S&P Closes Higher, But More Stocks Close Under Their Lower Bollinger Bands Wednesday

Institutions remained better sellers Wednesday. TICKscore closed at -8, the eighth negative reading in the last nine sessions. Cumulative TICK settled at a neutral +10,500, keeping the 20-day moving average trending lower. New 20-day lows continue to outnumber new 20-day highs even with the 1.5% morning run-up, suggesting there wasn’t broad participation on the upside. Along similar lines, we saw an increase in the number of stocks that closed under their lower bollinger bands Wednesday. That’s the third day in a row that the S&P has closed higher despite more stocks closing under their lower bands, a very unusual development. I only have four years of this data, but in that time there have only been nine cases in which more stocks closed under their lower bollinger bands two consecutive sessions and the S&P closed higher both days. In each case the S&P posted a subsequently lower close 1-2 trading days later. This occurred on both Tuesday and Wednesday, suggesting the potential for a selloff on Thursday…

11/04/09… S&P500 ???
11/03/09… S&P500 ???
01/16/09… S&P500 -5.3% one day later
09/26/08… S&P500 -8.8% one day later
09/12/08… S&P500 -4.7% one day later
09/11/08… S&P500 -4.5% two days later
08/21/08… S&P500 -0.9% two days later
07/01/08… S&P500 -1.8% one day later
08/07/07… S&P500 -1.6% two days later
08/02/07… S&P500 -2.7% one day later
04/13/06… S&P500 -0.3% one day later

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

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