March’s monthly Insights has been released and is available to subscribers on our website, www.wminsights.com. We also hope to make our blog available to all readers in the Comments section of our website in the next day or two. (Insights and the Short Term Review will continue to be available only to subscribers.) Readers interested in becoming a subscriber should send an e-mail to walter@wminsights.com. We are also on Twitter at http://twitter.com/waltergmurphy.
On Wednesday, the S&P 500 fell by only 0.02%, but that was enough to snap a six-day winning streak. Breadth, however, was modestly positive (by a 6:5 margin), as was the up/down volume ratio (by 7:5). Total volume fell by 10% to its lowest level of the year. The daily Coppock Curve is positive for 12 of the 24 S&P industry groups.
The six-day winning streak got us to thinking. Of the 44 trading days so far this year, 27 have been winners (based on the S&P 500). That equates to a winning percentage of 61.4%. For the period 1982- 2009, only one year had a higher percentage – 1995’s 61.9%. The average for all 28 years is 52.9% and the mean for the 21 up years is 54.9%.
S&P Day-to-Day Winning Percentage (1982-2010)
All of this suggests that there is a reasonably good chance that, in the months ahead, the S&P’s performance will be such that 2010’s winning percentage will revert closer to the mean in the low 50% range rather than the current low 60% figure. If so, this would be in line with our expectation – as outlined in January’s Year Ahead piece – that the second half of the year could be a difficult time.
Nearby support can be found at 1126-1117, then 1112-1104.
Resistance is indicated at 1150-1159.
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