On Monday I did an interview on Canada’s Business New Network. The link is: http://watch.bnn.ca/trading-day/january-2010/trading-day-january-11-2010/#clip254197.
On Tuesday I did an MTA podcast, hosted by friend and fellow technician Ed Carlson. The link is: http://media.mta.org/podcasts/2010-JAN12-waltermurphy.mp3.
The S&P 500 fell 0.9% on Tuesday, breaking a seven day winning streak. Breadth was negative by a bit less than a 9:2 margin. The up/down volume ratio was negative by better than 5:1 and total volume increased by 12%. Thus, Tuesday goes down as a distribution day. The daily Coppock Curve was negative for 14 of the 24 S&P industry groups.
Well it looks like 2010 won’t go down in the record books as a perfect year. After six straight up days to start off the year, the string was finally snapped on Tuesday. That got us to thinking. How many days in a given year can be expected to be up days? We were somewhat surprised by the answer.
In the 47 years from 1963 through 2009, fully 35 (74.5%) had more up days than down days(based on the S&P 500). Moreover, there have been three winning streaks of at least six years, all of which have bee relatively recent. So there has not only been a bullish bias overall, but a winning streak can be sustained for a fairly long period.
The three winning streaks were 1985-1990, 1992-1999, and 2003-present. That presents two observations. First, most people would probably be surprised to find that 2007 had more up days than down (the final tally was 127 to 126). So it would seem that, like Longfellow’s little girl, when the 2007 market was good, it was very good indeed, but when it was bad it was horrid. Second, it would seem that, since the market has had more up days than down for six straight years, it would not be unreasonable to see that streak broken in 2010.
S&P 500 Hourly
Tuesday’s weakness did not upset any apple carts, so our near term focus remains on nearby support at 1115-1114; A decline through that range would do much to lock in the rally from December 9 as a complete pattern, which would satisfy the minimum requirements for perhaps two larger wave degrees of trend. Until that happens, we will continue to give the current trend the benefit of the doubt. Second support remains at 1086-1085.
Meanwhile, there is still the potential for a continued challenge of the top end of our long-standing 1121-1156 resistance range.
If it's 2003-present the streak should be 7 shouldn't it?
ReplyDelete2003
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And did you mean 2008 instead of 2007 when your wrote "First, most people would probably be surprised to find that 2007 had more up days than down (the final tally was 127 to 126). So it would seem that, like Longfellow’s little girl, when the 2007 market was good, it was very good indeed, but when it was bad it was horrid"
Somebody's head must have been in the clouds last night. You're right on both counts. I'll mention it in tonight's blog. Thanks.
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