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

April 26, 2008

4-25-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 9:18 am
Subscriber email sent 4-26-08:

Market Breadth: Our Bull/Bear Point and Figure ratio at 0.83 is down very slightly from last week’s 0.88 , and the Sand 2 Pirls P&F Market Breadth Summary Chart continues to show us a market that is turning the corner from bearish to bullish. The total count of securities in Bullish or Bearish patterns, decreased by just 1% and remains above 1400. Bearish patterns increased by 2%, while Bullish patterns decreased by almost 5%. The market remains about where it was three weeks ago before the minor decline two weeks ago. 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 thirteenth time in twenty-one weeks. At -492, it remains above the January 2008 low, the November 2007 low, the August 2007 low, the April 2005 low, and the July 2006 low. Most significantly, it remains above the most recent pivot to the downside in February 2008.
The Nasdaq Composite Index has a count of four (4) accumulation days and one (1) distribution day in the last two weeks and is currently in neither accumulation nor distribution mode. The last three weeks it also ended 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.) Of the other indexes, all are neither in accumulation nor distribution mode.
Momentum: Checking the Daily CCI(20) of the Nasdaq Composite Index, in a Long trend by Woodie’s definition, last week we noted the ZLR (Zero Line Reject) Long entry pattern for Wednesday 4/16 close. An exit signal was given at Tuesday 4/22 close when the CCI(20) dropped sharply moving below 100. From Thu 4/17 open to Wed 4/23 open gave us a profit of 44.32 points on the Nasdaq Composite (not directly tradable) or $1.26 per share of QQQQ. We will look for a new entry signal in the Long trend when the CCI(20) moves back below +50.
In Woodie’s CCI trading system, six consecutive bars above or below zero are required for a change of trend. By this definition, the weekly CCI(20) of the Nasdaq Composite Index continues in a downtrend while the daily CCI(20) is now in an uptrend. We will watch to see if a longer term uptrend develops.
The Nasdaq Composite CCI(20) Weekly pattern now has one week above zero, and the CCI(20) continues to move upward without generating an entry signal. Remember the weekly chart is still in a down-trend and if the CCI(20) moves sharply downwards, a Short entry signal could be generated even though the CCI(20) is now above zero.
Industry Rotation the last two weeks: Although the market moved up only fractionally for the week, we see some notable bullish signs. Semis (SOX), Banks (BKX), and Brokers (XBD) are all back in the top 5, as are Networkers (NWX) and Internet-IW (IIX) from th etechnology sector. Oil Service (OSX) and Oil (XOI) have left the top five, and Gold & Silver (XAU) is back in the bottom group.
PnF 2% 3 box reversal chart of Banking Index (BKX)
Focus This Week: Although the Banking Index (BKX) is currently in a bearish P&F pattern, it is on the verge of breaking out of its current range into a bullish pattern. Watch to see if it breaks above 85.17 in the days to come. This could well trigger a strong bullish move with some general recognition that significant recovery of the Banking industry has begun.

–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 ]

April 19, 2008

4-18-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 10:17 am
Subscriber email sent 4-19-08:

Market Breadth: Our Bull/Bear Point and Figure ratio at 0.88 is up from last week’s 0.69, and the Sand 2 Pirls P&F Market Breadth Summary Chart shows us a market that appears to be turning the corner from bearish to bullish. The total count of securities in Bullish or Bearish patterns, increased by 10% and is now over 1400. Bearish patterns were unchanged, while Bullish patterns increased by 27%. The market is about where it was two weeks ago before last week’s decline. 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 twelfth time in twenty weeks. At -563, it remains above the January 2008 low, the November 2007 low, the August 2007 low, the April 2005 low, and the July 2006 low. Most significantly, it remains above the most recent pivot to the downside in February 2008.
The Nasdaq Composite Index has a count of three (3) accumulation days and one (1) distribution days in the last two weeks and is currently in neither accumulation nor distribution mode. The last two weeks it also ended 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.) Of the other indexes, the Dow (DIA) is in accumulation mode, while the S&P (SPY) is neither in accumulation nor distribution mode.
Momentum: Checking the Daily CCI(20) of the Nasdaq Composite Index, in a Long trend by Woodie’s definition, last week we noted the ZLR (Zero Line Reject) Long entry pattern for Friday 4/11 open and the momentum reversal when the CCI(20) dropped below our ZLR pivot giving us an exit signal at the close of the same day. The trade exited at Monday’s open for a loss of 40.68 points on the Nasdaq Composite and $0.81 per share of QQQQ. There was a new ZLR entry signal at Wednesday 4/16 close of this week. Although the CCI(20) dropped on Thursday 4/17, it did not drop below the ZLR pivot point, so we stay in the trade. 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. By this definition, the weekly CCI(20) of the Nasdaq Composite Index continues in a downtrend while the daily CCI(20) is now in an uptrend. We will watch to see if a longer term uptrend develops.
The Nasdaq Composite CCI(20) Weekly pattern now has sixteen weeks below zero, and the CCI(20) continues to move upward without generating an entry signal.
Industry Rotation the last two weeks: Although the market moved strongly upwards for the week, industry rotation shows some notable bearish signs. Semis (SOX) have left the top 5, and Oil Service (OSX) and Oil (XOI) are back. Banks (BKX) and Brokers (XBD) are in the bottom five. However, Gold & Silver (XAU) remains out of the top five tempering the potential for a bearish momentum shift.
PnF 2% 3 box reversal chart of Semi Conductor Index (SOX)
Focus This Week: Even though the Semis are out of the top five industry groups, we did get the breakout that we mentioned to look for last week. Referring again this week to the 2% 3 box reversal Point & Figure chart of the Philadelphia Semiconductor Index, we see we that a Triple Top Breakout pattern was formed on Friday 4/18. Semis are known to be market leaders, up or down. Our expectation is that the broader market will follow this bullish breakout.

–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 ]

April 12, 2008

4-11-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 9:12 am
Subscriber email sent 4-12-08:

Market Breadth: Our Bull/Bear Point and Figure ratio at 0.69 is down from last week’s 0.90, and the Sand 2 Pirls P&F Market Breadth Summary Chart shows us a market that has not quite decided to turn the corner from bearish to bullish. The total count of securities in Bullish or Bearish patterns, decreased by 9% and is now under 1300. Bearish patterns increased by 2%, and Bullish patterns decreased by 21%. So although the market is not as bullish as it was last week, it is more so than two weeks ago. Paid subscribers have access to the Excel data from which the image to the left is built.

In spite of the Nasdaq being down about 3.5% for the week, the well known market breadth indicator, the Nasdaq McClellan Summation Index (NASI) increased for the eleventh time in nineteen weeks. At -584, it remains above the January 2008 low, the November 2007 low, the August 2007 low, the April 2005 low, and the July 2006 low. Most significantly, it has just risen above the most recent pivot to the downside in February 2008.
The Nasdaq Composite Index has a count of three (3) accumulation days and one (1) distribution days in the last two weeks and is currently in neither accumulation nor distribution mode. Last week it also ended 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.) Of the other indexes, both the Dow and the S&P are currently in distribution mode.
Momentum: Checking the Daily CCI(20) of the Nasdaq Composite Index, now that we have Long trend by Woodie’s definition, we had a ZLR (Zero Line Reject) Long entry pattern for Friday 4/11 open, but momentum reversed and the CCI(20) dropped below our ZLR pivot giving us an exit signal at the close of the same day. So the trade exits at Monday’s open. We will report the results of 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. By this definition, the weekly CCI(20) of the Nasdaq Composite Index continues in a downtrend while the daily CCI(20) is now in an uptrend. We will watch to see if a longer term uptrend develops.
The Nasdaq Composite CCI(20) Weekly pattern now has fifteen weeks below zero. The CCI(20) formed a possible ZLR but we reject the pattern because the slope out of the reversal is less than the slope into it, lending suspicion that the CCI(20) Weekly may soon join the CCI(20) Daily in recognition of a Long trend.
Industry Rotation the last two weeks: Although the market moved down strongly for the week, industry rotation shows some notable bullish signs. Gold & Silver (XAU) is no longer in the top five, and Oil Services (OSX) has lost its leadership position. Semis (SOX) joining the top five is also bullish.
PnF 2% 3 box reversal chart of Semi Conductor Index (SOX)
Focus This Week: Looking at a 2% 3 box reversal Point & Figure chart of the Philadelphia Semiconductor Index, we see it has been in a trading range since the beginning of the year. Semis are known to be market leaders, up or down. Watch to see if the Semi Index breaks above 376.09 which will form a new bullish breakout pattern. Note that Semis are currently in a bullish pattern know as a “bear trap” formed when it reversed back upward after breaking support.

–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 ]

April 5, 2008

4-4-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 8:24 am
Subscriber email sent 4-5-08:

Market Breadth: Our Bull/Bear Point and Figure ratio at 0.90 is up from last week’s 0.49, and the Sand 2 Pirls P&F Market Breadth Summary Chart shows us a market that may be turning the corner from bearish to bullish. The total count of securities in Bullish or Bearish patterns, increased by 11% and is now over 1400. Bearish patterns decreased by 13%, and quite significantly, Bullish patterns increased by 61% beyond last week’s 22% increase. We last saw a two week shift of this magnitude in mid September of 2007, but it was not sustained and declines began in October. 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 tenth time in eighteen weeks. At -653, it remains above the January 2008 low, the November 2007 low, the August 2007 low, and the April 2005 lows, but has just risen above the July 2006 low. However, caution is in order, since it has not yet risen above -620, the most recent pivot to the downside in February 2008.
The Nasdaq Composite Index has a count of three (3) accumulation days and one (1) distribution days in the last two weeks and is currently in neither accumulation nor distribution mode. Last week it also ended 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.) Of the other indexes, both the Dow and the S&P are neither in accumulation nor distribution mode.
Momentum: Checking the Daily CCI(20) of the Nasdaq Composite Index, we now have more than six days with the CCI(20) above zero, and by Woodie’s definition are now in a Long trend. However, we can not accept the ZLR (Zero Line Reject) pattern formed at Monday 3/31 close because the change in the CCI(20) is less than 15 points, giving a poorly defined change of momentum. The following day the CCI(20) was above 100 at market close, so we do not chase the trade and wait for the CCI(20) drop to below 100 (preferably near 50) and present us with another entry signal.
In Woodie’s CCI trading system, six consecutive bars above or below zero are required for a change of trend. By this definition, the weekly CCI(20) of the Nasdaq Composite Index continues in a downtrend while the daily CCI(20) is now in an uptrend. We will watch to see if a longer term uptrend develops.
The Nasdaq Composite CCI(20) Weekly pattern now has fourteen weeks below zero. When the CCI(20) dropped below -200 a Vegas Trade Long and ZLR Short both became possibilities, and we have been watching for either signal entry pattern to develop. The CCI(20) now has two bars above -100 but is moving upward too quickly for the rounding needed to form a Vegas Trade (VT) trigger for a counter-trend Long trade. It may yet form a ZLR Short signal now that the CCI(20) is above -50.
Industry Rotation the last two weeks: Although the market moved up strongly for the week, industry rotation shows some notable bearish signs. Oil Services (OSX) and Gold & Silver (XAU) both in the top five, and REITs leaving the group is bearish as is Banks (BKX) now showing the largest decline with S&P Retail and Brokers (XBD) also in the bottom five.
Banking Index (BKX) from 2006 norm. on Gold& Silver (XAU)
Focus This Week: Looking at the Banking Index (BKX) normalized against the Gold and Silver Indexes (XAU) since 2006, we find that since the decline of the strength of Banking in mid 2007, there is a pattern of lower lows and lower highs. Therefore Banking, and by proxy, the economy in general, can not yet be viewed as yet being on a firm path to 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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