Technical Market Report For August 16, 2025
The good news is:
- The S&P 500 (SPX) closed at an all time high last Thursday & Nasdaq composite (OTC) closed at an all time high last Wednesday.
The Negatives
Negatives are scarce.
The Positives
The first chart covers the last 6 months showing the 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 confirmed Wednesday’s SPX all time high, but failed to confirm the next all time high on Thursday. The implication is higher highs in the near future.
The next chart is similar to the one above except it shows the OTC in blue and OTC NH in green has been calculated with Nasdaq data.
OTC NH, failed to confirm the OTC all time high last Wednesday by a small margin.
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; NYSE new lows declined late last week turning the indicator upward.
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.
Nasdaq new lows also declined late 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 rose finishing the week in comfortably positive 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 also rose last week.
Seasonality
Next week includes the 5 trading days prior to the 4th Friday of August during the 1st 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 2024 while SPX data runs from 1953 to 2024. There are summaries for both the 1st 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.
Seasonally for the coming week has been mixed, but mostly positive.
Report for the week before the 4th Friday of August.
The number following the year is the position in the Presidential Cycle.
Daily returns from Monday through the 4th Friday.
OTC Presidential Year 1 (PY1)
Year Mon Tue Wed Thur Fri Totals
1965-1 0.38% 0.00% 0.02% 0.36% 0.20% 0.95%
1969-1 0.94% 1.49% 0.25% 0.24% 0.50% 3.42%
1973-1 -1.00% -0.54% -0.76% 1.17% -0.13% -1.25%
1977-1 0.20% -0.11% -0.19% -0.61% -0.25% -0.95%
1981-1 -2.90% -1.48% 0.02% -0.50% 0.37% -4.50%
Avg -0.48% -0.16% -0.13% 0.13% 0.14% -0.47%
1985-1 -0.28% 0.25% 0.44% -0.27% -0.06% 0.08%
1989-1 -0.79% 0.01% 0.77% 0.87% 0.19% 1.04%
1993-1 -0.01% 0.59% -0.20% -0.31% 0.37% 0.43%
1997-1 0.48% 1.99% 1.75% -1.34% -0.50% 2.37%
2001-1 0.77% -2.66% 1.57% -0.92% 4.01% 2.77%
Avg 0.03% 0.03% 0.86% -0.39% 0.80% 1.34%
2005-1 0.27% -0.19% -0.39% 0.26% -0.64% -0.69%
2009-1 -0.14% 0.31% 0.01% 0.16% 0.05% 0.39%
2013-1 -0.38% 0.68% -0.38% 1.08% 0.52% 1.53%
2017-1 -0.05% 1.35% -0.30% -0.11% -0.09% 0.79%
2021-1 1.55% 0.52% 0.15% -0.64% 1.23% 2.80%
Avg 0.25% 0.53% -0.18% 0.15% 0.22% 0.96%
OTC summary for PY1 1965 - 2021
Avg -0.06% 0.16% 0.18% -0.04% 0.38% 0.61%
Win% 47% 64% 60% 47% 60% 73%
OTC summary for all years 1963 - 2024
Avg -0.07% 0.06% 0.43% -0.15% 0.15% 0.40%
Win% 45% 57% 68% 47% 65% 61%
SPX PY1
Year Mon Tue Wed Thur Fri Totals
1953-1 -1.07% -0.66% -0.29% -0.29% -0.21% -2.53%
1957-1 -2.01% 0.85% 0.44% -0.73% -1.44% -2.88%
1961-1 0.21% 0.01% -0.67% -0.57% 0.12% -0.91%
1965-1 -0.15% 0.17% 0.12% 0.38% 0.07% 0.59%
1969-1 0.61% 0.53% 0.00% 0.29% 0.60% 2.03%
1973-1 -0.68% -0.71% -0.36% 1.37% -0.28% -0.66%
1977-1 0.29% -0.17% -0.40% -1.11% -0.09% -1.49%
1981-1 -2.89% -0.29% -0.14% -1.16% 0.46% -4.02%
Avg -0.57% -0.10% -0.19% -0.04% 0.15% -0.71%
1985-1 0.15% 0.91% 0.57% -0.95% -0.10% 0.58%
1989-1 -1.55% 0.15% 1.03% 1.98% -0.28% 1.33%
1993-1 -0.20% 1.00% 0.08% 0.20% -0.11% 0.96%
1997-1 1.30% 1.48% 1.44% -1.52% -0.16% 2.53%
2001-1 0.81% -1.21% 0.70% -0.28% 1.97% 1.99%
Avg 0.10% 0.47% 0.76% -0.11% 0.26% 1.48%
2005-1 0.17% -0.34% -0.66% 0.23% -0.60% -1.20%
2009-1 -0.05% 0.24% 0.01% 0.28% -0.20% 0.27%
2013-1 -0.59% 0.38% -0.58% 0.86% 0.39% 0.47%
2017-1 0.12% 0.99% -0.35% -0.21% 0.17% 0.72%
2021-1 0.85% 0.15% 0.22% -0.58% 0.88% 1.52%
Avg 0.10% 0.28% -0.27% 0.12% 0.13% 0.36%
SPX summary for PY1 1953 - 2021
Avg -0.26% 0.19% 0.07% -0.10% 0.07% -0.04%
Win% 50% 67% 53% 44% 44% 61%
SPX summary for all years 1953 - 2024
Avg -0.13% 0.04% 0.27% -0.14% 0.00% 0.03%
Win% 46% 56% 61% 44% 53% 61%
Money supply (M2) and Interest Rates
The following chart was supplied by Gordon Harms.
The chart, was made with FastTrack, covers the past 2 years showing the SPX in red and M2 money supply in green.
Money supply has remained constant for several months.
Treasury rates at their close last Friday and their changes from last month:
2yr yield 3.763% down from 3.880%
5yr yield 3.844% down from 3.952%
10yr yield 4.321% down from 4.423%
30yr yield 4.920% down from 4.986%
Conclusion
Early last week all of the major indices moved upward taking the SPX and OTC to new all time highs. The breadth indicators improved as well.
The strongest sectors last week were Precious Metals (for the 2nd week) and Health care while the weakest were Energy (for the 2nd week) and Utilities.
I expect the major averages to be higher on Friday Aug 22 than they were on Friday August 15.
Last week's negative forecast was a miss.
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