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

August 25, 2007

8-24-07 Market Commentary

Filed under: Market Commentary — dlpirl @ 6:47 am

Subscriber email sent 8-25-07:

Our unique market breadth indicator now has less than 950 securities in either Bullish or Bearish patterns. This is a decrease of over 12% from last week and for the third week running, is the lowest total since we began tracking this index back in mid March of this year. Bullish patterns increased by 9% while Bearish patterns decreased by 20%. The Bullish/Bearish Point & Figure ratio increased slightly to 0.47 last week from 0.34 the previous week. Although the bearish decrease is notable, total P&F count and bullish increase have not yet clearly indicated that Bulls are back in control of market breadth. 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 last week, yet at -840 is still below -807, the level reached in July of 2006, but is above the low of -963 reached in April 2005.

With a count of three (3) accumulation day and two (2) distribution days in the last two weeks, the Nasdaq Composite Index is currently in accumulation mode. A week ago it was also 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.) We also note that of the major indexes, only the Nasdaq Composite is in Accumulation mode. The other indexes are currently neither in accumulation nor distribution mode.
Looking at the Nasdaq Composite CCI(20) Daily last week we have no current trend or counter trend entry signals. Note that the CCI never got below 200, we there was no opportunity for a hook from extremes (HFE) counter trend entry point. We now have three days with the CCI above zero. Woodie’s CCI rules require six days above or below the zero line to define a trend.
Looking at last week’s Nasdaq Composite CCI(20) Weekly pattern we see that a ZLR Long entry pattern has formed which looks very similar to the CCI pattern last March. Since we had less than six (6) weeks with the CCI(20) Weekly below zero (0), we have a CCI long entry point on the weekly chart. We will follow the results of this signal in our commentary in the following weeks. For more info on Woodie’s CCI patterns, click here.
Concerning industry index performance over the last two weeks, not surprisingly we see that Brokers ($XBD), Banks ($BKX), and REITs are significantly up. But we also find Computer Hardware ($HWI) has also gained strongly which we take as an indication of bullish breadth in the market’s recent upward turn. The most strongly negative industries continue to be Gold & Silver ($XAU). We also note that in the two week time frame, Semiconductors ($SOX) remain in negative territory. However, the are positive over the last 8 days, and will need to continue upward if the bulls are to gain strength.
The Bullish Percent Index for Financials Financials ($BPFINA) now leads gainers with an increase of over 45% in the last two weeks. In an indication that infrastructure industries are now benefiting, we see increases of approximately 10% in both the S&P Materials and Energy sectors.

–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 ]

August 18, 2007

8-17-07 Market Commentary

Filed under: Market Commentary — dlpirl @ 8:21 am

Subscriber email sent 8-11-07:

Our unique market breadth indicator now has about 1150 securities in either Bullish or Bearish patterns. This is a decrease of over 18% from last week and is the lowest total as well as the largest percentage change since we began tracking this index back in mid March of this year. Where did the liquidity injections go — into securities with Bullish patterns or Bearish ones? Bullish patterns decreased by over 25% while Bearish patterns decreased by just under 16%. When stocks poised to rise (those in bullish patterns) loose more ground than stocks poised to fall (those in bearish patterns), it is clear that the sell off is continuing in spite of efforts to catch the “falling knife”. The Bullish/Bearish Point & Figure ratio decreased to 0.30 last week from 0.35 the previous week. For the third week in a row, we have the lowest values on record for this index. 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 all last week, and at below -800 is the lowest it has been since July of 2006.

With a count of three (3) accumulation day 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 occur when the index closes down on volume higher than the prior market day.)
Looking at the Nasdaq Composite CCI(20) Daily last week, we see a zero line reject (ZLR) pattern above -50 that gave us a Short entry signal at market close on Thursday 8/9. We will track the results of this trade signal in next week’s commentary.
However, looking at last week’s CCI(20) Weekly pattern we see that a ZLR Long entry pattern may be beginning to form signaling caution for a short entry. Note, though that a ZLR, if formed here could quickly turn into a Shamu with renewed strength to the downside. For more info on Woodie’s CCI patterns, click here.
Concerning industry index performance over the last two weeks, we find it is clear where liquidity injections have been directed. All industries except REITs ($DJR) continue in negative territory. Most strongly negative continue to be Forestry and Paper ($DJUSFR), followed by Brokers ($XBD). Interestingly, Oil ($XOI), and Oil Services ($OSX) are no longer on the most negative list, and Computer Hardware ($HWI) has joined the most bearish list. In Addition to REITs, the least negative for the last two weeks are S&P Chemicals ($CEX), Pharmaceuticals ($DRG), and Health Products ($RXP). At this point, technology does not appear to be holding up particularly well, which is an indication of bearish strength.In a dramatic increase of over 75% in two weeks (83% in the last week), Financials ($BPFINA) now have the highest Bullish Percent Index, giving us another clear indication of where liquidity injections have been placed.

Thanks for subscribing to Sand 2 Pirls Market Commentary!

–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 ]

August 4, 2007

8-3-07 Market Commentary

Filed under: Market Commentary — dlpirl @ 8:45 am

Subscriber email sent 8-4-07:

Our unique market breadth indicator now has over 1400 securities in either Bullish or Bearish patterns, an increase of 4% from last week. Building on the dramatic market change discussed here last week, Bullish patterns decreased by another 13% and Bearish patterns increased by over 11%. The Bullish/Bearish Point & Figure ratio decreased to 0.35 last week from 0.44 the previous week. These are the lowest values 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 all last week, and at nearly -700 is the lowest it has been since August of 2006.

With a count of one (1) accumulation day and five (5) 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(20) Daily pattern last week, we see that the counter trend TLB (Trend Line Break) Short entry signal we mentioned two weeks ago gave an exit signal at Thursday 8/2 close. The Short gain from Monday 7/23 open to Friday 8/3 open was 125.57 points on the Nasdaq Composite Index (not directly tradable) and a Short gain of 1.96 points per share of QQQQ. By Woodie’s definition of six CCI bars or more below the zero line, we are now in a short trend. However, the ZLR pivot on Thursday 8/2 was well past the -50 line, so we currently wait for a better entry signal or for the trend to change. For more info on Woodie’s CCI patterns, compare the patterns on this weeks chart, click here.

Concerning industry index performance over the last two weeks, we find all industries are now in negative territory. Most strongly negative are Forestry and Paper ($DJUSFR), followed by Brokers ($XBD), and former leaders Oil ($XOI), and Oil Services ($OSX). The least negative for the last two weeks are Health Products ($RXP), Biotech ($BTK), Internet ($DOT), and Computer Technology ($XCI). If technology continues to hold up well, rebound from the current downward direction is likely to be strong. Telecom ($BPTELE) and Technology ($BPINFO) have the highest Bullish Percent Index over the last two week, adding to the likelyhood that technology will help lead the recovery once it begins.

–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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