NYSE Breadth 2:1 Negative, but Unusually Light Volume Suggests a Short-term Turnaround

Market averages settled with solid losses Monday in very light trading.
Breadth ended 2:1 negative on both the NYSE and NASDAQ. NYSE TICK action was
negative, with our TICKscore and Cumulative TICK indicators settling at -13
and -60,000 respectively. Big board volume hit its second-lowest level of the
year as less than 1 billion shares traded hands. The table below lists the
last thirty occurrences in which breadth on the NYSE came in 2:1 or better in
favor of declining issues and big board volume hit a three-week low (as was
the case Monday). Following the date is the performance of the S&P500 over the
next 2-3 trading days. Note that in 26 out of 30 cases stretching back to the
late 80's, the S&P500 closed at a higher level 2-3 trading days later. That
suggests good odds we'll see the S&P close back over today's settlement of
1278 in the Wednesday-Thursday time frame. Also noteworthy is that even on the
four occasions this setup was proved wrong, the largest loss amounted to a
small 0.6% drop for the S&P...

NYSE Breadth 2:1 Negative, Volume at Three-Week Low
08/18/08... S&P500 ???
07/28/08... S&P500 +4.0% two sessions later
08/27/07... S&P500 -0.6% three sessions later
03/27/07... S&P500 -0.5% three sessions later
06/19/06... S&P500 +1.0% two sessions later
04/08/05... S&P500 +0.6% two sessions later
11/11/02... S&P500 +0.7% two sessions later
08/02/02... S&P500 +1.5% three sessions later
05/06/02... S&P500 +3.4% two sessions later
03/25/02... S&P500 +1.1% two sessions later
07/26/99... S&P500 +1.3% two sessions later
02/12/99... S&P500 +0.6% three sessions later
09/17/98... S&P500 +0.5% two sessions later
08/10/98... S&P500 +0.1% two sessions later
05/18/98... S&P500 +1.2% two sessions later
07/05/96... S&P500 -0.2% three sessions later (*)
11/11/94... S&P500 +0.6% two sessions later
05/09/94... S&P500 +0.3% three sessions later
03/21/94... S&P500 -0.0% two sessions later (*)
04/29/91... S&P500 +1.8% two sessions later
02/26/91... S&P500 +1.2% two sessions later
02/20/91... S&P500 +0.1% two sessions later
12/17/90... S&P500 +1.3% two sessions later
08/30/90... S&P500 +1.4% two sessions later
08/10/90... S&P500 +1.2% two sessions later
07/05/90... S&P500 +1.1% two sessions later
02/12/90... S&P500 +0.6% two sessions later
11/20/89... S&P500 +0.8% two sessions later
09/25/89... S&P500 +0.3% two sessions later
08/21/89... S&P500 +1.2% two sessions later
08/14/89... S&P500 +0.8% two sessions later

Note that the one-week buy setup recently discussed in my August 7th column
was also triggered Monday.

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

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