Buyers Rush in Late Tuesday, NYSE TICK Hits Six-Month High

Stocks surged higher in the final hour of Tuesday’s session, turning a modest up day into a solid advance. TICKscore closed at +21, Cumulative TICK +76,600, marking 30 out of the past 31 sessions with a positive Cumulative TICK. The NYSE TICK ran up to a very high +1500 at the start of the last hour (a level not seen in over six months), which could signal buying power is at/near a short-term exhaustion point. Looking back at previous instances in which the NYSE TICK initially recorded its highest reading in two months, there’s a tendency for the market to trade lower short-term. The last thirty occurrences are listed in the table below…

NYSE TICK Hits Two-Month High
03/23/10… ???
02/11/10… Lower S&P close one session later
02/09/10… Lower S&P close one session later
11/27/09… No lower close within two sessions
09/04/09… No lower close within two sessions
08/27/09… Lower S&P close one session later
08/21/09… Lower S&P close one session later
05/18/09… Lower S&P close one session later
02/24/09… Lower S&P close one session later
10/17/08… No lower close within two sessions
09/18/08… No lower close within two sessions
09/05/08… Lower S&P close two sessions later
07/08/08… Lower S&P close one session later
03/26/08… Lower S&P close one session later
01/23/08… Lower S&P close two sessions later
06/27/07… Lower S&P close one session later
06/12/07… No lower close within two sessions
06/08/07… Lower S&P close two sessions later
03/21/07… Lower S&P close one session later
03/12/07… Lower S&P close one session later
12/20/06… Lower S&P close one session later
11/30/06… Lower S&P close one session later
08/29/06… Lower S&P close one session later
05/19/06… Lower S&P close one session later
01/03/06… No lower close within two sessions
04/12/05… Lower S&P close one session later
04/07/05… Lower S&P close one session later
07/12/04… Lower S&P close two sessions later
05/14/04… Lower S&P close one session later
05/12/04… Lower S&P close one session later
03/05/04… Lower S&P close one session later

Over the past 30 occurrences this pattern has led to a lower S&P close (below the setup day’s close) within the next two sessions 80% of the time, significantly greater than the 60% random chance for a lower S&P close within the next two days in the same time frame. Recent performance has been erratic, so I wouldn’t assign too much weight to this one signal, but the notion of weakness (or at least limited upside) on Wednesday is reinforced by today’s fresh six-month closing high for the S&P500. As discussed in this March 12th column, the S&P rarely manages a gain of more than 0.5% the day after a six-month high. On the downside, the market seems to have found an area of support at former trendline resistance. With most studies calling for an SPX above 1160 around the Easter break, I’d expect that line to continue functioning as support in this low-volatility environment.

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

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