The good news is:
All of the major averages except the Dow Jones Industrial Average closed at all time highs last Friday.
The Negatives
This is the end of the world as we have been relishing it.
The market is overbought!
In the past 2 weeks the index price charts have moved from the lowest low of the past 6 months to all time highs. +12% for the SPX and +17% for the OTC (a nice annual gain in 2 weeks).
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 failed to confirm the index all time high by a wide margin.
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 hit its highest point in the last 6 months last Friday.
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 extreme 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 continued its upward move 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 days prior to the 4th 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 weekly Seasonality reports will be unreliable this month.
In addition to the weekly seasonal data I am including some of the April seasonal charts that I published 2 weeks ago.
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 negative by all measures and weaker during the 2nd year of the Presidential Cycle than other years.
There are a lot of 0’s in the report because of Good Friday.
Report for the week before the 20th Friday of April.
The number following the year is the position in the Presidential Cycle.
Daily returns from Monday through the 4th Friday.
OTC Presidential Year 2 (PY2)
Year Mon Tue Wed Thur Fri Totals
1966-2 0.25% 1.10% 0.03% -0.81% -0.07% 0.50%
Avg 0.25% 1.10% 0.03% -0.81% -0.07% 0.50%
1970-2 -1.37% -1.70% -1.37% -1.55% -2.78% -8.77%
1974-2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
1978-2 0.25% 0.60% 0.37% -0.10% 0.51% 1.63%
1982-2 0.47% -0.58% 0.09% -0.40% 0.30% -0.12%
1986-2 0.20% -0.24% -0.25% 0.52% 0.21% 0.45%
Avg -0.11% -0.48% -0.29% -0.38% -0.44% -1.70%
1990-2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
1994-2 1.14% 0.47% 0.00% -0.34% 0.29% 1.56%
1998-2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2002-2 -2.12% -1.61% -0.98% 0.02% -2.91% -7.60%
2006-2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Avg -0.49% -0.57% -0.98% -0.16% -1.31% -3.02%
2010-2 -0.28% -2.04% 0.01% 1.63% -2.02% -2.71%
2014-2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2018-2 -0.24% -1.69% -0.05% 1.22% 0.02% -0.76%
2022-2 1.29% -3.95% -0.01% 3.06% -4.17% -3.79%
OTC summary for PY2 1966 - 2022
Avg -0.04% -0.97% -0.24% 0.32% -1.06% -1.96%
Win% 60% 30% 44% 50% 50% 40%
OTC summary for all years 1963 - 2025
Avg 0.04% -0.22% -0.01% 0.22% -0.39% -0.37%
Win% 61% 45% 69% 66% 48% 58%
SPX PY2
Year Mon Tue Wed Thur Fri Totals
1954-2 0.36% -0.43% 0.00% 1.51% 0.28% 1.73%
1958-2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
1962-2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
1966-2 -0.21% -0.10% -0.25% -0.69% -0.08% -1.32%
1970-2 0.19% -0.52% -1.30% -1.46% -0.33% -3.42%
1974-2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
1978-2 1.52% 0.91% 0.19% -0.99% 1.01% 2.63%
1982-2 0.52% -1.06% -0.63% -0.96% 0.27% -1.86%
Avg 0.50% -0.19% -0.50% -1.03% 0.22% -0.99%
1986-2 0.97% -0.95% -0.28% 0.11% 0.11% -0.03%
1990-2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
1994-2 1.13% -0.19% 0.00% -0.61% 0.40% 0.74%
1998-2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2002-2 0.00% -2.15% -0.71% -0.15% -1.39% -4.40%
Avg 1.05% -1.10% -0.49% -0.22% -0.29% -1.23%
2006-2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2010-2 -0.43% -2.34% 0.65% 1.29% -1.66% -2.49%
2014-2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2018-2 0.01% -1.34% 0.18% 1.03% 0.11% -0.01%
2022-2 0.57% -2.81% 0.21% 2.47% -3.63% -3.19%
Avg 0.05% -2.16% 0.35% 1.60% -1.73% -1.90%
SPX summary for PY2 1954 - 2022
Avg 0.46% -1.00% -0.22% 0.14% -0.45% -1.06%
Win% 80% 09% 44% 45% 55% 27%
SPX summary for all years 1953 - 2025
Avg 0.01% -0.04% -0.16% 0.08% -0.10% -0.21%
Win% 55% 51% 44% 45% 54% 51%
April
Historically, April has been a pivotal month during the 2nd year of the Presidential Cycle. On average the high for the year occurs in mid to late April and the low for the year usually arrives in early October.
Since 1963, over all years, the OTC in April has been up 67% of the time with an average gain of 1.5%. During the 2nd year of the Presidential Cycle April has been up 40% of the time with an average loss of -2.0% (helped considerably by a 18.5% loss in 1970). The best April ever for the OTC was 2001 (+15.0%), the worst 1970 (-18.5%).
The average month has 21 trading days. The charts below have been calculated by averaging the daily percentage change for each of the 1st 11 trading days and each of the last 10. In months when there were more than 21 trading days some of the days in the middle were not counted. In months when there were less than 21 trading days some of the days in the middle of the month were counted twice. Dashed vertical lines have been drawn after the 1st trading day and at 5 trading day intervals after that. The line is solid on the 11th trading day, the dividing point.
In the chart below the blue line shows the average daily performance of the OTC in April over all years since 1963, while the black line shows the average during the 2nd year of the Presidential Cycle over the same period.
Since 1928 the SPX has been up 63% of the time in April with an average gain of 1.3%. During the 2nd year of the Presidential Cycle the SPX has been up 58% of the time with an average gain of 0.2%. The best April ever for the SPX was 1933 (+42.2%) the worst 1932 (-20.2%).
The chart below is similar to the one above except it shows the average daily performance over all years since 1928 for the SPX in April in red and the average daily performance during the 2nd year of the Presidential Cycle, over the same period, in black.
Conclusion
So far this year my weekly forecasts have been, on average, losers.
Keep that in mind.
This has been a seasonal rally. I am unable to predict the exact date of the top, however, as you can see from the charts above, it is, on schedule, to end some time next week.
The strongest sectors last week were Technology and Finance while the weakest were Utilities (down from the top for the past 2 weeks) and Energy (for the 3rd consecutive week).
I expect the major averages to be lower on Friday April 24 than they were Friday April 17.
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