Technical Market Report For August 8, 2026

The good news is:

• Positives will be easy to spot when they appear.

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 fell as the index rose. 

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

OTC NH continued falling.  

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 rose a little last week, but remained in negative territory.

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 popped up into positive territory, but resumed declining as the index rose.

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 moving downward 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 tumbled last week.  

The Positives

Positives are scarce.

Seasonality

Next week includes the first 5 trading days 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 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 weaker during the 2nd year of the Presidential Cycle than other years.

Report for the first 5 days of August.

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      Day2      Day3      Day4      Day5      Totals

 1966-2       0.00% 1  -1.26% 2  -0.09% 3   0.39% 4   0.62% 5    -0.34%

 1970-2      -0.83% 1  -1.25% 2   0.17% 3   0.07% 4  -0.44% 5    -2.28%

 1974-2      -0.51% 4  -0.33% 5   0.39% 1   1.23% 2   1.63% 3     2.41%

 1978-2       0.39% 2   1.06% 3   0.67% 4   0.53% 5   0.39% 1     3.04%

 1982-2       0.61% 1  -0.24% 2  -0.84% 3  -0.85% 4  -0.94% 5    -2.26%

 Avg         -0.07%    -0.40%     0.06%     0.28%     0.25%       0.11%

 1986-2      -0.19% 5  -1.08% 1   0.02% 2  -0.55% 3   0.09% 4    -1.71%

 1990-2      -0.53% 3  -1.61% 4  -2.67% 5  -4.17% 1   0.51% 2    -8.47%

 1994-2       0.37% 1  -0.01% 2  -0.15% 3  -0.49% 4  -0.21% 5    -0.48%

 1998-2      -1.14% 1  -3.54% 2   0.15% 3   2.29% 4   0.97% 5    -1.28%

 2002-2      -3.63% 4  -2.51% 5  -3.36% 1   4.44% 2   1.70% 3    -3.36%

 Avg         -1.02%    -1.75%    -1.20%     0.30%     0.61%      -3.06%

 2006-2      -1.41% 2   0.82% 3   0.65% 4  -0.35% 5  -0.60% 1    -0.89%

 2010-2       1.80% 1  -0.52% 2   0.88% 3  -0.46% 4  -0.20% 5     1.51%

 2014-2      -0.39% 5   0.72% 1  -0.71% 2   0.05% 3  -0.46% 4    -0.79%

 2018-2       0.46% 3   1.24% 4   0.12% 5   0.61% 1   0.31% 2     2.74%

 2022-2      -0.18% 1  -0.16% 2   2.59% 3   0.41% 4  -0.50% 5     2.17%

 Avg          0.06%     0.42%     0.71%     0.05%    -0.29%       0.94%

OTC summary for PY2 1966 - 2022

Averages     -0.35%    -0.58%    -0.15%     0.21%     0.19%      -0.67%

% Winners       33%       27%       60%       60%       53%         33%

MDD  8/5/2002  9.20% --  8/6/1990  8.72% --  8/4/1998  4.64%

OTC summary for all years 1963 - 2025

Averages     -0.08%    -0.19%    -0.12%     0.08%     0.11%      -0.19%

% Winners       52%       40%       51%       67%       57%         54%

MDD 8/5/2002  9.20% --  8/6/1990  8.72% --  8/5/2011  8.13%

SPX PY2

               Day1      Day2      Day3      Day4      Day5      Totals

 1930-2      -0.47% 5   0.57% 6   1.37% 1   0.00% 2  -1.58% 3    -0.12%

 1934-2       3.11% 3   0.67% 4  -1.22% 5  -2.02% 6  -0.11% 1     0.42%

 1938-2      -1.21% 1   1.31% 2  -0.89% 3   0.65% 4   2.26% 5     2.12%

 1942-2       0.00% 6   0.12% 1  -0.23% 2  -0.94% 3  -0.12% 4    -1.17%

 1946-2       0.28% 4   0.06% 5  -0.61% 1  -0.28% 2   0.95% 3     0.40%

 1950-2       1.01% 2  -0.39% 3   0.22% 4   0.83% 5   1.49% 1     3.17%

 1954-2       0.36% 1  -0.19% 2  -0.10% 3  -0.42% 4  -1.27% 5    -1.62%

 1958-2       0.64% 5   0.95% 1  -0.40% 2  -0.61% 3   0.65% 4     1.23%

 1962-2      -0.82% 3   0.40% 4   0.24% 5  -0.64% 1  -0.68% 2    -1.50%

 Avg          0.29%     0.16%    -0.13%    -0.22%     0.23%       0.34%

 1966-2      -1.54% 1   0.02% 2   1.00% 3   0.94% 4   0.08% 5     0.50%

 1970-2      -1.32% 1   0.22% 2  -0.01% 3  -0.13% 4   0.26% 5    -0.98%

 1974-2      -0.71% 4  -0.20% 5   0.89% 1   1.55% 2   2.65% 3     4.18%

 1978-2      -0.02% 2   2.25% 3   0.57% 4   0.40% 5  -0.36% 1     2.84%

 1982-2       1.76% 1  -1.06% 2  -1.57% 3  -0.92% 4  -1.38% 5    -3.16%

 Avg         -0.36%     0.25%     0.18%     0.37%     0.25%       0.67%

 1986-2      -0.51% 5   0.46% 1   0.44% 2  -0.08% 3   0.08% 4     0.39%

 1990-2      -0.18% 3  -1.14% 4  -1.88% 5  -3.02% 1   0.12% 2    -6.10%

 1994-2       0.60% 1  -0.10% 2   0.20% 3  -0.66% 4  -0.29% 5    -0.25%

 1998-2      -0.74% 1  -3.63% 2   0.87% 3   0.76% 4  -0.02% 5    -2.76%

 2002-2      -2.96% 4  -2.31% 5  -3.43% 1   2.99% 2   2.00% 3    -3.70%

 Avg         -0.76%    -1.34%    -0.76%     0.00%     0.38%      -2.48%

 2006-2      -0.45% 2   0.60% 3   0.13% 4  -0.07% 5  -0.28% 1    -0.07%

 2010-2       2.20% 1  -0.48% 2   0.61% 3  -0.13% 4  -0.37% 5     1.83%

 2014-2      -0.29% 5   0.72% 1  -0.97% 2   0.00% 3  -0.56% 4    -1.09%

 2018-2      -0.10% 3   0.49% 4   0.46% 5   0.35% 1   0.28% 2     1.49%

 2022-2      -0.28% 1  -0.67% 2   1.56% 3  -0.08% 4  -0.16% 5     0.37%

 Avg          0.22%     0.13%     0.36%     0.02%    -0.22%       0.51%

SPX summary for PY2 1930 - 2022

Averages     -0.07%    -0.06%    -0.11%    -0.06%     0.15%      -0.15%

% Winners       33%       58%       54%       38%       46%         50%

MDD  8/5/2002  8.45% --  8/6/1990  6.10% --  8/6/1982  4.84%

SPX summary for all years 1928 - 2025

Averages      0.05%    -0.05%     0.06%    -0.10%     0.13%       0.09%

% Winners       49%       49%       51%       50%       55%         50%

MDD 8/5/2002  8.45% --  8/5/2011  7.19% --  8/6/1990  6.10%

August

Since 1963, over all years, the OTC in August has been up 60% of the time with an average gain of 0.5%.  During the 2nd year of the Presidential Cycle the OTC in August has been up 53% of the time with an average loss of -1.9%, helped considerably by a 19.9% loss in 1998, a 13.0% loss in 1990, a 10.9% loss in 1974 and a 9.9% loss in 1966. The best August ever for the OTC was 2000 (+11.7%), the worst 1998 (-19.9%).

The average month has 21 trading days.  The chart below has 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 August 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 59% of the time in August with an average gain of 0.7%.  During the 2nd year of the Presidential Cycle the SPX has been up 63% of the time with an average loss of -0.5%.  The best August ever for the SPX was 1932 (+37.5%) the worst 1998 (-14.6%).

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 August in red and the average daily performance during the 2nd year of the Presidential Cycle, over the same period, in black.

Since 1979 the Russell 2000 (R2K) has been up 55% of the time in August with an average gain of 0.3%.  During the 2nd year of the Presidential Cycle the R2K has been up 55% of the time with an average loss of -1.4%.  The best August ever for the R2K, 1984 (+11.5%), the worst 1998 (-19.5%)

The chart below is similar to those above except it shows the average daily performance of the R2K, over all years since 1979, in August in magenta and the average daily performance during the 2nd year of the Presidential Cycle in black.

Since 1885 the Dow Jones Industrial Average (DJIA) has been up 64% of the time in August with an average gain of 1.2%.  During the 2nd year of the Presidential Cycle the DJIA has been up 65% of the time in August with an average gain of 0.5%.  The best August ever for the DJIA 1932 (+34.8%), the worst 1998 (-15.1%)

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

Conclusion

The breadth indicators continued their deterioration last week.

The strongest sectors last week were Energy (for the 4th week) and Internet while the weakest were Biotech and Utilities (down from the top last week).

I expect the major averages to be lower on Friday August 7 than they were on Friday July 31.

Last week's positive forecast was a miss.