Cumulative TICK Pre-Fed

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NYSE Cumulative TICK has closed in negative territory seven consecutive sessions heading into today’s session. Below I’ve noted all previous instances when Cumulative TICK closed negative six out of seven sessions leading up to a regularly scheduled Fed announcement. Stocks tended to remains under pressure short-term, with the S&P almost twice as likely to trade lower over the next couple of sessions (up 7, down 13).

Cumulative TICK Negative 6/7 Days Ahead of FOMC Announcement
01/25/22… SPX ??? two sessions later
12/18/18… SPX -3.1% two sessions later
07/31/18… SPX +0.4% two sessions later
12/12/17… SPX -0.5% two sessions later
03/14/17… SPX +0.7% two sessions later
11/01/16… SPX -1.1% two sessions later
12/15/15… SPX -0.1% two sessions later
07/28/15… SPX +0.7% two sessions later
12/16/14… SPX +4.5% two sessions later
03/14/11… SPX -3.1% two sessions later
09/15/08… SPX -3.0% two sessions later
06/24/08… SPX -2.4% two sessions later
11/14/00… SPX -0.8% two sessions later
10/02/00… SPX -0.1% two sessions later
06/27/00… SPX -0.6% two sessions later
05/15/00… SPX -0.3% two sessions later
02/01/00… SPX +1.1% two sessions later
12/20/99… SPX +1.2% two sessions later
11/15/99… SPX +1.2% two sessions later
03/29/99… SPX -1.8% two sessions later
02/02/99… SPX -1.1% two sessions later

The S&P500 is also set to trigger the negative two-week signal mentioned at the end of Sunday’s note. This pre-Fed signal has led to an average drop of nearly 4% for the S&P over the next two weeks. Sample size is small, but along with the study above it suggests the market is in a tough spot short-term.

One thing to watch Tuesday is for a VIX close above 32.75, which would send the VIX 2-day RSI to 100 (rounded). That’s been a decent indication volatility is near a short-term top and stocks near a short-term bottom. Over 21 prior occurrences since 1990, the S&P was flat or higher one week later in all but one case. Average gain was 2%…

VIX 2-day RSI 100 (rounded)
02/25/20… SPX -4.0% one week later
01/27/20… SPX +0.2% one week later
08/05/19… SPX +1.4% one week later
12/24/18… SPX +6.8% one week later
12/30/16… SPX +1.3% one week later
11/02/16… SPX +3.1% one week later
08/24/15… SPX +4.2% one week later
09/01/09… SPX +3.5% one week later
02/27/07… SPX -0.3% one week later
06/13/06… SPX +1.3% one week later
03/10/04… SPX -0.0% one week later
10/12/00… SPX +4.4% one week later
10/28/96… SPX +1.4% one week later
09/05/96… SPX +3.3% one week later
03/31/95… SPX +1.1% one week later
04/04/94… SPX +2.5% one week later
09/21/93… SPX +1.9% one week later
10/07/92… SPX +1.3% one week later
08/13/92… SPX +0.1% one week later
08/19/91… SPX +4.6% one week later
08/06/90… SPX +1.3% one week later

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