Technical Market Report For August 8, 2026

The good news is:

• The Dow Jones Industrial Average (DJIA) and Russell 2000 (R2K) closed at all time highs last Tuesday and the S&P 500 (SPX) closed at an all time high last Friday.

The Negatives

The first chart covers the past 6 months showing the 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 failed to confirm the SPX high by a wide margin. 

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 rose with the rally in prices, but will fail to confirm a new high if it happens any time soon.  

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 did not follow the index upward last week.

The Positives

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 moved sharply upward last week.  

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 jumped into positive territory early 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 continued to trend into positive territory, but declined a bit as the index moved to an all time high on Friday.

Seasonality

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

Report for the week before the 2nd Friday of August.

The number following the year is the position in the Presidential Cycle.

Daily returns from Monday to 2nd Friday.

OTC Presidential Year 2 (PY2)

 Year       Mon     Tue     Wed    Thur    Fri    Totals

 1966-2   0.70%  -0.14%   0.44%   0.09%  -0.14%   0.95%

 1970-2  -0.87%  -1.71%  -0.44%  -0.98%  -1.28%  -5.29%

 1974-2   0.39%   1.23%   1.63%  -1.42%   0.04%   1.87%

 1978-2   0.39%   0.22%   0.88%  -0.05%   0.32%   1.76%

 1982-2  -1.35%  -0.04%  -0.34%  -0.58%  -0.44%  -2.75%

 Avg     -0.15%  -0.09%   0.43%  -0.59%  -0.30%  -0.69%

 1986-2  -1.08%   0.02%  -0.55%   0.09%   0.22%  -1.29%

 1990-2  -4.17%   0.51%   1.41%   1.29%  -1.20%  -2.17%

 1994-2   0.25%   0.30%   0.77%   0.00%   0.47%   1.79%

 1998-2  -0.41%  -2.53%   1.83%  -1.26%  -0.68%  -3.05%

 2002-2  -3.36%   4.44%   1.70%   2.78%  -0.79%   4.77%

 Avg     -1.75%   0.55%   1.03%   0.72%  -0.40%   0.01%

 2006-2  -0.60%  -0.56%  -0.03%   0.56%  -0.68%  -1.31%

 2010-2   0.75%  -1.24%  -3.01%  -0.83%  -0.77%  -5.09%

 2014-2   0.72%  -0.71%   0.05%  -0.46%   0.83%   0.43%

 2018-2   0.61%   0.31%   0.06%   0.04%  -0.67%   0.35%

 2022-2  -0.10%  -1.19%   2.89%  -0.58%   2.09%   3.10%

 Avg      0.28%  -0.68%  -0.01%  -0.25%   0.16%  -0.50%

OTC summary for PY2 1966 - 2022 

 Avg     -0.54%  -0.07%   0.49%  -0.09%  -0.18%  -0.40%

 Win%       47%     47%     67%     43%     40%     53%

OTC summary for all years 1963 - 2025

 Avg     -0.31%   0.08%   0.16%   0.12%   0.06%   0.11%

 Win%       46%     51%     60%     65%     51%     57%

SPX PY2

 Year       Mon     Tue     Wed    Thur    Fri    Totals

 1954-2  -0.86%   0.83%   1.15%  -0.42%   0.42%   1.13%

 1958-2   0.95%  -0.40%  -0.61%   0.65%   0.59%   1.18%

 1962-2  -0.64%  -0.68%   0.26%  -0.07%   0.14%  -0.98%

 1966-2  -0.30%  -0.31%  -0.46%  -0.11%   0.18%  -0.99%

 1970-2  -1.40%  -0.50%  -0.53%  -0.88%   0.56%  -2.74%

 1974-2   0.89%   1.55%   2.65%  -1.31%  -0.87%   2.91%

 1978-2  -0.36%   0.44%   0.47%  -0.80%   0.29%   0.04%

 1982-2  -0.61%  -0.23%  -0.23%  -0.18%   1.40%   0.15%

 Avg     -0.35%   0.19%   0.38%  -0.65%   0.31%  -0.13%

 1986-2   0.46%   0.44%  -0.08%   0.08%  -0.07%   0.84%

 1990-2  -3.02%   0.12%   1.05%   0.47%  -1.30%  -2.68%

 1994-2   0.18%   0.01%   0.52%  -0.31%   0.67%   1.06%

 1998-2  -0.58%  -1.30%   1.42%  -0.86%  -1.13%  -2.45%

 2002-2  -3.43%   2.99%   2.00%   3.27%   0.35%   5.19%

 Avg     -1.28%   0.45%   0.98%   0.53%  -0.30%   0.39%

 2006-2  -0.28%  -0.34%  -0.44%   0.46%  -0.40%  -0.99%

 2010-2   0.55%  -0.59%  -2.82%  -0.54%  -0.40%  -3.81%

 2014-2   0.72%  -0.97%   0.00%  -0.56%   1.15%   0.35%

 2018-2   0.35%   0.28%  -0.03%  -0.14%  -0.71%  -0.25%

 2022-2  -0.12%  -0.42%   2.13%  -0.07%   1.73%   3.24%

 Avg      0.24%  -0.41%  -0.23%  -0.17%   0.27%  -0.29%

SPX summary for PY2 1954 - 2022 

 Avg     -0.42%   0.05%   0.36%  -0.07%   0.14%   0.07%

 Win%       39%     44%     56%     28%     61%     56%

SPX summary for all years 1953 - 2025

 Avg     -0.29%   0.16%   0.10%   0.10%   0.08%   0.15%

 Win%       42%     58%     54%     49%     53%     58%

Conclusion

Three out of 4 of what I consider the major indices hit all time highs last week  The index highs were not confirmed by the breadth indicators.

The strongest sectors last week were the Metals and Healthcare while the weakest were Utilities (for the 2nd week in a row) and Energy (down from the top last week).

I expect the major averages to be higher on Friday August 14 than they were on Friday August 7.

Last week's negative forecast was a miss.