Intraday Update (A Look at Breadth on the NASDAQ and a Price Pattern for the Dow Industrials)

The last thirty times the Nasdaq has closed higher two days on a declining advance/decline ratio (as occurred last Thursday and Friday) and managed to settle higher the next session (as it’s in the process of doing today) are listed in the table below, along with the performance of the NDX the following session. Note that in only three cases out of thirty did the Nasdaq close up 0.5% or more, while it lost 0.5% or more sixteen times…

Naz Up Two, A/D Down Two + Higher Close Next Day
04/24/09… Nasdaq100 -0.2% next day
01/31/08… Nasdaq100 +0.8% next day (*)
10/31/07… Nasdaq100 -1.9% next day
07/06/07… Nasdaq100 +0.0% next day
05/31/07… Nasdaq100 +0.0% next day
05/09/07… Nasdaq100 -1.6% next day
09/15/06… Nasdaq100 -0.0% next day
08/18/06… Nasdaq100 -1.0% next day
01/11/06… Nasdaq100 -0.6% next day
11/25/05… Nasdaq100 -1.0% next day
11/07/05… Nasdaq100 -0.1% next day
07/13/05… Nasdaq100 +1.0% next day (*)
05/23/05… Nasdaq100 +0.3% next day
05/04/05… Nasdaq100 -0.1% next day
12/06/04… Nasdaq100 -1.9% next day
11/08/04… Nasdaq100 -0.0% next day
10/06/04… Nasdaq100 -1.3% next day
09/14/04… Nasdaq100 -1.3% next day
05/28/04… Nasdaq100 +0.2% next day
09/02/03… Nasdaq100 -0.1% next day
08/21/03… Nasdaq100 -0.8% next day
05/30/03… Nasdaq100 -1.1% next day
04/17/03… Nasdaq100 -0.2% next day
11/06/02… Nasdaq100 -3.8% next day
05/17/02… Nasdaq100 -2.5% next day
03/06/02… Nasdaq100 -0.9% next day
11/05/01… Nasdaq100 +2.9% next day (*)
10/08/01… Nasdaq100 -2.7% next day
05/02/01… Nasdaq100 -4.3% next day
08/24/00… Nasdaq100 -0.5% next day

The Dow Industrials have posted a sixth consecutive session of ‘higher highs’, a pattern that in recent years has often coincided with a short-term topping period for the Dow. Note that out of the last 30 occurrences, 21 (70%) led to a lower Dow close two sessions later. That’s a pretty good record considering the ‘at-any-time’ odds of a lower Dow close two days later in the same time frame is 49%.

Six Higher Highs for the Dow Industrials
07/20/09… Dow ??? two sessions later
03/17/09… Dow +0.1% two sessions later
07/23/08… Dow -2.3% two sessions later
05/21/07… Dow -0.1% two sessions later
04/27/07… Dow +0.1% two sessions later
12/20/06… Dow -1.0% two sessions later
11/20/06… Dow +0.1% two sessions later
03/15/06… Dow +0.6% two sessions later
02/22/06… Dow -0.7% two sessions later
11/25/05… Dow -0.4% two sessions later
05/23/05… Dow -0.6% two sessions later
04/26/05… Dow -0.8% two sessions later
12/16/04… Dow -0.4% two sessions later
04/01/04… Dow +1.8% two sessions later (*)
01/21/04… Dow -0.5% two sessions later
01/05/04… Dow -0.1% two sessions later
11/03/03… Dow -0.4% two sessions later
08/14/03… Dow +1.1% two sessions later (*)
03/20/03… Dow -0.9% two sessions later
02/14/02… Dow -2.6% two sessions later
01/20/01… Dow +0.6% two sessions later
11/08/01… Dow -0.4% two sessions later
08/08/00… Dow -0.6% two sessions later
04/26/00… Dow -1.9% two sessions later
02/30/99… Dow -0.8% two sessions later
10/11/99… Dow -3.9% two sessions later
07/06/99… Dow -0.1% two sessions later
04/12/99… Dow +0.7% two sessions later
11/05/98… Dow -0.2% two sessions later
04/17/98… Dow +0.2% two sessions later
03/20/98… Dow -0.0% two sessions later

Categories : Archived Intraday Commentary, Intraday Commentary

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