Examining Higher Highs on a Longer Time Frame

Institutional participation was light Tuesday, with our TICKscore indicator settling at a modest +5. 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 usually led to a lower S&P 2-4 trading days later, particularly in recent years…

TICKscore <=+5 on 2:1+ Positive Breadth Session
09/15/09… ???
03/25/09… Lower S&P close three sessions later
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

Looking beyond the short-term, pull up a monthly chart of the S&P500 and note that the market has made ‘higher highs’ during each of the past six months. That’s only the fourth time this decade that the S&P has entered into such a persistent long-term uptrend. The table below highlights every prior instance since 1928 when the market initially recorded six consecutive months of ‘higher highs’ (Dow Industrials data was used prior to 1962 given the absence of high-low-close data for the S&P pre-’62). Note that in every case but one, the market either exceeded the most recent high the following month, and/or the S&P closed higher the following month. In only two cases out of twenty-five did neither occur, suggesting we’re likely to see some upside follow-through in the month of October…

Six Consecutive Higher Highs on Monthly Chart
09/30/09… ???
01/31/07… High Exceeded Following Month
04/28/06… High Exceeded Following Month
02/27/04… High Exceeded Following Month
03/31/99… High Exceeded Following Month
06/30/95… High Exceeded Following Month
04/30/91… Higher Monthly Close Next Month
09/29/89… High Exceeded Following Month
04/30/87… Higher Monthly Close Next Month
03/31/86… High Exceeded Following Month
01/31/83… High Exceeded Following Month
10/31/80… High Exceeded Following Month
06/30/75… High Exceeded Following Month
05/31/72… No Higher High/Higher Close Following Month
03/31/67… High Exceeded Following Month
05/28/64… Higher Monthly Close Next Month
04/30/63… High Exceeded Following Month
04/28/61… High Exceeded Following Month
09/30/58… High Exceeded Following Month
03/31/54… High Exceeded Following Month
12/31/49… High Exceeded Following Month
01/31/46… High Exceeded Following Month
05/31/45… High Exceeded Following Month
02/27/43… High Exceeded Following Month
11/30/36… No Higher High/Higher Close Following Month
09/30/35… High Exceeded Following Month

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

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