Sand 2 Pirls Market Commentary a weekly technical stock market overview featuring our custom Bull/Bear P&F ratio

July 28, 2007

7-27-07 Market Commentary

Filed under: Market Commentary — dlpirl @ 9:42 am

Subscriber email sent 7-28-07:

Our unique market breadth indicator now has less than 1400 securities in either Bullish or Bearish patterns, an decrease of over 11% from last week. In a dramatic market change, Bullish patterns decreased by over 56% and Bearish patterns increased by over 65%. The Bullish/Bearish Point & Figure ratio decreased to 0.44 last week from 1.70 the previous week. This is the lowest value since we created and began following this index back in mid March of this year when it was 0.98. A graphical presentation of this week’s Bull/Bear P&F indicator can be viewed at http://www.s2pmarketsignal.com/Bull-Bear_PnF.pdf. The well known market breadth indicator, the Nasdaq McClellan Summation Index fell sharply last week, and at nearly -400 is the lowest it has been since August of 2006.

With a count of two (2) accumulation days and four (4) distribution days in the last two weeks, the Nasdaq Composite Index is currently neither in accumulation nor distribution mode. A week ago it was in distribution mode. (Accumulation days are counted when the index closes up on higher volume than the prior day while Distribution days occur when the index closes down on volume higher than the prior market day.)

 Looking at the Nasdaq Composite CCI(20) Daily pattern last week, we see that the counter trend TLB (Trend Line Break) Short entry signal we mentioned in last week’s commentary is performing very well with a Short gain of 136.25 points on the Nasdaq Composite Index (not directly tradable) and a Short gain of 2.22 points per share of QQQQ. We will note the trade exit signal when it occurs, perhaps in next week’s commentary. Although counter trend TLB signals such as our current one are not shown, for more info on using CCI TLB entry points, you can compare the patterns on this weeks chart, click here.

Concerning industry index performance over the last two weeks, we find only Disk Drives ($DDX) are still in positive territory. Oil Services ($OSX) and Computer Hardware ($HWI) are slightly negative with all other industries negative. Most strongly negative are REITs ($DJR), Brokers ($XBD), and very interestingly Oil ($XOI). In he past, when oil has declined, major indexes have risen. However, it now appears that credit concerns in teh fnancial industries have trumped this pattern. All industry equities except Telecom ($BPTELE) now have a negative Bullish Percept Index (BPI) with Finance ($BPFINA) the most negative.

–Donald Pirl www.s2pmarketsignal.com

S2P Market Signal Commentary may be freely forwarded and otherwise distributed providing content is unchanged and authorship acknowledged. © 2004 Sand2Pirls, Inc. All rights reserved. [ Terms and Conditions/Disclaimer ]

July 21, 2007

7-20-07 Market Commentary

Filed under: Market Commentary — dlpirl @ 6:57 am

Subscriber email sent 7-21-07:

Our unique market breadth indicator now has less than 1550 securities in either Bullish or Bearish patterns, an decrease of about 5% from last week. Bullish patterns decreased by 11% and Bearish patterns increased by 9%. The Bullish/Bearish Point & Figure ratio decreased to 1.70 last week from 2.08 the previous week. Again, the market is following the “three steps forward, two steps back” pattern. Stepping back and looking at the overall pattern, a pullback like this is to be expected so that the bullish run does not become exhausted. A graphical presentation of this week’s Bull/Bear P&F indicator can be viewed at http://www.s2pmarketsignal.com/Bull-Bear_PnF.pdf. The well known market breadth indicator, the Nasdaq McClellan Summation Index fell then rose last week, and is still in negative territory.

With a count of four (4) accumulation days and three (3) distribution days in the last two weeks, the Nasdaq Composite Index is currently in distribution mode. A week ago it was neither in accumulation nor distribution mode. (Accumulation days are counted when the index closes up on higher volume than the prior day while Distribution days occur when the index closes down on volume higher than the prior market day.)

 Looking at the Nasdaq Composite CCI(2) Daily pattern last week, we see that Friday’s sell-off caused a trend line break (TLB). For those bearish on the market, this is a short entry signal. Bulls will be watching the pull back to see if another zero line reject (ZLR) CCI Long entry point occurs if and when the CCI passes below +50. Last week we mentioned that we didn’t take the ZLR Long entry signal because the ZLR rebound was above +50. That was the “V” in the middle of our current TLB. For more info on using CCI ZLR Long entry points, compare the patterns on this weeks chart, click here.

Looking at industry index performance over the last two weeks, we find Networkers ($NWX) and Disk Drives ($DDX) are leading followed by Gold and Silver ($XAU), Computer Hardware ($HWI) and Semiconductors ($SOX). Oil Services ($OSX) follow, and Oil ($XOI) is now slightly negative. So currently it appears that the leadership battle between oil and technology is being won by technology — a bullish sign. The materials industry ($BPMATE) continues leadership strength for yet another week. Brokers ($XBD), and REITs ($DJR) are currently the weakest industries, and are in negative territory for the last two weeks.

–Donald Pirl www.s2pmarketsignal.com

S2P Market Signal Commentary may be freely forwarded and otherwise distributed providing content is unchanged and authorship acknowledged. © 2004 Sand2Pirls, Inc. All rights reserved. [ Terms and Conditions/Disclaimer ]

July 14, 2007

7-13-07 Market Commentary

Filed under: Market Commentary — dlpirl @ 8:18 am

Subscriber email sent 7-14-07:

Our unique market breadth indicator now has over 1600 securities in either Bullish or Bearish patterns, an increase of about 9% from last week. Bullish patterns increased by 13% and Bearish patterns increased by 1%. The Bullish/Bearish Point & Figure ratio increased to 2.08 last week from 1.85 the previous week. We have not had two back-to-back weeks of bullish increase this strong since we began tracking the it back in March. The highest our Bull/Bear P&F Ratio has yet reached in 2.90 the last week in April. A graphical presentation of this week’s Bull/Bear P&F indicator can be viewed at http://www.s2pmarketsignal.com/Bull-Bear_PnF.pdf. The well known market breadth indicator, the Nasdaq McClellan Summation Index fell then rose last week, and is still in negative territory.

With a count of three (3) accumulation days and two (2) distribution days in the last two weeks (unchanged from last week), the Nasdaq Composite Index is currently neither in accumulation nor distribution mode. A week ago it was neither in accumulation nor distribution mode. (Accumulation days are counted when the index closes up on higher volume than the prior day while Distribution days occur when the index closes down on volume higher than the prior market day.)

 Our current ZLR (Zero Line Reject) Entry pattern begun at market close a week ago Monday (7/2) ended at market close last Tuesday (7/10). The gain on the Nasdaq from 7/3 Open to 7/11 Open was 0.41. For QQQQ the gain was 0.28. See the entry and exit annotations in the chart to the left and compare them to the Woodie’s ZLR patterns shown here. At market close on Thursday (7/12), another ZLR signal was given, but with the CCI’s lowest point well above 50 at market close the day before, we choose to disregard the signal as a lower probability trade (as mentioned in Jeff Gannon’s article in the link above). Note that the ZLR signal in the trade just completed began just below 50 and was barely profitable.

Looking at industry index performance over the last two weeks, we find Gold and Silver ($XAU) is up leading gainers followed by Oil ($XOI), Commodities ($CRX), and Semi-conductors ($SOX). Computer technologies ($XCI) and Disk Drives ($DDX) remain positive. The materials industry ($BPMATE) continues leadership strength. Banks ($BKS), REITs ($DJR), Utilities ($UTY), and Telecom ($XTC) are currently among the weakest industries, yet are also all in positive territory. With Oil ($XOI) continueing strong, but Oil Services ($OSX) loosing some momentum, and some technology sectors looking stronger than others, we continue have the unusual situation in which both oil and technology are trending upwards. With the current strength of Gold & Silver, traditionally a bearish hedge, the leadership trend is particularly unclear. We expect that the current strength of Gold & Silver maybe due in part to hedging weak REITs and other Real Estate investments, and this may also be the case for Oil.

–Donald Pirl www.s2pmarketsignal.com

S2P Market Signal Commentary may be freely forwarded and otherwise distributed providing content is unchanged and authorship acknowledged. © 2004 Sand2Pirls, Inc. All rights reserved. [ Terms and Conditions/Disclaimer ]

July 7, 2007

7-6-07 Market Commentary

Filed under: Market Commentary — dlpirl @ 9:54 am

Subscriber email sent 7-7-07:

Our unique market breadth indicator now has close to 1500 securities in either Bullish or Bearish patterns, an increase of about 5% from last week. Bullish patterns increased by 16% and Bearish patterns decreased by 10%. The Bullish/Bearish Point & Figure ratio increased to 1.85 last week from 1.44 the previous week. Whether this bullish trend will continue without the ongoing shifting of leadership we have seen in the last several weeks remains to be seen. Last week’s Bullish count rise and the Bearish count drop are greater than we have seen for over 10 weeks, hinting that acceleration from the prolonged leadership shift may have begun. A graphical presentation of this week’s Bull/Bear P&F indicator can be viewed at http://www.s2pmarketsignal.com/Bull-Bear_PnF.pdf. The well known market breadth indicator, the Nasdaq McClellan Summation Index rose all last week, yet is still in negative territory.

With three (3) accumulation days and two (2) distribution days in the last two weeks, the Nasdaq Composite Index is currently neither in accumulation nor distribution mode. A week ago it was in distribution mode. (Accumulation days are counted when the index closes up on higher volume than the prior day while Distribution days are occur when the index closes down on volume higher than the prior market day.)

 The 20 Day CCI Woodie’s ZLR pattern that we mentioned in last week’s commentary was profitable. The trade Thursday (6/28) open to last Monday (7/2) open gave us 11.25 on the Nasdaq composite (not directly tradable) and 0.19 on QQQQ. The 20 Week CCI (Commodity Channel Index) bearish divergence pattern (higher price peaks and valleys and lower CCI peaks and valleys) that we mentioned for the last two weeks appears to have ended, since both CCI and Nasdaq Composite price rose this past week. Last week’s ZLR exit was immediately followed by a new ZLR Entry with the signal at market close on last Monday. See the entry annotations in the chart to the left and compare them to the Woodie’s ZLR patterns shown here. We will mark the exit of this trade in next week’s commentary if it occurs by then.

Looking at industry index performance over the last two weeks, we now find that Disk Drives ($DDX), once of the lagging industries until market leadership began shifting, continues to lead the U.S. industry indexes. Technology stocks continue with a positive Bullish Percent Index ($BPINFO) although the highest bullish percent for the last two weeks is now the materials industry($BPMATE). Airlines ($XAL) also continue their rebound in positive territory now joined by Gold & Silver ($XAU) previously one of the most negative. REITs ($DJR) have now begun to rebound. Brokers ($XBD), Banks ($BKS), and Natural Gas ($XNG) are now in positive territory, but are among the weakest industries. With Oil ($XOI) and Oil Services ($OSX) regaining upward momentum, we have the unusual situation in which both oil and technology are trending upwards. Likely one will likely give way to the other. Technology leadership would likely be a more bullish scenario overall.

–Donald Pirl www.s2pmarketsignal.com

S2P Market Signal Commentary may be freely forwarded and otherwise distributed providing content is unchanged and authorship acknowledged. © 2004 Sand2Pirls, Inc. All rights reserved. [ Terms and Conditions/Disclaimer ]

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