NYSE TICK Action Not Keeping Up With Price

TICKscore closed at -5 Tuesday, leaving intact a major divergence between cumulative TICKscore and price. NYSE TICK action hasn’t been particularly strong during this recent run-up, especially in light of the extremely negative action in late October. If recent price action wasn’t so strong, this would be a major concern. As it stands, I will defer to price but expect a choppy, difficult rally rather than smooth sailing.

The Nasdaq100 posted a NR10 day, meaning it was the narrowest range day of the past ten sessions. That’s a potentially positive sign considering the narrow range was accompanied by lopsided negative breadth (2:1 on the NASDAQ).  This has only occurred thirteen times since 1990, eleven of which led to a higher Nasdaq three sessions later…

Nasdaq NR10 Day & 2:1 Negative Breadth
11/10/09… Nasdaq ??? three sessions later
08/31/09… Nasdaq -1.2% three sessions later
03/27/09… Nasdaq +0.1% three sessions later
10/27/08… Nasdaq +14.0% three sessions later
05/23/08… Nasdaq +3.1% three sessions later
08/11/06… Nasdaq +5.6% three sessions later
07/21/06… Nasdaq +2.5% three sessions later
10/18/05… Nasdaq +1.7% three sessions later
05/10/04… Nasdaq +1.4% three sessions later
04/06/04… Nasdaq +0.2% three sessions later
12/13/02… Nasdaq +0.8% three sessions later
09/05/02… Nasdaq +7.3% three sessions later
08/03/98… Nasdaq -0.2% three sessions later
01/21/92… Nasdaq +5.3% three sessions later

One short-term negative sign was Tuesday’s contraction in new 52-week highs and expansion in new 52-week lows on both the NYSE and NASDAQ. That’s a fairly unusual development given that the NDX posted a higher high, higher low and higher close. This hints at underlying weakness not evident on the surface, and has usually led to a lower Nasdaq close within the next few sessions…

New Highs Contract, New Lows Expand on NDX Rally Day
11/10/09… ???
08/25/09… Lower NDX close one session later
04/03/09… Lower NDX close one session later
03/17/09… Lower NDX close three sessions later
11/04/08… Lower NDX close one session later
06/04/08… Lower NDX close two sessions later
04/21/08… Lower NDX close one session later
04/10/08… Lower NDX close one session later
10/18/07… Lower NDX close one session later
09/24/07… No lower close within three sessions
04/17/07… Lower NDX close one session later
02/21/07… Lower NDX close three sessions later
11/08/06… Lower NDX close one session later
09/14/06… Lower NDX close three sessions later
05/08/06… Lower NDX close one session later
07/15/05… Lower NDX close one session later
05/24/05… Lower NDX close one session later
05/06/05… Lower NDX close two sessions later
02/08/05… Lower NDX close one session later
09/04/03… Lower NDX close one session later
07/30/02… Lower NDX close one session later
03/08/02… Lower NDX close one session later
06/07/01… Lower NDX close one session later
08/15/00… Lower NDX close one session later
07/17/00… Lower NDX close one session later
11/10/99… No lower close within three sessions
08/24/99… Lower NDX close three sessions later
01/07/99… Lower NDX close three sessions later
11/10/98… Lower NDX close two sessions later
07/13/98… Lower NDX close one session later
07/07/98… No lower close within three sessions

Note that out of the past 30 occurrences, 27 led to a lower NDX close within the next three sessions. That 90% win rate is significantly above the 67% at-any-time odds for a lower NDX close (below the setup day) within three days.

Considering the ‘Gap & Go’ price pattern triggered by S&P futures (see intraday update), I would look upon any pullback on Wednesday as a buying opportunity.

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

 Print This Post