Technical Market Report For August 2, 2025
The good news is:
- The S&P 500 (SPX) & Nasdaq composite (OTC) closed at an all time highs last Monday.
The Negatives
The first 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 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 (equal numbers of new highs and new lows).
OTC HL Ratio fell into negative territory last Friday.
The Positives
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 managed to remain in positive territory at 52%.
The next 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
NY NH confirmed the new high for the SPX last Monday.
The implication is there should be higher index 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, also confirmed the OTC all time high last Monday.
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 increased significantly last Thursday and Friday; turning this indicator downward.
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.
OTC NL Nasdaq new lows also increased significantly at the end of last week..
Seasonality
Next week includes the 5 trading days prior to the 2nd 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 the coming week has been mixed and weaker during the 1st year of the Presidential Cycle than other years.
Report for the week before the 2nd Friday of August.
The number following the year is the position in the Presidential Cycle. Daily returns from Monday to 2nd Friday.
OTC Presidential Year 1 (PY1)
Year Mon Tue Wed Thur Fri Totals
1965-1 0.82% 0.35% 0.45% 0.71% -0.14% 2.18%
1969-1 1.52% -0.42% 0.56% 0.08% 0.33% 2.07%
1973-1 0.37% 0.08% -1.09% 0.02% -0.78% -1.40%
1977-1 -0.31% -0.03% 0.29% 0.13% -0.18% -0.10%
1981-1 -0.25% 0.39% 0.13% 0.19% -0.11% 0.36%
Avg 0.43% 0.07% 0.07% 0.23% -0.18% 0.62%
1985-1 -0.78% -0.64% -0.67% 0.17% 0.14% -1.78%
1989-1 0.94% 0.34% -0.19% 0.25% -0.23% 1.11%
1993-1 0.06% -0.20% 0.24% -0.23% 0.16% 0.03%
1997-1 0.70% 1.00% 0.55% -0.38% -1.58% 0.29%
2001-1 -1.55% -0.32% -3.03% -0.15% -0.35% -5.40%
Avg -0.13% 0.04% -0.62% -0.07% -0.37% -1.15%
2005-1 -0.62% 0.45% -0.75% 0.78% -0.81% -0.96%
2009-1 -0.40% -1.13% 1.47% 0.53% -1.19% -0.71%
2013-1 0.09% -0.74% -0.32% 0.41% -0.25% -0.80%
2017-1 0.50% -0.21% -0.28% -2.12% 0.64% -1.47%
2021-1 0.16% -0.49% -0.16% 0.35% 0.04% -0.08%
Avg -0.05% -0.42% -0.01% -0.01% -0.31% -0.81%
OTC summary for PY1 1965 - 2021
Avg 0.08% -0.10% -0.19% 0.05% -0.29% -0.45%
Win% 60% 40% 47% 73% 33% 40%
OTC summary for all years 1963 - 2024
Avg -0.34% 0.09% 0.14% 0.12% 0.05% 0.05%
Win% 45% 52% 59% 64% 50% 56%
SPX PY1
Year Mon Tue Wed Thur Fri Totals
1953-1 -0.12% -0.12% 0.24% -0.20% -0.44% -0.65%
1957-1 -0.88% -1.25% 0.77% -0.28% 0.04% -1.59%
1961-1 -0.01% 0.22% -0.12% 0.31% 0.16% 0.56%
1965-1 -0.24% 0.01% 0.30% 0.29% 0.45% 0.81%
1969-1 -0.51% 0.45% 0.55% 0.07% -0.05% 0.51%
1973-1 0.23% -0.17% -0.94% 0.06% -0.80% -1.62%
1977-1 -0.78% 0.06% 0.89% -0.77% -0.29% -0.88%
1981-1 0.60% 0.99% -0.34% 0.08% -0.76% 0.57%
Avg -0.14% 0.27% 0.09% -0.05% -0.29% -0.12%
1985-1 -0.45% -1.41% -0.13% 0.68% -0.33% -1.65%
1989-1 1.60% -0.02% -0.69% 0.38% -1.01% 0.26%
1993-1 0.45% -0.28% 0.22% -0.33% 0.26% 0.33%
1997-1 0.33% 0.22% 0.83% -0.95% -1.85% -1.42%
2001-1 -1.14% 0.33% -1.73% -0.01% 0.57% -1.99%
Avg 0.16% -0.23% -0.30% -0.05% -0.47% -0.89%
2005-1 -0.27% 0.67% -0.18% 0.71% -0.60% 0.33%
2009-1 -0.33% -1.27% 1.15% 0.69% -0.85% -0.61%
2013-1 -0.15% -0.57% -0.38% 0.39% -0.36% -1.07%
2017-1 0.16% -0.24% -0.04% -1.45% 0.13% -1.43%
2021-1 -0.09% 0.10% 0.25% 0.30% 0.16% 0.71%
Avg -0.14% -0.26% 0.16% 0.13% -0.30% -0.42%
SPX summary for PY1 1953 - 2021
Avg -0.09% -0.13% 0.04% 0.00% -0.31% -0.49%
Win% 33% 50% 50% 61% 39% 44%
SPX summary for all years 1953 - 2024
Avg -0.31% 0.17% 0.09% 0.10% 0.07% 0.12%
Win% 42% 58% 54% 50% 53% 57%
Conclusion
Last Friday it was revealed that the government has been fudging employment data for a while and that did not set well with traders.
By short term measures the market is oversold, so if the buy the dippers still believe in the eternal bull market we should see a bounce pretty soon.
The strongest sectors last week were Utilities and Biotech while the weakest were Basic Materials (down from the top last week) and Banks.
I expect the major averages to be lower on Friday Aug 8 than they were on Friday August 1.
Last week's positive forecast was a miss.
More By This Author:
Technical Market Report For July 26, 2025Technical Market Report For July 19, 2025
Technical Market Report For July 12, 2025
Comments
