The good news is:

• The Dow Jones Industrial Average (DJIA) closed at an all time high Friday. 

 

The Negatives

The first chart covers the last 6 months showing the S&P 500 (SPX) in red and a 10% trend (19 day EMA) of NYSE new highs (NY NH) in green.  Dashed vertical lines have been drawn on the 1^st trading day of each month.  

The SPX closed a hair off its all time high of Friday, but NY NH was short of a confirmation.

 

The next chart is similar to the one above except it shows the Nasdaq composite (OTC) in blue and OTC NH in green has been calculated with Nasdaq data.  

OTC NH, deteriorated over the past week with a pattern of lower highs and lower lows.  

 

The Positives

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 declined to 1 last Friday.

 

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.

Nasdaq new lows increased during the week, but declined to a non threatening level on Friday.

 

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 rose Friday after dipping into negative territory on Thursday. 

 

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 finished the week at a comfortable 82%. 

 

Seasonality

Next week includes the last 5 trading days of August during the 1^st 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 1928 to 2024.  There are summaries for both the 1^st year of the Presidential Cycle and all years combined. 

Seasonality for the coming week has been modest and mixed.

 

Report for the last 5 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 1 (PY1)

               Day5      Day4      Day3      Day2      Day1      Totals

 1965-1       0.02% 3   0.36% 4   0.20% 5   0.26% 1   0.20% 2     1.03%

 1969-1       0.80% 1  -0.24% 2  -0.59% 3   0.06% 4   0.97% 5     0.99%

 1973-1       0.50% 1   0.08% 2   0.78% 3   0.19% 4   0.85% 5     2.39%

 1977-1      -0.61% 4  -0.25% 5   0.48% 1  -0.26% 2  -0.01% 3    -0.64%

 1981-1      -1.48% 2   0.02% 3  -0.50% 4   0.37% 5  -0.91% 1    -2.51%

 

 Avg         -0.15%    -0.01%     0.07%     0.12%     0.22%       0.25%

 

 1985-1      -0.13% 1  -0.10% 2   0.34% 3   0.11% 4   0.13% 5     0.35%

 1989-1       0.19% 5   0.09% 1  -0.13% 2   0.36% 3   0.23% 4     0.74%

 1993-1      -0.20% 3  -0.31% 4   0.37% 5   0.45% 1   0.74% 2     1.05%

 1997-1       0.18% 1  -0.64% 2   0.26% 3  -0.89% 4   0.38% 5    -0.71%

 2001-1      -0.23% 1  -2.48% 2  -1.17% 3  -2.79% 4   0.77% 5    -5.90%

 

 Avg         -0.04%    -0.69%    -0.07%    -0.55%     0.45%      -0.90%

 

 2005-1       0.26% 4  -0.64% 5   0.80% 1  -0.37% 2   1.05% 3     1.09%

 2009-1       0.31% 2   0.01% 3   0.16% 4   0.05% 5  -0.97% 1    -0.44%

 2013-1      -0.01% 1  -2.16% 2   0.41% 3   0.75% 4  -0.84% 5    -1.84%

 2017-1      -0.09% 5   0.28% 1   0.30% 2   1.05% 3   0.94% 4     2.48%

 2021-1       0.15% 3  -0.64% 4   1.23% 5   0.90% 1  -0.04% 2     1.60%

 

 Avg          0.12%    -0.63%     0.58%     0.48%     0.03%       0.58%

 

OTC summary for PY1 1965 - 2021

Averages     -0.02%    -0.44%     0.20%     0.02%     0.23%      -0.02%

% Winners       53%       40%       73%       73%       67%         60%

MDD  8/30/2001  6.53% --  8/31/1981  2.50% --  8/27/2013  2.17%

 

OTC summary for all years 1963 - 2024

Averages      0.20%    -0.11%     0.13%    -0.07%     0.12%       0.27%

% Winners       58%       55%       63%       61%       69%         60%

MDD 8/31/1998  16.63% --  8/30/2001  6.53% --  8/31/2022  6.51%

 

SPX PY1

               Day5      Day4      Day3      Day2      Day1      Totals

 1929-1      -0.26% 1  -0.06% 2  -0.19% 3   0.97% 4   1.34% 5     1.80%

 1933-1       3.68% 5  -0.18% 1  -0.53% 2  -0.89% 3  -0.09% 4     1.98%

 1937-1      -1.94% 4  -1.67% 5   0.19% 6   1.32% 1  -0.50% 2    -2.60%

 1941-1       0.79% 2   0.10% 3   0.29% 4  -0.10% 5   0.19% 6     1.27%

 

 1945-1       1.46% 1   0.33% 2  -0.13% 3   0.33% 4   1.04% 5     3.03%

 1949-1       0.26% 4   0.39% 5  -1.05% 1   0.60% 2   0.07% 3     0.27%

 1953-1      -0.66% 2  -0.29% 3  -0.29% 4  -0.21% 5  -1.77% 1    -3.23%

 1957-1      -1.39% 1   1.64% 2   0.07% 3  -0.40% 4   1.71% 5     1.62%

 1961-1       0.12% 5   0.04% 1  -0.22% 2   0.38% 3   0.38% 4     0.71%

 

 Avg         -0.04%     0.42%    -0.33%     0.14%     0.29%       0.48%

 

 1965-1       0.12% 3   0.38% 4   0.07% 5   0.01% 1  -0.05% 2     0.53%

 1969-1      -1.03% 1  -0.66% 2   0.20% 3   0.42% 4   0.65% 5    -0.42%

 1973-1       0.79% 1   0.59% 2   0.98% 3  -0.14% 4   0.36% 5     2.57%

 1977-1      -1.11% 4  -0.09% 5   0.90% 1  -0.56% 2   0.40% 3    -0.46%

 1981-1      -0.29% 2  -0.14% 3  -1.16% 4   0.46% 5  -1.04% 1    -2.17%

 

 Avg         -0.31%     0.01%     0.20%     0.04%     0.07%       0.01%

 

 1985-1       0.07% 1   0.42% 2   0.39% 3   0.05% 4  -0.16% 5     0.78%

 1989-1      -0.28% 5   0.45% 1  -0.64% 2   0.23% 3   0.23% 4    -0.02%

 1993-1       0.08% 3   0.20% 4  -0.11% 5   0.30% 1   0.36% 2     0.82%

 1997-1      -0.37% 1  -0.78% 2   0.07% 3  -1.10% 4  -0.46% 5    -2.63%

 2001-1      -0.48% 1  -1.50% 2  -1.11% 3  -1.70% 4   0.40% 5    -4.40%

 

 Avg         -0.20%    -0.24%    -0.28%    -0.44%     0.07%      -1.09%

 

 2005-1       0.23% 4  -0.60% 5   0.60% 1  -0.32% 2   0.99% 3     0.89%

 2009-1       0.24% 2   0.01% 3   0.28% 4  -0.20% 5  -0.81% 1    -0.48%

 2013-1      -0.40% 1  -1.59% 2   0.27% 3   0.20% 4  -0.32% 5    -1.84%

 2017-1       0.17% 5   0.05% 1   0.08% 2   0.46% 3   0.57% 4     1.33%

 2021-1       0.22% 3  -0.58% 4   0.88% 5   0.43% 1  -0.13% 2     0.82%

 

 Avg          0.09%    -0.54%     0.42%     0.11%     0.06%       0.15%

 

SPX summary for PY1 1929 - 2021

Averages      0.00%    -0.15%    -0.01%     0.02%     0.14%       0.01%

% Winners       54%       50%       58%       58%       58%         58%

MDD  8/30/2001  4.72% --  8/27/1937  3.58% --  8/31/1953  3.20%

 

SPX summary for all years 1928 - 2024

Averages     -0.03%    -0.08%     0.06%    -0.06%     0.11%       0.00%

% Winners       46%       47%       65%       50%       60%         59%

MDD 8/31/1998  12.39% --  8/29/1938  6.10% --  8/31/2022  5.81%

 

Conclusion

Last week the market deteriorated until Friday when it recovered most of its early in the week losses and sent the DJIA to a new all time high.

The strongest sectors last week were Basic Material and Finance while the weakest were Biotech and Electronics.

I expect the major averages to be higher on Friday Aug 29 than they were on Friday August 22.

Last week the OTC was down while the other major averages were up so I am calling last week's positive forecast a tie.

 

---

More By This Author:

Technical Market Report For August 16, 2025
Technical Market Report For August 9, 2025
Technical Market Report For August 2, 2025