The good news is:

• There is an old saying that goes “Never short a dull market” and that is what we have had for the past 2 weeks.

The Negatives

The first chart covers the past 6 months showing the Nasdaq composite (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 vertical lines have been drawn on the first trading day of each month.  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 remained in negative territory and has been pretty much unchanged for the past 2 weeks. 

The Positives

The next chart is similar to the first one except it shows the S&P 500 (SPX) in red and NY HL ratio, in blue, has been calculated with NYSE data.

NY HL ratio rose slightly.  

The next chart covers the last 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 continued its slow upward movement.

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 also continued moving slowly upward last week.

Summation indices are running totals of oscillator values. Short term momentum indicators make them binary so position is all that matters.

The next chart covers the past 6 months showing momentum of summation indices of oscillators of advancing and declining issues, new highs and new lows and upside and downside volume on the Nasdaq.  

They are all at the top of the chart. 

The next chart is similar to the one above, but it has been generated from NYSE data.  

All the NYSE SI’s momentum indicators are sitting at the top of the chart.  

This chart is much easier to read.

Seasonality

Next week includes the last 5 trading days of April during the 3^rd 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 2022 while SPX data runs from 1928 to 2022.  There are summaries for both the 3^rd year of the Presidential Cycle and all years combined.  

Average returns for the coming week have been modestly positive by all measures and slightly stronger during the 3^rd year of the Presidential Cycle than other years.. 

Report for the last 5 days of April.

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 3 (PY3)

               Day5      Day4      Day3      Day2      Day1      Totals

 1963-3       0.34% 3   0.30% 4   0.30% 5   0.24% 1   0.06% 2     1.25%

 1967-3       0.56% 1  -0.19% 2   0.10% 3   0.28% 4   0.83% 5     1.57%

 1971-3       0.40% 1   0.50% 2   0.61% 3   0.08% 4  -0.14% 5     1.45%

 1975-3      -0.22% 4   0.73% 5  -0.46% 1  -0.59% 2   0.93% 3     0.39%

 1979-3       0.31% 2   0.36% 3  -0.10% 4  -0.20% 5  -0.41% 1    -0.04%


 Avg          0.28%     0.34%     0.09%    -0.04%     0.25%       0.93%


 1983-3      -0.68% 1   0.53% 2   0.28% 3   0.66% 4   0.76% 5     1.56%

 1987-3      -1.15% 5  -0.71% 1   0.55% 2   0.55% 3   0.87% 4     0.11%

 1991-3       0.48% 3  -0.49% 4  -0.28% 5  -1.39% 1  -0.62% 2    -2.30%

 1995-3       0.66% 1   0.29% 2   0.68% 3   0.48% 4   0.36% 5     2.47%

 1999-3       2.37% 1  -1.87% 2  -2.00% 3  -0.86% 4   0.57% 5    -1.79%


 Avg          0.34%    -0.45%    -0.15%    -0.11%     0.39%       0.01%


 2003-3      -0.61% 4  -1.56% 5   1.93% 1   0.62% 2  -0.48% 3    -0.09%

 2007-3       0.03% 2   0.92% 3   0.26% 4   0.11% 5  -1.26% 1     0.07%

 2011-3       0.20% 1   0.77% 2   0.78% 3   0.09% 4   0.04% 5     1.88%

 2015-3       0.71% 5  -0.63% 1  -0.10% 2  -0.63% 3  -1.64% 4    -2.27%

 2019-3      -0.23% 3   0.21% 4   0.34% 5   0.19% 1  -0.81% 2    -0.31%


 Avg          0.02%    -0.06%     0.64%     0.08%    -0.83%      -0.14%


OTC summary for PY3 1963 - 2019

Averages      0.21%    -0.06%     0.19%    -0.02%    -0.06%       0.26%

% Winners       67%       60%       67%       67%       53%         60%

MDD  4/29/1999  4.66% --  4/30/2015  2.96% --  4/30/1991  2.75%


OTC summary for all years 1963 - 2022

Averages     -0.04%    -0.06%    -0.01%     0.28%     0.05%       0.22%

% Winners       57%       47%       63%       68%       58%         55%

MDD 4/29/1970  7.72% --  4/30/2004  6.32% --  4/29/2022  5.15%

SPX PY3

               Day5      Day4      Day3      Day2      Day1      Totals

 1931-3      -2.22% 6  -1.27% 1  -0.61% 2  -2.04% 3   5.01% 4    -1.14%

 1935-3       1.29% 4  -0.42% 5  -0.64% 6   0.54% 1  -1.17% 2    -0.41%

 1939-3       0.19% 2   1.02% 3   1.10% 4  -0.91% 5  -0.09% 6     1.31%


 1943-3       0.00% 1   0.00% 2   0.00% 3   0.96% 4   0.00% 5     0.96%

 1947-3      -0.69% 5   0.07% 6  -0.21% 1   0.21% 2   1.25% 3     0.63%

 1951-3       0.05% 3   0.86% 4   1.04% 5   0.18% 6   0.00% 1     2.13%

 1955-3       0.26% 1   0.52% 2  -0.52% 3  -1.13% 4   0.74% 5    -0.12%

 1959-3       0.63% 5   0.31% 1  -0.38% 2  -0.40% 3  -0.17% 4    -0.01%


 Avg          0.05%     0.35%    -0.01%    -0.04%     0.36%       0.72%


 1963-3       0.27% 3   0.06% 4  -0.09% 5  -0.07% 1   0.22% 2     0.39%

 1967-3       0.35% 1   0.53% 2  -0.10% 3   0.85% 4   0.21% 5     1.84%

 1971-3      -0.11% 1   0.43% 2   0.36% 3  -0.13% 4  -0.65% 5    -0.09%

 1975-3      -0.09% 4   0.67% 5  -0.45% 1  -0.68% 2   1.94% 3     1.39%

 1979-3       0.62% 2   0.29% 3  -0.48% 4  -0.21% 5  -0.04% 1     0.19%


 Avg          0.21%     0.40%    -0.15%    -0.05%     0.34%       0.74%


 1983-3      -1.00% 1   1.89% 2  -0.23% 3   0.94% 4   0.90% 5     2.49%

 1987-3      -1.85% 5   0.11% 1   0.24% 2   0.73% 3   1.33% 4     0.56%

 1991-3       0.26% 3  -0.92% 4  -0.06% 5  -1.41% 1   0.45% 2    -1.68%

 1995-3       0.87% 1  -0.14% 2   0.10% 3   0.17% 4   0.23% 5     1.22%

 1999-3       0.24% 1   0.20% 2  -0.87% 3  -0.59% 4  -0.57% 5    -1.60%


 Avg         -0.30%     0.23%    -0.16%    -0.03%     0.47%       0.20%


 2003-3      -0.83% 4  -1.38% 5   1.78% 1   0.33% 2  -0.10% 3    -0.20%

 2007-3      -0.04% 2   1.01% 3  -0.08% 4  -0.01% 5  -0.78% 1     0.11%

 2011-3      -0.16% 1   0.90% 2   0.62% 3   0.36% 4   0.23% 5     1.95%

 2015-3       0.23% 5  -0.41% 1   0.28% 2  -0.37% 3  -1.01% 4    -1.30%

 2019-3      -0.22% 3  -0.04% 4   0.47% 5   0.11% 1   0.10% 2     0.41%


 Avg         -0.20%     0.02%     0.62%     0.08%    -0.31%       0.19%


SPX summary for PY3 1931 - 2019

Averages     -0.09%     0.19%     0.06%    -0.11%     0.35%       0.39%

% Winners       52%       65%       39%       48%       52%         61%

MDD  4/29/1931  6.02% --  4/29/1991  2.38% --  4/25/2003  2.20%


SPX summary for all years 1928 - 2022

Averages     -0.16%     0.04%    -0.07%     0.04%     0.15%       0.00%

% Winners       49%       57%       52%       54%       55%         57%

MDD 4/29/1932  7.02% --  4/29/1936  6.82% --  4/29/1931  6.02%

Conclusion

We had a remarkably boring week.

The strongest sectors last week were Utilities and Hearth care while the weakest were Precious metals and Energy (both down from the top last week)..

I expect the major averages to be higher on Friday April 28 than they were on Friday April 21.

Last week none of the major indices moved as much as 1%.  The DJIA, OTC and SPX were down slightly while the Russell 2000 was up slightly so I am calling last week's positive forecast a tie.

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