Market Breadth: With this week’s steep market decline, our Bull/Bear Point and Figure Ratio fell from 1.62 to 0.90, dropping back into bearish territory. The total count of securities in bullish or bearish patterns decreased 11% to 1221. The count of bearish stocks increased 23%, while the count of stocks in bullish patterns decreased by 32%. The Sand 2 Pirls P&F Market Breadth Summary Chart shows us a market reverting back into bearish territory. 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 eleventh time in the last sixteen weeks, losing 122 points. At -298, it has now broken back below 2008 tops, but remains above the February 2010 and November 2009 bottoms.
This week the Nasdaq Composite Index ended the week in neither Accumulation nor Distribution mode with one (1) Accumulation day and four (4) Distribution days in the last two weeks. The previous week 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, both the S&P (SPY) and the DOW (DIA) ended the week in neither Accumulation nor Distribution mode.
Momentum: The CCI(20) is now below -100 with 3 days below zero.We expect a change of Woodie’s trend at Wednesday close in the coming 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 downtrend five weeks ago. The Daily CCI(20) an up trend three weeks ago, but appears to be headed for a change of Woodie’s trend next week.
We received the ZLR reject Short entry signal we anticipated last week. Trade entry is at Monday 8/16 open. We will begin following the result of this trade in next week’s commentary.
Industry Rotation the last two weeks: Only two of the top five industries are positive, and all the bottom-most are negative. Bullish: Oil Services (OSX) and Oil (XOI) have left the top five. Networkers (NWX) has left the bottom five. Bearish: Gold and Silver ($XAU leads the top five. Brokers (XBD) has left the top five. Compuer Hardware (HWI) and Banks (BKX) have entered the bottom five. DiskDrives (DDX) and Semis (SOX) remain in the bottom five.
8-13-10 Market Commentary
Subscriber email sent 8-15-10:
The well known market breadth indicator, the Nasdaq McClellan Summation Index (NASI) decreased for the eleventh time in the last sixteen weeks, losing 122 points. At -298, it has now broken back below 2008 tops, but remains above the February 2010 and November 2009 bottoms.
Focus this week: Economist Marc Faber on Monetization of Debt: “The feds will continue to print, print, print. They will not let up until the final crisis wipes out the system.”
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