Technical Market Report For February 15, 2025
The good news is:
- The S&P 500 (SPX) finished the week just a hair short of an all time high.
The Negatives
The first 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. Dashed vertical lines have been drawn on the 1st trading day of each month.
NY NH continued going nowhere while the SPX is, for all practical purposes, at its all time high; a significant non confirmation.
The next chart is similar to the 1st one except it shows the NASDAQ composite (OTC) in blue and OTC NH in green has been calculated with NASDAQ data.
OTC NH; slightly better, but nowhere near confirming a new high if one occurs any time soon.
The Positives
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 (equal numbers of new highs and new lows).
NY HL ratio has been ratcheting downward, but remained above the neutral line.
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 has been bouncing around the neutral line and finished the week above it.
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 took a bit of a dive last week, but finished the week on a positive note.
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; NY new lows increased a little as the SPX headed for an all time high.
An interesting chart
The chart below shows the OTC in blue, a 5% trend of NASDAQ upside volume in green and a 5% trend of NASDAQ downside volume, on an inverted Y axis, in orange (increasing downside volume moves the indicator downward).
The chart shows both upside and downside volume near their highs of the past 6 months.
Seasonality
Next week includes the 4 trading days prior to the 3rd Friday of February during the 1st year of the Presidential Cycle. The tables below show the daily change, on a percentage basis, for that period. Monday is a holiday and the market will be closed.
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 for next week has been negative during the 1st year of the Presidential Cycle, positive over all years.
Report for the week before the 3rd Friday of February.
The number following the year is the position in the Presidential Cycle.
Daily returns from Monday through 3rd Friday.
OTC Presidential Year 1 (PY1)
Year Mon Tue Wed Thur Fri Totals
1965-1 0.43% -0.25% -0.40% 0.79% 0.21% 0.77%
1969-1 -1.88% -0.74% -0.90% 0.53% -0.82% -3.82%
1973-1 1.52% 1.06% -1.39% -0.79% 0.10% 0.50%
1977-1 0.04% 0.29% 0.22% -0.06% -0.19% 0.30%
1981-1 0.00% 0.05% 0.39% -1.02% -0.23% -0.82%
Avg 0.03% 0.08% -0.42% -0.11% -0.19% -0.61%
1985-1 -0.32% -0.30% 0.61% 0.01% -0.22% -0.22%
1989-1 -0.27% 0.19% 0.67% 0.24% 0.37% 1.19%
1993-1 0.00% -3.64% -0.90% 0.46% 0.18% -3.90%
1997-1 0.00% 0.00% -0.12% -1.33% -0.97% -2.42%
2001-1 0.76% -2.49% 2.62% 2.47% -4.99% -1.64%
Avg 0.05% -1.56% 0.58% 0.37% -1.13% -1.40%
2005-1 0.30% 0.30% -0.09% -1.25% -0.13% -0.86%
2009-1 0.00% -4.15% -0.18% -1.71% -0.11% -6.16%
2013-1 -0.06% -0.17% 0.33% 0.06% -0.21% -0.06%
2017-1 0.52% 0.32% 0.64% -0.08% 0.41% 1.81%
2021-1 0.00% -0.34% -0.58% -0.72% 0.07% -1.58%
Avg 0.25% -0.81% 0.02% -0.74% 0.00% -1.37%
OTC summary for PY1 1965 - 2021
Avg 0.10% -0.71% 0.06% -0.16% -0.44% -1.13%
Win% 60% 43% 47% 47% 40% 33%
OTC summary for all years 1963 - 2024
Avg 0.16% -0.02% 0.16% 0.07% -0.17% 0.14%
Win% 59% 52% 60% 60% 47% 58%
SPX PY1
Year Mon Tue Wed Thur Fri Totals
1953-1 -0.35% -0.58% -0.08% 0.35% 0.23% -0.43%
1957-1 -1.73% -0.42% 1.53% -0.12% 1.21% 0.47%
1961-1 -0.59% 0.44% 0.83% 0.61% -0.32% 0.98%
1965-1 -0.12% -0.46% 0.12% 0.33% 0.19% 0.05%
1969-1 -1.19% -0.63% 0.48% -0.31% -0.01% -1.67%
1973-1 1.20% 0.62% -1.44% -0.56% 0.46% 0.28%
1977-1 0.52% 0.30% 0.46% -0.57% -0.43% 0.27%
1981-1 0.00% 0.65% 0.52% -1.46% -0.02% -0.30%
Avg 0.10% 0.10% 0.03% -0.52% 0.04% -0.27%
1985-1 -0.92% 0.03% 1.55% -0.51% -0.44% -0.31%
1989-1 0.18% -0.25% 0.83% 0.19% 0.66% 1.62%
1993-1 0.00% -2.40% -0.14% -0.32% 0.54% -2.33%
1997-1 0.00% 0.97% -0.47% -1.19% -0.13% -0.82%
2001-1 1.18% -0.87% -0.22% 0.81% -1.89% -0.98%
Avg 0.15% -0.50% 0.31% -0.20% -0.25% -0.56%
2005-1 0.07% 0.33% 0.02% -0.79% 0.07% -0.30%
2009-1 0.00% -4.56% -0.10% 0.07% -2.39% -6.98%
2013-1 -0.06% 0.16% 0.06% 0.07% -0.10% 0.12%
2017-1 0.52% 0.40% 0.50% -0.09% 0.17% 1.51%
2021-1 0.00% -0.06% -0.03% -0.44% -0.19% -0.72%
Avg 0.18% -0.74% 0.09% -0.24% -0.49% -1.27%
SPX summary for PY1 1953 - 2021
Avg -0.10% -0.35% 0.25% -0.22% -0.13% -0.53%
Win% 46% 50% 61% 39% 44% 44%
SPX summary for all years 1953 - 2024
Avg 0.11% 0.01% 0.22% -0.05% -0.02% 0.23%
Win% 49% 55% 61% 47% 46% 57%
Conclusion
The market appears to be heading toward new all time highs that will be unconfirmed by the breadth indicators.
Seasonality has been weak during the 3rd week of February during the 1st year of the Presidential Cycle.
The strongest sectors last week were Telecomm (for the 2nd week) and Internet while the weakest were Banks and Health Care.
I expect the major averages to be lower on Friday February 21 than they were on Friday February 14.
Last weeks negative forecast was a miss.
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Disclosure: None
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