week later
12/26/02... S&P500 +2.1% one week later
12/13/02... S&P500 +0.7% one week later

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

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