Technical Market Report For October 24, 2026

The good news is:

• NYSE new lows declined last week and the secondaries outperformed the blue chips. 

The Negatives

The first chart covers the past 6 months showing the S&P 500 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 is rising while the SPX is falling, that is good, but it will be far from confirming a new index high should it occur in the near future.

The next chart is similar to the first one except it shows the Nasdaq composite (OTC) in blue and OTC NH in green has been calculated with Nasdaq data.  

OTC NH is near its lowest level in over a year.  

The next chart covers the past 6 months showing the SPX in red and a 40% trend (4 day EMA) of NYSE new highs divided by new highs + new lows (NY HL Ratio), in blue.  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). 

NY HL Ratio has been sluggishly improving, but remained in negative territory. 

The next chart is similar to the one above except it was calculated with Nasdaq data. The OTC is shown in blue while OTC HL Ratio is shown in red.

OTC HL Ratio was slightly improved from last week, but remains in deeply negative territory.

The next chart covers the past 6 months showing the 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). 

OTC NL rose modestly last week, but remains near its lowest level in more than a year. 

The Positives

The next chart is similar to the previous one except it shows the SPX in red and NY NL, in blue, has been calculated with NYSE data.

NY NL continued to move upward last week. 

Seasonality

Next week includes the last 5 trading days of October 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 positive by all measures.

Report for the last 5 days of October.

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       0.27% 2   0.45% 3   0.82% 4   1.33% 5   0.40% 1     3.26%

 1970-2       0.48% 1  -0.76% 2  -1.04% 3  -0.55% 4   0.22% 5    -1.65%

 1974-2       0.45% 5  -0.60% 1   1.87% 2   1.90% 3   0.54% 4     4.15%

 1978-2       0.02% 3  -2.61% 4  -2.33% 5  -2.47% 1  -1.14% 2    -8.53%

 1982-2      -1.40% 1  -0.51% 2   1.09% 3  -0.16% 4   0.36% 5    -0.62%

 Avg         -0.04%    -0.81%     0.08%     0.01%     0.08%      -0.68%

 1986-2      -0.02% 1   0.17% 2   0.35% 3   0.73% 4  -0.08% 5     1.15%

 1990-2      -0.36% 4  -1.58% 5  -1.06% 1  -0.29% 2   0.00% 3    -3.30%

 1994-2      -0.39% 2   0.66% 3   0.55% 4   1.13% 5   0.17% 1     2.13%

 1998-2       1.84% 1  -0.43% 2   1.09% 3   1.20% 4   0.81% 5     4.51%

 2002-2       2.50% 5  -1.15% 1  -1.16% 2   2.01% 3   0.23% 4     2.43%

 Avg          0.71%    -0.47%    -0.05%     0.95%     0.23%       1.38%

 2006-2       0.50% 3   0.96% 4  -1.20% 5   0.56% 1   0.12% 2     0.94%

 2010-2       0.46% 1   0.26% 2   0.24% 3   0.16% 4   0.00% 5     1.13%

 2014-2       0.05% 1   1.75% 2  -0.33% 3   0.37% 4   1.41% 5     3.25%

 2018-2       2.95% 4  -2.06% 5  -1.63% 1   1.58% 2   2.01% 3     2.85%

 2022-2       2.25% 2  -2.04% 3  -1.63% 4   2.87% 5  -1.03% 1     0.43%

 Avg          1.24%    -0.23%    -0.91%     1.11%     0.51%       1.72%

OTC summary for PY2 1966 - 2022

Averages      0.64%    -0.50%    -0.29%     0.69%     0.27%       0.81%

% Winners       73%       40%       47%       73%       80%         73%

MDD  10/31/1978  8.29% --  10/29/2018  3.66% --  10/27/2022  3.63%

OTC summary for all years 1963 - 2025

Averages     -0.37%     0.13%    -0.12%     0.31%     0.31%       0.27%

% Winners       44%       44%       60%       56%       62%         54%

MDD 10/28/1987  11.13% --  10/31/1978  8.29% --  10/27/1997  7.01%

SPX PY2

               Day5      Day4      Day3      Day2      Day1      Totals

 1930-2       0.79% 1   0.45% 2  -1.74% 3  -1.20% 4  -2.31% 5    -4.00%

 1934-2      -1.46% 5   0.11% 6  -0.57% 1   0.34% 2   0.23% 3    -1.34%

 1938-2      -1.27% 3   0.53% 4  -1.43% 5  -0.23% 6   0.46% 1    -1.93%

 1942-2      -0.95% 2  -0.85% 3  -0.11% 4   0.65% 5   0.64% 6    -0.62%

 1946-2      -0.07% 6  -2.04% 1  -0.90% 2   0.42% 3   3.63% 4     1.04%

 1950-2      -2.19% 4   0.82% 5   0.10% 6  -0.91% 1  -0.41% 2    -2.59%

 1954-2      -0.53% 1  -0.06% 2   0.25% 3  -0.44% 4  -0.63% 5    -1.41%

 1958-2      -0.77% 1   0.38% 2   1.15% 3   0.16% 4   0.12% 5     1.03%

 1962-2      -0.94% 4  -0.27% 5   2.16% 1   1.47% 2  -0.04% 3     2.38%

 Avg         -0.90%    -0.24%     0.55%     0.14%     0.54%       0.09%

 1966-2       0.61% 2   0.86% 3   0.82% 4   0.01% 5  -0.05% 1     2.25%

 1970-2      -0.55% 1  -0.23% 2   0.37% 3  -0.08% 4  -0.13% 5    -0.62%

 1974-2      -0.14% 5  -0.04% 1   3.91% 2   2.03% 3  -0.55% 4     5.20%

 1978-2      -0.18% 3  -1.32% 4  -1.50% 5   0.50% 1  -2.01% 2    -4.51%

 1982-2      -4.00% 1   0.87% 2   0.59% 3  -1.25% 4   0.09% 5    -3.69%

 Avg         -0.85%     0.03%     0.84%     0.24%    -0.53%      -0.27%

 1986-2       0.21% 1   0.21% 2   0.70% 3   1.15% 4   0.11% 5     2.38%

 1990-2      -0.78% 4  -1.76% 5  -0.93% 1   0.72% 2  -0.02% 3    -2.76%

 1994-2       0.15% 2   0.24% 3   0.70% 4   1.70% 5  -0.30% 1     2.49%

 1998-2       0.15% 1  -0.65% 2   0.26% 3   1.67% 4   1.18% 5     2.60%

 2002-2       1.72% 5  -0.83% 1  -0.91% 2   0.97% 3  -0.55% 4     0.40%

 Avg          0.29%    -0.56%    -0.03%     1.24%     0.08%       1.02%

 2006-2       0.35% 3   0.50% 4  -0.85% 5   0.04% 1   0.00% 2     0.05%

 2010-2       0.21% 1   0.00% 2  -0.27% 3   0.11% 4  -0.04% 5     0.02%

 2014-2      -0.15% 1   1.19% 2  -0.14% 3   0.62% 4   1.17% 5     2.70%

 2018-2       1.86% 4  -1.73% 5  -0.66% 1   1.57% 2   1.09% 3     2.13%

 2022-2       1.63% 2  -0.74% 3  -0.61% 4   2.46% 5  -0.75% 1     2.00%

 Avg          0.78%    -0.16%    -0.50%     0.96%     0.29%       1.38%

SPX summary for PY2 1930 - 2022

Averages     -0.26%    -0.18%     0.02%     0.52%     0.04%       0.13%

% Winners       42%       50%       46%       75%       46%         58%

MDD  10/31/1930  5.15% --  10/31/1978  4.45% --  10/25/1982  4.00%

SPX summary for all years 1928 - 2025

Averages     -0.43%     0.10%    -0.08%     0.41%     0.17%       0.16%

% Winners       37%       59%       50%       57%       56%         56%

MDD 10/29/1929  21.78% --  10/26/1987  8.28% --  10/31/1933  6.96%

Conclusion

The small caps came alive last week.  The Russell 2000 was the strongest of the major indices.

The strongest sectors last week were Banks and Utilities (for the 4th week in a row) while the weakest were Electronics (fort the 4th week in a row) and Precious Metals

I expect the major averages to be higher on Friday October 30 than they were on Friday October 23.

Last week the Dow Jones Industrial Average and Russell 2000 were up while the OTC and SPX were down, so I am calling last week’s positive forecast a tie.