Short-term market breadth is presaging a weak day or a day of consolidation for Thursday. Longer term market breadth is still showing a slight bearish divergence.
The top pane shows the number of stocks trading above their 5 day moving averages (red line) and the number of stocks in an uptrend (gray histogram).
The middle pane (green line) shows the Decliners Indicator.
The bottom pane show the 52 week New Highs and Lows indicator.
The short term indicators (red and green lines) are near extremes which have in the past led to slight weakness or consolidation.
The longer-term indicators (gray and green histograms) show that the market foundation is not quite as strong as it was when it was at the same price levels a few months ago.
The Day before 3 Day Weekends, thoght of you. when i read this ,
In my formulative years, the trading day before any three day weekend had a distinct bullish bias, up over 82.6% of the time from 1950-1975. This was eventually documented by students of the calendar and I first read about it in the mid 80s and as I have mentioned often, one of my Uncle Yogi Berra favorite quotes, ‘Once something is obvious, it ain’t obvious no more’. Over the last 10 years, the day before all three day weekends is only 34-30 for a median gain of 0.05%. And once it comes out in Print, you would almost do as well to fade it, especially if the market shows signs of frontrunning the trend. For example, on those 8 occasions in the last ten years, where the 2nd day before a three day weekend was up at least 1%, the S&P was up only twice on the actual day before a three day weekend for a median loss of 0.90%. The S&P was up 1.3% today. Day -1 in the table represents the day before the three day weekend and Day +1, the day after.
DATE DAY-2 DAY-1 DAY+1
20020118 1.00 -0.99 -0.73
20020524 1.02 -1.21 -0.86
20030703 1.17 -0.81 1.90
20040903 1.12 -0.42 0.69
20060526 1.11 0.57 -1.59
20080829 1.48 -1.37 -0.41
20090409 1.18 3.81 0.25
20100528 3.29 -1.24 -1.72
#UP-DN = 2- 6 3- 5
AVG%CHG= -0.21 -0.31
MED%CHG= -0.90 -0.57
1%MOVES= 1- 3 1- 2
The Bulls will argue that today’s gains were more about some Gonzo earnings announcements from IBM, Intel and Apple after hours than frontrunning of seasonal trends. I would like to believe they are correct and the fact that Globex SPs are up 6 points in after hours trading doesn’t hurt their case