Implications of Wednesday’s Late-Afternoon Recovery

A violently choppy session ended on a strong note Wednesday. Institutional participation was mixed, with our TICKscore indicator settling at a neutral -4. That’s a fairly weak reading in light of today’s 2:1 positive breadth. Closing TICKscore readings of +5 or lower that have coincided with a 2:1+ positive breadth session have tended to lead to a lower S&P 2-4 trading days later?

TICKscore <=+5 on 2:1+ Positive Breadth Session
03/25/09?
12/26/08? No lower close 2-4 trading days later
12/10/08? Lower S&P close two sessions later
11/13/08? Lower S&P close two sessions later
11/07/08? Lower S&P close two sessions later
09/18/08? Lower S&P close three sessions later
06/25/08? Lower S&P close two sessions later
06/13/08? Lower S&P close two sessions later
12/21/07? Lower S&P close three sessions later
12/05/07? Lower S&P close four sessions later
10/31/07? Lower S&P close two sessions later
10/26/07? Lower S&P close two sessions later
10/23/07? Lower S&P close two sessions later
08/08/07? Lower S&P close two sessions later
07/12/07? Lower S&P close four sessions later
06/01/07? Lower S&P close two sessions later
04/20/07? Lower S&P close two sessions later
10/14/05? Lower S&P close two sessions later
08/11/05? Lower S&P close two sessions later
05/24/04? No lower close 2-4 trading days later
12/16/02? Lower S&P close two sessions later
11/21/02? Lower S&P close two sessions later
10/17/02? No lower close 2-4 trading days later
03/27/02? Lower S&P close three sessions later
02/11/02? Lower S&P close four sessions later
01/31/02? Lower S&P close two sessions later
11/13/01? Lower S&P close three sessions later
09/24/01? No lower close 2-4 trading days later
04/10/01? No lower close 2-4 trading days later
04/05/01? Lower S&P close two sessions later
03/30/01? Lower S&P close two sessions later

Noteworthy that Wednesday’s late-afternoon recovery erased a 1.8% deficit and left the S&P with a modest 0.9% gain. In recent years, this type of ‘recovery’ action has typically led to a lower S&P close within the next 1-2 days. The last thirty occurrences in which the S&P erased a 1.5% intraday loss to close up less than 1% are listed in the table below. Note that in 25 out of 30 cases, or 83% of the time, the S&P posted a subsequently lower close within the next two days. That’s significantly above the 60% at-any-time odds for a lower S&P close within two days…

S&P Down 1.5%+ Intraday, Closes Up Less Than 1%
03/25/09?
03/06/09? Lower SPX close one session later
02/12/09? Lower SPX close one session later
01/23/09? No lower close within two sessions
01/15/09? Lower SPX close two sessions later
12/12/08? Lower SPX close one session later
11/25/08? No lower close within two sessions
11/18/08? Lower SPX close one session later
09/26/08? Lower SPX close one session later
09/05/08? Lower SPX close two sessions later
07/01/08? Lower SPX close one session later
03/13/08? Lower SPX close one session later
08/16/07? No lower close within two sessions
08/10/07? Lower SPX close one session later
06/08/06? Lower SPX close one session later
05/12/04? Lower SPX close one session later
03/20/03? Lower SPX close two sessions later
02/25/03? Lower SPX close one session later
10/23/02? Lower SPX close one session later
08/09/02? Lower SPX close one session later
07/30/02? Lower SPX close two sessions later
07/11/02? Lower SPX close one session later
06/24/02? Lower SPX close one session later
10/05/01? Lower SPX close one session later
03/01/01? Lower SPX close one session later
04/27/00? Lower SPX close one session later
01/05/00? No lower close within two sessions
05/12/99? Lower SPX close two sessions later
09/21/98? No lower close within two sessions
06/07/96? Lower SPX close one session later
03/31/94? Lower SPX close one session later

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

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