NYSE TICK Hits Multi-Year High

NYSE TICK ran up to a very high +1615 during Thursday’s late-day surge, which marks the highest TICK reading in years and what could be the highest reading ever recorded (depending if you believe the +2058 reading on the last day of 2006). That’s a short-term bearish indication, as unusually high TICK readings suggest buying power is spent for the short-term. In the table below are the last 30 instances in which the NYSE TICK recorded its highest intraday high in two months or more…

NYSE TICK Hits Two-Month High
07/15/10… ???
05/25/10… Lower S&P close one session later
03/23/10… Lower S&P close one session later
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

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, well above the 60% random chance for a lower S&P close within the next two days in the same time frame. Even more significant is that in 20 out of 30 cases, or 67% of the time the S&P closed lower the next day vs. a 45% random chance.

Recent performance has been somewhat erratic, but I give this signal a better-than-average chance of success with the SPX 2-day RSI climbing back over 98 at Thursday’s close. Recall from Wednesday’s column that a 2-day RSI over 98 has been a good indication of limited upside potential over the short-term until the RSI falls out of overbought territory. The recent failure of the S&P to post a higher high after Tuesday’s 90% up volume day also points to generally lower prices heading into the middle of next week.

The ability of the Nasdaq100 (NDX) to string together an eighth consecutive higher close was another noteworthy development, as this price pattern has a tendency to lead to a higher NDX one week later (see table below). I suspect we’ll still trade lower short-term, but we’ll want to monitor the quality of the selloff for additional insight into next week’s action…

Nasdaq100 Up Eight Consecutive Sessions
07/15/10… Nasdaq ??? one week later
03/05/10… Nasdaq +1.9% one week later
11/11/09… Nasdaq +1.1% one week later
10/14/09… Nasdaq -0.0% one week later
07/17/09… Nasdaq +4.1% one week later
05/24/05… Nasdaq +1.2% one week later
06/01/04… Nasdaq +1.9% one week later
12/27/99… Nasdaq +5.3% one week later
11/08/96… Nasdaq +0.1% one week later
09/20/96… Nasdaq +0.2% one week later
07/10/95… Nasdaq +4.1% one week later
08/17/94… Nasdaq +0.4% one week later
01/02/92… Nasdaq +5.1% one week later
05/31/91… Nasdaq -3.0% one week later
02/01/91… Nasdaq +4.3% one week later
12/03/90… Nasdaq +2.5% one week later
05/09/90… Nasdaq +4.5% one week later
10/09/89… Nasdaq -5.0% one week later
09/14/88… Nasdaq +0.5% one week later
01/13/87… Nasdaq +4.3% one week later
05/29/86… Nasdaq +0.5% one week later
04/17/86… Nasdaq +0.5% one week later
02/11/86… Nasdaq +1.0% one week later

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

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