Technical Market Report For March 21, 2026

The good news is:

• The market is oversold and due for a bounce.

The Negatives

Not much changed last week.  The pattern was nearly identical to the previous week, i.e. up Monday and down the rest of the week.

The first chart covers the last 6 months showing the Nasdaq composite (OTC) in blue and a 10% trend (19 day EMA) of Nasda new highs (OTC NH) in green.  Dashed vertical lines have been drawn on the 1st trading day of each month.  

OTC NH continued to fall last week.  

The next chart is similar to the one above except it shows the S&P 500 (SPX) in red and NY NH in green has been calculated with NYSE data.  

NY NH also continued falling. 

The next chart covers the past 6 months showing the OTC in blue and a 40% trend (4 day EMA) of Nasd 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 fell further into negative territory 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 also 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 sharply 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 fell last week, breaking its positive trend.

The Positives

The market is oversold and due for a bounce.

Seasonality

Next week includes the five trading days prior to the 4th Friday of March 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 negative during the 2nd year of the Presidential Cycle and weaker than other years.

Report for the week before the 4th Friday of March.

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

Daily returns from Monday through the 4th Friday.

OTC Presidential Year 2 (PY2)

 Year       Mon     Tue     Wed    Thur    Fri    Totals

 1966-2   0.56%   0.56%   0.60%  -0.03%   0.53%   2.22%

 Avg      0.56%   0.56%   0.60%  -0.03%   0.53%   2.22%

 1970-2   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 1974-2  -1.20%  -0.65%   0.21%   0.43%   0.09%  -1.11%

 1978-2  -0.09%   0.36%   0.38%   0.09%   0.02%   0.77%

 1982-2   1.21%   0.64%  -0.06%   0.57%  -0.36%   1.99%

 1986-2   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 Avg     -0.03%   0.12%   0.18%   0.36%  -0.08%   0.55%

1990-2   0.17%  -0.64%  -0.18%  -1.09%   0.63%  -1.11%

 1994-2  -0.82%  -0.12%   0.15%  -1.36%  -0.41%  -2.57%

 1998-2   0.18%   1.12%   0.63%   0.25%  -0.27%   1.91%

 2002-2   0.47%   0.20%  -2.55%   1.96%  -0.93%  -0.85%

 2006-2   0.33%  -0.86%   0.40%  -0.14%   0.55%   0.28%

 Avg      0.07%  -0.06%  -0.31%  -0.08%  -0.09%  -0.47%

 2010-2   0.88%   0.83%  -0.68%  -0.06%  -0.10%   0.88%

 2014-2  -1.18%   0.19%  -1.43%  -0.54%   0.11%  -2.85%

 2018-2  -1.83%   0.27%  -0.26%  -2.42%  -2.42%  -6.66%

 2022-2  -0.40%   1.95%  -1.32%   1.93%  -0.16%   2.01%

OTC summary for PY2 966 - 2022 

 Avg     -0.13%   0.30%  -0.32%  -0.03%  -0.21%  -0.39%

 Win%       54%     69%     46%     46%     46%     54%

OTC summary for all years 1963 - 2025

 Avg      0.05%   0.01%  -0.04%   0.27%  -0.14%   0.15%

 Win%       53%     47%     49%     56%     53%     55%

SPX PY2

 Year       Mon     Tue     Wed    Thur    Fri    Totals

 1954-2  -0.07%  -0.71%  -0.49%  -0.19%   0.53%  -0.93%

 1958-2   0.38%  -0.33%  -0.33%  -0.31%   0.07%  -0.52%

 1962-2  -0.13%  -0.27%  -0.21%  -0.16%   0.07%  -0.69%

 1966-2   0.76%   0.29%  -0.37%   0.18%   0.28%   1.14%

 1970-2   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 1974-2  -1.24%  -0.84%   0.35%  -0.24%  -0.07%  -2.03%

 1978-2  -0.55%   0.71%   0.16%  -0.26%  -0.22%  -0.16%

 1982-2   1.95%   0.69%  -0.51%   0.21%  -1.12%   1.22%

 Avg      0.23%   0.21%  -0.09%  -0.03%  -0.28%   0.04%

 1986-2   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 1990-2   0.47%  -0.57%  -0.54%  -1.19%   0.46%  -1.37%

 1994-2  -0.53%   0.06%  -0.06%  -0.89%  -0.81%  -2.24%

 1998-2  -0.34%   0.92%  -0.33%  -0.10%  -0.49%  -0.34%

 2002-2  -0.05%   0.41%  -1.58%   0.15%  -0.42%  -1.49%

 Avg     -0.11%   0.20%  -0.63%  -0.51%  -0.32%  -1.36%

 2006-2  -0.17%  -0.60%   0.60%  -0.26%   0.10%  -0.33%

 2010-2   0.51%   0.72%  -0.55%  -0.17%   0.07%   0.58%

 2014-2  -0.49%   0.44%  -0.70%  -0.19%   0.46%  -0.47%

 2018-2  -1.42%   0.15%  -0.18%  -2.52%  -2.10%  -6.07%

 2022-2  -0.04%   1.13%  -1.23%   1.43%   0.51%   1.80%

 Avg     -0.32%   0.37%  -0.41%  -0.34%  -0.19%  -0.90%

SPX summary for PY2 1954 - 2022 

 Avg     -0.06%   0.14%  -0.37%  -0.28%  -0.17%  -0.74%

 Win%       31%     63%     19%     25%     56%     25%

SPX summary for all years 1953 - 2025

 Avg      0.05%   0.06%   0.01%   0.09%  -0.17%   0.05%

 Win%       44%     48%     42%     44%     52%     41%

Conclusion

The market is oversold and ripe for a bounce.  

Volume picked up on Friday so we may be looking at the beginning of capitulation.

Seasonality for next week has been negative during the 2nd year of the Presidential Cycle.

The annual seasonal pattern calls for a rally sometime between now and late April when a cycle top is scheduled.

The strongest sectors last week were Energy (for the 3rd week in a row) and Electronics while the weakest were Basic Materials and Precious Metals.

I expect the major averages to be lower on Friday March 27 than they were on Friday March 13.