29 Days of New 20-day Highs > New 20-day Lows

Institutional participation was light throughout Wednesday’s session. TICKscore closed at a relatively neutral +9, Cumulative TICK +45,000. New 20-day highs jumped to over 1,400, suggesting limited upside potential heading into Friday’s close (see my April 12th column for a recent discussion). At the same time, the spread between new 20-day highs and lows remains persistently positive, as it has ever since the March bottom, indicating pullbacks will most likely continue to be shallow.

Note that the CBOE equity put/call ratio closed at .64 on Wednesday, keeping the 10-day moving average trending lower. Any close under .65 on Thursday would keep the 10-day moving average in a downtrend, a positive sign for stocks. Should the ratio close under .65 and the S&P closes lower Thursday, a short-term buy signal would be triggered. See my February 26th column for details.

Wednesday’s outperformance by the tech sector was a short-term positive development. While the S&P500 settled with a loss of 0.76%, the Nasdaq100 (NDX) closed higher. That’s a short-term bullish combination. In the table below I’ve listed each of the last thirty instances in which the S&P500 closed down at least two-thirds of one percent (-0.66%) and the Nasdaq100 closed down less than one-third of one percent or settled higher. Note the strong tendency for the S&P to close above the setup day within the next three sessions. Out of the last thirty occurrences stretching back to 2000, the SPX closed above the setup day in 28 cases, or 93% of the time. That’s significantly greater than the 72% at-any-time odds for a higher S&P close within the next three days, suggesting further weakness on Thursday will be followed by a resumption of the uptrend on Friday and/or Monday.

S&P500 -0.66% or More, NDX -0.33% or Less
04/22/09… ???
04/06/09… Higher S&P close three sessions later
03/19/09… Higher S&P close two sessions later
02/20/09… Higher S&P close two sessions later
02/04/09… Higher S&P close one sessions later
10/29/08… Higher S&P close one sessions later
10/08/08… Higher S&P close three sessions later
08/12/08… Higher S&P close two sessions later
07/31/08… Higher S&P close three sessions later
07/15/08… Higher S&P close one sessions later
07/07/08… Higher S&P close one sessions later
05/23/08… Higher S&P close one sessions later
03/07/08… Higher S&P close two sessions later
02/28/08… No higher close within three days
06/13/06… Higher S&P close one sessions later
09/13/05… Higher S&P close three sessions later
07/21/05… Higher S&P close one sessions later
05/12/05… Higher S&P close two sessions later
10/13/04… Higher S&P close three sessions later
06/25/03… Higher S&P close one sessions later
04/16/03… Higher S&P close one sessions later
02/11/03… Higher S&P close three sessions later
01/22/03… Higher S&P close one sessions later
12/17/02… No higher close within three days
09/24/02… Higher S&P close one sessions later
04/15/02… Higher S&P close one sessions later
03/05/02… Higher S&P close one sessions later
10/18/01… Higher S&P close one sessions later
10/08/01… Higher S&P close two sessions later
08/09/00… Higher S&P close three sessions later
06/16/00… Higher S&P close one sessions later

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

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