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

October 25, 2008

10-24-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 11:26 am
Subscriber email sent 10-25-08:

Market Breadth: This week our Bull/Bear Ratio fell to the lowest on record, slightly lower than that three weeks ago. The total count of Bearish stocks is the second highest on record, lower only than the remarkable spike two weeks ago. Our Bull/Bear Point and Figure fell from from 0.12  to 0.07. The count of stocks in Bearish patterns increased by by over 105%, more than double. There are now over 14 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 a bear market driven periodically lower by bearish spikes. Last week the total count of securities in Bullish or Bearish patterns increased by 97% to 2379. Bullish patterns increased by 25%. 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 eighth consecutive time in fifteen weeks with a drop of 112 points. At -1626, it continues below the intermediate bottom it made thirteen weeks ago, and below the October 2005 low, the July 2006 low, the August 2007 July 2008 low points, and continuing downwards.
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 in neither 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, this week both the S&P (SPI) and the DOW (DIA) both ended in neither accumulation nor distribution mode.
Momentum: As we stated previously, since the CCI(20) Daily down-trend began Monday 9/8, we have not had a Zero Line Reject (ZLR) that presented a CCI(20) within the +/-50 range, and we do not take ZLR trades outside the range, since the risk to reward ratio is lower. Although this past week, the CCI(20) approached -50, we require not only that a ZLR Short entry signal be between -50 and +50 a sharp angle, not rounded as occurred early in the week.
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 eleven weeks ago, while the Daily CCI(20) began an down trend seven weeks ago.
The ZLR Short entry from Friday 8/22 close continued another week with the Weekly CCI(20) decreasing but still below -100, 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: Note that all industries except Airlines are negative over the last two weeks. Bullish: Gold & Silver (XAU) leads the bottom five. Banks (BKX) has entered the top five. Bearish: REITs (DJR) has entered the bottom five.  Disk Drives (DDX) remain in the bottom five. Oil Services (OSX) and Oil (XOI) have left bottom five.
open 75 day World Currency perf chart
Focus This Week: Looking at a performance chart of world currencies over the last 75 days we find that the U.S. Dollar and Japanese Yen have gained, but all other world currencies including the Euro are down. The international effect is to decrease the power of U.S. and Japanese international corporations because decreased consumer buying power in overseas markets decreases their revenue. In contrast, European, British, Canadian, and Australian corporations and off shore government operations have increased revenue because their outside markets have increased buying power.  How long this trend will continue is of course anyone’s guess.

–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 ]

October 18, 2008

10-17-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 5:24 pm
Subscriber email sent 10-18-08:

Market Breadth: After last week’s amazing spike, this week the count of stocks in bearish patterns has returned to more normal recent albeit bearish levels. Indexes were up this week but our Bull/Bear Point and Figure ratio was virtually unchanged falling slightly from from 0.14 to 0.12. The count of stocks in Bearish patterns decreased by 69%. There are now almost 9 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 a market unlikely to quickly recover. Last week the total count of securities in Bullish or Bearish patterns decreased by 70% to 1208, a much more normal volume. Bullish patterns decreased by 75%. 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 seventh consecutive time in fourteen weeks with a drop of 188 points. At -1514, has now broken below the intermediate bottom it made twelve weeks ago, and has also broken through the October 2005 low, the July 2006 low, the August 2007 July 2008 low points, and continues downwards.
The Nasdaq Composite Index has a count of two (2) accumulation days and six (6) distribution days in the last two weeks and is currently in accumulation mode.  Last week it also 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) both ended in accumulation mode.
Momentum: As we stated previously, since the CCI(20) Daily down-trend began Monday 9/8, we have not had a Zero Line Reject (ZLR) that presented a CCI(20) within the +/-50 range, and we do not take ZLR trades outside the range, since the risk to reward ratio is lower. Now that the CCI(20) is almost back up to -50, a ZLR Short entry signal is possible within the next week.
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 ten weeks ago, while the Daily CCI(20) began an down trend six weeks ago.
The ZLR Short entry from Monday 8/22 close continued another week with the Weekly CCI(20) decreasing but still below -100, 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: Note that all industries except Airlines are negative over the last two weeks. Bullish: Gold & Silver (XAU) is in the bottom five. Computer Technology (XCI) remains in the top five. Oil Services (OSX) remains in the bottom five and Oil (XOI) has entered the bottom five. Internet (IIX),  Bearish: Banks (BKX) and REITs (DJR) have left the top five.  Disk Drives (DDX) have entered bottom five.
open GOLD 2% 3box rev P&F chart
Focus This Week: Is Gold the safe place to be in this bear market?  Maybe not. The Point & Figure chart above shows that Gold has recently been very volatile, and most recently has fallen dramatically and has broken through support. In the daily Gold chart we can see a double top in a declining trend. Looking at the Dollar and Oil normalized against Gold for the last 60 days, Gold investment may be benefiting from reinvestment of Oil securities profits, but the surprise is the growing strength of the Dollar. As we know current market conditions have been felt around the world, with other world currencies being hit even harder than the Dollar.

–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 ]

October 11, 2008

10-10-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 5:20 pm
Subscriber email sent 10-11-08:

Market Breadth: This week’s chart is truly remarkable. Although our Bull/Bear Point and Figure ratio rose from 0.07 to 0.14 this week, the total volume of bearish stocks has spiked dramatically indicating a massive sell-off of normally lower volume securities. The count of stocks in Bearish patterns nearly doubled to 3522, about 75% higher than our previous high since we began tracking the value. There are now 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 a market unlikely to quickly recover. Last week the total count of securities in Bullish or Bearish patterns increased by 100% to 4019. Remember this sell-off based increase is on top of last week’s 73% increase in total high volume security count. Bearish patterns increased by 94%, nearly doubling from last week, while Bullish patterns increased by 258%. Although this bullish percentage increase is high, the increase is from 139 to 497, much lower numbers than the 88% bearish pattern increase of 1875 to 3522. 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 sixth consecutive time in thirteen weeks with a drop of 499 points. At -1326, has now broken below the intermediate bottom it made twelve weeks ago, and has also broken through the October 2005 low, the July 2006 low, and now the August 2007 July 2008 low points.
The Nasdaq Composite Index has a count of two (2) accumulation days and six (6) distribution days in the last two weeks and is currently in accumulation mode.  Last week it 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, this week both the S&P (SPI) and the DOW (DIA) again ended in distribution mode.
Momentum: As we explained previously, since the CCI(20) Daily down-trend began Monday 9/8, we have not had a Zero Line Reject (ZLR) that presented a CCI(20) within the +/-50 range, and we do not take ZLR trades outside the range, since the risk to reward ratio is lower.
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 nine weeks ago, while the Daily CCI(20) began an down trend five weeks ago.
The ZLR Short entry from Monday 8/22 close continued with the Weekly CCI(20) strongly 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: Note that all industries are negative for the last two weeks. Bullish: Banks (BKX) lead the top five. Oil Services (OSX) leads the bottom five. Oil (XOI) has entered the bottom five. Internet (IIX), Computer Tech (XCI) and REITs (DJR) have entered the top five. Bearish: Gold & Silver (XAU) remains out of the bottom five.
open Dow Nasdaq Performance Chart
Focus This Week: How does the current market look compared to the crash of 1929? Over the last year, the Dow and Nasdaq have lost over 40% of their value. In the fall of 1929, the drop from the peak value of 381.17 to 198.69 was 51.2%. So the current decrease, as sharp as it is, is slower than what happened in 1929. Note that the bottom of the 1929 crash did not occur until 1932. By then the Dow had lost almost 90 percent of its value.

–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 ]

October 5, 2008

10-3-08 Market Commentary

Filed under: Market Commentary — dlpirl @ 2:42 pm
Subscriber email sent 10-5-08:

Market Breadth: At 0.07 our Bull/Bear ratio is now the lowest on record. The count of stocks in Bearish patterns is the highest and stocks in bullish patterns is the lowest, since our tracking began in March 2007. The Bull/Bear Point and Figure ratio fell from from 0.20 to 0.07, again the most strongly bearish on record. There are now over 13 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 a market not likely to quickly recover. Last week the total count of securities in Bullish or Bearish patterns increased by 73% to 2014. Bearish patterns increased by 94%, nearly doubling from last week, while Bullish patterns decreased by 30%. 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 fifth time in twelve weeks with a drop of 225 points. At -827, it appears to have made an intermediate bottom eleven weeks ago, and but has broken through the October 2005 low, and is now likely to break though the July 2006 low. However, it is still above 2007 and 2008 low point.
The Nasdaq Composite Index has a count of three (3) accumulation days and five (5) distribution days in the last two weeks and is currently in distribution mode.  last week it 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, this week both the S&P (SPI) and the DOW (DIA) ended in distribution mode.
Momentum: As we explained last week, since the CCI(20) Daily down-trend began Monday 9/8, we have not had a Zero Line Reject (ZLR) that presented a CCI(20) within the +/-50 range, and we do not take these trades since the risk to reward ratio is lower.
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 eight weeks ago, while the Daily CCI(20) began an down trend four weeks ago.
The ZLR Short entry from Monday 8/22 close continued with the Weekly CCI(20) strongly 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: Oil Services (OSX) leads the bottom five. Oil (XOI) has left the the top five. Gold & Silver (XAU) has moved from leadership of the top five to second place in the bottom five. Computer Hardware (HWI) and S&P Retail (RLX) have left the bottom five. Bearish: Banks (BKX), REITs (DJR), and Brokers (XBD) remain out of the top five.
 
Focus This Week: What is really going on now with the markets, and what is really driving the current economic crisis? The roots are much deeper than coverage in the mainstream media. Here are some links we hope you find helpful.

–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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