Stock Indexes Settle Lower, Post Higher Highs & Higher Lows in a Typical Post-90% Up Volume Day
By
Rennie on Thursday, February 26th, 2009 at 2:18 am
Stock indexes posted higher highs and higher lows despite negative market internals Wednesday. This hasn’t meant much in terms of the S&P, but the NDX typically continues to push higher when it posts higher highs and higher lows on a 3:2+ negative breadth day. The last thirty occurrences are listed in the table below?
NDX Higher High & Higher Low Despite 3:2 Neg Breadth
02/25/09? NDX ??? two sessions later
02/04/09? NDX +5.1% two sessions later
01/22/09? NDX +1.4% two sessions later
12/09/08? NDX -2.6% two sessions later
12/04/08? NDX +8.6% two sessions later
10/14/08? NDX -3.8% two sessions later
08/07/08? NDX +3.3% two sessions later
06/17/08? NDX +0.5% two sessions later
03/19/08? NDX +5.8% two sessions later
02/28/08? NDX -3.4% two sessions later
02/21/08? NDX +1.1% two sessions later
10/30/07? NDX -0.5% two sessions later
09/24/07? NDX +1.5% two sessions later
07/16/07? NDX +0.5% two sessions later
05/17/07? NDX +1.4% two sessions later
05/14/07? NDX +0.2% two sessions later
11/09/06? NDX +1.6% two sessions later
10/20/06? NDX +0.3% two sessions later
08/09/06? NDX +0.1% two sessions later
07/27/06? NDX +2.1% two sessions later
04/03/06? NDX +1.5% two sessions later
10/20/05? NDX +2.3% two sessions later
07/21/05? NDX -0.5% two sessions later
05/12/05? NDX +1.8% two sessions later
04/08/05? NDX +0.2% two sessions later
01/13/05? NDX +1.8% two sessions later
10/19/04? NDX +2.2% two sessions later
10/13/04? NDX -0.2% two sessions later
10/07/04? NDX -1.2% two sessions later
09/08/04? NDX +2.6% two sessions later
05/07/04? NDX +1.1% two sessions later
Note that in 23 out of 30 cases, or 77% of the time, the NDX closed at a subsequently higher level two sessions later, significantly better than the Nasdaq?s 50% at-any-time odds of closing higher two sessions later in the same time frame.
Today’s NASDAQ breadth actually came in better than 2:1 negative, and it’s much more unusual to see the NDX post higher highs and higher lows when breadth is this lopsided. It’s only occurred 17 times in the history of the NDX, 14 of which led to a higher close two sessions later.
Of course, it wasn’t surprising to see higher highs and higher lows after Tuesday’s 93% up volume session. The S&P usually trades in this manner after such a lopsided buying session. Key for Thursday’s session is whether the S&P can keep that trend of higher highs intact by trading above Wednesday’s high at SPX 780.12. The table below lists all recent instances [since 1970] in which the S&P500 posted two consecutive higher highs immediately after a 90%+ up volume session. Note that in every case, the second higher high was a short-term buying opportunity, and the S&P settled above the first day’s high (which would be Wednesday’s high in this case) either the same day or the next in every case…
Buy the S&P on the Second Higher High after 90%+ Up Volume
Buy 01/02/09 @ 910.32… S&P close +2.4% same day
Buy 11/26/08 @ 868.94… S&P close +2.2% same day
Buy 11/30/07 @ 1473.81… S&P close +0.5% same day
Buy 08/31/07 @ 1468.43… S&P close +0.4% same day
Buy 08/21/07 @ 1451.75… S&P close +0.9% next day
Buy 03/08/07 @ 1401.16… S&P close +0.1% same day
Buy 07/03/06 @ 1276.30… S&P close +0.3% same day
Buy 04/20/06 @ 1310.39… S&P close +0.1% same day
Buy 03/19/03 @ 866.94… S&P close +0.8% same day
Buy 01/06/03 @ 911.25… S&P close +2.0% same day
Buy 07/31/02 @ 909.81… S&P close +0.2% same day
Buy 11/02/87 @ 254.04… S&P close +0.7% same day
Buy 01/07/87 @ 253.99… S&P close +0.5% same day
Buy 08/24/82 @ 116.09… S&P close +1.3% next day
Buy 05/29/70 @ 75.44… S&P close +1.5% same day
For this setup to go into effect Thursday, the S&P would need to trade above 780.12 on an intraday basis. Should that occur, odds would favor a close above that level on Thursday or Friday at the latest.
The Nasdaq/NYSE Volume Ratio has been running at relatively low levels the past few days, which is supportive of further upside short-term. But note that the 20-day moving average of the volume ratio is also high from a historical perspective, which does not support the notion of a sustainable rally beyond the short-term.
Stock Indexes Settle Lower, Post Higher Highs & Higher Lows in a Typical Post-90% Up Volume Day
By Rennie on Thursday, February 26th, 2009 at 2:18 amStock indexes posted higher highs and higher lows despite negative market internals Wednesday. This hasn’t meant much in terms of the S&P, but the NDX typically continues to push higher when it posts higher highs and higher lows on a 3:2+ negative breadth day. The last thirty occurrences are listed in the table below?
NDX Higher High & Higher Low Despite 3:2 Neg Breadth
02/25/09? NDX ??? two sessions later
02/04/09? NDX +5.1% two sessions later
01/22/09? NDX +1.4% two sessions later
12/09/08? NDX -2.6% two sessions later
12/04/08? NDX +8.6% two sessions later
10/14/08? NDX -3.8% two sessions later
08/07/08? NDX +3.3% two sessions later
06/17/08? NDX +0.5% two sessions later
03/19/08? NDX +5.8% two sessions later
02/28/08? NDX -3.4% two sessions later
02/21/08? NDX +1.1% two sessions later
10/30/07? NDX -0.5% two sessions later
09/24/07? NDX +1.5% two sessions later
07/16/07? NDX +0.5% two sessions later
05/17/07? NDX +1.4% two sessions later
05/14/07? NDX +0.2% two sessions later
11/09/06? NDX +1.6% two sessions later
10/20/06? NDX +0.3% two sessions later
08/09/06? NDX +0.1% two sessions later
07/27/06? NDX +2.1% two sessions later
04/03/06? NDX +1.5% two sessions later
10/20/05? NDX +2.3% two sessions later
07/21/05? NDX -0.5% two sessions later
05/12/05? NDX +1.8% two sessions later
04/08/05? NDX +0.2% two sessions later
01/13/05? NDX +1.8% two sessions later
10/19/04? NDX +2.2% two sessions later
10/13/04? NDX -0.2% two sessions later
10/07/04? NDX -1.2% two sessions later
09/08/04? NDX +2.6% two sessions later
05/07/04? NDX +1.1% two sessions later
Note that in 23 out of 30 cases, or 77% of the time, the NDX closed at a subsequently higher level two sessions later, significantly better than the Nasdaq?s 50% at-any-time odds of closing higher two sessions later in the same time frame.
Today’s NASDAQ breadth actually came in better than 2:1 negative, and it’s much more unusual to see the NDX post higher highs and higher lows when breadth is this lopsided. It’s only occurred 17 times in the history of the NDX, 14 of which led to a higher close two sessions later.
Of course, it wasn’t surprising to see higher highs and higher lows after Tuesday’s 93% up volume session. The S&P usually trades in this manner after such a lopsided buying session. Key for Thursday’s session is whether the S&P can keep that trend of higher highs intact by trading above Wednesday’s high at SPX 780.12. The table below lists all recent instances [since 1970] in which the S&P500 posted two consecutive higher highs immediately after a 90%+ up volume session. Note that in every case, the second higher high was a short-term buying opportunity, and the S&P settled above the first day’s high (which would be Wednesday’s high in this case) either the same day or the next in every case…
Buy the S&P on the Second Higher High after 90%+ Up Volume
Buy 01/02/09 @ 910.32… S&P close +2.4% same day
Buy 11/26/08 @ 868.94… S&P close +2.2% same day
Buy 11/30/07 @ 1473.81… S&P close +0.5% same day
Buy 08/31/07 @ 1468.43… S&P close +0.4% same day
Buy 08/21/07 @ 1451.75… S&P close +0.9% next day
Buy 03/08/07 @ 1401.16… S&P close +0.1% same day
Buy 07/03/06 @ 1276.30… S&P close +0.3% same day
Buy 04/20/06 @ 1310.39… S&P close +0.1% same day
Buy 03/19/03 @ 866.94… S&P close +0.8% same day
Buy 01/06/03 @ 911.25… S&P close +2.0% same day
Buy 07/31/02 @ 909.81… S&P close +0.2% same day
Buy 11/02/87 @ 254.04… S&P close +0.7% same day
Buy 01/07/87 @ 253.99… S&P close +0.5% same day
Buy 08/24/82 @ 116.09… S&P close +1.3% next day
Buy 05/29/70 @ 75.44… S&P close +1.5% same day
For this setup to go into effect Thursday, the S&P would need to trade above 780.12 on an intraday basis. Should that occur, odds would favor a close above that level on Thursday or Friday at the latest.
The Nasdaq/NYSE Volume Ratio has been running at relatively low levels the past few days, which is supportive of further upside short-term. But note that the 20-day moving average of the volume ratio is also high from a historical perspective, which does not support the notion of a sustainable rally beyond the short-term.