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The lowest A/D issues and A/D volume ratios in 2003

In 2003, there were 8 instances where the S&P 500 index reached critically low A/D issues and A/D volume ratios, as summarized in Table 1 below.

Table 1. Lowest critical A/D volume and A/D issues ratios. S&P 500 index. 2003.

Date	Critical A/D Issues Ratio	Critical A/D Volume Ratio	Magnitude of Uptrend (Recovery Rally)	Chart and Point Reference

01/24/2003	0.04	0.09	0.8%	Chart #1 - A
03/04/2003	0.10	0.12	1.0%	Chart #1 - B
03/10/2003	0.03	0.06	10.9%	Chart #1 - C
03/24/2003	0.02	0.02	9.8%	Chart #1 - D
05/19/2003	0.05	0.06	10.3%	Chart #2 - A
06/23/2003	0.10	0.10	3.4%	Chart #2 - B
08/05/2003	0.07	0.05	7.7%	Chart #2 - C
09/22/2003	0.10	0.13	13.7%	Chart #2 - D
Copyright © 1997-2006 MarketVolume®

Chart #1: Lowest critical A/D volume and A/D issues ratios. S&P 500 index. January to April 2003. (In the bottom pane, A/D issues ratios are listed at the top and A/D volume ratios at the bottom).

Chart #2 - Point A-C:	On January 24, critically low A/D ratios were reached; however, the index hardly bounced and instead continued to push lower for more than another month. At point B, the index again reached critically low sentiment readings; at point C, panic selling took hold. After reaching point C, the index gained more than 20%, recovering ground until July.

Chart # 1 - Point D:	March 24 (point D) was characterized by a strong one-day decline that once again resulted in panic selling among traders. Between points C and D, the index had already made a recovery of more than 10%, so at point D, it might not have seemed likely to anyone that the recovery would still continue. But the panic selling that took place at this time only paved the way for a further index gains – by July, the market had pushed over 10% higher.

Chart #2: Lowest critical A/D volume and A/D issues ratios. S&P 500 index. May to October 2003. (In the bottom pane, A/D issues ratios are listed at the top and A/D volume ratios at the bottom).

Chart #2 - Point A:	On May 19 (point A) the S&P 500 index dropped about 2.6%. A single day with a substantial decline created an extremely negative market sentiment. A few days later, the market had reverted back to its previous uptrend. Within a month after the panic selling seen at point A, the market was trading over 5% higher.

Chart # 1 - Point B-C:	After the A/D issues and volume ratios had reached critical levels on June 23 (point B), the index proceeded to regain ground, but recovered by only 3.5%. After this brief rebound, the S&P 500 continued its push lower and sold off, reaching extremely low sentiment readings on August 5 (point C). Even though point C was only 10 points below point B, the selling pressure at that level was intense. Immediately after point B, selling pressure abated and the S&P 500 index started a new recovery process.

Chart # 1 - Point D:	Once again, critically low A/D volume and A/D issues ratios were reached, this time on September 22 (point D). A two-day sell-off led to the extremely negative market sentiment. Point D might be seen as a confirmation for the mid-term up-trend that began with critically low A/D volume and issues ratios on August 5, 2003. Panic selling between May to August 2003 when index moved sideway created in summary help to move the S&P 500 index more then 20% up (from point C) by the end of January 2004.

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