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

February 23, 2008

2-22-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 8:49 am
Subscriber email sent 2-23-08:

Market Breadth: Our Bull/Bear Point and Figure ratio rose from 0.44 to 0.48 this week, and the Sand 2 Pirls P&F Market Breadth Summary Chart shows us a market that is continuing to come into balance after the bearish spike and apparent short term bottom of January 18. The total count of securities in Bullish or Bearish patterns, increased by 9% to over 1200. Bearish patterns increased by 6%, and Bullish patterns increased by 15%. Paid subscribers have access to the Excel data from which the image to the left is built.

The well known market breadth indicator, the Nasdaq McClellan Summation Index (NASI) increased for the seventh time in twelve weeks. At -712, it continues to rise above the August 2007, July 2006, and April 2005 lows as well as the November 2007 low when the market began its rebound attempt at that time, yet it is not above -600 where declines began last December.
The Nasdaq Composite Index has a count of four (4) accumulation days and two (2) distribution days in the last two weeks and is currently in accumulation mode. A week ago it was also in neither 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.) Of the other indexes, the Dow is in distribution mode while other the S&P is in either accumulation or distribution mode.
Momentum: Our Woodie’s Daily CCI(20) zero line reject (ZLR) Short entry at Thursday 2/14 open continues to develop and has now broken through a CCI(20) support trend line. We will continue to follow this trade simulation in next week’s commentary. In Woodie’s CCI trading system, six consecutive bars above or below zero are required for a change of trend. Both daily and weekly CCI(20) continue in a downtrend by this definition.
The Nasdaq Composite CCI(20) Weekly pattern now has eight weeks below zero. With the CCI(20) having dropped below -200 a Vegas Trade Long and ZLR Short are both possibilities we will be watching for as we continue to wait for a weekly signal entry pattern. However, to qualify for a counter trend Vegas Trade, the CCI(20) must rise above -100. For a ZLR short signal, we require the CCI(20) be above -100.
Industry Rotation: Over the last two weeks Oil Services (OSX) and Oil (XOI) continue in the top five group joined by Gold & Silver which is bearish. However, Computer Hardware (HWI) has entered the top five which is bulish. Yet, financials such as Brokers (XBD), REITs (DJR), and Banks (BKX) are no longer in the bottom five, so the picture continues to be mixed.
S&P Technology Sector Bullish Percent Index P&F chartFocus This Week: Looking at a Point and Figure chart of the S&P Technology Sector Bullish Percent Index, we see that its activity over the last few months compared to the last several years is really quite remarkable. Will the recent upward momentum of technology continue with enough strength to sustain a bullish market? It appears unlikely until stability from the recent decline is more clearly established, and that will take some time.

–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 ]

February 16, 2008

2-15-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 10:16 am

Subscriber email sent 2-16-08:

Market Breadth: Our Bull/Bear Point and Figure ratio rose from 0.35 to 0.44 this week, and the Sand 2 Pirls P&F Market Breadth Summary Chart shows us a market that is just coming into balance after the bearish spike and apparent short term bottom of five weeks ago. The total count of securities in Bullish or Bearish patterns, increased by 2% to over 1100. Bearish patterns decreased by 5%, and Bullish patterns increased by 21%. Paid subscribers have access to the Excel data from which the image to the left is built.

The well known market breadth indicator, the Nasdaq McClellan Summation Index (NASI) increased for the third time in seven weeks. At -733, it continues to rise above the August 2007, July 2006, and April 2005 lows as well as the November 2007 low when the market began its rebound attempt at that time.
The Nasdaq Composite Index has a count of three (3) accumulation days and three (3) distribution days in the last two weeks and is currently in neither accumulation nor distribution mode. A week ago it was also in neither 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.) None of the other indexes are currently in either accumulation or distribution mode.
Momentum: On Tuesday 2/6 Woodie’s CCI(20) daily gave a Short entry signal for Wednesday 2/7 open. At close on Friday 2/8 the daily CCI(20) hooked back, giving us an exit signal at open Monday 2/11. Profit was 16.43 on the Nasdaq Composite (not directly tradable) and $0.15 per share of QQQQ.
Also on the CCI(20) daily, we also had another zero line reject (ZLR) Short entry at last Thursday’s open. Note that although the CCI(20) rose above the zero line, it was there for less than six days, so there was no change in Woodie’s trend definition. We will continue to follow this trade simulation in next week’s commentary.
The Nasdaq Composite CCI(20) Weekly pattern now has seven weeks below zero. In Woodie’s CCI trading system, six consecutive weeks above or below zero is required for a change of trend. With the CCI(20) having dropped below -200 a Vegas Trade Long and ZLR Short are both possibilities we will be watching for as we continue to wait for a weekly signal entry pattern. However, to qualify for a counter trend Vegas Trade, the CCI(20) must rise above -100. For a ZLR short signal, we require the CCI(20) be above -100.
Industry Rotation: Over the last two weeks losing industries have lost more ground than gainers have risen. Having Oil Services (OSX) and Oil (XOI) in the top five group is bearish as is having technologies like Disk Drives (DDX) and Semis (SOX) and financials like Brokers (XBD), REITs (DJR), and Banks (BKX) in the bottom five. In addition, Computer Hardware (HWI) has fallen out of in the top five. Yet Gold and Silver (XAU) has not risen significantly since mid January which shows a lack of bearish strength.
Focus This Week: Looking at the performance of the S&P Financials, the S&P Banking Index, and the Philadelphia Banking Index for the last four weeks, we see that they have gained ground, but have been dropping since the beginning of February. Current signs are mixed, and investor confidence for market recovery does not yet appear to be strong.

–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 ]

February 9, 2008

2-8-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 8:58 am
Subscriber email sent 2-9-08:

Market Breadth: With our Bull/Bear Point and Figure ratio dropping from 0.55 to 0.35 this week, the Sand 2 Pirls P&F Market Breadth Summary Chart reveals that market breadth is still coming into balance after the bearish spike and apparent short term bottom of three weeks ago. The total count of securities in Bullish or Bearish patterns, decreased by 10% to just under 1100. Bearish patterns increased by 3%, and Bullish patterns decreased by 35%. Paid subscribers have access to the Excel data from which the image to the left is built.

The well known market breadth indicator, the Nasdaq McClellan Summation Index (NASI) increased for the second time in six weeks. At -843, it is now above the August 2007, July 2006, and April 2005 lows as well as the November 2007 low when the market began its rebound attempt at that time.
The Nasdaq Composite Index has a count of four (4) accumulation days and two (2) distribution days in the last two weeks and is currently in neither accumulation nor distribution mode. A week ago it was in 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 only the S&P 500 is in distribution mode. The others are currently in neither accumulation or distribution mode.
Momentum: On Tuesday 2/6 Woodie’s CCI(20) gave a Short entry signal for the next day open with the Nasdaq Composite Index at 2,327.18 and QQQQ at 43.92 per share. At close on Friday 2/8 the daily CCI(20) hooked back, giving us an exit signal at open next Monday 2/11. We will report the results of this trade simulation next week.
The Nasdaq Composite CCI(20) Weekly pattern now has six weeks below zero. In Woodie’s CCI trading system, this defines a change of trend. With the CCI(20) having dropped below -200 a Vegas Trade Long and ZLR Short are both possibilities we will be watching for as we continue to wait for a weekly signal entry pattern. However, to qualify for a counter trend Vegas Trade, the CCI(20) must rise above -100.
Industry Rotation: The shift we mentioned last week appears to be undergoing a balancing. Over the last two weeks Airlines (XAL), continues to lead gainers but Banks (BKX), Brokers (XBD), and REITs (DJR) have fallen out of the top five industry groups. However, Computer Hardware (HWI) remains in the top five. Having REITs now the most negative is bearish, yet Gold and Silver (XAU) as well as Oil Services (OSX) are grouped with the laggards which is bullish.
Focus On… This week both the S&P and Philadelphia Banking Indexes gave bearish breakout Point and Figure signals countering the bullish signals we mentioned last week. However, both remain well above recent lows and as we stated previously, barring unexpected negative news from the financial sector, both are likely on the bullish road to market recovery yet not without setbacks along the way.

–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 ]

February 2, 2008

2-1-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 10:07 am
Subscriber email sent 2-2-08:

With our Bull/Bear Point and Figure ratio now at 0.55, a look at the Sand 2 Pirls P&F Market Breadth Summary Chart shows us that the bullish advance begun two weeks ago continued again last week. At this point it appears that a bottom has been put in. The total count of securities in Bullish or Bearish patterns, decreased almost 10% to just over 1200. Bearish patterns decreased by 28%, and Bullish patterns increased by 67%, the largest bullish change since mid September 2007. Paid subscribers have access to the Excel data from which the image to the left is built.

The well known market breadth indicator, the Nasdaq McClellan Summation Index (NASI) increased for the first time in five weeks. At -931, it is now above the August 2007, July 2006, and April 2005 lows but not yet above the November 2007 low when the market began its rebound attempt at that time.
The Nasdaq Composite Index has a count of four (4) accumulation days and three (3) distribution day in the last two weeks and is currently in accumulation mode. A week ago it was in neither 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 none of the other indexes are currently in either accumulation or distribution mode.
On Tuesday 1/8 Woodie’s CCI(20) had six days below zero, and since then we have been waiting for a Short entry signal. With the CCI(20) now close to zero, renewed momentum to the downside is likely to result in a ZLR (Zero Line Reject) entry signal.
The Nasdaq Composite CCI(20) Weekly pattern is now on its fifth week below zero. In Woodie’s CCI trading system, six weeks above or below zero are required to establish a change of trend. With the CCI(20) having dropped below -200 a Vegas Trade Long and ZLR Short are both possibilities we will be watching for as we continue to wait for a weekly signal entry pattern.
Signs of a market shift are clear as we examine industry index performance over the last two weeks. With Airlines (XAL), Banks (BKX), Brokers (XBD), REITs (DJR), and Computer Hardware (HWI) all in the top five industry groups, and only Pharmaceuticals (DRG) and Biotech (BTK) in negative territory, we now have the combination of recovering Financials and Technology that will allow a new wave of leadership to emerge.
Last week both the S&P and Philadelphia Banking Indexes gave bullish breakout Point and Figure signals. Clearly, there is still a ways to go to recover back to the levels set in mid 2007, and this will likely happen in stages over several months. Barring unexpected negative news from the financial sector, we are likely on the bullish road to market recovery.

–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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