Technical Market Report For August 29, 2026

The good news is:

• New lows declined last week. 

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 also continued its decline.  

The Positives

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 rose into positive territory.

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 remained in 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 turned upward breaking its pattern of lower highs and lower lows.

The next chart is similar to the chart 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 last trading of August and the first 4 trading days of September 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 1928 to 2025.  There are summaries for both the 2nd year of the Presidential Cycle and all years combined.  

Seasonality for the coming week has been mixed; weaker during the 2nd year of the Presidential Cycle than other years.

Report for the last 1 day of August and the first 4 days of September.

The number following the year represents its position in the Presidential Cycle.

The number following the daily return represents the day of the week; 1 = Monday, 2 = Tuesday etc.

OTC Presidential Year 2 (PY2)

               Day1      Day1      Day2      Day3      Day4      Totals

 1966-2       0.73% 3   1.44% 4  -0.23% 5  -0.12% 2  -0.40% 3     1.42%

 1970-2       0.64% 1   0.00% 2  -0.80% 3   0.05% 4   0.98% 5     0.87%

 1974-2       1.63% 5  -2.39% 2  -3.17% 3   2.15% 4   0.80% 5    -0.98%

 1978-2       0.19% 4   0.25% 5   0.82% 2   0.23% 3   0.23% 4     1.73%

 1982-2       0.77% 2  -0.23% 3   1.24% 4   1.42% 5  -0.64% 2     2.55%

 Avg          0.79%    -0.19%    -0.43%     0.75%     0.19%       1.12%

 1986-2       0.12% 5  -0.71% 2  -0.33% 3   0.57% 4  -0.70% 5    -1.05%

 1990-2       0.67% 5   0.12% 2   0.20% 3  -0.96% 4   0.42% 5     0.46%

 1994-2      -0.11% 3  -0.87% 4   0.04% 5   0.03% 2   0.63% 3    -0.28%

 1998-2      -8.57% 1   5.06% 2   1.12% 3  -1.31% 4  -0.34% 5    -4.04%

 2002-2      -1.57% 5  -3.88% 2   2.25% 3  -3.20% 4   3.54% 5    -2.85%

 Avg         -1.89%    -0.06%     0.66%    -0.97%     0.71%      -1.55%

 2006-2      -0.09% 4   0.43% 5   0.57% 2  -1.72% 3  -0.58% 4    -1.38%

 2010-2      -0.28% 2   2.97% 3   1.06% 4   1.53% 5  -1.11% 2     4.18%

 2014-2       0.50% 5   0.39% 2  -0.56% 3  -0.22% 4   0.45% 5     0.56%

 2018-2       0.26% 5  -0.23% 2  -1.19% 3  -0.91% 4  -0.25% 5    -2.31%

 2022-2      -0.56% 3  -0.26% 4  -1.31% 5  -0.74% 2   2.14% 3    -0.73%

 Avg         -0.04%     0.66%    -0.28%    -0.41%     0.13%       0.06%

OTC summary for PY2  1966 - 2022

Averages     -0.38%     0.14%    -0.02%    -0.21%     0.34%      -0.13%

% Winners       60%       47%       53%       47%       53%         47%

MDD  8/31/1998  8.57% --  9/5/2002  6.35% --  9/4/1974  5.48%

OTC summary for all years 1963 - 2025

Averages      0.10%    -0.04%     0.09%    -0.07%     0.12%       0.19%

% Winners       68%       56%       60%       59%       57%         57%

MDD 8/31/1998  8.57% --  9/7/2001  6.52% --  9/5/2008  6.46%

SPX PY2

               Day1      Day1      Day2      Day3      Day4      Totals

 1930-2       1.14% 5   0.05% 2  -0.98% 3  -0.71% 4   1.52% 5     1.01%

 1934-2      -0.11% 5  -0.22% 6  -0.77% 2   1.66% 3  -2.06% 4    -1.50%

 1938-2       0.17% 3  -1.16% 4   2.85% 5   0.73% 6  -1.05% 2     1.54%

 1942-2       0.00% 1   0.00% 2   0.12% 3  -0.12% 4  -0.12% 5    -0.12%

 1946-2      -0.66% 5  -6.73% 2  -0.45% 3   3.43% 4  -0.94% 5    -5.34%

 1950-2      -0.05% 4   0.71% 5   0.70% 2  -0.75% 3   0.27% 4     0.87%

 1954-2      -1.71% 2   0.70% 3   0.77% 4   0.76% 5   0.52% 2     1.04%

 1958-2       0.19% 5   0.52% 2   0.38% 3  -0.17% 4  -0.27% 5     0.65%

 1962-2       0.75% 5  -0.95% 2  -0.75% 3   0.41% 4   0.03% 5    -0.50%

 Avg         -0.30%    -1.15%     0.13%     0.74%    -0.08%      -0.66%

 1966-2       1.63% 3   0.78% 4  -0.36% 5  -0.59% 2  -0.81% 3     0.65%

 1970-2      -0.42% 1  -0.70% 2   0.01% 3   1.40% 4   0.90% 5     1.19%

 1974-2       3.09% 5  -2.26% 2  -2.60% 3   3.17% 4   0.78% 5     2.18%

 1978-2      -0.20% 4   0.38% 5   0.78% 2   0.85% 3   0.04% 4     1.85%

 1982-2       1.57% 2  -1.05% 3   1.72% 4   2.00% 5  -1.07% 2     3.16%

 Avg          1.13%    -0.57%    -0.09%     1.36%    -0.03%       1.81%

 1986-2       0.04% 5  -1.74% 2   0.63% 3   1.50% 4  -1.32% 5    -0.90%

 1990-2       1.21% 5   0.16% 2   0.40% 3  -1.21% 4   0.92% 5     1.48%

 1994-2      -0.12% 3  -0.49% 4  -0.46% 5   0.18% 2  -0.18% 3    -1.07%

 1998-2      -6.78% 1   3.83% 2  -0.38% 3  -0.83% 4  -0.85% 5    -5.01%

 2002-2      -0.19% 5  -4.15% 2   1.75% 3  -1.60% 4   1.68% 5    -2.51%

 Avg         -1.17%    -0.48%     0.39%    -0.39%     0.05%      -1.60%

 2006-2      -0.04% 4   0.55% 5   0.17% 2  -0.99% 3  -0.48% 4    -0.78%

 2010-2       0.04% 2   2.95% 3   0.91% 4   1.32% 5  -1.15% 2     4.07%

 2014-2       0.33% 5  -0.05% 2  -0.08% 3  -0.15% 4   0.50% 5     0.55%

 2018-2       0.01% 5  -0.17% 2  -0.28% 3  -0.37% 4  -0.22% 5    -1.02%

 2022-2      -0.78% 3   0.30% 4  -1.07% 5  -0.41% 2   1.83% 3    -0.13%

 Avg         -0.09%     0.72%    -0.07%    -0.12%     0.10%       0.54%

SPX summary for PY2 1930 - 2022

Averages     -0.04%    -0.36%     0.13%     0.40%    -0.06%       0.06%

% Winners       50%       46%       54%       50%       46%         54%

MDD  9/4/1946  7.76% --  8/31/1998  6.78% --  9/4/1974  4.80%

SPX summary for all years 1928 - 2025

Averages      0.10%    -0.09%     0.13%     0.18%    -0.08%       0.24%

% Winners       60%       62%       54%       56%       43%         56%

MDD 9/4/1946  7.76% --  8/31/1998  6.78% --  9/4/1931  5.74%

September

September has the reputation of being the worst month of the year and, by some measures, it is.  Since 1963, over all years the OTC in September has been up 57% of the time with, on average loss of 0.3%.  During the 2nd year of the Presidential Cycle the OTC in September has been up 40% time with an average loss of -0.8%.  The worst September ever, 2001 (-17.0%) the best 1998 (+13.0%)

The average month has 21 trading days.  The chart below has been calculated by averaging the daily percentage change of the OTC 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.

The blue line shows the average of the OTC in September over all years since 1963 while the black line shows the average during the 2nd year of the Presidential Cycle.

Since 1928 the SPX has been up 45% of the time in September with an average loss of -1.1%.  During the 2nd year of the Presidential Cycle the SPX has also been up 46% of the time with an average loss of -1.5%.  The best ever September for the SPX was 1939 (+16.5%) the worst 1931 (-29.9%).

The chart below is similar to the one above except it shows the daily performance over all years for the SPX in September in red and the performance during the 2nd year of the Presidential Cycle in black.

Since 1979 the Russell 2000 (R2K) has been up 53% of the time in September with an average loss of -0.7%.  During the 2nd year of the Presidential Cycle the R2K has only been up 36% of the time with an average loss of -1.6%.  The best ever September for the R2K 2010 (+12.3%), the worst 2001 (-13.6%)

The chart below is similar to those above except it shows the daily performance over all years of the R2K in September in magenta and the performance during the 2nd year of the Presidential Cycle in black.

Since 1885 the Dow Jones Industrial Average (DJIA) has been up 44% of the time in September with an average loss of -0.9%.  During the 2nd year of the Presidential Cycle the DJIA has only been up 38% of the time with an average loss of -1.7%.  The best September ever for the DJIA 1939, up 13.5%, the worst 1931 (-30.7%)

The chart below is similar to those above except it shows the daily performance over all years of the DJIA in September in light grey and the performance during the 2nd year of the Presidential Cycle in black.

Conclusion

Last week was unusual in that both new highs and new lows decreased on both markets

The strongest sectors last week were Energy (for the 3rd week in a row) and Internet while the weakest were Utilities and Electronics (both fore the 2nd week in a row).

I expect the major averages to be lower on Friday September 4 than they were on Friday August 28.

Last week the R2K was down while the other major indices were up; so I am calling last week's negative forecast a tie.