Technical Market Report For December 20, 2025
The good news is:
- Seasonality for the rest of the year has been good.
The Negatives
The first chart covers the last 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 on the 1st trading day of each month.
OTC NH turned downward last week.
The next chart is similar to the one above except it shows the S&P 500 (SPX) in red and NY NH in green has been calculated with NYSE data.
NY NH also turned downward. There is little hope for a confirmation if there is a new SPX high.
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 has returned to territory.
The next chart covers the past 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 turned downward last week.
The Positives
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 continued moving upward, but at a slower pace.
The next chart is similar to the third chart above except it shows the SPX in red and NY HL ratio, in blue, has been calculated with NYSE data.
NY HL Ratio declined last week, but finished the week in comfortably positive territory.
Seasonality
Next week includes the 5 trading prior to the fourth Friday of December during the 1st year of the Presidential Cycle. The tables below show the daily performance on a percentage basis for both the OTC and SPX. There are a lot of 0’s in these tables because the market is closed for Christmas and when Christmas falls on a Friday the report generator cannot identify the week at all.
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.
Seasonality for the coming week has been modestly positive by all measures.
Report for the week before the 4th Friday of December.
The number following the year is the position in the Presidential Cycle. Daily returns from Monday through the 4th Friday.
OTC Presidential Year 1 (PY1)
Year Mon Tue Wed Thur Fri Totals
1965-1 -1.05% -0.75% -0.63% 0.35% 0.09% -1.98%
1969-1 0.33% 0.03% -0.42% 0.00% 0.51% 0.45%
1973-1 -0.95% 0.00% 1.71% 1.18% 0.47% 2.41%
1977-1 -0.72% -0.77% 0.52% 0.37% 0.51% -0.10%
1981-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Avg -0.60% -0.50% 0.30% 0.63% 0.39% 0.20%
1985-1 -0.48% -0.38% 0.00% -0.02% 0.77% -0.11%
1989-1 -1.76% -0.39% 0.60% 0.95% 0.79% 0.19%
1993-1 0.31% 0.46% 0.36% 0.49% 0.74% 2.36%
1997-1 0.49% -1.45% -0.69% 0.00% 0.79% -0.86%
2001-1 -0.07% 0.00% 0.83% 0.80% 0.55% 2.12%
Avg -0.30% -0.44% 0.28% 0.55% 0.73% 0.74%
2005-1 -1.32% -0.01% 0.42% 0.66% 0.13% -0.12%
2009-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2013-1 1.08% 0.16% 0.00% 0.28% -0.25% 1.26%
2017-1 0.84% -0.44% -0.04% 0.06% -0.08% 0.34%
2021-1 1.39% -0.56% -0.10% -0.16% -0.61% -0.04%
Avg 0.50% -0.22% 0.09% 0.21% -0.20% 0.36%
OTC summary for PY1 1965 - 2021
Avg -0.15% -0.37% 0.23% 0.45% 0.34% 0.46%
Win% 46% 27% 55% 82% 77% 54%
OTC summary for all years 1963 - 2024
Avg -0.23% 0.01% 0.12% 0.19% 0.36% 0.39%
Win% 45% 47% 58% 62% 72% 62%
SPX PY1
Year Mon Tue Wed Thur Fri Totals
1953-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
1957-1 0.00% 0.10% 0.00% 1.01% -0.35% 0.76%
1961-1 -0.35% -0.70% -0.20% -0.37% 0.07% -1.54%
1965-1 -0.73% 0.01% 0.31% 0.42% 0.25% 0.26%
1969-1 -0.88% -0.39% 1.05% 0.00% 0.78% 0.57%
1973-1 -0.68% 0.00% 3.06% 2.09% -0.20% 4.26%
1977-1 -0.76% -0.20% 0.59% 0.81% 0.95% 1.38%
1981-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Avg -0.76% -0.19% 1.25% 1.11% 0.44% 1.62%
1985-1 -1.12% -0.69% 0.00% 0.25% 0.94% -0.62%
1989-1 -1.84% -0.36% 0.11% 0.57% 0.77% -0.76%
1993-1 0.68% 0.09% -0.08% -0.41% -0.47% -0.19%
1997-1 0.73% -1.53% -0.68% 0.00% 0.40% -1.08%
2001-1 -0.02% 0.00% 0.41% 0.68% 0.34% 1.40%
Avg -0.32% -0.62% -0.06% 0.27% 0.40% -0.25%
2005-1 0.00% -0.61% 0.25% 0.42% 0.04% 0.11%
2009-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2013-1 0.53% 0.29% 0.00% 0.47% -0.03% 1.26%
2017-1 0.54% -0.32% -0.08% 0.20% -0.05% 0.28%
2021-1 1.38% -0.10% 0.14% -0.30% -0.26% 0.86%
Avg 0.82% -0.19% 0.10% 0.20% -0.07% 0.63%
SPX summary for PY1 1953 - 2021
Avg -0.19% -0.34% 0.41% 0.45% 0.21% 0.46%
Win% 38% 31% 67% 77% 60% 67%
SPX summary for all years 1953 - 2024
Avg -0.16% 0.05% 0.28% 0.15% 0.18% 0.44%
Win% 40% 50% 65% 59% 70% 70%
Conclusion
Seasonality is the dominant consideration for the next 2 weeks and it has been modestly positive.
The strongest sectors last week were Precious Metals and Transportation (for the 2nd week in a row) while the weakest were Utilities and Energy (for the 2nd week in a row).
I expect the major averages to be higher on Friday December 26 than they were on Friday December 19.
Last week the Dow Jones Industrial Average and Russell 2000 were down while the SPX and OTC were up so I am calling last weeks negative forecast a tie.
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