More Stats That Favor the Bulls

Three straight 80% upside days are pretty rare.

Technical Edge — 

• NYSE Breadth: 29% Upside Volume 

• NASDAQ Breadth: 36% Upside Volume 

• VIX: ~$26

I did some more number-crunching on volume breadth yesterday. In the last ten years, there have only been three occasions where upside breadth tallied 80% or higher in three straight sessions: February 2016, March 2020 and last week. 

In the prior two occurrences, it marked a long-term low. Because the data set is so limited, I expanded my search, looking for three such 80%+ upside days in a four-session span. We had six of those occurrences in the last decade. 

In all of those occasions, it marked the short-term low for the next three months. In five out of six occurrences, it marked the intermediate-term low for the next six months. 

Additionally, the S&P 500 had a positive return in 5 out of the 6 times over the following time horizons: 1 month, 1 quarter and 1 year. In all six occurrences, the S&P was positive 6 months later. 

If you add the stats for three days in a row of 80%+ upside days, the numbers are even better (but that’s not surprising): 

When combined with the stats of the S&P 500 falling in 7 or more consecutive weeks, it’s reasonable that one could be looking for more upside and considering that we may have seen the low for now. 

Game Plan — S&P (ES and SPY), Oil, Wheat, XLE, AMD

S&P 500 — ES

I’m glad we did this yesterday: “I want to take today slowly after such a strong finish to last week.”

It’s a new month, but I am watching last week’s high near 4168. If the ES clears that level,