The S&P500 After Four Consecutive Up Weeks

The S&P closed out a fourth consecutive week of gains on its highs, an intermediate-term bullish sign assuming we see higher highs this coming week. The table below lists each of the last thirty instances in which the S&P500 initially posted four consecutive up weeks and the SPX proceeded to take out the most recent weekly high the following week. In 26 out of 30 cases, or 87% of the time, the S&P managed to hold onto a gain through the end of the week. Even when wrong, losses amounted to less than 1.5% in all four cases. This setup will go into effect on trade above SPX 1148.90, just above Friday’s close.

S&P Up Four Weeks, Most Recent Weekly High Exceeded
03/26/10… S&P500 Higher Highs Next Week, Ends +1.0%
04/03/09… S&P500 Higher Highs Next Week, Ends +1.7%
10/05/07… S&P500 Higher Highs Next Week, Ends +0.3%
04/27/07… S&P500 Higher Highs Next Week, Ends +0.8%
10/20/06… S&P500 Higher Highs Next Week, Ends +0.6%
11/18/05… S&P500 Higher Highs Next Week, Ends +1.6%
07/22/05… S&P500 Higher Highs Next Week, Ends +0.0%
09/03/04… S&P500 Higher Highs Next Week, Ends +0.9%
12/19/03… S&P500 Higher Highs Next Week, Ends +0.7%
09/05/03… S&P500 Higher Highs Next Week, Ends -0.3%
05/09/03… S&P500 Higher Highs Next Week, Ends +1.2%
11/01/02… S&P500 Higher Highs Next Week, Ends -0.7%
08/16/02… S&P500 Higher Highs Next Week, Ends +1.3%
08/25/00… S&P500 Higher Highs Next Week, Ends +0.9%
11/12/99… S&P500 Higher Highs Next Week, Ends +1.9%
09/03/99… S&P500 Higher Highs Next Week, Ends -0.4%
07/10/98… S&P500 Higher Highs Next Week, Ends +1.9%
02/20/98… S&P500 Higher Highs Next Week, Ends +1.5%
05/23/97… S&P500 Higher Highs Next Week, Ends +0.1%
11/22/96… S&P500 Higher Highs Next Week, Ends +1.1%
02/09/96… S&P500 Higher Highs Next Week, Ends -1.3% (*)
02/17/95… S&P500 Higher Highs Next Week, Ends +1.3%
08/13/93… S&P500 Higher Highs Next Week, Ends +1.3%
12/04/92… S&P500 Higher Highs Next Week, Ends +0.4%
12/27/91… S&P500 Higher Highs Next Week, Ends +3.2%
02/08/91… S&P500 Higher Highs Next Week, Ends +2.7%
11/24/89… S&P500 Higher Highs Next Week, Ends +1.9%
07/28/89… S&P500 Higher Highs Next Week, Ends +0.5%
06/02/89… S&P500 Higher Highs Next Week, Ends +0.4%
04/21/89… S&P500 Higher Highs Next Week, Ends +0.0%

We’ll be entering the last three sessions of the month from Monday’s close until Thursday’s close, traditionally a time of profit-taking after a big up month, so it looks like the best chances for further gains will be towards the beginning and end of the week. Thursday’s close marks the last trading day of September, which seasonally kicks off the very bullish ‘first week after a big month’ seasonal time frame.

The 20-day moving average of NYSE down volume fell below 40%, a longer-term bullish indication. Recall that this same setup was triggered at the beginning of August, and that signal is set to expire early this week. The fact it was just triggered again suggests we remain in a generally supportive environment heading into year-end.

On a short-term basis, NYSE TICK only traded down to -716 on Friday, the highest intraday low in months and indicative of limited upside potential on Monday. This signal was recently discussed in last Monday’s column. Looking out towards the end of the week, it would be positive confirmation to see NYSE TICK gauges like cumulative TICK and cumulative TICKscore shift back into a pattern of higher highs.

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

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