Technical Market Report For August 1

The good news is August, during the 4th year of the Presidential Cycle, has historically been the best month of the year.

The Negatives

Leadership is narrow; there have been very few new highs considering the indices are near their all time highs.

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 highs (OTC NH) in green. Dashed vertical lines have been drawn of the first trading day of each month.

The OTC missed closing at a new all time high by a hair and missed being unconfirmed (both short and intermediate term) by OTC NH.

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

NY NH performance has been pitiful.

The Positives

The number of new lows has remained insignificant.

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 at 10% levels for the indicator; the line is solid at the 50%, neutral, level.

NY HL Ratio declined a little, but finished the week at a very strong 86%. 

The next chart is similar to the one above except it shows the OTC in blue and OTC HL Ratio, in red has been calculated with Nasdaq data.

OTC HL Ratio rose a little to a strong 82%.

Seasonality

Next week includes the first five trading days of August during the fourth 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.vThere are summaries for both the fourth year of the Presidential Cycle and all years combined. 

Returns for next week, during the fourth year of the Presidential Cycle have been sensational; other years, not so much.

Report for the first five days of August

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)

               Day1 Day2 Day3 Day4 Day5 Totals

1 2 3 4
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