Low SPY Volume on a Lopsided Negative Breadth Session is Short-term Bullish
By
Rennie on Monday, December 15th, 2008 at 9:30 pm
Breadth settled near 3:1 negative territory on Monday, sending the NYSE McClellan Oscillator back under 100 for the first time in nearly two weeks. That closes out the short-term sell signal triggered on December 3rd, leaving nothing on the board short-term.
Volume was light, with NYSE and NASDAQ volume both setting fresh two-week lows. SPY volume was similarly light, which is noteworthy considering Monday’s lopsided negative breadth. That marks only the 13th time since the SPY began trading that volume hit a two-week low on the same day that NYSE breadth was at least 2:1 negative. Most of the time this coincided with short-term bottoming action and the SPY was usually trading higher four sessions later, although the small sample size precludes it from being added to the board…
SPY Volume at Two-Week Low, NYSE Breadth 2:1 Negative
12/15/08… SPY ??? four sessions later
09/22/08… SPY -0.4% four sessions later
08/18/08… SPY +1.0% four sessions later
07/28/08… SPY +2.0% four sessions later
09/17/07… SPY +2.6% four sessions later
08/27/07… SPY +0.4% four sessions later
10/27/05… SPY +3.1% four sessions later
02/12/03… SPY +3.8% four sessions later
11/11/02… SPY +3.6% four sessions later
10/07/02… SPY +6.4% four sessions later
08/10/98… SPY -2.2% four sessions later
07/22/96… SPY +0.3% four sessions later
03/10/94… SPY +1.4% four sessions later
The Nasdaq100 posted an inside day, noteworthy considering the nearly 3:1 negative breadth on the NASDAQ exchange. Since 1990, there have only been thirteen instances in which the NDX posted an inside day on a 2:1 negative breadth session. Note the tendency for the Nasdaq to trade higher over the next few sessions, although again, the sample size is too small to be considered statistically significant…
Nasdaq Breadth 2:1 Negative & Inside Day
12/15/08… NDX ??? three sessions later
11/14/08… NDX -7.8% three sessions later
10/27/08… NDX +14.0% three sessions later
07/14/08… NDX +3.1% three sessions later
11/19/07… NDX +0.4% three sessions later
07/27/07… NDX -0.6% three sessions later
06/22/07… NDX +0.6% three sessions later
03/02/07… NDX +0.6% three sessions later
01/05/07… NDX +1.7% three sessions later
08/11/06… NDX +5.5% three sessions later
10/18/05… NDX +1.8% three sessions later
02/24/03… NDX +0.1% three sessions later
01/30/03… NDX -1.4% three sessions later
10/09/02… NDX +11.2% three sessions later
09/20/01… NDX +2.0% three sessions later
With short-term sell setups off the board, there’s potential for some upside over the near-term, but in general there’s little reason to expect a sustainable rally. Note that another intermediate-term sell signal was triggered Monday given that the S&P is once again up over 5% from its two-week ago close while the New High-Low Index continues to drag along in the 10% neighborhood. As I noted in my December 7th column, when we saw this setup last trigger a sell, upside potential is typically limited over the next two weeks. In 23 out of 30 cases, or 77% of the time, the S&P was trading at a lower level ten trading days later, significantly greater than the 47% at-any-time odds of a lower S&P two weeks later.
On a service note, we’ve been hard at work rebuilding the entire Market Tells site on a new platform, and beginning January 2nd, you’ll see an entirely new and improved interface. Everything that you’ve grown accustomed to seeing will still be there, of course. But because the new service is built on a blogging platform, we’ll be able to offer subscribers a whole new experience in terms of interaction. Although barely recognizable as a blog, it will combine what blogs are best at – the interaction not just with the blog author but other visitors/subscribers – with the intraday and daily content you’ve come to expect from Market Tells. Subscribers will have the option of participating in forums, taking part in polls, commenting on intraday/end-of-day posts, modifying their account, subscribing to a private RSS feed and/or Twitter updates and more. In addition, the new format will provide a search feature to assist in finding that elusive post on a certain topic. While 95% of the content will only be available to subscribers, certain intraday charts and data will be published on the public side of the site. One of those charts will be the NYSE Cumulative TICK, an indicator many investors would like to follow but one that requires a bit of technical know-how to set up properly. We’ve published a similar indicator throughout the past year – the cumulative adjusted TICK (created by Brett Steenbarger). We’ll now include both the adjusted as well as the standard Cumulative TICK in the intraday section of the site (and the standard version on the front page of the new site). They’re both based on 1-minute NYSE TICK readings. The adjusted version compares each minute to the preceding 7,800 minutes (20 sessions) and uses the difference in its summation, while the standard version is a simple summation of each minute’s closing TICK value. One of the benefits of the new site is that we’ll be archiving the intraday charts (and data), allowing visitors to look back and examine the Cumulative TICK’s intraday performance against the S&P500 on a day-to-day basis.
Low SPY Volume on a Lopsided Negative Breadth Session is Short-term Bullish
By Rennie on Monday, December 15th, 2008 at 9:30 pmBreadth settled near 3:1 negative territory on Monday, sending the NYSE McClellan Oscillator back under 100 for the first time in nearly two weeks. That closes out the short-term sell signal triggered on December 3rd, leaving nothing on the board short-term.
Volume was light, with NYSE and NASDAQ volume both setting fresh two-week lows. SPY volume was similarly light, which is noteworthy considering Monday’s lopsided negative breadth. That marks only the 13th time since the SPY began trading that volume hit a two-week low on the same day that NYSE breadth was at least 2:1 negative. Most of the time this coincided with short-term bottoming action and the SPY was usually trading higher four sessions later, although the small sample size precludes it from being added to the board…
SPY Volume at Two-Week Low, NYSE Breadth 2:1 Negative
12/15/08… SPY ??? four sessions later
09/22/08… SPY -0.4% four sessions later
08/18/08… SPY +1.0% four sessions later
07/28/08… SPY +2.0% four sessions later
09/17/07… SPY +2.6% four sessions later
08/27/07… SPY +0.4% four sessions later
10/27/05… SPY +3.1% four sessions later
02/12/03… SPY +3.8% four sessions later
11/11/02… SPY +3.6% four sessions later
10/07/02… SPY +6.4% four sessions later
08/10/98… SPY -2.2% four sessions later
07/22/96… SPY +0.3% four sessions later
03/10/94… SPY +1.4% four sessions later
The Nasdaq100 posted an inside day, noteworthy considering the nearly 3:1 negative breadth on the NASDAQ exchange. Since 1990, there have only been thirteen instances in which the NDX posted an inside day on a 2:1 negative breadth session. Note the tendency for the Nasdaq to trade higher over the next few sessions, although again, the sample size is too small to be considered statistically significant…
Nasdaq Breadth 2:1 Negative & Inside Day
12/15/08… NDX ??? three sessions later
11/14/08… NDX -7.8% three sessions later
10/27/08… NDX +14.0% three sessions later
07/14/08… NDX +3.1% three sessions later
11/19/07… NDX +0.4% three sessions later
07/27/07… NDX -0.6% three sessions later
06/22/07… NDX +0.6% three sessions later
03/02/07… NDX +0.6% three sessions later
01/05/07… NDX +1.7% three sessions later
08/11/06… NDX +5.5% three sessions later
10/18/05… NDX +1.8% three sessions later
02/24/03… NDX +0.1% three sessions later
01/30/03… NDX -1.4% three sessions later
10/09/02… NDX +11.2% three sessions later
09/20/01… NDX +2.0% three sessions later
With short-term sell setups off the board, there’s potential for some upside over the near-term, but in general there’s little reason to expect a sustainable rally. Note that another intermediate-term sell signal was triggered Monday given that the S&P is once again up over 5% from its two-week ago close while the New High-Low Index continues to drag along in the 10% neighborhood. As I noted in my December 7th column, when we saw this setup last trigger a sell, upside potential is typically limited over the next two weeks. In 23 out of 30 cases, or 77% of the time, the S&P was trading at a lower level ten trading days later, significantly greater than the 47% at-any-time odds of a lower S&P two weeks later.
On a service note, we’ve been hard at work rebuilding the entire Market Tells site on a new platform, and beginning January 2nd, you’ll see an entirely new and improved interface. Everything that you’ve grown accustomed to seeing will still be there, of course. But because the new service is built on a blogging platform, we’ll be able to offer subscribers a whole new experience in terms of interaction. Although barely recognizable as a blog, it will combine what blogs are best at – the interaction not just with the blog author but other visitors/subscribers – with the intraday and daily content you’ve come to expect from Market Tells. Subscribers will have the option of participating in forums, taking part in polls, commenting on intraday/end-of-day posts, modifying their account, subscribing to a private RSS feed and/or Twitter updates and more. In addition, the new format will provide a search feature to assist in finding that elusive post on a certain topic. While 95% of the content will only be available to subscribers, certain intraday charts and data will be published on the public side of the site. One of those charts will be the NYSE Cumulative TICK, an indicator many investors would like to follow but one that requires a bit of technical know-how to set up properly. We’ve published a similar indicator throughout the past year – the cumulative adjusted TICK (created by Brett Steenbarger). We’ll now include both the adjusted as well as the standard Cumulative TICK in the intraday section of the site (and the standard version on the front page of the new site). They’re both based on 1-minute NYSE TICK readings. The adjusted version compares each minute to the preceding 7,800 minutes (20 sessions) and uses the difference in its summation, while the standard version is a simple summation of each minute’s closing TICK value. One of the benefits of the new site is that we’ll be archiving the intraday charts (and data), allowing visitors to look back and examine the Cumulative TICK’s intraday performance against the S&P500 on a day-to-day basis.