Outside Week – MarketTells.com

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Despite over 400 advancers, SPX up volume totaled just under 68% of total S&P500 volume Friday. Interestingly, light up volume on an ‘all-or-nothing’ advancers day has been a short-term positive in recent years. Below is every instance since 2010 when 400+ S&P500 components closed higher and SPX up volume was under 70%. Over 21 occurrences, all but one led to a flat-to-up market over the next few sessions. Average gain was 1.2%. A caveat is that prior to 2010, results were almost completely reversed with SPX usually lower three days later.

SPX 400+ Advancers, SPX Up Volume <70%
07/23/21… SPX ??? three sessions later
12/31/20… SPX -0.2% three sessions later
07/29/20… SPX +1.1% three sessions later
04/22/20… SPX +2.8% three sessions later
12/27/18… SPX +0.9% three sessions later
01/17/18… SPX +1.1% three sessions later
03/29/16… SPX +0.9% three sessions later
03/28/14… SPX +1.8% three sessions later
10/11/13… SPX +1.1% three sessions later
04/19/13… SPX +1.5% three sessions later
01/17/13… SPX +0.9% three sessions later
10/15/12… SPX +1.2% three sessions later
11/10/11… SPX +1.5% three sessions later
04/26/11… SPX +1.2% three sessions later
04/20/11… SPX +1.3% three sessions later
03/29/11… SPX +1.0% three sessions later
03/21/11… SPX +0.9% three sessions later
03/08/11… SPX -1.3% three sessions later
01/12/11… SPX +0.7% three sessions later
11/02/10… SPX +2.7% three sessions later
10/20/10… SPX +0.6% three sessions later
07/23/10… SPX +0.3% three sessions later

A headwind visible on the weekly S&P500 chart is the fact that we’ve drawn an outside week at a high point on the chart. When an outside week (higher high, lower low) occurs at a six-month high, there’s a tendency for a flat-to-down market over the next two weeks. The last 30 occurrences are shown below…

S&P500 Outside Week at 26-week High
07/23/21… S&P500 ??? two weeks later
05/07/21… S&P500 -1.8% two weeks later
01/08/21… S&P500 +0.4% two weeks later
10/27/17… S&P500 +0.1% two weeks later
09/29/17… S&P500 +1.3% two weeks later
01/27/17… S&P500 +0.9% two weeks later
08/19/16… S&P500 -0.2% two weeks later
08/05/16… S&P500 +0.1% two weeks later
05/01/15… S&P500 +0.7% two weeks later
01/02/15… S&P500 -1.9% two weeks later
12/05/14… S&P500 -0.2% two weeks later
09/19/14… S&P500 -2.1% two weeks later
09/05/14… S&P500 +0.1% two weeks later
03/07/14… S&P500 -0.6% two weeks later
01/17/14… S&P500 -3.1% two weeks later
12/20/13… S&P500 +0.7% two weeks later
04/05/13… S&P500 +0.1% two weeks later
02/22/13… S&P500 +2.4% two weeks later
02/08/13… S&P500 -0.2% two weeks later
09/07/12… S&P500 +1.6% two weeks later
02/03/12… S&P500 +1.2% two weeks later
05/06/11… S&P500 -0.5% two weeks later
04/30/10… S&P500 -4.3% two weeks later
04/23/10… S&P500 -8.7% two weeks later
01/22/10… S&P500 -2.3% two weeks later
08/21/09… S&P500 -1.0% two weeks later
07/13/07… S&P500 -6.0% two weeks later
06/08/07… S&P500 -0.3% two weeks later
02/16/07… S&P500 -4.7% two weeks later
01/26/07… S&P500 +1.1% two weeks later
05/12/06… S&P500 -0.9% two weeks later

Over 30 occurrences stretching back to 2006, the S&P500 was up 13 times, down 17 times two weeks later. That 43% win rate is a bit below the 59% random odds for a higher S&P two weeks later. Gains were usually small when they did occur, with an average gain of just 0.8%, less than half of the 2.2% average loss. Should stocks continue higher into mid-week as indicated by the initial study, this suggests further upside will be limited heading into August 6th.