Advance/Decline Quotes
Advance/Decline Archive

Friday, September 30, 2005

Chart 1.	Advancing and Declining (AD) Issues and AD Volume. S&P 500 Index. September 26, 2005 to September 30, 2005. Intraday Data (One Bar = 5 minutes)

 

Table 1.	Advancing and Declining (AD) Issues and AD Volume. S&P 500 Index. September 26, 2005 to September 30, 2005. End-of-day data.
Date S&P 500 Change from previous close Advancing Issues Declining Issues A/D Issues Ratio Advanced Volume Declined Volume A/D Volume Ratio 9/26/2005 0.02% 230 256 0.90 783 935 0.84 9/27/2005 0.00% 249 231 1.08 792 933 0.85 9/28/2005 0.10% 268 218 1.23 1,150 759 1.51 9/29/2005 0.88% 388 101 3.84 1,488 463 3.21 9/30/2005 0.09% 318 166 1.92 1,236 540 2.29 Weekly Total: 1.11 1,453 972 1.49 5,449 3,630 1.50
Online, the data in this table can best be viewed using a 6-month AD chart. Select the following settings: "A/D" and either "Adv / Decl Volume or "Adv / Decl Issues". Apply a 1-day Advance/Decline MA (moving average).

Table 1 above shows that:

• September 26: By day's end, 256 stocks had declined while 230 had advanced (an A/D issues ratio of 0.90). Looking at volume readings, this ratio was about 6 to 5 (an Advance/Decline volume ratio of 0.84). The session's highest A/D issues ratio (of 4.25) was noted around 10:20. By this time, the index had gained about 0.47%. Around 12:15, the index started to slide. The day's lowest Adv/Decl issues ratio (of 0.52) and its lowest A/D volume ratio (of 0.53) were recorded around 14:40. By this time, the index had declined about 0.27%. The day's data indicates a neutral market breadth;
• On September 27, 249 stocks belonged to the group of advancing issues and 249 were counted among the group of declining issues (an A/D issues ratio of 1.08). In comparison, the day's volume data reveals that advances topped declines by a ratio of 6 to 5 (an Advance/Decline volume ratio of 0.85). The Advance/Decline issues ratio hit its lowest value of the session (of 0.39) around 10:50. By this time, the index had declined about 0.33%. After this time, the index started to advance, and the Advance/Decline issues ratio hit its highest level of the day (of 2.06) at 15:00. By this time, the index had gained about 0.29%. The end-of-day divergence noted between the A/D issues and the A/D volume ratios (TRIN = 1.27) reveals that declining stocks were traded more actively than advancing issues. The average volume traded per declining stock was 4.04 M; in contrast, the average volume traded per advancing stock amounted to only 3.18 M. The session's data points to a neutral market breadth;
• September 28: 268 S&P 500 index stocks advanced while 218 belonged to the group of decliners. Advances beat declines by a ratio of almost 5 to 4 (an Adv/Decl issues ratio of 1.23). On the volume side, a higher A/D volume ratio of 1.51 was generated. The day's highest A/D issues ratio of 3.67 was noted around 9:35, immediately following the market opening. By this time, the index had gained about 0.35%. Between 11:15 and 13:50, we witnessed a strong decline; however, by the end of the session, the index had recovered its losses. The session's lowest Advance/Decline issues and Advance/Decline volume readings (an Adv/Decl issues ratio of 0.67 and an A/D volume ratio of 1.03) were recorded around 13:45. By this time, the index had declined about 0.23%. The session's data reveals a neutral overall market sentiment;
• September 29: By the end of trading, we counted 388 advancing stocks and 101 declining issues. Winners beat losers by a margin of 23 to 6 (an A/D issues ratio of 3.84). Looking at volume readings, this ratio was not quite as positive - about 16 to 5 (an A/D volume ratio of 3.21). The index opened the session with a push to the down-side. The day's lowest Adv/Decl issues ratio of 0.31 was noted around 11:05. By this time, the index had declined about 0.43%. A strong rally then followed, and at 15:25, the Adv/Decl issues ratio peaked for the day (at a level of 3.92); the A/D volume ratio displayed a similar pattern. At this time, the index showed a daily gain of about 0.93%. Market mood for this session was bullish;
• On September 30, 318 stocks in the S&P 500 index belonged to the group of advancing issues while 166 were counted among the decliners. Based on the number of issues, advances beat declines by a ratio of almost 2 to 1 (an Advance/Decline issues ratio of 1.92). On the other hand, the A/D volume ratio (of 2.29) remained above the Advance/Decline issues ratio. Throughout the entire session, the index meandered sideways. The day's data reveals that market breadth was slightly positive, although not deviating far from a neutral reading.

In Summary:

The S&P 500 gained 1.11% this week, and the bulk of this gain occurred on Thursday (September 29) where the index added 0.88%. Positive sentiment readings were limited to that one day; the week's four other sessions were characterized by a neutral or slightly positive (i.e., on September 30) market mood. For the week as a whole, we consider market sentiment to have been neutral to slightly positive.

We consider this week's index advance a reaction to last week's prevailing negative sentiment readings. This assessment should come as no surprise to our members; in fact, in our previous AD report, we noted the following:" Scrolling back in time on our charts, you may notice that in 8 of 10 recent cases, the S&P 500 index recovered after having generated similarly negative market sentiment readings."

It bears mentioning that the S&P 500's up-thrust on September 29 (where the index gained a respectable 0.88%) was not accompanied by particularly high volume. In fact, volume readings remained consistently near average levels throughout the entire week. Furthermore, while market breadth on the day of the breakout was positive, it was not particularly impressive.