Technical Market Report For July 4, 2026

The good news is:

• The Russell 2000 (R2K) closed at an all time high last Tuesday.

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 with the SPX only 1.7% off its all time high, NY NH continues to show narrow leadership. 

The Positives

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 has been rising in spite of the spotty behavior of the index..  

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 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 turned upward.

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 turned upward; finishing the week at a comfortable 71%.

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 also moved upward.

Seasonality

Next week includes the 5 trading days prior to the 2nd Friday 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 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 2nd Friday of July.

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   0.00%   0.30%  -0.09%   0.64%   0.60%   1.45%

 1970-2   0.55%  -0.48%   1.04%   1.80%   1.93%   4.84%

 1974-2  -3.55%  -0.52%  -1.09%  -0.24%   2.84%  -2.56%

 1978-2   0.17%   0.38%   0.38%   0.12%   0.95%   2.00%

 1982-2   0.00%  -0.49%  -0.67%  -0.76%   0.76%  -1.16%

 Avg     -0.94%  -0.16%  -0.09%   0.31%   1.42%   0.91%

 1986-2  -1.72%  -1.59%   0.27%   0.49%  -0.14%  -2.68%

 1990-2   0.25%  -0.15%   0.64%   0.70%   0.27%   1.71%

 1994-2   0.00%  -0.46%  -0.37%   0.79%   0.13%   0.09%

 1998-2   1.16%   0.15%   1.33%   0.31%   0.41%   3.35%

 2002-2  -2.95%  -1.74%  -2.54%   2.11%  -0.07%  -5.19%

  - Avg     -0.82%  -0.76%  -0.14%   0.88%   0.12%  -0.55%

 2006-2  -0.62%   0.56%  -1.81%  -1.73%  -0.82%  -4.41%

 2010-2   0.00%   0.10%   3.13%   0.74%   0.97%   4.94%

 2014-2   0.56%  -0.54%   0.22%  -1.41%   1.57%   0.40%

 2018-2   0.88%   0.04%  -0.55%   1.39%   0.03%   1.79%

 2022-2   0.00%   1.75%   0.35%   2.28%   0.12%   4.50%

 Avg      0.28%   0.38%   0.27%   0.25%   0.37%   1.44%

OTC summary for PY2  1966 - 2022

 Avg     -0.53%  -0.18%   0.01%   0.48%   0.64%   0.60%

 Win%       60%     47%     53%     73%     80%     67%

OTC summary for all years 1963 - 2025

 Avg      0.06%  -0.03%   0.38%   0.31%   0.43%   1.11%

 Win%       69%     57%     65%     65%     78%     71%

SPX PY2

 Year       Mon     Tue     Wed    Thur    Fri    Totals

 1954-2   0.00%   1.12%   0.07%   0.00%   0.67%   1.85%

 1958-2  -1.27%  -0.07%   0.31%   0.66%   0.48%   0.12%

 1962-2   0.68%   1.15%   0.93%   0.52%  -0.34%   2.93%

 1966-2   0.00%   0.25%   1.44%   0.37%   0.26%   2.32%

 1970-2  -0.12%  -0.08%   1.09%   1.48%   1.77%   4.13%

 1974-2  -3.07%   0.48%  -1.83%  -0.13%   4.08%  -0.46%

 1978-2   0.40%   0.69%   0.32%   0.01%   1.38%   2.81%

 1982-2   0.00%  -0.33%  -0.07%   0.29%   1.21%   1.10%

 Avg     -0.93%   0.20%   0.19%   0.40%   1.74%   1.98%

 1986-2  -1.70%  -1.87%   0.58%   0.45%   0.12%  -2.41%

 1990-2   0.31%  -0.84%   1.33%   1.17%   0.51%   2.47%

 1994-2   0.00%   0.04%  -0.05%   0.50%   0.26%   0.75%

 1998-2   0.08%   1.06%  -0.24%   0.78%   0.23%   1.91%

 2002-2  -1.22%  -2.47%  -3.40%   0.75%  -0.64%  -6.98%

 Avg     -0.63%  -0.82%  -0.36%   0.73%   0.10%  -0.85%

 2006-2   0.15%   0.41%  -1.09%  -1.30%  -0.49%  -2.32%

 2010-2   0.00%   0.54%   3.13%   0.94%   0.72%   5.33%

 2014-2   0.48%  -0.19%   0.42%  -1.18%   1.03%   0.55%

 2018-2   0.88%   0.35%  -0.71%   0.87%   0.11%   1.50%

 2022-2   0.00%   0.16%   0.36%   1.50%  -0.08%   1.93%

 Avg      0.50%   0.25%   0.42%   0.17%   0.26%   1.40%

SPX summary for PY2  1954 - 2022

 Avg     -0.37%   0.02%   0.14%   0.45%   0.63%   0.97%

 Win%       58%     61%     61%     82%     78%     78%

SPX summary for all years 1953 - 2025

 Avg      0.05%   0.00%   0.29%   0.17%   0.31%   0.80%

 Win%       62%     48%     63%     61%     68%     73%

Conclusion

All of the breadth indicators moved upward last week along with most of the indices.  The R2K moved downward, and finished the week with a loss, after closing at an all time high Tuesday.

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

I expect the major averages to be higher on Friday July 10th than they were on Thursday July 2.

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