3:1 Positive Breadth and 90% Up Volume Suggests a Lower Close on Wednesday
By
Rennie on Tuesday, December 16th, 2008 at 9:00 pm
Heavy institutional buying in the final hour of trading sent the NYSE TICKscore up to +34 at the close. Cumulative TICK settled at +44,800, keeping the 20-day moving average trending higher for the time being. Breadth closed better than 3:1 positive on both the NYSE and NASDAQ, which suggests buying power is likely spent for the short-term. Over the last decade, there have been 25 separate sessions in which advancing issues outnumbered declining issues by more than a 3:1 margin on the NASDAQ exchange. Each instance is noted in the table below, along with the performance of the NDX the following day. Note that in only one case did the Nasdaq gain more than 0.5%, suggesting limited upside potential on Wednesday…
Nasdaq Breadth 3:1 Positive
12/16/08… NDX ??? next day
11/26/08… NDX -0.6% next day
11/24/08… NDX -1.0% next day
10/31/08… NDX -0.0% next day
10/13/08… NDX -4.5% next day
09/19/08… NDX -4.5% next day
07/16/08… NDX +0.5% 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
Also indicating limited upside potential on Wednesday, volume associated with advancing issues accounted for over 90% of total volume on the NYSE. Over the past decade, we’ve seen a total of 25 sessions with better than 90% up volume. In 18 cases, or 68% of the time, the S&P closed lower the following session, significantly greater than the 48% at-any-time odds of a lower S&P close the next day…
90%+ Up Volume on the NYSE
12/16/08… S&P500 ??? next day
11/24/08… S&P500 +0.7% next day
11/13/08… S&P500 -4.2% next day
10/28/08… S&P500 -1.1% next day
10/13/08… S&P500 -0.5% next day
04/01/08… S&P500 -0.2% next day
03/18/08… S&P500 -2.4% next day
11/28/07… S&P500 +0.1% next day
11/23/07… S&P500 -2.3% next day
11/13/07… S&P500 -0.7% next day
09/18/07… S&P500 +0.6% next day
08/31/07… S&P500 +1.1% next day
08/29/07… S&P500 -0.4% next day
08/17/07… S&P500 -0.0% next day
03/21/07… S&P500 -0.0% next day
03/06/07… S&P500 -0.3% next day
07/19/06… S&P500 -0.9% next day
06/29/06… S&P500 -0.2% next day
06/15/06… S&P500 -0.4% next day
04/18/06… S&P500 +0.2% next day
06/07/04… S&P500 +0.1% next day
03/17/03… S&P500 +0.4% next day
01/02/03… S&P500 -0.1% next day
07/29/02… S&P500 +0.4% next day
07/05/02… S&P500 -1.2% next day
09/08/98… S&P500 -1.7% next day
Today’s 5:1 positive breadth sent the NYSE McClellan Oscillator back into overbought territory. Breadth needs to close at least 3:2 negative on Wednesday to send the McClellan back under +150. If it doesn’t, we’ll see another short-term sell signal triggered, identical to the one triggered December 3rd and closed out Monday.
3:1 Positive Breadth and 90% Up Volume Suggests a Lower Close on Wednesday
By Rennie on Tuesday, December 16th, 2008 at 9:00 pmHeavy institutional buying in the final hour of trading sent the NYSE TICKscore up to +34 at the close. Cumulative TICK settled at +44,800, keeping the 20-day moving average trending higher for the time being. Breadth closed better than 3:1 positive on both the NYSE and NASDAQ, which suggests buying power is likely spent for the short-term. Over the last decade, there have been 25 separate sessions in which advancing issues outnumbered declining issues by more than a 3:1 margin on the NASDAQ exchange. Each instance is noted in the table below, along with the performance of the NDX the following day. Note that in only one case did the Nasdaq gain more than 0.5%, suggesting limited upside potential on Wednesday…
Nasdaq Breadth 3:1 Positive
12/16/08… NDX ??? next day
11/26/08… NDX -0.6% next day
11/24/08… NDX -1.0% next day
10/31/08… NDX -0.0% next day
10/13/08… NDX -4.5% next day
09/19/08… NDX -4.5% next day
07/16/08… NDX +0.5% 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
Also indicating limited upside potential on Wednesday, volume associated with advancing issues accounted for over 90% of total volume on the NYSE. Over the past decade, we’ve seen a total of 25 sessions with better than 90% up volume. In 18 cases, or 68% of the time, the S&P closed lower the following session, significantly greater than the 48% at-any-time odds of a lower S&P close the next day…
90%+ Up Volume on the NYSE
12/16/08… S&P500 ??? next day
11/24/08… S&P500 +0.7% next day
11/13/08… S&P500 -4.2% next day
10/28/08… S&P500 -1.1% next day
10/13/08… S&P500 -0.5% next day
04/01/08… S&P500 -0.2% next day
03/18/08… S&P500 -2.4% next day
11/28/07… S&P500 +0.1% next day
11/23/07… S&P500 -2.3% next day
11/13/07… S&P500 -0.7% next day
09/18/07… S&P500 +0.6% next day
08/31/07… S&P500 +1.1% next day
08/29/07… S&P500 -0.4% next day
08/17/07… S&P500 -0.0% next day
03/21/07… S&P500 -0.0% next day
03/06/07… S&P500 -0.3% next day
07/19/06… S&P500 -0.9% next day
06/29/06… S&P500 -0.2% next day
06/15/06… S&P500 -0.4% next day
04/18/06… S&P500 +0.2% next day
06/07/04… S&P500 +0.1% next day
03/17/03… S&P500 +0.4% next day
01/02/03… S&P500 -0.1% next day
07/29/02… S&P500 +0.4% next day
07/05/02… S&P500 -1.2% next day
09/08/98… S&P500 -1.7% next day
Today’s 5:1 positive breadth sent the NYSE McClellan Oscillator back into overbought territory. Breadth needs to close at least 3:2 negative on Wednesday to send the McClellan back under +150. If it doesn’t, we’ll see another short-term sell signal triggered, identical to the one triggered December 3rd and closed out Monday.