The good news is:
Positives should 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 from its low level..
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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 fell dramatically.
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 fell into deeply 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 fell into negative 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 moved 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 as the index fell.
The Positives
Positives are difficult to find.
Seasonality
Next week includes the last 5 trading days of July 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 last 5 days of July.
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)
Day5 Day4 Day3 Day2 Day1 Totals
1966-2 -2.64% 1 0.49% 2 -0.92% 3 0.30% 4 -0.21% 5 -2.98%
1970-2 0.01% 1 0.13% 2 0.46% 3 0.38% 4 -0.22% 5 0.76%
1974-2 -1.50% 4 -0.93% 5 -1.84% 1 -0.27% 2 -1.84% 3 -6.37%
1978-2 0.16% 2 0.56% 3 0.52% 4 0.56% 5 0.39% 1 2.19%
1982-2 -0.38% 1 -0.43% 2 -1.37% 3 -0.46% 4 -0.15% 5 -2.79%
Avg -0.87% -0.04% -0.63% 0.10% -0.41% -1.84%
1986-2 0.29% 5 -1.33% 1 -0.73% 2 -0.32% 3 0.15% 4 -1.95%
1990-2 0.65% 3 0.00% 4 -0.64% 5 -0.73% 1 -0.26% 2 -0.97%
1994-2 0.03% 1 -0.17% 2 -0.49% 3 0.04% 4 1.37% 5 0.77%
1998-2 0.12% 1 -1.90% 2 -0.79% 3 2.02% 4 -2.46% 5 -3.01%
2002-2 -3.89% 4 1.78% 5 5.79% 1 0.67% 2 -1.19% 3 3.17%
Avg -0.56% -0.33% 0.63% 0.34% -0.48% -0.40%
2006-2 0.58% 2 -0.17% 3 -0.77% 4 1.93% 5 -0.13% 1 1.45%
2010-2 1.19% 1 -0.36% 2 -1.04% 3 -0.57% 4 0.13% 5 -0.64%
2014-2 -0.50% 5 -0.10% 1 -0.05% 2 0.45% 3 -2.09% 4 -2.29%
2018-2 1.17% 3 -1.01% 4 -1.46% 5 -1.39% 1 0.55% 2 -2.14%
2022-2 -0.43% 1 -1.87% 2 4.06% 3 1.08% 4 1.88% 5 4.72%
Avg 0.40% -0.70% 0.15% 0.30% 0.07% 0.22%
OTC summary for PY2 1966 - 2022
Averages -0.34% -0.35% 0.05% 0.25% -0.27% -0.67%
% Winners 60% 27% 27% 60% 40% 40%
MDD 7/31/1974 6.22% -- 7/25/2002 3.89% -- 7/30/2018 3.81%
OTC summary for all years 1963 - 2025
Averages 0.03% -0.01% -0.04% 0.02% 0.03% 0.03%
% Winners 54% 48% 46% 62% 51% 59%
MDD 7/28/2000 9.10% -- 7/31/1974 6.22% -- 7/31/1969 4.97%
SPX PY2
Day5 Day4 Day3 Day2 Day1 Totals
1930-2 0.98% 6 0.51% 1 -0.78% 2 -2.63% 3 0.62% 4 -1.31%
1934-2 -7.83% 4 2.87% 5 1.51% 6 -0.69% 1 0.12% 2 -4.02%
1938-2 -1.41% 2 -2.93% 3 1.88% 4 -1.20% 5 0.57% 6 -3.09%
1942-2 0.00% 1 -0.12% 2 -1.62% 3 0.24% 4 0.71% 5 -0.80%
1946-2 0.52% 4 0.57% 5 0.34% 1 0.57% 2 1.13% 3 3.12%
1950-2 -1.43% 2 0.23% 3 1.33% 4 1.09% 5 0.85% 1 2.07%
1954-2 0.10% 1 0.59% 2 0.20% 3 0.36% 4 0.62% 5 1.87%
1958-2 0.69% 5 0.38% 1 -0.40% 2 0.28% 3 0.21% 4 1.16%
1962-2 0.18% 3 0.55% 4 0.76% 5 1.10% 1 0.69% 2 3.28%
Avg 0.01% 0.47% 0.44% 0.68% 0.70% 2.30%
1966-2 -1.85% 1 -0.16% 2 0.48% 3 -0.39% 4 -0.20% 5 -2.12%
1970-2 -0.22% 1 0.15% 2 0.35% 3 0.04% 4 -0.03% 5 0.30%
1974-2 -1.19% 4 -1.88% 5 -1.77% 1 -0.54% 2 -1.48% 3 -6.86%
1978-2 0.74% 2 0.65% 3 0.46% 4 0.46% 5 0.68% 1 2.99%
1982-2 -0.73% 1 -0.84% 2 -1.55% 3 -0.01% 4 -0.58% 5 -3.72%
Avg -0.65% -0.41% -0.41% -0.09% -0.32% -1.88%
1986-2 0.95% 5 -1.75% 1 -0.62% 2 0.87% 3 -0.20% 4 -0.75%
1990-2 0.37% 3 -0.33% 4 -0.69% 5 0.60% 1 0.17% 2 0.11%
1994-2 0.25% 1 -0.20% 2 -0.17% 3 0.37% 4 0.88% 5 1.14%
1998-2 0.57% 1 -1.49% 2 -0.44% 3 1.57% 4 -1.94% 5 -1.73%
2002-2 -0.56% 4 1.69% 5 5.41% 1 0.42% 2 0.98% 3 7.94%
Avg 0.32% -0.42% 0.70% 0.77% -0.02% 1.34%
2006-2 0.63% 2 -0.04% 3 -0.41% 4 1.22% 5 -0.15% 1 1.25%
2010-2 1.16% 1 -0.10% 2 -0.69% 3 -0.42% 4 0.01% 5 -0.05%
2014-2 -0.48% 5 0.03% 1 -0.45% 2 0.01% 3 -2.00% 4 -2.90%
2018-2 0.91% 3 -0.30% 4 -0.66% 5 -0.58% 1 0.49% 2 -0.14%
2022-2 0.13% 1 -1.15% 2 2.62% 3 1.21% 4 1.42% 5 4.23%
Avg 0.47% -0.31% 0.08% 0.29% -0.05% 0.48%
SPX summary for PY2 1930 - 2022
Averages -0.31% -0.13% 0.21% 0.16% 0.15% 0.08%
% Winners 58% 46% 46% 67% 67% 50%
MDD 7/26/1934 7.83% -- 7/31/1974 6.68% -- 7/27/1938 4.30%
SPX summary for all years 1928 - 2025
Averages -0.03% 0.03% 0.10% 0.14% 0.07% 0.30%
% Winners 56% 57% 50% 60% 60% 56%
MDD 7/26/1934 7.83% -- 7/31/1933 6.84% -- 7/31/1974 6.68%
Conclusion
The breadth indicators collapsed along with prices last week.
The strongest sectors last week were Energy (for the 3rd week) and Utilities while the weakest were Electronics (for the 2nd week) and Telecom.
I expect the major averages to be lower on Friday July 31th than they were on Friday July 24.
Last week's positive forecast was a miss.
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