Counting 3:1 Breadth Days
By
Rennie on Friday, February 12th, 2010 at 1:06 am
Thursday was the second 3:1 positive breadth session in the last three days and the fourth in the last two weeks. In contrast, we’ve seen only one 3:1 negative breadth session in the same time frame. I’ve created a chart in which a 3:1 positive breadth session is scored a +1 and a 3:1 negative breadth session is assigned a -1. This count is then charted cumulatively, which is the red line seen on this chart stretching back to 2003. It’s interesting to note that after tracking the S&P fairly closely for the entire period, the breadth count took off at last year’s low and hasn’t looked back. It’s already above its 2007 high and is showing no signs of slowing. What to make of it? One takeaway is that the market is clearly not getting the same mileage out of 3:1 positive breadth days as it did throughout 2003-2007. If it did, the S&P would be in new all-time highs by now. At the same time, a prolonged selloff is not going to happen while the count of 3:1 breadth days continues to make higher highs. The indicator has already taken out its January high, suggesting the S&P may follow suit with its own challenge of the January high.
NYSE TICK ran up to a very high +1423 around 11:45 Thursday, the second time in the last three days that the TICK has recorded a two-month high. It’s noteworthy that today’s high TICK occurred in the same range (SPX 1075-1080) as Tuesday’s +1368 reading, suggesting this area will be a significant level to monitor. Short-term it could act as resistance given the tendency for lower prices in the days immediately following a two-month TICK high. An eventual break of this area could lead to a retest of the January high. Will the retest fail? This long-term trendline says ‘yes’, the bearish divergence on the long-term TICKscore chart says ‘yes’ as long as the January high continues to hold, and if the S&P hasn’t posted a monthly close below January’s close at 1073, seasonals would also say ‘yes’.
Here’s a look at the latest principal program activity (that is, program volume executed for member firms’ own accounts expressed as a percentage of total program volume). Click here for the long-term chart. I haven’t updated these chart since the beginning of the year as the link on this page of the NYSE website was (and still is) stale. Here’s the link to the 2010 data. While the NYSE states that data post-July ’09 is not comparable with historical data, we can begin to see a new range forming in the 40-50% area and it looks as though program activity remains fairly healthy, which is usually a supportive factor for the market.
Counting 3:1 Breadth Days
By Rennie on Friday, February 12th, 2010 at 1:06 amThursday was the second 3:1 positive breadth session in the last three days and the fourth in the last two weeks. In contrast, we’ve seen only one 3:1 negative breadth session in the same time frame. I’ve created a chart in which a 3:1 positive breadth session is scored a +1 and a 3:1 negative breadth session is assigned a -1. This count is then charted cumulatively, which is the red line seen on this chart stretching back to 2003. It’s interesting to note that after tracking the S&P fairly closely for the entire period, the breadth count took off at last year’s low and hasn’t looked back. It’s already above its 2007 high and is showing no signs of slowing. What to make of it? One takeaway is that the market is clearly not getting the same mileage out of 3:1 positive breadth days as it did throughout 2003-2007. If it did, the S&P would be in new all-time highs by now. At the same time, a prolonged selloff is not going to happen while the count of 3:1 breadth days continues to make higher highs. The indicator has already taken out its January high, suggesting the S&P may follow suit with its own challenge of the January high.
NYSE TICK ran up to a very high +1423 around 11:45 Thursday, the second time in the last three days that the TICK has recorded a two-month high. It’s noteworthy that today’s high TICK occurred in the same range (SPX 1075-1080) as Tuesday’s +1368 reading, suggesting this area will be a significant level to monitor. Short-term it could act as resistance given the tendency for lower prices in the days immediately following a two-month TICK high. An eventual break of this area could lead to a retest of the January high. Will the retest fail? This long-term trendline says ‘yes’, the bearish divergence on the long-term TICKscore chart says ‘yes’ as long as the January high continues to hold, and if the S&P hasn’t posted a monthly close below January’s close at 1073, seasonals would also say ‘yes’.
Here’s a look at the latest principal program activity (that is, program volume executed for member firms’ own accounts expressed as a percentage of total program volume). Click here for the long-term chart. I haven’t updated these chart since the beginning of the year as the link on this page of the NYSE website was (and still is) stale. Here’s the link to the 2010 data. While the NYSE states that data post-July ’09 is not comparable with historical data, we can begin to see a new range forming in the 40-50% area and it looks as though program activity remains fairly healthy, which is usually a supportive factor for the market.