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

November 24, 2007

11-23-07 Market Commentary

Filed under: Market Commentary — dlpirl @ 2:41 pm

Subscriber email sent 11-24-07:
This continues to be a very strong bear market. The number of securities in bearish patterns is the highest its been since we began tracking it back in March. In fact each of the last three weeks have been higher than the previous highest bear security count back on August 3. The total count of securities in either bullish or bearish patterns is now over 1600, an increase of over 13% from last week. Before two weeks ago, this total count had been most recently reached in April and May in a bull market. Bullish patterns decreased by over 13% while Bearish patterns increased by almost 22%. The Bullish/Bearish Point & Figure ratio is now 0.22, our lowest level on record, and down from 0.31 the previous week. 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 (NASI) decreased for the sixth week in a row, and at -818, it is nearing the bottoms it reached in previous bear runs ending in August 2007, July 2006, and April 2005, and is now below the October 2005 bottom.

The Nasdaq Composite Index has a count of two (2) accumulation days and one (1) distribution days in the last two weeks and is currently in neither in accumulation nor distribution mode. A week ago it was accumulation 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 other indexes, all are currently in neither in accumulation nor distribution mode.

We continue to wait for both daily and weekly Woodie’s CCI(20) trade signals to form. Reviewing last week’s Nasdaq Composite CCI(20) Daily chart, although we have passed 6 bars with the CCI(20) below the zero line and are in a Short trend by Woodie’s trend definition, the CCI(20) is still just above minus 100, and we require that it be above minus 50 before taking a ZLR short entry signal.
Looking at last week’s Nasdaq Composite CCI(20) Weekly pattern, the CCI(20) has been below zero for two weeks, and we continue to wait for a Long ZLR or another possible entry pattern to form.
Concerning industry index performance over the last two weeks, we see that Oil Services (OSX), Natural Gas (XNG), and Gold and Silver (XAU) are again leading which is bearish. Somewhat surprisingly, Computer Technology (XCI) is now also in the top 5 leading industries. However, Semis (SOX) and Networkers (NWX) are in the bottom five. Technology appears to be searching for its bottom, but it is not at all clear it has yet found it. Financial industries including Banks (BKX), Brokers (XBD), and REITs (DJR) all continue to remain out of the bottom five. However, none of the Financials have moved significantly upwards which we continue to require as an indication of the market regaining bullish strength.
The Bullish Percent (BP) Equity Indexes over the last two weeks, shows a similar bearish picture to the industry indexes. With only Consumer Staples (BPSTAP) and Utilities (BPUTIL) in positive territory, all other equity indices are losing ground, especially Technology (BPINFO). With energy costs increasing again, and Financials not showing much strength, we expect the current bear market to continue until Financials regain strength and enable recovery of broader market and allow the appearance of new leadership.

–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 ]

November 17, 2007

11-16-07 Market Commentary

Filed under: Market Commentary — dlpirl @ 11:32 am

Subscriber email sent 11-17-07:
Although the market was up fractionally for the week, Bears held their ground. The total count of securities in either bullish or bearish patterns our unique market breadth indicator has dropped to just over 1400 — a decrease of more than 12% from last week. Bullish patterns decreased by over 26% while Bearish patterns decreased by almost 7%. The Bullish/Bearish Point & Figure ratio is now 0.31, down from 0.39 the previous week. 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 (NASI) decreased for the fifth week in a row, and at -624, it is approaching the bottom it reached in previous bear runs ending in in July 2006, October 2005, and April 2005.

The Nasdaq Composite Index has a count of two (2) accumulation days and two (2) distribution days in the last two weeks and is currently in accumulation 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.) We also note that of the other indexes, all are currently in accumulation mode.

Reviewing last week’s Nasdaq Composite CCI(20) Daily chart, we mentioned last week that we were waiting for 6 bars with the CCI(20) below the zero line for the Woodie’s trend definition to shift from Long to Short. Wednesday 11/14 was the 6th day. However, the CCI(20) is still below -100, and we require that it be above minus 50 before taking a ZLR short entry signal.
Looking at last week’s Nasdaq Composite CCI(20) Weekly pattern, the CCI(20) is now just below zero, and we are waiting for a Long ZLR or another possible entry pattern to form.
Concerning industry index performance over the last two weeks, we see that our former leader, the bearish hedge Gold and Silver (XAU) has lost its recent gains and now is among the top 5 losing industries. Only Hospitals (RXH), and Pharmaceuticals (DRG) show recent gains. Computer Hardware (HWI) shows the largest loss followed by Internet (IIX), Computer Technology (XCI), and Networks (NWX). Semis (SOX) continues to decline as well. However, Banks (BKX), Brokers (XBD), and REITs (DJR) are all no longer in the bottom five and show signs of having made an intermediate bottom. In addition, Oil (XOI) and Oil Services (OSX) are showing signs of having reached an intermediate top. However, none of the Financials have moved significantly upwards which at this point we would require as an indication of the market regaining bullish strength.
The Bullish Percent (BP) Equity Indexes over the last two weeks, shows an eqully bearish picture. With only Consumer Staples (BPSTAP) in positive territory, all other equity indices are losing ground, especially Energy (BPENER). Whether relative stabilization of Financials and decreased energy costs will be sufficient begin recovery and allow the appearance of new leadership is very questionable at this point.

–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 ]

November 10, 2007

11-9-07 Market Commentary

Filed under: Market Commentary — dlpirl @ 10:42 am

Subscriber email sent 11-10-07:
The count of securities in our unique market breadth indicator is a measure of how “clearly” the market is speaking. The total count of securities in either bullish or bearish patterns is now over 1600, an increase of nearly 6% from last week. The “voice” of the market is now very clear. With the market sharply down for the week, Bullish patterns decreased by over 27% while Bearish patterns increased by over 29%. The Bullish/Bearish Point & Figure ratio is now 0.39, down from 0.70 the previous week. Bears gained more ground this week. 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 (NASI) decreased for the fourth week in a row, and at -461, it is in the middle of the range seen in previous bear runs in July 2007, March 2006, August through October 2005, and January through April 2005.

The Nasdaq Composite Index has a count of two (2) accumulation days and four (4) distribution days in the last two weeks and is currently neither in accumulation nor distribution 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 other indexes, none are either in accumulation nor distribution mode. This might be surprising to some, but highlights the weakness of the Distribution Days analysis — its very limited context.

On last week’s Nasdaq Composite CCI(20) Daily chart, we mentioned last week that we were waiting for our next entry signal. On Wednesday 11/7, the CCI(20) crossed below the zero line, and is now below -200. Movement above -200 within the next three days would give us a ZLR Long entry signal. However, if this movement does not occur by market close Wednesday 11/14, a Long trend entry point can not be triggered since we will then be in a down trend acording to Woodie’s definition of a trend as a count of six bars above or below the zero line.
Looking at last week’s Nasdaq Composite CCI(20) Weekly pattern, the CCI(20) has now moved below 50 and we are waiting for a Long ZLR or another possible entry pattern to form.
Concerning industry index performance over the last two weeks, we see that the bearish hedge Gold and Silver (XAU) continues to lead followed by Utilities (UTY), Hospitals (RXH), and Natural Gas (XNG). With the top performer, Gold and Silver only fractionally positive, and Computer Technology (XCI) is no longer in the top five, we expect a bounce next week as the market adjusts to what may be excessive bearish sentiment. Banks (BKX), and Brokers (XBD) continue in the bottom five, and Semis (SOX) although not in the bottom five, continues lower. Thus the bearish signs line up one after another. One slightly bullish sign is that Oil and Oil Service remain out of the top 5 and show signs of having reached at least an intermediate top.
Looking at Bullish Percent (BP) Equity Indexes over the last two weeks, we find that only industrials (aided by the falling U.S. Dollar) show a small measure of strength. Last week we mentioned that Technology (BPINFO) was weakening. It has now dropped sharply. Financials (BPFINA) and Consumer Discretionary spending (BPDISC) continue in the bottom 5. With the Energy BP (BPENER) now negative, we look for new leadership to emerge to enable the bulls can begin to recover ground recently lost to the bears.

–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 ]

November 3, 2007

11-2-07 Market Commentary

Filed under: Market Commentary — dlpirl @ 12:26 pm

Subscriber email sent 11-3-07:
Our unique market breadth indicator now has over 1500 securities in either Bullish or Bearish patterns, an increase of nearly 9% from last week. With the market up for the week, Bullish patterns decreased by 6% while Bearish patterns increased by nearly 22%. The Bullish/Bearish Point & Figure ratio is now 0.70, down from 0.90 the previous week. Bears gained ground again this week. 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 (NASI) decreased for the third week in a row, and at -266, it has now broken below the low it reached in March of 2007 just before the market began its rebound at that time.

The Nasdaq Composite Index has a count of two (2) accumulation days and four (4) distribution days in the last two weeks and is currently neither in accumulation nor distribution 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 other indexes, the S&P 500 is currently in accumulation mode. The others are currently in neither accumulation or distribution mode.

On last week’s Nasdaq Composite CCI(20) Daily chart, our ZLR Long trade has completed with an exit given when the CCI(20) broke below 100 on Thursday. The Monday 10/29 to Friday 11/2 open to open trade gave a gain of 2.37 points on the Nasdaq Composite index and $0.23 per share of QQQQ. We will now wait for the next CCI(20) entry signal.
Looking at last week’s Nasdaq Composite CCI(20) Weekly pattern, we are still waiting for the CCI(20) to form a ZLR below 50 or for other possible entry patterns to form.
Concerning industry index performance over the last two weeks, we see that Gold and Silver (XAU) leads followed by Natural Gas (XNG) and Computer Technology (XCI). Banks (BKX), Semis (SOX) and Brokers (XBD) are now in the bottom 5, as economic weaknesses in the mortgage banking sector continue to take their toll. Semis (SOX) which normally lead technology equities are continuing in the most negative list, and this is another bearish sign. However, Oil and Oil Service equities are no longer in the top 5. If the long expected intermediate top has arrived for Oil, this will bullish for the market.
Looking at Bullish Percent Equity Indexes over the last two weeks, we find that Technology (BPINFO) continues strong, although it appears to be weakening. Financials (BPFINA) and Consumer Discretionary spending (BPDISC) as well as Consumer Stapes (BPSTAP) are back in the bottom 5 and appear. The next week will likely be a make-or-break week for Bulls. Otherwise, bears appear poised to establish strong control.

–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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