The good news is:
- The Dow Jones Industrial Average (DJIA) closed at an all time high last Monday.
The Negatives
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 lows (OTC NL) in brown. OTC NL has been plotted on an inverted Y axis so decreasing numbers of new lows move the indicator upward (up is good). Dashed vertical lines have been drawn on the 1st trading day of each month.
OTC NL bounced around at a high level last week.
The next chart is similar to the one above except it shows the S&P 500 (SPX) in red and NY NL, in blue, has been calculated with NYSE data.
NY NL moved downward 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 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 moved around the neutral line ending the week slightly negative.
The Positives
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 rose a bit last week.
The next chart covers the last 6 months showing the 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 moved upward last week.
The next chart is similar to the one above except it shows the SPX in red and NY NH in green has been calculated with NYSE data.
NY NH continued moving higher after confirming the all time high for the the DJIA earlier in the week.
Seasonality
Next week includes the 5 trading days prior to the 3rd Friday of February 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 positive by all measures.
Report for the week before the 3rd Friday of February.
The number following the year is the position in the Presidential Cycle. Daily returns from Monday through 3rd Friday.
OTC Presidential Year 2 (PY2)
Year Mon Tue Wed Thur Fri Totals
1966-2 0.23% -0.22% -0.47% 0.50% 0.13% 0.19%
1970-2 -0.17% -0.10% -0.17% 0.67% 0.02% 0.26%
1974-2 -1.16% -0.69% -0.46% 0.14% 0.85% -1.32%
1978-2 -0.23% -0.54% -0.21% -0.38% 0.08% -1.29%
1982-2 0.00% -0.99% 0.30% 0.07% -0.40% -1.02%
Avg -0.33% -0.51% -0.20% 0.20% 0.14% -0.64%
1986-2 0.00% 0.61% 0.15% 0.06% 0.72% 1.54%
1990-2 -0.57% -0.15% 0.19% 0.72% -0.14% 0.04%
1994-2 0.52% 0.59% 0.32% -0.30% -0.18% 0.95%
1998-2 0.00% -0.41% 0.72% 0.66% 0.06% 1.04%
2002-2 1.53% -0.67% 1.36% -0.85% -2.07% -0.71%
Avg 0.49% 0.00% 0.55% 0.06% -0.32% 0.57%
2006-2 -0.98% 1.00% 0.63% 0.80% -0.53% 0.92%
2010-2 0.00% 1.40% 0.55% 0.69% 0.10% 2.74%
2014-2 0.00% 0.68% -0.82% 0.70% -0.10% 0.46%
2018-2 1.56% 0.45% 1.85% 1.57% -0.23% 5.19%
2022-2 0.00% 2.53% -0.11% -2.88% -1.23% -1.70%
Avg 0.19% 1.21% 0.42% 0.18% -0.40% 1.52%
OTC summary for PY2 1966 - 2022
Avg 0.07% 0.23% 0.26% 0.14% -0.19% 0.49%
Win% 40% 47% 60% 73% 47% 67%
OTC summary for all years 1963 - 2025
Avg 0.16% -0.02% 0.16% 0.06% -0.21% 0.10%
Win% 59% 53% 60% 59% 46% 57%
SPX PY2
Year Mon Tue Wed Thur Fri Totals
1954-2 -0.31% -0.88% 0.19% 0.39% -0.15% -0.76%
1958-2 -0.53% 0.15% -0.05% -0.58% -0.07% -1.09%
1962-2 -0.03% -0.01% -0.04% 0.45% -0.21% 0.16%
1966-2 -0.17% -0.51% -0.01% -0.54% -0.27% -1.50%
1970-2 -0.08% -0.12% 1.24% 0.37% 0.31% 1.72%
1974-2 -1.81% 0.31% 0.04% -0.03% 1.45% -0.04%
1978-2 -0.24% -0.91% -0.24% -0.84% -0.14% -2.37%
1982-2 0.00% -0.28% -0.32% 0.11% -0.53% -1.02%
Avg -0.58% -0.30% 0.14% -0.19% 0.17% -0.64%
1986-2 0.00% 1.22% -1.21% 1.12% 1.08% 2.21%
1990-2 -1.06% 0.28% 0.30% 0.87% -0.65% -0.26%
1994-2 0.01% 0.49% 0.06% -0.52% -0.56% -0.53%
1998-2 0.00% 0.26% 0.91% -0.37% 0.57% 1.38%
2002-2 1.43% -0.40% 0.99% -0.18% -1.10% 0.75%
Avg 0.13% 0.37% 0.21% 0.18% -0.13% 0.71%
2006-2 -0.33% 1.00% 0.35% 0.73% -0.17% 1.59%
2010-2 0.00% 1.80% 0.42% 0.66% 0.22% 3.10%
2014-2 0.00% 0.12% -0.65% 0.60% -0.19% -0.13%
2018-2 1.39% 0.26% 1.34% 1.21% 0.04% 4.24%
2022-2 -0.38% 1.58% 0.09% -2.12% -0.72% -1.55%
Avg 0.23% 0.95% 0.31% 0.22% -0.16% 1.45%
SPX summary for PY2 1954 - 2022
Avg -0.16% 0.24% 0.19% 0.07% -0.06% 0.33%
Win% 23% 61% 61% 56% 33% 44%
SPX summary for all years 1953 - 2025
Avg 0.11% 0.01% 0.22% -0.06% -0.05% 0.21%
Win% 49% 56% 62% 47% 45% 56%
Conclusion
The high level of new lows continues to be worrisome.
The strongest sectors last week were Utilities and Precious Metals (up from the bottom last wee) while the weakest were Internet (for the 5th week in a row and Banks.
I expect the major averages to be higher on Friday February 20 than they were on Friday February 13
Last week's positive forecast was a miss.
More By This Author:
Technical Market Report For February 7, 2026
Technical Market Report As Of Jan. 31
Technical Market Report For January 24, 2026
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