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Monday was yet another session in which the S&P closed higher while NYSE TICK reflected underlying selling pressure. It’s the third occurrence in six sessions, triggering the bullish setup discussed in my October 2nd note. This time around, however, it’s hard not to notice that this has become increasingly frequent, to the point that one has to wonder if there isn’t more going on. Monday was the 34th negative Cumulative TICK reading in the last two months, a record. The chart below shows a rolling sum of the number of negative daily Cumulative TICK readings over the past two months…

VIX 10-day average dropped under the 16 level Monday, a pattern that tends to precede short-term strength in stocks. The S&P has rallied over the next three sessions 80% of the time. We’re also coming off the highest number of SPX new 52-week lows in a year on Friday, a pattern that can precede short-term weakness. We’ll see…

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