First Session of 2010 w/ Active Institutional Participation
By
Rennie on Friday, January 22nd, 2010 at 2:09 am
Stocks came under significant selling pressure Thursday on very heavy volume, although the tech sector in general and semiconductors in particular escaped the brunt of the selling. SPY traded over 300 million shares, E-mini S&P futures traded over 3 million contracts. TICKscore closed at -29, the first double-digit negative reading in over a month and the first sign of active institutional participation this year. Note the long-term negative divergence remains intact. The last time we saw such a significant negative divergence (higher high for S&P not confirmed by a higher high for cumulative TICKscore) was at the October 2007 top.
Cumulative TICK settled at -48,000, making the first pair of back-to-back negative Cumulative TICK closes since late October. S&P futures posted a wide range day, with 28 points separating the intraday high and low, the largest daily range in over two months. VXO popped 24% to close over its upper bollinger band, although I haven’t found a consistently reliable signal utilizing overbought volatility. In fact the board remains surprisingly quiet despite the sharp break.
With today’s selloff, the S&P is only up 1 point for the month of January. A down January has a good track record of leading to a subsequently lower monthly close – see this January 4th column – so this will be a pivotal area to watch over the next six sessions.
The Last Hour indicator gained another 100 points Thursday on top of Wednesday’s 175 point rally. This indicator remains in a long-term downtrend, but it will be noteworthy if the recent countertrend move persists much longer. After the kind of sharp move down seen in recent months, it’s unusual (but not unprecedented) to see a quick retracement of the entire decline.
First Session of 2010 w/ Active Institutional Participation
By Rennie on Friday, January 22nd, 2010 at 2:09 amStocks came under significant selling pressure Thursday on very heavy volume, although the tech sector in general and semiconductors in particular escaped the brunt of the selling. SPY traded over 300 million shares, E-mini S&P futures traded over 3 million contracts. TICKscore closed at -29, the first double-digit negative reading in over a month and the first sign of active institutional participation this year. Note the long-term negative divergence remains intact. The last time we saw such a significant negative divergence (higher high for S&P not confirmed by a higher high for cumulative TICKscore) was at the October 2007 top.
Cumulative TICK settled at -48,000, making the first pair of back-to-back negative Cumulative TICK closes since late October. S&P futures posted a wide range day, with 28 points separating the intraday high and low, the largest daily range in over two months. VXO popped 24% to close over its upper bollinger band, although I haven’t found a consistently reliable signal utilizing overbought volatility. In fact the board remains surprisingly quiet despite the sharp break.
With today’s selloff, the S&P is only up 1 point for the month of January. A down January has a good track record of leading to a subsequently lower monthly close – see this January 4th column – so this will be a pivotal area to watch over the next six sessions.
The Last Hour indicator gained another 100 points Thursday on top of Wednesday’s 175 point rally. This indicator remains in a long-term downtrend, but it will be noteworthy if the recent countertrend move persists much longer. After the kind of sharp move down seen in recent months, it’s unusual (but not unprecedented) to see a quick retracement of the entire decline.