Drop in New Highs Points to Limited Upside on Wednesday
By
Rennie on Tuesday, October 12th, 2010 at 9:33 pm
A late-day rally sent the S&P500 and Nasdaq to new multi-month highs, yet new 52-week highs contracted on both the NYSE and NASDAQ. While not a sell signal, this does imply limited upside potential on Wednesday. The table below summarized the last 30 instances in which the SPX and NDX both hit new 20-day highs and closed higher while 52-week highs dropped on both exchanges…
NDX & SPX Hit New 20day Highs, Close Higher, New 52-week Highs Drop
10/12/10… S&P500 ??? next session
04/06/10… S&P500 -0.6% next session
03/11/10… S&P500 -0.0% next session
03/09/10… S&P500 +0.5% next session
09/14/09… S&P500 +0.3% next session
08/25/09… S&P500 +0.0% next session
08/04/09… S&P500 -0.3% next session
06/02/09… S&P500 -1.4% next session
05/06/09… S&P500 -1.3% next session
01/02/09… S&P500 -0.5% next session
05/15/08… S&P500 +0.1% next session
04/17/07… S&P500 +0.1% next session
02/15/07… S&P500 -0.1% next session
11/16/06… S&P500 +0.1% next session
09/01/06… S&P500 +0.2% next session
07/12/05… S&P500 +0.1% next session
05/19/05… S&P500 -0.2% next session
12/03/04… S&P500 -0.1% next session
09/02/04… S&P500 -0.4% next session
06/08/04… S&P500 -1.0% next session
01/07/04… S&P500 +0.5% next session
05/06/03… S&P500 -0.5% next session
08/22/02… S&P500 -2.3% next session
03/08/02… S&P500 +0.3% next session
04/19/01… S&P500 -0.9% next session
01/18/01… S&P500 -0.4% next session
09/01/00… S&P500 -0.9% next session
07/17/00… S&P500 -1.1% next session
07/14/00… S&P500 +0.0% next session
11/18/99… S&P500 -0.2% next session
11/12/99… S&P500 -0.1% next session
While the chance for a higher or lower close the next day only slightly favors the downside, note that the S&P never gained more than 0.5% the next day in each of the last 30 occurrences stretching back over a decade. The S&P fell more than 0.5% eight times, meaning in nearly 3 out of 4 cases the S&P settled within 0.5% of unchanged. Not a sell signal, but a sign of limited upside potential and probable consolidation on Wednesday . The short-term bullish signal based off the steady decline in the CBOE equity put/call ratio went into effect at today’s close, and combined with the pair of bullish Cumulative TICK readings on Tuesday and Friday of last week, indications continue to point higher heading into the end of the week.
Drop in New Highs Points to Limited Upside on Wednesday
By Rennie on Tuesday, October 12th, 2010 at 9:33 pmA late-day rally sent the S&P500 and Nasdaq to new multi-month highs, yet new 52-week highs contracted on both the NYSE and NASDAQ. While not a sell signal, this does imply limited upside potential on Wednesday. The table below summarized the last 30 instances in which the SPX and NDX both hit new 20-day highs and closed higher while 52-week highs dropped on both exchanges…
NDX & SPX Hit New 20day Highs, Close Higher, New 52-week Highs Drop
10/12/10… S&P500 ??? next session
04/06/10… S&P500 -0.6% next session
03/11/10… S&P500 -0.0% next session
03/09/10… S&P500 +0.5% next session
09/14/09… S&P500 +0.3% next session
08/25/09… S&P500 +0.0% next session
08/04/09… S&P500 -0.3% next session
06/02/09… S&P500 -1.4% next session
05/06/09… S&P500 -1.3% next session
01/02/09… S&P500 -0.5% next session
05/15/08… S&P500 +0.1% next session
04/17/07… S&P500 +0.1% next session
02/15/07… S&P500 -0.1% next session
11/16/06… S&P500 +0.1% next session
09/01/06… S&P500 +0.2% next session
07/12/05… S&P500 +0.1% next session
05/19/05… S&P500 -0.2% next session
12/03/04… S&P500 -0.1% next session
09/02/04… S&P500 -0.4% next session
06/08/04… S&P500 -1.0% next session
01/07/04… S&P500 +0.5% next session
05/06/03… S&P500 -0.5% next session
08/22/02… S&P500 -2.3% next session
03/08/02… S&P500 +0.3% next session
04/19/01… S&P500 -0.9% next session
01/18/01… S&P500 -0.4% next session
09/01/00… S&P500 -0.9% next session
07/17/00… S&P500 -1.1% next session
07/14/00… S&P500 +0.0% next session
11/18/99… S&P500 -0.2% next session
11/12/99… S&P500 -0.1% next session
While the chance for a higher or lower close the next day only slightly favors the downside, note that the S&P never gained more than 0.5% the next day in each of the last 30 occurrences stretching back over a decade. The S&P fell more than 0.5% eight times, meaning in nearly 3 out of 4 cases the S&P settled within 0.5% of unchanged. Not a sell signal, but a sign of limited upside potential and probable consolidation on Wednesday . The short-term bullish signal based off the steady decline in the CBOE equity put/call ratio went into effect at today’s close, and combined with the pair of bullish Cumulative TICK readings on Tuesday and Friday of last week, indications continue to point higher heading into the end of the week.