Two-day Cumulative TICK Just Under +200k, Highest since Last July
By
Rennie on Sunday, July 25th, 2010 at 8:19 pm
The S&P500 followed through from Thursday’s 90% up volume day with another strong session. Cumulative TICK closed in the +100,000 range for the third time in the last five sessions, a bullish cluster that normally leads to higher prices over the short-term (see beginning of last Thursday’s column). Total number of 52-week highs expanded while new 52-week lows contracted for the fourth consecutive session. As discussed at the end of Thursday’s column, when the S&P consistently advances with expanding new highs and contracting new lows, it normally leads to a higher S&P 2-3 sessions later – that signal was also triggered for a second time at Friday’s close and points to higher prices in the Tuesday-Wednesday time frame. With new 52-week highs above levels from mid-June on both the NYSE and NASDAQ, and with cumulative breadth trading well above its June high, I expect the SPX will soon exceed its mid-June closing high of 1117 as price plays catch-up.
The NYSE McClellan Oscillator closed at a high +246 on Friday, signaling an overbought market. While readings this high more often than not relate to topping periods in the market, I’m not particularly concerned at the moment given the unusually strong market internals. We’ll revisit this in a couple of days. One noteworthy point about +200 readings is that if the S&P can close higher one week later, it’s normally a longer-term bullish sign.
New highs also expanded on a shorter-term time frame, with 20-day highs increasing and 20-day lows decreasing each of the last four sessions. New 20-day highs exceeded 2,000 on Friday, a pattern that usually preceded a day of consolidation. Here’s a look at the last 30 times new 20-day highs topped 2,000…
New 20-day Highs Hit 2,000+
07/23/10… S&P500 ???
06/21/10… S&P500 -1.6% next session
04/23/10… S&P500 -0.4% next session
04/14/10… S&P500 +0.1% next session
04/12/10… S&P500 +0.1% next session
04/05/10… S&P500 +0.2% next session
03/17/10… S&P500 -0.0% next session
03/12/10… S&P500 +0.1% next session
03/05/10… S&P500 -0.0% next session
03/01/10… S&P500 +0.2% next session
01/11/10… S&P500 -0.9% next session
01/04/10… S&P500 +0.3% next session
09/15/09… S&P500 +1.5% next session (*)
09/10/09… S&P500 -0.1% next session
08/03/09… S&P500 +0.3% next session
07/30/09… S&P500 +0.1% next session
07/23/09… S&P500 +0.3% next session
07/20/09… S&P500 +0.4% next session
06/01/09… S&P500 +0.2% next session
05/04/09… S&P500 -0.4% next session
04/29/09… S&P500 -0.1% next session
04/16/09… S&P500 +0.5% next session
04/09/09… S&P500 +0.3% next session
04/02/09… S&P500 +1.0% next session (*)
03/26/09… S&P500 -2.0% next session
03/23/09… S&P500 -2.0% next session
03/19/09… S&P500 -2.0% next session
01/02/09… S&P500 -0.5% next session
09/19/08… S&P500 -3.8% next session
08/11/08… S&P500 -1.2% next session
10/11/07… S&P500 +0.5% next session
In only two cases out of the last thirty did the S&P gain more than 0.5% the next day, and in only seven cases did it fall over 0.5%. In the majority of cases the market closed near unchanged.
With the S&P posting a higher high after Thursday’s 90% up volume session, we’ll want to monitor Friday’s high at SPX 1103.73. When the S&P500 can post two consecutive higher highs immediately after a 90%+ up volume session, the second higher high is usually a short-term buy. The persistent strength in the days following a heavily lopsided session signals buyers aren’t backing down, and the S&P has a good track record (25/28 since 1970) of closing above the first day’s high either the same day or the next. This pattern will go into effect on an intraday move above SPX 1103.73 on Monday and would call for a close above that level either Monday or Tuesday…
Buy the S&P on the Second Higher High after 90%+ Up Volume
Buy 07/09/10 @ 1071.25… S&P close +0.6% same day
Buy 06/14/10 @ 1092.25… S&P close +2.1% next day
Buy 05/12/10 @ 1170.48… S&P close +0.1% same day
Buy 03/09/10 @ 1141.05… S&P close +0.4% next day
Buy 02/18/10 @ 1101.03… S&P close +0.5% same day
Buy 11/11/09 @ 1096.42… S&P close +0.2% same day
Buy 08/25/09 @ 1035.82… S&P close -0.7% next day
Buy 07/15/09 @ 905.84… S&P close +3.0% same day
Buy 05/20/09 @ 916.39… S&P close -3.1% next day
Buy 03/25/09 @ 823.65… S&P close +1.1% next day
Buy 03/19/09 @ 803.04… S&P close -4.3% next day
Buy 03/16/09 @ 758.29… S&P close +2.6% next day
Buy 03/12/09 @ 731.92… S&P close +2.6% same day
Buy 01/02/09 @ 910.32… S&P close +2.4% same day
Buy 11/26/08 @ 868.94… S&P close +2.2% same day
Buy 11/30/07 @ 1473.81… S&P close +0.5% same day
Buy 08/31/07 @ 1468.43… S&P close +0.4% same day
Buy 08/21/07 @ 1451.75… S&P close +0.9% next day
Buy 03/08/07 @ 1401.16… S&P close +0.1% same day
Buy 07/03/06 @ 1276.30… S&P close +0.3% same day
Buy 04/20/06 @ 1310.39… S&P close +0.1% same day
Buy 03/19/03 @ 866.94… S&P close +0.8% same day
Buy 01/06/03 @ 911.25… S&P close +2.0% same day
Buy 07/31/02 @ 909.81… S&P close +0.2% same day
Buy 11/02/87 @ 254.04… S&P close +0.7% same day
Buy 01/07/87 @ 253.99… S&P close +0.5% same day
Buy 08/24/82 @ 116.09… S&P close +1.3% next day
Buy 05/29/70 @ 75.44… S&P close +1.5% same day
Two-day Cumulative TICK Just Under +200k, Highest since Last July
By Rennie on Sunday, July 25th, 2010 at 8:19 pmThe S&P500 followed through from Thursday’s 90% up volume day with another strong session. Cumulative TICK closed in the +100,000 range for the third time in the last five sessions, a bullish cluster that normally leads to higher prices over the short-term (see beginning of last Thursday’s column). Total number of 52-week highs expanded while new 52-week lows contracted for the fourth consecutive session. As discussed at the end of Thursday’s column, when the S&P consistently advances with expanding new highs and contracting new lows, it normally leads to a higher S&P 2-3 sessions later – that signal was also triggered for a second time at Friday’s close and points to higher prices in the Tuesday-Wednesday time frame. With new 52-week highs above levels from mid-June on both the NYSE and NASDAQ, and with cumulative breadth trading well above its June high, I expect the SPX will soon exceed its mid-June closing high of 1117 as price plays catch-up.
The NYSE McClellan Oscillator closed at a high +246 on Friday, signaling an overbought market. While readings this high more often than not relate to topping periods in the market, I’m not particularly concerned at the moment given the unusually strong market internals. We’ll revisit this in a couple of days. One noteworthy point about +200 readings is that if the S&P can close higher one week later, it’s normally a longer-term bullish sign.
New highs also expanded on a shorter-term time frame, with 20-day highs increasing and 20-day lows decreasing each of the last four sessions. New 20-day highs exceeded 2,000 on Friday, a pattern that usually preceded a day of consolidation. Here’s a look at the last 30 times new 20-day highs topped 2,000…
New 20-day Highs Hit 2,000+
07/23/10… S&P500 ???
06/21/10… S&P500 -1.6% next session
04/23/10… S&P500 -0.4% next session
04/14/10… S&P500 +0.1% next session
04/12/10… S&P500 +0.1% next session
04/05/10… S&P500 +0.2% next session
03/17/10… S&P500 -0.0% next session
03/12/10… S&P500 +0.1% next session
03/05/10… S&P500 -0.0% next session
03/01/10… S&P500 +0.2% next session
01/11/10… S&P500 -0.9% next session
01/04/10… S&P500 +0.3% next session
09/15/09… S&P500 +1.5% next session (*)
09/10/09… S&P500 -0.1% next session
08/03/09… S&P500 +0.3% next session
07/30/09… S&P500 +0.1% next session
07/23/09… S&P500 +0.3% next session
07/20/09… S&P500 +0.4% next session
06/01/09… S&P500 +0.2% next session
05/04/09… S&P500 -0.4% next session
04/29/09… S&P500 -0.1% next session
04/16/09… S&P500 +0.5% next session
04/09/09… S&P500 +0.3% next session
04/02/09… S&P500 +1.0% next session (*)
03/26/09… S&P500 -2.0% next session
03/23/09… S&P500 -2.0% next session
03/19/09… S&P500 -2.0% next session
01/02/09… S&P500 -0.5% next session
09/19/08… S&P500 -3.8% next session
08/11/08… S&P500 -1.2% next session
10/11/07… S&P500 +0.5% next session
In only two cases out of the last thirty did the S&P gain more than 0.5% the next day, and in only seven cases did it fall over 0.5%. In the majority of cases the market closed near unchanged.
With the S&P posting a higher high after Thursday’s 90% up volume session, we’ll want to monitor Friday’s high at SPX 1103.73. When the S&P500 can post two consecutive higher highs immediately after a 90%+ up volume session, the second higher high is usually a short-term buy. The persistent strength in the days following a heavily lopsided session signals buyers aren’t backing down, and the S&P has a good track record (25/28 since 1970) of closing above the first day’s high either the same day or the next. This pattern will go into effect on an intraday move above SPX 1103.73 on Monday and would call for a close above that level either Monday or Tuesday…
Buy the S&P on the Second Higher High after 90%+ Up Volume
Buy 07/09/10 @ 1071.25… S&P close +0.6% same day
Buy 06/14/10 @ 1092.25… S&P close +2.1% next day
Buy 05/12/10 @ 1170.48… S&P close +0.1% same day
Buy 03/09/10 @ 1141.05… S&P close +0.4% next day
Buy 02/18/10 @ 1101.03… S&P close +0.5% same day
Buy 11/11/09 @ 1096.42… S&P close +0.2% same day
Buy 08/25/09 @ 1035.82… S&P close -0.7% next day
Buy 07/15/09 @ 905.84… S&P close +3.0% same day
Buy 05/20/09 @ 916.39… S&P close -3.1% next day
Buy 03/25/09 @ 823.65… S&P close +1.1% next day
Buy 03/19/09 @ 803.04… S&P close -4.3% next day
Buy 03/16/09 @ 758.29… S&P close +2.6% next day
Buy 03/12/09 @ 731.92… S&P close +2.6% same day
Buy 01/02/09 @ 910.32… S&P close +2.4% same day
Buy 11/26/08 @ 868.94… S&P close +2.2% same day
Buy 11/30/07 @ 1473.81… S&P close +0.5% same day
Buy 08/31/07 @ 1468.43… S&P close +0.4% same day
Buy 08/21/07 @ 1451.75… S&P close +0.9% next day
Buy 03/08/07 @ 1401.16… S&P close +0.1% same day
Buy 07/03/06 @ 1276.30… S&P close +0.3% same day
Buy 04/20/06 @ 1310.39… S&P close +0.1% same day
Buy 03/19/03 @ 866.94… S&P close +0.8% same day
Buy 01/06/03 @ 911.25… S&P close +2.0% same day
Buy 07/31/02 @ 909.81… S&P close +0.2% same day
Buy 11/02/87 @ 254.04… S&P close +0.7% same day
Buy 01/07/87 @ 253.99… S&P close +0.5% same day
Buy 08/24/82 @ 116.09… S&P close +1.3% next day
Buy 05/29/70 @ 75.44… S&P close +1.5% same day