Potential Divergence Between Price and New 52-week Lows

With the SPX and NDX falling to fresh 5-day lows this morning, it’s noteworthy that new 52-week lows haven’t expanded on either the NYSE or NASDAQ. Current data shows NYSE new lows just under Thursday’s close (96 vs. 98 Thursday) while NASDAQ new lows are running well below Thursday’s level (126 vs. 163 Thursday). This data usually ends up being revised after the close, so it’s too soon to say, but if the final number of new 52-week lows does not expand above yesterday’s levels, it would have short-term bullish implications. The last thirty times we’ve seen this pattern triggered are listed in the table below. Note that in 28 out of 30 cases, or 93% of the time, the S&P closed higher (above the setup day’s close) within the next two sessions, significantly above the 68% at-any-time odds for a higher SPX close within two days…

SPX & NDX Hit 5-Day Lows, New 52-week Lows Fail to Expand
01/28/10… Higher SPX close two sessions later
11/20/09… Higher SPX close one session later
08/11/09… Higher SPX close one session later
07/07/09… Higher SPX close two sessions later
02/23/09… Higher SPX close one session later
12/02/08… Higher SPX close one session later
11/21/08… Higher SPX close one session later
10/09/08… Higher SPX close two sessions later
10/07/08… No higher close within two sessions
09/18/08… Higher SPX close one session later
09/17/08… Higher SPX close one session later
08/20/08… Higher SPX close one session later
06/12/08… Higher SPX close one session later
06/03/08… Higher SPX close two sessions later
01/23/08… Higher SPX close one session later
01/07/08… No higher close within two sessions
01/02/08… Higher SPX close one session later
11/21/07… Higher SPX close one session later
11/12/07… Higher SPX close one session later
11/09/07… Higher SPX close two sessions later
07/31/07… Higher SPX close one session later
06/08/07… Higher SPX close one session later
04/12/07… Higher SPX close one session later
12/22/06… Higher SPX close one session later
11/03/06… Higher SPX close one session later
05/18/06… Higher SPX close one session later
01/03/06… Higher SPX close one session later
12/08/05… Higher SPX close one session later
11/30/05… Higher SPX close one session later
08/24/05… Higher SPX close one session later

Currently the previously mentioned BKX/SPX sell setup isn’t set to trigger as the S&P is only up 0.2%. If that signal doesn’t trigger and new 52-week lows hold below Thursday’s levels, we would have mixed signals on the board for early next week. Note that if the S&P closes lower today, recently mentioned sell signals would be fulfilled and the short-term outlook would shift to bullish.

Categories : Archived Intraday Commentary, Intraday Commentary

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