The good news is:
There should be a little left in this rally.
The Negatives
The first chart covers the past 6 months showing the Nasdaq composite (OTC) in blue and a 10% trend (19 day EMA) of Nasdaq new highs (OTC NH) in green. Dashed vertical lines have been drawn on the 1st trading day of each month.
OTC NH turned upward, but will fail to confirm a new high, if one is reached, in the index.
The next chart is similar to the one above except it shows the S&P 500 (SPX) in red and NY NH in green has been calculated with NYSE data.
NY NH ditto.
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The Positives
The next chart covers the past 6 months showing the OTC in blue and a 40% trend (4 day EMA) of Nasdaq new highs divided by new highs + new lows (OTC HL Ratio), in red. Dashed horizontal lines have been drawn, on the Y axis, at 10% levels for the indicator; the line is solid at the 50%, neutral level (equal numbers of new highs and new lows).
OTC HL Ratio made it into positive territory last week.
The next chart is similar to the one above except it shows the SPX in red and NY HL ratio, in blue, has been calculated with NYSE data.
NY HL Ratio moved upward into comfortably positive territory.
The next chart covers the past 6 months showing the SPX in red and a 10% trend (19 day EMA) of NYSE new lows (NY NL) in blue. NY NL has been plotted on an inverted Y axis so decreasing numbers of new lows move the indicator upward (up is good).
NY NL moved sharply upward last week.
The next chart is similar to the one above except it shows the OTC in blue and OTC NL, in brown, has been calculated with Nasdaq data.
OTC NL also moved sharply upward.
Seasonality
Next week includes the 5 prior to the 3rd Friday of April during the 2nd year of the Presidential Cycle. The tables below show the daily change, on a percentage basis, for that period. The report generator calculates its position by counting Fridays. Because Good Friday fell on the 1st Friday of April the Seasonality reports will be unreliable this month.
OTC data covers the period from 1963 to 2025 while SPX data runs from 1953 to 2025. There are summaries for both the 2nd year of the Presidential Cycle and all years combined. Prior to 1953 the market traded 6 days a week, so that data has been ignored.
Seasonality for the coming week has been mixed.
Report for the week before the 3rd Friday of April
The number following the year is the position in the Presidential Cycle.
Daily returns from Monday through 3rd Friday.
OTC Presidential Year 2 (PY2)
Year Mon Tue Wed Thur Fri Totals
1966-2 0.68% -0.25% -0.45% 0.57% 0.20% 0.75%
1970-2 -0.83% -1.56% -0.92% -1.35% -1.42% -6.09%
1974-2 -0.04% -1.99% -1.72% -1.05% 0.23% -4.57%
1978-2 0.56% -0.43% 0.19% 1.09% 0.41% 1.82%
1982-2 0.07% -0.24% 0.21% 0.73% 0.69% 1.47%
Avg 0.09% -0.89% -0.54% 0.00% 0.02% -1.32%
1986-2 0.51% 0.23% 1.55% 0.60% 0.16% 3.05%
1990-2 -1.34% -0.21% 0.33% 0.12% -0.73% -1.84%
1994-2 -1.03% -1.05% -1.03% 1.87% 0.53% -0.71%
1998-2 1.10% 0.89% 0.72% -1.88% -0.66% 0.16%
2002-2 -0.14% 3.59% -0.34% -0.46% -0.31% 2.35%
Avg -0.18% 0.69% 0.25% 0.05% -0.20% 0.60%
2006-2 -0.40% -0.13% 0.14% 0.49% -0.95% -0.86%
2010-2 -0.05% 0.81% 0.17% 0.58% 0.44% 1.96%
2014-2 0.64% 0.97% -0.83% 0.52% -1.75% -0.46%
2018-2 0.70% 1.74% 0.19% -0.78% -1.26% 0.58%
2022-2 -0.14% 2.15% -1.22% -2.07% -2.55% -3.82%
Avg 0.15% 1.11% -0.31% -0.25% -1.22% -0.52%
OTC summary for PY2 1966 - 2022
Avg 0.02% 0.30% -0.20% -0.07% -0.47% -0.41%
Win% 47% 47% 53% 60% 47% 53%
OTC summary for all years 1963 - 2025
Avg -0.41% 0.31% 0.27% 0.28% 0.12% 0.57%
Win% 44% 58% 68% 60% 62% 67%
SPX PY2
Year Mon Tue Wed Thur Fri Totals
1954-2 -0.64% -0.04% -0.40% 0.14% 0.36% -0.57%
1958-2 0.52% -0.30% 0.00% 0.79% 0.51% 1.52%
1962-2 -0.09% -0.10% -1.10% -0.97% -1.12% -3.38%
1966-2 -0.45% -0.01% 0.56% 0.37% -0.16% 0.31%
1970-2 -0.68% -0.86% -0.18% -0.98% -0.24% -2.94%
1974-2 -0.39% -1.68% -1.64% -0.81% 0.68% -3.85%
1978-2 1.65% -1.08% 0.46% 0.72% -0.21% 1.54%
1982-2 -0.09% -1.08% 0.24% 1.27% 1.24% 1.58%
Avg 0.01% -0.94% -0.11% 0.12% 0.26% -0.67%
1986-2 0.56% 0.19% 1.89% 0.33% -0.27% 2.70%
1990-2 -1.21% -0.21% 0.51% 0.27% -1.14% -1.79%
1994-2 -0.83% 0.02% -0.13% 1.53% -0.25% 0.34%
1998-2 0.08% 0.24% 0.33% -0.92% -1.05% -1.32%
2002-2 -0.76% 2.34% -0.20% -0.14% 0.06% 1.30%
Avg -0.43% 0.52% 0.48% 0.21% -0.53% 0.25%
2006-2 -0.24% -0.49% 0.28% 0.33% 0.07% -0.05%
2010-2 0.45% 0.81% -0.10% 0.23% 0.71% 2.09%
2014-2 0.38% 0.41% -0.22% 0.17% -0.81% -0.07%
2018-2 0.81% 1.07% 0.08% -0.57% -0.85% 0.53%
2022-2 -0.02% 1.61% -0.06% -1.48% -2.77% -2.73%
Avg 0.28% 0.68% 0.00% -0.26% -0.73% -0.04%
SPX summary for PY2 1954 - 2022
Avg -0.05% 0.05% 0.02% 0.02% -0.29% -0.27%
Win% 39% 44% 47% 61% 39% 50%
SPX summary for all years 1953 - 2025
Avg -0.18% 0.29% 0.13% 0.11% -0.03% 0.31%
Win% 47% 55% 57% 60% 51% 64%
Conclusion
Prices continued their rally and the new low indicators moved sharply upward.
The annual seasonal pattern calls for this rally to continue between now and late April when a cycle top is expected.
The strongest sectors last week were Utilities (for the 3rd consecutive week) and Transportation while the weakest were Internet and Energy (for the 2nd consecutive week).
I expect the major averages to be higher on Friday April 17 than they were Friday April 10
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