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

September 27, 2008

9-26-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 8:56 am
Subscriber email sent 9-27-08:

Market Breadth: In the largest Ln(Bull/Bear) shift on record, we are back in strongly bearish territory. Bulls quickly took their gains and headed to the sidelines this week as our Bull/Bear Point and Figure ratio fell from 1.06 to 0.20, back in strongly bearish territory. There are now just nearly 5 stocks in a bearish P&F pattern for every one in a bullish pattern. The new format Sand 2 Pirls P&F Market Breadth Summary Chart shows us a market in which bears have quickly restablished market dominance. Last week the total count of securities in Bullish or Bearish patterns decreased by 31% to 1167. Bearish patterns increased by 17%, while Bullish patterns decreased by 77%. 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 eleven weeks with a drop of 121 points. At -603, it appears to have made an intermediate bottom ten weeks ago, and although it is approaching the October 2005 low, remains above all low points for the past three years.
The Nasdaq Composite Index has a count of four (4) accumulation days and three (3) distribution days in the last two weeks and is currently in 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, this week both the S&P (SPI) and the DOW (DIA) ended in neither accumulation nor distribution mode.
Momentum: Following the CCI(20) Daily down-trend begun on Monday 9/8, we had a possible Zero Line Reject (ZLR) on Monday 9/22. However, the CCI(20) was just outside the +/-50 range, so we do not take the trade. If we had taken it, we would have entered Short at Tue 9/23 open and exited at Friday 9/26 open for a very small gain.
In Woodie’s CCI trading system, six consecutive bars above or below zero are required for a change of trend. The weekly CCI(20) of the Nasdaq Composite Index began a down trend seven weeks ago, while the Daily CCI(20) began an down trend three weeks ago.
The ZLR Short entry signal from Friday 8/22 close continued with the Weekly CCI(20) leveling off, but not increasing, so we stay in the trade. We will continue to follow the results of this trade simulation in next week’s commentary.
Industry Rotation the last two weeks: Bullish: Banks (BKX) remain in the top five. REITs (DJR) and Brokers (XBD) have entered the top five. Bearish: Gold & Silver (XAU) leads the top five. Oil (XOI) has entered the top five. Computer Hardware (HWI) and S&P Retail (RLX) are in the bottom five.
438 Day PerfChart ($BPINFO,$COMPQ,$SOX)
Focus This Week: Is technology leading the market up or down? Looking at a Performance Chart Nasdaq Composite Index, the Semiconductor Index, and the Technology Bullish Percent Index since early 2007, we do not yet see a clearly sustained recovery from the lows earlier this year. In fact, the Semiconductor Index is at its lowest point since early 2003 shortly after the market began a sustained uptrend.  Could that cycle repeat?

–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 ]

September 20, 2008

9-19-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 8:47 am

Subscriber email sent 9-20-08:

Market Breadth: In a dramatic move we are now just inside Bull market territory for the first time since June 6. Bulls seized multiple buying opportunities this week as our Bull/Bear Point and Figure ratio rose from 0.37 to 1.06, barely in Bull territory. There is now just over 1 stock in a bullish P&F pattern for every one in a bearish pattern. The new format Sand 2 Pirls P&F Market Breadth Summary Chart shows us a market in which bears have now lost market dominance. Last week the total count of securities in Bullish or Bearish patterns increased by 16% to 1701. Bearish patterns decreased by less than 23%, while Bullish patterns increased by 121%. Yes, bullish patterns more than doubled! 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 ten weeks with a drop of 158 points. At -481, it appears to have made an intermediate bottom nine weeks ago, and remains above all low points for the past three years.
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 accumulation mode.  The previous eight weeks 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, this week for the third week in a row, the S&P (SPI) ended in accumulation mode while the DOW (DIA) ended the week in neither accumulation nor distribution mode.
Momentum: With six continuous days below zero, the CCI(20) Daily began a down-trend on Monday 9/8. We expect either a Zero Line Reject (ZLR) Short signal with the CCI(20) in the +/- 50 range or a change to an up trend if the current upward move gives us six days with the CCI(20) above the zero line.
In Woodie’s CCI trading system, six consecutive bars above or below zero are required for a change of trend. The weekly CCI(20) of the Nasdaq Composite Index began a down trend seven weeks ago, while the Daily CCI(20) began an down trend two weeks ago.
The ZLR Short entry signal from Friday 8/22 close continued with the Weekly CCI(20) decreasing for another week. We will continue to follow the results of this trade simulation in next week’s commentary.
Industry Rotation the last two weeks: Bullish: Banks (BKX) leads the top five. Semis (SOX), Networkers (NWX), and Internet (IIX) have left the bottom five. Bearish: Gold & Silver (XAU) has moved from the bottom five to second place in the top five. Brokers (XBD) leads the bottom five. S&P Retail (RLX) has moved from the top five to the bottom five. REITs (DJR) has left the top five. Computer Hardware (HWI) is in the bottom five.
3 Box 2% Reversal P&F Chart of Banking Index
Focus This Week: Two days before Friday’s dramatic upward move, the Banking Index gave a double top P&F breakout signal.  At already 8% above the breakout point, Banking now shows potential to provide some sustained upward momentum to reverse the recent market downturn.

–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 ]

September 13, 2008

9-12-08 Commentary

Filed under: Market Commentary — dlpirl @ 7:28 am
Subscriber email sent 9-13-08:

Market Breadth: Bulls gained a small bit of ground this week as our Bull/Bear Point and Figure ratio rose from 0.34 to 0.37 still in strongly bearish territory. There are now 2.7 stocks in bearish P&F patterns for every one in a bullish pattern. The new format Sand 2 Pirls P&F Market Breadth Summary Chart shows us market in which bears refuse to relinquish control to bulls. Last week the total count of securities in Bullish or Bearish patterns increased by 1% to 1469. Bearish patterns decreased by less than 1%, while Bullish patterns increased by 7%. 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 nine weeks with a drop of 88 points. At -323, it appears to have made an intermediate bottom eight weeks ago, and is now above all low points for the past three years.
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.  The last eight weeks it also 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, this week for teh second week in a row, the S&P (SPI) ended in accumulation mode while the DOW (DIA) ended the week in neither accumulation nor distribution mode.
Momentum: With six continuous days below zero, the CCI(20) Daily began a down-trend on Monday 9/8. We look for Zero Line Reject (ZLR) signal with the CCI(20) in the +/- 50 range.
In Woodie’s CCI trading system, six consecutive bars above or below zero are required for a change of trend. The weekly CCI(20) of the Nasdaq Composite Index began a down trend six weeks ago, while the Daily CCI(20) began an down trend last week.
The ZLR Short entry signal from Friday 8/22 close continued another week. We will continue to follow the results of this trade simulation in next week’s commentary.
Industry Rotation the last two weeks: Bullish: Banks (BKX), REITs (DJR) and S&P retail (RLX) are in the top five. Gold & Silver (XAU) is in the bottom five. Bearish: Oil Services (OSX) has moved out of the bottom five. Semis (SOX), Networkers (NWX), and Internet (IIX) are in the bottom five.
3 Box 2% Reversal P&F Chart of Dow Transports
Focus This Week: Two weeks ago we looked at a long time P&F chart of the Dow Transports, noting its critical state. The following week it gave a bearish P&F signal and broke through long term support.  Even with oil prices finally declining, the movement of good and services is declining due to current economic conditions.  Along with the banking index, this chart will be an important one to watch in the weeks and months ahead.

–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 ]

September 6, 2008

9-5-08 Commentary

Filed under: Market Commentary — dlpirl @ 9:20 am
Subscriber email sent 9-6-08:

Market Breadth: Bears showed aggressive dominance of the market this week gaining more ground as our Bull/Bear Point and Figure ratio fell from 0.64 to 0.34 back into strongly bearish territory. There are now nearly 3 stocks in bearish P&F patterns for every one in a bullish pattern. The new format Sand 2 Pirls P&F Market Breadth Summary Chart shows us market in which bears refuse to relinquish control to bulls. Last week the total count of securities in Bullish or Bearish patterns increased by 20% to 1449. Bearish patterns increased by 47%, while Bullish patterns decreased 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) decreased for the first time in eight weeks but with a drop of only 3 points. At -235, it appears to have made an intermediate bottom seven weeks ago, and is now above all low points for the past three years.
The Nasdaq Composite Index has a count of two (2) accumulation days and five (5) distribution days in the last two weeks and is currently in neither accumulation nor distribution mode.  The last seven weeks it also 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, this week the S&P (SPI) ended in accumulation mode while the DOW (DIA) ended the week in neither accumulation nor distribution mode.
Momentum: With no new signals and five continuous days below zero, the CCI(20) Daily is now one day away from beginning a down-trend. The result of the Thursday 8/28 open to Tuesday 9/2 open ZLR Long signal “whipsaw” discussed last week, was a gain of 12.00 points on the Nasdaq Composite but a loss of $0.05 per share of QQQQ.  Note that it is not unusual for Woodie’s CCI signal “whipsaws” to actually be winners or very slight losers.
In Woodie’s CCI trading system, six consecutive bars above or below zero are required for a change of trend. The weekly CCI(20) of the Nasdaq Composite Index began a down trend five weeks ago, while the Daily CCI(20) began an uptrend five weeks ago, and is now one day away from changing to a down-trend. Thus we expect Weekly and Daily trends to be in agreement at Monday’s close.
The ZLR Short entry signal from Friday 8/22 close continued another week with gains. We will continue to follow the results of this trade simulation in next week’s commentary.
Industry Rotation the last two weeks: Bullish: In one week, Gold & Silver (XAU) moved from top five leader to bottom five leader. Banks (BKX), and Brokers (XBD) lead the top five. Oil Services (OSX) has moved from the top five to the bottom five. S&P Retail is in the top five. Bearish: Semis (SOX) and Computer Tech (XCI) remain in the bottom five.
USD GOLD CrudeOil PerformanceChart from 16 Jan 2007
Focus This Week: Looking at a Performance Chart of Gold, Crude Oil and the US Dollar from early 2007, we see that although Crude Oil is still more than double its initial value, it appears to have peaked. In addition, Gold is also declining and the Dollar is rising. These are bullish signs in a very bearish market. Is a recovery around the corner or will we see a double top on crude oil before true recovery begins?  The extent and speed at which profits from the oil bubble are reinvested will determine the course the market takes.

–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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