Cumulative TICK 20-day Moving Average Continues to Trend Higher
By
Rennie on Thursday, December 11th, 2008 at 9:00 pm
Institutions sold aggressively during the last two hours of Thursday’s session, leading to a solid down day for the major averages. TICKscore settled at -32, Cumulative TICK -51,500. Noteworthy that the 20-day moving average of the Cumulative TICK is trending higher and will most likely continue to do so over the next 1-2 weeks as the very weak readings from mid-November ‘fall off’ the average. The implication is that once short-term sell setups are no longer in play, which could happen as early as Friday’s close, the market will most likely stabilize heading into triple witching expiration.
Breadth settled 3:1 negative on the big board, although that still wasn’t enough to send the NYSE McClellan Oscillator below 100. It will break 100 on Friday (and close out last Wednesday’s sell signal) if breadth settles at least 3:2 negative (see my December 3rd column for more on this short-term setup.)
Noteworthy that volatility declined along with the market Thursday, leading to the fifth consecutive lower close for the VXO. The last thirty times that the VXO initially posted five consecutive lower closes are listed in the table below, along with the S&P500′s performance the following session…
VXO Down Five Consecutive Days
12/11/08… S&P500 ??? next session
07/22/08… S&P500 +0.4% next session
05/16/08… S&P500 +0.1% next session
12/24/07… S&P500 +0.1% next session
08/22/07… S&P500 -0.1% next session
06/19/07… S&P500 -1.4% next session
04/04/07… S&P500 +0.3% next session
03/12/07… S&P500 -2.0% next session
12/14/06… S&P500 +0.1% next session
11/20/06… S&P500 +0.2% next session
08/18/06… S&P500 -0.4% next session
01/27/06… S&P500 +0.1% next session
06/15/05… S&P500 +0.4% next session
05/20/05… S&P500 +0.4% next session
04/08/05… S&P500 +0.0% next session
05/24/04… S&P500 +1.6% next session (*)
02/26/04… S&P500 +0.0% next session
01/21/04… S&P500 -0.3% next session
07/02/03… S&P500 -0.8% next session
04/24/03… S&P500 -1.4% next session
01/06/03… S&P500 -0.7% next session
08/19/02… S&P500 -1.4% next session
02/13/02… S&P500 -0.2% next session
12/05/01… S&P500 -0.3% next session
10/03/01… S&P500 -0.3% next session
07/31/01… S&P500 +0.4% next session
04/16/01… S&P500 +1.0% next session (*)
11/17/00… S&P500 -1.8% next session
10/24/00… S&P500 -2.4% next session
02/04/00… S&P500 -0.0% next session
10/22/99… S&P500 -0.6% next session
While the chances for a higher or lower close the next session has been about 50/50, note that the S&P gained more than 0.4% the following session only two times out of the last thirty occurrences, suggesting limited upside potential on Friday.
Cumulative TICK 20-day Moving Average Continues to Trend Higher
By Rennie on Thursday, December 11th, 2008 at 9:00 pmInstitutions sold aggressively during the last two hours of Thursday’s session, leading to a solid down day for the major averages. TICKscore settled at -32, Cumulative TICK -51,500. Noteworthy that the 20-day moving average of the Cumulative TICK is trending higher and will most likely continue to do so over the next 1-2 weeks as the very weak readings from mid-November ‘fall off’ the average. The implication is that once short-term sell setups are no longer in play, which could happen as early as Friday’s close, the market will most likely stabilize heading into triple witching expiration.
Breadth settled 3:1 negative on the big board, although that still wasn’t enough to send the NYSE McClellan Oscillator below 100. It will break 100 on Friday (and close out last Wednesday’s sell signal) if breadth settles at least 3:2 negative (see my December 3rd column for more on this short-term setup.)
Noteworthy that volatility declined along with the market Thursday, leading to the fifth consecutive lower close for the VXO. The last thirty times that the VXO initially posted five consecutive lower closes are listed in the table below, along with the S&P500′s performance the following session…
VXO Down Five Consecutive Days
12/11/08… S&P500 ??? next session
07/22/08… S&P500 +0.4% next session
05/16/08… S&P500 +0.1% next session
12/24/07… S&P500 +0.1% next session
08/22/07… S&P500 -0.1% next session
06/19/07… S&P500 -1.4% next session
04/04/07… S&P500 +0.3% next session
03/12/07… S&P500 -2.0% next session
12/14/06… S&P500 +0.1% next session
11/20/06… S&P500 +0.2% next session
08/18/06… S&P500 -0.4% next session
01/27/06… S&P500 +0.1% next session
06/15/05… S&P500 +0.4% next session
05/20/05… S&P500 +0.4% next session
04/08/05… S&P500 +0.0% next session
05/24/04… S&P500 +1.6% next session (*)
02/26/04… S&P500 +0.0% next session
01/21/04… S&P500 -0.3% next session
07/02/03… S&P500 -0.8% next session
04/24/03… S&P500 -1.4% next session
01/06/03… S&P500 -0.7% next session
08/19/02… S&P500 -1.4% next session
02/13/02… S&P500 -0.2% next session
12/05/01… S&P500 -0.3% next session
10/03/01… S&P500 -0.3% next session
07/31/01… S&P500 +0.4% next session
04/16/01… S&P500 +1.0% next session (*)
11/17/00… S&P500 -1.8% next session
10/24/00… S&P500 -2.4% next session
02/04/00… S&P500 -0.0% next session
10/22/99… S&P500 -0.6% next session
While the chances for a higher or lower close the next session has been about 50/50, note that the S&P gained more than 0.4% the following session only two times out of the last thirty occurrences, suggesting limited upside potential on Friday.