Nice Rally, but S&P Still Down for the Month

You may recall that the months of May, June and August all started out with two consecutive down days, and the S&P was never able to erase those losses over the remainder of the month. This month also started out with two consecutive down days, which means we should watch for a rally above last month’s close at 1218.89. A move above that level would trigger a one-week buy signal (see this May 3rd column for details), but until that happens there’s reason to remain cautious.  The market enters into a seasonally negative time frame from Friday’s close through the end of the month (see the end of Monday’s column) and new 52-week highs among NYSE common stocks failed to expand despite today’s solid advance. Historically, this has led to a lower S&P one week later 26 out of 35 occurrences (74%) since 2005, a significant edge over the 45% random chance for a lower S&P five sessions later…

SPX 0.5% Above Previous Day’s High, NYSE Common Stock 52wk Highs <= Previous Session
09/15/11… SPX ??? one week later
08/25/11… SPX +3.9% one week later
08/23/11… SPX +4.4% one week later
06/09/11… SPX -1.7% one week later
04/27/11… SPX -0.6% one week later
06/15/10… SPX -1.8% one week later
05/27/10… SPX -3.5% one week later
09/17/09… SPX -1.4% one week later
07/16/09… SPX +3.8% one week later
06/29/09… SPX -5.0% one week later
05/19/09… SPX -1.7% one week later
05/06/09… SPX -3.9% one week later
04/16/09… SPX -1.6% one week later
04/13/09… SPX -3.1% one week later
03/12/09… SPX +4.4% one week later
03/04/09… SPX +1.2% one week later
02/06/09… SPX -4.8% one week later
02/03/09… SPX -1.4% one week later
01/16/09… SPX -1.6% one week later
01/02/09… SPX -4.5% one week later
11/28/08… SPX -2.3% one week later
11/10/08… SPX -7.5% one week later
11/04/08… SPX -10.6% one week later
10/31/08… SPX -3.9% one week later
10/28/08… SPX +6.9% one week later
10/17/08… SPX -6.8% one week later
10/13/08… SPX -1.8% one week later
08/06/08… SPX -0.3% one week later
06/25/08… SPX -4.6% one week later
05/12/08… SPX +1.6% one week later
02/13/08… SPX -1.8% one week later
01/24/08… SPX +2.0% one week later
12/24/07… SPX -3.3% one week later
12/10/07… SPX -4.6% one week later
04/20/06… SPX -0.1% one week later
11/21/05… SPX +0.2% one week later

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

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