The good news is:

• The S&P 500 (SPX) closed at an all time high last Wednesday.

 

The Negatives

The first chart covers the past 6 months showing the Nasdaq composite (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).  Dashed vertical lines have been drawn on the 1^st trading day of each month.

OTC NL turned downward last week.

 

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

NY NL has also turned downward last week.

 

The Positives

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

OTC NH stopped rising last week at a pretty high level.

 

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

NY NH confirmed the new all time high in the SPX last Wednesday implying higher highs ahead.

 

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 took a dive last week, finishing the week in marginally 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 took a dive last week but finished the week in comfortably positive territory.

 

Seasonality

Next week includes the first 5 trading days of February during the 2^nd 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 2^nd year of the Presidential Cycle and all years combined.  

Seasonality for the coming week has been, on average, positive over all years, but has been mixed during the 2^nd year of the Presidential Cycle.  Prior to the 1960’s prices were stronger than they have been since the 1960’s.

 

Report for the first 5 days of February.

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)

               Day1      Day2      Day3      Day4      Day5      Totals

 1966-2      -0.64% 2  -0.81% 3   0.36% 4   0.54% 5   0.37% 1    -0.18%

 1970-2      -1.85% 1  -0.29% 2   0.67% 3  -0.15% 4   0.46% 5    -1.17%

 1974-2      -0.82% 5  -1.34% 1  -0.46% 2   0.30% 3   0.08% 4    -2.24%

 1978-2       0.69% 3   0.39% 4   0.27% 5   0.05% 1   0.47% 2     1.88%

 1982-2      -0.83% 1   0.34% 2  -0.02% 3  -0.15% 4   0.57% 5    -0.09%

 

 Avg         -0.69%    -0.34%     0.16%     0.12%     0.39%      -0.36%

 

 1986-2       0.50% 1   0.12% 2   0.29% 3   0.56% 4   0.42% 5     1.90%

 1990-2       0.47% 4   1.07% 5   0.60% 1  -0.17% 2   0.66% 3     2.62%

 1994-2      -0.40% 2   0.29% 3  -0.22% 4  -2.57% 5   0.25% 1    -2.66%

 1998-2       2.07% 1   0.81% 2   0.85% 3  -0.21% 4   1.04% 5     4.56%

 2002-2      -1.18% 5  -2.91% 1  -0.92% 2  -1.40% 3  -1.69% 4    -8.10%

 

 Avg          0.29%    -0.12%     0.12%    -0.76%     0.14%      -0.34%

 

 2006-2       0.21% 3  -1.25% 4  -0.83% 5  -0.17% 1  -0.61% 2    -2.66%

 2010-2       1.11% 1   0.87% 2   0.04% 3  -2.99% 4   0.74% 5    -0.23%

 2014-2      -2.61% 1   0.86% 2  -0.50% 3   1.14% 4   1.69% 5     0.59%

 2018-2      -0.34% 4  -1.95% 5  -3.76% 1   2.12% 2  -0.89% 3    -4.83%

 2022-2       0.75% 2   0.50% 3  -3.74% 4   1.58% 5  -0.58% 1    -1.50%

 

 Avg         -0.18%    -0.20%    -1.76%     0.34%     0.07%      -1.73%

 

OTC summary for PY2 1966 - 2022

Averages     -0.19%    -0.22%    -0.49%    -0.10%     0.20%      -0.81%

% Winners       47%       60%       47%       47%       73%         33%

MDD  2/7/2002  7.86% --  2/5/2018  5.97% --  2/3/2022  3.74%

 

OTC summary for all years 1963 - 2025

Averages      0.33%     0.09%    -0.02%     0.12%     0.06%       0.59%

% Winners       70%       68%       55%       60%       60%         65%

MDD 2/7/2002  7.86% --  2/7/2001  6.29% --  2/5/2018  5.97%

 

SPX PY2

               Day1      Day2      Day3      Day4      Day5      Totals

 1930-2       0.61% 6  -0.83% 1   1.19% 2   1.30% 3  -1.07% 4     1.20%

 1934-2       2.60% 4  -0.09% 5   1.14% 6   1.99% 1   0.08% 2     5.72%

 1938-2       1.87% 2  -1.38% 3  -3.72% 4   1.93% 5   2.09% 6     0.79%

 1942-2       0.34% 1   0.68% 2   0.79% 3  -0.22% 4  -1.12% 5     0.47%

 

 1946-2       0.38% 5   0.38% 6  -0.48% 1   0.43% 2  -0.70% 3     0.01%

 1950-2       0.00% 3   1.06% 4   0.35% 5   0.35% 6  -0.17% 1     1.58%

 1954-2      -0.35% 1  -0.27% 2   0.35% 3   0.73% 4   0.38% 5     0.84%

 1958-2       0.82% 1   1.00% 2  -0.64% 3  -0.21% 4  -0.88% 5     0.09%

 1962-2       0.61% 4   0.79% 5   0.10% 1   0.11% 2   0.66% 3     2.28%

 

 Avg          0.29%     0.59%    -0.06%     0.28%    -0.14%       0.96%

 

 1966-2      -0.78% 2   0.40% 3   0.13% 4   0.66% 5   0.35% 1     0.77%

 1970-2       0.86% 1   1.19% 2  -0.61% 3  -0.39% 4   0.50% 5     1.54%

 1974-2      -1.29% 5  -2.13% 1  -0.31% 2   0.28% 3   0.04% 4    -3.41%

 1978-2       0.76% 3   0.22% 4  -0.57% 5  -0.13% 1   0.93% 2     1.21%

 1982-2      -2.18% 1   0.20% 2  -1.30% 3  -0.05% 4   0.72% 5    -2.61%

 

 Avg         -0.53%    -0.02%    -0.53%     0.07%     0.51%      -0.50%

 

 1986-2       1.03% 1  -0.55% 2   0.08% 3   0.24% 4   0.51% 5     1.31%

 1990-2      -0.09% 4   0.65% 5   0.28% 1  -0.66% 2   1.24% 3     1.42%

 1994-2      -0.41% 2   0.50% 3  -0.27% 4  -2.27% 5   0.42% 1    -2.04%

 1998-2       2.14% 1   0.47% 2   0.09% 3  -0.34% 4   0.90% 5     3.26%

 2002-2      -0.71% 5  -2.47% 1  -0.40% 2  -0.60% 3  -0.31% 4    -4.49%

 

 Avg          0.39%    -0.28%    -0.04%    -0.72%     0.55%      -0.11%

 

 2006-2       0.19% 3  -0.91% 4  -0.54% 5   0.08% 1  -0.81% 2    -1.99%

 2010-2       1.43% 1   1.30% 2  -0.55% 3  -3.11% 4   0.29% 5    -0.65%

 2014-2      -2.28% 1   0.76% 2  -0.20% 3   1.24% 4   1.33% 5     0.85%

 2018-2      -0.06% 4  -2.12% 5  -4.10% 1   1.74% 2  -0.50% 3    -5.04%

 2022-2       0.69% 2   0.94% 3  -2.44% 4   0.52% 5  -0.37% 1    -0.67%

 

 Avg         -0.01%     0.00%    -1.56%     0.09%    -0.01%      -1.50%

 

SPX summary for PY2 1930 - 2022

Averages      0.26%    -0.01%    -0.48%     0.15%     0.19%       0.10%

% Winners       58%       63%       42%       58%       63%         67%

MDD  2/5/2018  6.19% --  2/3/1938  5.05% --  2/7/2002  4.43%

 

SPX summary for all years 1928 - 2025

Averages      0.22%     0.12%    -0.16%     0.06%    -0.02%       0.21%

% Winners       65%       62%       48%       54%       51%         64%

MDD 2/4/1933  7.06% --  2/5/2018  6.19% --  2/5/1932  5.47%

 

Conclusion

As measured by the equities market, last week was kind of exciting.  The SPX hit a confirmed all time high last Wednesday along with Precious Metals. On Friday Precious Metals collapsed and equities declined with a significant increase in the number of new lows.

The strongest sectors last week were Energy (for the 3^rd week in a row) and Utilities while the weakest were Internet (for the 3^rd week in a row and Precious Metals (down from the top last week..

I expect the major averages to be lower on Friday February 6 than they were on Friday January 30. 

Last week the SPX was up a little while the other Major Indices were down a little so I am calling last weeks positive forecast a tie.

 

 

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