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

June 28, 2008

6-27-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 7:59 am
Subscriber email sent 6-28-08:

Market Breadth: This week’s drop was even more precipitous than the one two weeks ago. Our Bull/Bear Point and Figure ratio fell from 0.58 to 0.31, almost half. There are over three stocks in bearish P&F patterns for every one in a bullish pattern. The Sand 2 Pirls P&F Market Breadth Summary Chart now shows us market with increasing bearish acceleration after bulls were not able to take control. Last week the total count of securities in Bullish or Bearish patterns increased by nearly 14% to over 1700. Bearish patterns increased by 38%, while Bullish patterns decreased by 27%. 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) decreased for the fourth time in six weeks with a drop of 251 points. At -657, it is approaching the October 2005 and and July 2006 lows.
The Nasdaq Composite Index has a count of one (1) accumulation days and five (5) distribution days in the last two weeks and is currently in distribution mode. Last week it also ended 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.) Of the other indexes, the S&P (SPY) also ended the week in distribution mode.
Momentum: We continue in the trade we began last week at Thursday 6/19 open. The CCI(20) has not risen above the ZLR (Zero Line Reject) pivot point or come back above the minus 100 line once it passed below it. We will continue monitoring 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 began an uptrend four weeks ago, while the Daily CCI(20) began a downtrend two weeks ago.
The Nasdaq Composite CCI(20) Weekly pattern now had nine weeks above zero without giving a Long entry signal and now has one week below zero. However, it remains in the +50 to -50 range, and a valid Zero Line Reject (ZLR) Long entry signal is still possible.
Industry Rotation the last two weeks: Bearish: Gold & Silver (XAU) leads the top five industry groups followed by Oil Services (OSX). Disk Drives (DDX) leads the bottom five followed by Banks (BKX). Brokers (XBD) has joined the bottom five while Oil (XOI) has left the bottom five. Bullish: Semis (SOX) have left the bottom five industry groups.
S&P Financial Sector (XLF) 2% 3br P&F
Focus This Week: The Financial Sector continues to deteriorate. In the 2% 3 box reversal Point & Figure chart shown above, note that one week ago we had a renewed bearish P&F pattern. In the volume area of the chart at the bottom, note that recently –this month, June (see the 6 marker)– volume is much higher when the sector is falling than when it is rising. We don’t expect the decline trend to change until the declining and rising volumes are more similar.

–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 ]

June 21, 2008

6-20-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 7:33 am
Subscriber email sent 6-21-08:

Market Breadth: If last week wasn’t convincing enough, this week our Our Bull/Bear Point and Figure ratio moved from 0.61 to 0.58, slightly further into Bear Market territory. There are now nearly 3.5 stocks in bearish P&F patterns for every two in bullish patterns. The Sand 2 Pirls P&F Market Breadth Summary Chart now shows us market which has become bearish after bulls were not able to take control. The total count of securities in Bullish or Bearish patterns increased by over 6% yet to over 1500. Bearish patterns increased by 8%, while Bullish patterns increased by 3%. 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) decreased for the third time in thirteen weeks with a drop of 77 points. However, at -407, it remains above all low points for the last few years and is also lower than the peaks from which recent previous strong declines have begun.
The Nasdaq Composite Index has a count of two (2) accumulation days and three (3) distribution days in the last two weeks and is currently in distribution mode. Last week it ended 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 (DIA) also ended the week in distribution mode.
Momentum: As we expected last week, the Woodie’s daily trend changed to Short at Monday 6/16 close. At Wednesday 6/18 close we had a Zero Line Reject (ZLR) Short Entry signal for Thursday open. At Thursday 6/17 close the CCI(20) had risen, but not above the ZLR pivot point, so we stay in the trade with the CCI(20) dropping below -100 at Friday 6-18 close. We will continue monitoring 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 began an uptrend three weeks ago, while the Daily CCI(20) began a downtrend this week.
The Nasdaq Composite CCI(20) Weekly pattern now has nine weeks above zero and continues in an uptrend by Woodie’s definition. The CCI(20) has is now in the +50 to -50 range, so we wait for a valid Zero Line Reject (ZLR) entry signal.
Industry Rotation the last two weeks: Bearish: All industries have lost ground in the last 10 market days. Banks (BKX) continue to lead the bottom five. Computer Hardware (HWI) has left the top five. Semis (SOX) are in the bottom five. Bullish: Oil (XOI) is in the bottom five. Brokers (XBD) lead the top five.
Bubble Comparison: Nasdaq & Oil
Focus This Week: A bigger bubble! Yes on a percentage basis, the current bubble in Crude Oil now surpasses the gains of the Nasdaq at the peak of the “dot com” bubble. All bubbles eventually burst. Is the top nearby?

–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 ]

June 14, 2008

6-13-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 8:43 am
Subscriber email sent 6-14-08:

Market Breadth: Although by the end of the week, market index declines were fractional (less than one percent), compared to recent weeks, the shift in Our Bull/Bear Point and Figure ratio was dramatic. At 0.61 it is significantly lower than last week’s 1.07. This means that there are now more than 3 stocks in bearish P&F patterns for every two in bullish patterns, while last week the ratio was close to 1 to 1. The Sand 2 Pirls P&F Market Breadth Summary Chart now shows us a market tipping in favor of the bears. The total count of securities in Bullish or Bearish patterns decreased by nearly 3% yet remains over 1400. Bearish patterns increased by 25%, while Bullish patterns decreased by 29%. 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) decreased for the second time in twelve weeks. However, the drop of 145 points is a greater bearish shift than most of the recent bullish advances. Yet at -330, it continues above all low points for the last few years and remains comparatively close to positive territory.
The Nasdaq Composite Index has a count of three (3) accumulation days and two (2) distribution days in the last two weeks and is currently in neither accumulation nor distribution mode. Last week it ended 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, all ended the week in neither accumulation nor distribution mode.
Momentum: The Thursday 6/5 open to Monday 6/9 open Long trade we discussed last week gave us a loss of 26.27 points on the Nasdaq Composite or $0.76 per share of QQQQ. The Daily CCI(20) continued to drop dramatically this week. It fell just below -200, and we now have 5 days below zero, virtually assuring the Woodie’s daily trend will change to Short at Monday’s close. Our ZLR Long signal at Thursday 6/12 close had the CCI(20) below -100, so is not considered tradable.
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 began an uptrend two weeks ago, joining the Daily CCI(20) which has now been in an uptrend for twelve weeks.
The Nasdaq Composite CCI(20) Weekly pattern now has eight weeks above zero and continues in an uptrend by Woodie’s definition. The CCI(20) has is close to the +50 to -50 range, and we wait for a valid Zero Line Reject (ZLR) entry signal.
Industry Rotation the last two weeks: Bearish: Banks (BKX) continue to lead the bottom five. Oil Services (OSX) are back in the top five, and Airlines (XAL) are back in the bottom five. Bullish: Computer Hardware (HWI) remains in the top five.
2% box 3 box reversal P&F Crude Oil (WTIC)
Focus This Week: A 2 percent 3 box reversal Point & Figure chart shows Crude Oil (WTIC) continue to go “through the roof”. Where is the top? How much more can the market and our economy take?

–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 ]

June 7, 2008

6-6-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 7:20 am
Subscriber email sent 6-7-08:

Market Breadth: In our tug of war between the bulls and bears, remarkably after Friday’s sell-off, we remain in bull market territory. Our Bull/Bear Point and Figure ratio at1.07 is virtually unchanged from last week’s 1.09, and the Sand 2 Pirls P&F Market Breadth Summary Chart shows us a market with the scales gradually tipping in favor of the bulls. The total count of securities in Bullish or Bearish patterns increased by over 4% and is now approaching 1500. Bearish patterns increased by 5%, while Bullish patterns increased by 4%. 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 eleven weeks. At -184, it continues above all low points for the last few years and is approaching positive territory.
The Nasdaq Composite Index has a count of five (5) accumulation days and one (1) distribution days in the last two weeks and is currently in neither accumulation nor distribution mode. Last week it ended 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.) Of the other indexes, all ended the week in distribution mode.
Momentum: The Daily CCI(20) gave us a wild ride this week. At Monday close when the CCI(20) dropped below 100, we had an exit signal for our Long ZLR (Zero Line Reject) trade entered at Wednesday 5/28 open. This trade resulted in a gain of 9.00 points on the Nasdaq Composite (not directly tradable) or $0.31 per share of QQQQ. At Wednesday 6/4 close we got a new ZLR Long entry signal for Thursday 6/5 open. But Friday 6/6 close dropped the CCI(20) below 100 giving us an exit signal from that trade for Monday 6/9 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 began an uptrend one week ago, joining the Daily CCI(20) which has now been in an uptrend for eleven weeks.
The Nasdaq Composite CCI(20) Weekly pattern now has seven weeks above zero and is in an uptrend by Woodie’s definition. We continue to wait for the CCI(20) to drop into the +50 to -50 range for a valid Zero Line Reject (ZLR) entry signal.
Industry Rotation the last two weeks: Bearish: Gold & Silver (XAU) has left the bottom five. Banks (BKX) lead the bottom five. Networkers (NWX) have moved from the top to bottom five. Brokers (XBD) have joined the laggards group. Bullish: Oil (XOI), and Oil Services (OSX) remain out of the top five. Airlines (XAL) have moved from the bottom to top five. Computer Hardware (HWI) and Biotech (BTK) remain in the top five.
60 day performance chart of SOX & OIX per XAU
Focus This Week: The Banking Index (BKX) has indeed broken through support, a concern we mentioned in last week’s commentary –see the current Point & Figure chart. Yet as the 60 day performance chart above shows, the semiconductor industry continues to show surprising strength when normalized against Gold & Silver (XAU) and compared to Oil (OIX).

–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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