The good news is:

• The Russell 2000 (R2K) had a good week.

The Negatives

Most of the economy is shut down. Excepting Amazon, Walmart and Target retail is awful. This was done capriciously using what now appears to have been bad data. The PPT aka the working group on financial markets has retarded the collapse, but there is likely to be a new normal with more government intrusion when this is over.

The first chart covers the past six months showing the S&P 500 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 vertical lines have been drawn on the 1st 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.

NY HL Ratio spent the week dancing around the neutral line finishing the week at a slightly negative 43%.

The Positives

New highs and new lows have dropped to insignificant levels.

The next chart is similar to the first one except it shows the NASDAQ composite (OTC) in blue and OTC HL Ratio, in red has been calculated with NASDAQ data.

OTC HL Ratio finished the week at a modestly positive 60%.

Seasonality

Next week includes the last four trading days of April and the first trading day of May during thefour4th 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 2019 while SPX data runs from 1928 to 2019. There are summaries for both the 4th year of the Presidential Cycle and all years combined. 

Except for the OTC in 2000, on average, the market has been pretty flat during this period.

Report for the last four days of April and first of May

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 4 (PY4)

               Day4Day3Day2Day1Day1Totals

 1964-4-1.17% 1-0.03% 2 0.57% 3-0.49% 4-0.05% 5-1.17%

 1968-4 0.95% 4 1.87% 5 0.30% 1 0.30% 2 0.00% 3 3.43%

 1972-4-0.80% 2 0.06% 3 0.07% 4 0.24% 5-0.89% 1-1.32%

 1976-4-0.65% 2 0.36% 3 0.28% 4-0.52% 5-1.14% 1-1.68%

 1980-4-0.56% 5 0.45% 1 0.58% 2 0.46% 3-0.22% 4 0.72%

 1984-4-0.07% 3 0.83% 4 0.39% 5 0.22% 1 1.15% 2 2.53%

 1988-4 0.68% 2 0.22% 3 0.03% 4 0.12% 5 0.13% 1 1.19%

 1992-4-1.04% 1-1.17% 2 1.72% 3 1.53% 4-0.09% 5 0.95%

 1996-4 0.63% 4 0.23% 5 0.11% 1 0.19% 2 0.77% 3 1.93%

 Avg -0.07% 0.11% 0.57% 0.51% 0.35% 1.46%

 2000-4 6.57% 2-2.19% 3 3.96% 4 2.30% 5 2.52% 113.17%

 2004-4-0.21% 2-2.12% 3-1.55% 4-1.97% 5 0.97% 1-4.87%

 2008-4-0.25% 5 0.06% 1 0.07% 2-0.55% 3 2.81% 4 2.15%

 2012-4 2.30% 3 0.69% 4 0.61% 5-0.74% 1 0.13% 2 2.99%

 2016-4-0.15% 2-0.51% 3-1.19% 4-0.62% 5 0.88% 1-1.60%

 Avg1.65%-0.81% 0.38%-0.32% 1.46% 2.37%

OTC summary for PY4 1964 - 2016

Averages0.45%-0.09% 0.43% 0.03% 0.50% 1.31%

% Winners 36% 64% 86% 57% 57% 64%

MDD4/30/20045.73% --4/29/20162.46% --4/28/19922.19%

OTC summary for all years 1963 - 2019

Averages -0.01% 0.02% 0.18% 0.14% 0.33% 0.66%

% Winners 47% 67% 67% 61% 64% 63%

MDD 4/30/20045.73% --4/29/19705.08% --4/29/19994.66%

SPX PY4

               Day4Day3Day2Day1Day1Totals

 1928-4 0.72% 4 1.08% 5 0.36% 6 0.00% 1 0.15% 2 2.31%

 1932-4 2.45% 3-3.83% 4-3.32% 5 0.00% 6-1.54% 1-6.24%

 1936-4-3.86% 1-0.14% 2-2.94% 3 1.77% 4 0.73% 5-4.44%

 1940-4-0.90% 5 0.08% 6 0.25% 1 0.58% 2-1.31% 3-1.31%

 1944-4 0.60% 3 0.43% 4 0.51% 5 0.00% 6 0.76% 1 2.29%

 1948-4 0.06% 2 0.13% 3-0.32% 4-0.26% 5-0.26% 6-0.64%

 1952-4 0.17% 6-0.13% 1-0.25% 2-0.72% 3-0.64% 4-1.58%

 1956-4-0.36% 3 0.85% 4 1.05% 5 0.81% 1-0.45% 2 1.90%

 Avg -0.09% 0.27% 0.25% 0.08%-0.38% 0.13%

 1960-4 0.33% 2 0.00% 3-0.87% 4-0.35% 5-0.44% 1-1.33%

 1964-4-0.50% 1 0.69% 2-0.25% 3-0.30% 4 0.89% 5 0.53%

 1968-4 0.31% 4 0.30% 5 0.26% 1 0.13% 2 0.39% 3 1.39%

 1972-4-0.99% 2-0.21% 3 0.15% 4 0.58% 5-0.91% 1-1.39%

 1976-4-0.56% 2 0.27% 3 0.00% 4-0.48% 5-0.71% 1-1.48%

 Avg -0.28% 0.21%-0.14%-0.08%-0.16%-0.45%

 1980-4 0.73% 5 0.46% 1 0.21% 2 0.41% 3-0.78% 4 1.02%

 1984-4 0.37% 3 1.04% 4-0.26% 5 0.10% 1 1.02% 2 2.27%

 1988-4 0.56% 2-0.05% 3-0.45% 4-0.49% 5 0.09% 1-0.34%

 1992-4-0.14% 1 0.16% 2 0.71% 3 0.71% 4-0.58% 5 0.86%

 1996-4 0.42% 4 0.09% 5 0.11% 1 0.00% 2 0.06% 3 0.68%

 Avg0.39% 0.34% 0.06% 0.15%-0.04% 0.90%

 2000-4 3.30% 2-1.09% 3 0.27% 4-0.85% 5 1.09% 1 2.72%

 2004-4 0.23% 2-1.38% 3-0.76% 4-0.59% 5 0.92% 1-1.58%

 2008-4 0.65% 5-0.11% 1-0.39% 2-0.38% 3 1.71% 4 1.48%

 2012-4 1.36% 3 0.67% 4 0.24% 5-0.39% 1 0.57% 2 2.45%

 2016-4 0.19% 2 0.16% 3-0.92% 4-0.51% 5 0.78% 1-0.30%

 Avg1.15%-0.35%-0.31%-0.54% 1.02% 0.96%

SPX summary for PY4 1928 - 2016

Averages0.22%-0.02%-0.29%-0.01% 0.07%-0.03%

% Winners 70% 61% 48% 35% 57% 52%

MDD5/2/19328.45% --4/29/19366.82% --4/30/20042.71%

SPX summary for all years 1928 - 2019

Averages0.06%-0.07%-0.02% 0.22% 0.11% 0.28%

% Winners 58% 53% 52% 57% 56% 61%

MDD 5/2/19328.45% --4/29/19366.82% --5/2/19384.86%

May

Since 1963, over all years, the OTC in May has been up 61% of the time with an average gain of 0.6%. During the fourth year of the Presidential Cycle May has been up 64% time with an average gain of 0.2%.The average return was pulled down by an 11.9% loss in 2000. The best May ever for the OTC was 1997 (+11.1%), the worst 1970 (-13.0%).

The average month has 21 trading days. The chart below has been calculated by averaging the daily percentage change of the OTC for each of the first 11 trading days and each of the last 10. In months when there were more than 21 trading days some of the days in the middle were not counted. In months when there were less than 21 trading days some of the days in the middle of the month were counted twice. Dashed vertical lines have been drawn after the 1st trading day and at 5 trading day intervals after that. The line is solid on the 11th trading day, the dividing point.

In the chart below the blue line shows the average of the OTC in May over all years since 1963 while the green line shows the average during the 4th year of the Presidential Cycle over the same period.

Since 1928 the SPX has been up 58% of the time in May with an average loss of -0.2%. During the fourth year of the Presidential Cycle the SPX has been up 70% of the time with an average loss of -1.4% (helped considerably by losses of 23.3% and 24.0% in 1932 and 1940 respectively). The best May ever for the SPX was 1933 (+15.9%) the worst 1940 (-24.0%). The SPX has not had a double digit % move, either way, in May since 1940.

The chart below is similar to the one above except it shows the daily average performance over all years for the SPX in May in red and the performance during the 4th year of the Presidential Cycle in green.

Since 1979 the Russell 2000 (R2K) has been up 63% of the time in May with an average gain of 1.2%.During the 4th year of the Presidential Cycle the R2K has been up 60% of the time with no average gain or loss.The best May ever for the R2K, 1997 (+11.0%), the worst 2019 (-7.9%)

The chart below is similar to those above except it shows the daily performance over all years of the R2K in May in magenta and the performance during the 4th year of the Presidential Cycle in green.

Since 1885 the Dow Jones Industrial Average (DJIA) has been up 52% of the time in May with an average loss of -0.2%. During the 4th year of the Presidential Cycle the DJIA has been up 42% of the time in May with an average loss of -1.4%. The best May ever for the DJIA 1898 (+14.7%), the worst 1940 (-21.7%)

The chart below is similar to those above except it shows the daily performance over all years of the DJIA in May in grey and the performance during the fourth year of the Presidential Cycle in green.

Conclusion

PPT appears to be firmly in control and has no intention of allowing any sharp declines.  

The strongest sectors last week were Precious metals and Electronics; the weakest were Banks, Finance and Utilities.

I expect the major averages to be higher on Friday, May 1, than they were on Thursday, April 24. In the PPT I trust.

Last week the blue chip averages were down while the Russell 2000 was up; the opposite of the previous week. I am calling last week's positive forecast a tie.