Technical Market Report For August 22, 2026

The good news is:

• Evasive

The Negatives

The first chart covers the past 6 months showing the S&P 500 (SPX) in red and a 10% trend (19 day EMA) of NYSE new highs (NY NH) in green.  Dashed vertical lines have been drawn on the 1st trading day of each month.

NY NH continued to decline from its already low level. 

The next chart is similar to the first chart except it shows the NASDAQ composite (OTC) in blue and OTC NH in green has been calculated with NASDAQ data.  

OTC NH resumed its decline.  

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 pattern of lower highs and lower lows.

The next chart covers the past 6 months showing the SPX in red and a 40% trend (4 day EMA) of NYSE new highs divided by new highs + new lows (NY HL Ratio), in blue.  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). 

NY HL Ratio fell into negative territory.

The Positives

The next chart is similar to the one above except it was calculated with NASDAQ data and the OTC is shown in blue while OTC HL Ratio is shown in red.

OTC HL Ratio fell sharply, but remained in positive territory.

The next chart is similar to the NY NL chart shown above except it shows the OTC in blue and OTC NL, in brown, has been calculated with NASDAQ data.

OTC NL continued moving  upward.  

Seasonality

Next week includes the 5 trading days prior to the 4th Friday of August during the 2nd year of the Presidential Cycle.  The tables below show the daily change, on a percentage basis, for that period.  

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; weaker during the 2nd year of the Presidential Cycle than other years.

Report for the week before the 4th Friday of August.

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  -0.69%  -2.36%   0.00%   1.36%  -1.16%  -2.85%

 Avg     -0.69%  -2.36%   0.00%   1.36%  -1.16%  -2.85%

 1970-2   2.41%   0.64%   0.98%  -0.05%   1.15%   5.13%

 1974-2  -1.11%   0.91%  -1.22%  -2.05%  -1.60%  -5.07%

 1978-2  -0.70%   0.07%   0.64%   0.41%   0.41%   0.84%

 1982-2   1.75%   1.38%   1.57%   1.85%  -0.32%   6.23%

 1986-2  -0.24%  -0.12%   0.56%   0.06%   0.10%   0.35%

 Avg      0.42%   0.58%   0.51%   0.04%  -0.05%   1.50%

 1990-2  -1.25%  -2.29%  -1.27%  -3.90%   1.97%  -6.74%

 1994-2  -0.02%   0.77%   0.50%   0.41%   1.08%   2.74%

 1998-2  -0.38%   0.41%  -1.66%  -4.63%  -2.77%  -9.03%

 2002-2   2.46%  -1.29%   2.37%   0.97%  -2.97%   1.55%

 2006-2  -0.75%   0.11%  -0.71%   0.11%   0.15%  -1.09%

 Avg      0.01%  -0.46%  -0.16%  -1.41%  -0.51%  -2.52%

 2010-2  -0.92%  -1.66%   0.84%  -1.07%   1.65%  -1.17%

 2014-2   0.97%   0.43%  -0.02%   0.12%   0.14%   1.64%

 2018-2   0.06%   0.49%   0.38%  -0.13%   0.86%   1.65%

 2022-2  -2.55%   0.00%   0.41%   1.67%  -3.94%  -4.41%

OTC summary for PY2 1966 - 2022

 Avg     -0.06%  -0.17%   0.24%  -0.32%  -0.35%  -0.68%

 Win%       33%     60%     64%     60%     60%     53%

OTC summary for all years 1963 - 2025

 Avg     -0.07%   0.03%   0.41%  -0.15%   0.18%   0.39%

 Win%       46%     56%     67%     46%     65%     60%

SPX PY2

 Year       Mon     Tue     Wed    Thur    Fri    Totals

 1954-2  -0.67%  -0.42%  -0.71%  -0.26%   0.29%  -1.77%

 1958-2  -0.59%   0.17%   0.04%   0.66%   0.21%   0.49%

 1962-2   0.61%  -0.42%   1.12%  -0.13%  -0.20%   0.97%

 1966-2  -1.73%  -0.17%   1.23%  -1.28%  -2.11%  -4.06%

 1970-2   2.21%   0.16%   0.11%  -0.16%   0.96%   3.28%

 1974-2  -1.45%   0.51%  -1.92%  -0.97%  -1.72%  -5.55%

 1978-2  -0.80%   0.40%   0.58%   0.16%  -0.17%   0.17%

 1982-2   2.73%  -0.65%   1.93%   0.82%  -1.21%   3.62%

 Avg      0.19%   0.05%   0.39%  -0.28%  -0.85%  -0.51%

 1986-2   0.09%  -0.35%   1.32%  -0.04%   0.21%   1.23%

 1990-2   0.21%  -2.02%  -1.65%  -3.00%   1.45%  -5.02%

 1994-2  -0.30%   0.48%   0.97%  -0.20%   1.22%   2.17%

 1998-2   0.64%   0.44%  -0.80%  -3.84%  -1.48%  -5.03%

 2002-2   2.36%  -1.40%   1.27%   1.41%  -2.27%   1.37%

 Avg      0.60%  -0.57%   0.22%  -1.13%  -0.17%  -1.05%

 2006-2  -0.37%   0.10%  -0.45%   0.24%  -0.07%  -0.55%

 2010-2  -0.40%  -1.45%   0.33%  -0.77%   1.66%  -0.64%

 2014-2   0.85%   0.50%   0.25%   0.29%  -0.20%   1.70%

 2018-2   0.24%   0.21%  -0.04%  -0.17%   0.62%   0.86%

 2022-2  -2.14%  -0.22%   0.29%   1.41%  -3.37%  -4.03%

 Avg     -0.36%  -0.17%   0.08%   0.20%  -0.27%  -0.53%

SPX summary for PY2 1954 - 2022 

 Avg      0.08%  -0.23%   0.22%  -0.32%  -0.34%  -0.60%

 Win%       50%     50%     67%     39%     44%     56%

SPX summary for all years 1953 - 2025

 Avg     -0.13%   0.03%   0.26%  -0.15%   0.02%   0.03%

 Win%       45%     55%     61%     44%     53%     62%

Conclusion

Most of the breadth indicators deteriorated last week, the exception was Nasdaq new lows.

The strongest sectors last week were Energy (for the 2nd week in a row) and Precious Metals while the weakest were Utilities and Electronics.

I expect the major averages to be lower on Friday August 28 than they were on Friday August 21.

Last week-s positive forecast was a miss.