Technical Market Report For February 22, 2025
The good news is:
- The S&P 500 (SPX) closed at an all time high last Wednesday.
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 failed to confirm the SPX all time high last Wednesday by a large margin.
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 has 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 slightly below 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 did not tumble with the index.
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 also did not follow the index downward.
Seasonality
Next week includes the last 5 trading days of February 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 1928 to 2024. There are summaries for both the 1st year of the Presidential Cycle and all years combined.
Seasonally for next week has been negative by all measures.
Report for the last 5 days of February.
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 0.21% 5 0.61% 2 0.93% 3 0.54% 4 -0.15% 5 2.15%
1969-1 -1.88% 1 -0.74% 2 -0.90% 3 0.53% 4 -0.82% 5 -3.82%
1973-1 -0.22% 4 -1.08% 5 -0.87% 1 -1.21% 2 0.51% 3 -2.88%
1977-1 -0.25% 2 -0.40% 3 -0.96% 4 0.06% 5 -0.35% 1 -1.89%
1981-1 0.40% 1 0.46% 2 0.03% 3 1.10% 4 0.96% 5 2.94%
Avg -0.35% -0.23% -0.36% 0.20% 0.03% -0.70%
1985-1 -0.28% 5 -0.78% 1 0.37% 2 -0.31% 3 0.02% 4 -0.98%
1989-1 -0.96% 3 0.14% 4 -0.77% 5 -0.26% 1 0.19% 2 -1.65%
1993-1 -1.69% 1 -0.16% 2 1.70% 3 0.70% 4 0.55% 5 1.11%
1997-1 0.81% 1 0.19% 2 -0.53% 3 -2.08% 4 -0.28% 5 -1.89%
2001-1 -1.05% 4 0.78% 5 2.03% 1 -4.36% 2 -2.54% 3 -5.14%
Avg -0.63% 0.04% 0.56% -1.26% -0.41% -1.71%
2005-1 -1.37% 2 0.05% 3 1.01% 4 0.67% 5 -0.66% 1 -0.32%
2009-1 -3.71% 1 3.90% 2 -1.14% 3 -2.38% 4 -0.98% 5 -4.31%
2013-1 0.97% 5 -1.44% 1 0.43% 2 1.04% 3 -0.07% 4 0.93%
2017-1 -0.09% 3 -0.43% 4 0.17% 5 0.28% 1 -0.62% 2 -0.69%
2021-1 -2.46% 1 -0.50% 2 0.99% 3 -3.52% 4 0.56% 5 -4.94%
Avg -1.33% 0.31% 0.29% -0.78% -0.35% -1.87%
OTC summary for PY1 1965 - 2021
Averages -0.77% 0.04% 0.16% -0.61% -0.24% -1.42%
% Winners 27% 47% 60% 53% 40% 27%
MDD 2/28/2001 6.79% -- 2/25/2021 5.44% -- 2/27/2009 4.44%
OTC summary for all years 1963 - 2024
Averages -0.21% 0.05% 0.19% -0.18% -0.10% -0.25%
% Winners 50% 53% 60% 60% 47% 53%
MDD 2/27/2020 10.55% -- 2/28/2001 6.79% -- 2/25/2021 5.44%
SPX PY1
Day5 Day4 Day3 Day2 Day1 Totals
1929-1 1.10% 4 0.20% 1 0.16% 2 1.20% 3 1.35% 4 4.01%
1933-1 -4.70% 4 3.87% 5 -5.25% 6 -1.07% 1 2.35% 2 -4.80%
1937-1 -2.12% 2 0.56% 3 -0.39% 4 0.33% 5 0.17% 6 -1.46%
1941-1 0.82% 1 0.91% 2 0.20% 3 -0.70% 4 0.40% 5 1.64%
1945-1 -0.21% 5 -0.28% 6 -0.21% 1 0.78% 2 0.70% 3 0.78%
1949-1 -0.95% 3 -1.23% 4 -0.28% 5 0.49% 6 1.18% 1 -0.80%
1953-1 0.23% 5 0.47% 2 0.62% 3 0.15% 4 -0.19% 5 1.29%
1957-1 -0.34% 4 -0.23% 1 0.16% 2 -0.09% 3 -0.35% 4 -0.85%
1961-1 0.06% 2 0.37% 4 0.40% 5 0.73% 1 0.22% 2 1.79%
Avg -0.24% -0.18% 0.14% 0.41% 0.31% 0.44%
1965-1 0.19% 5 0.50% 2 0.61% 3 0.03% 4 0.26% 5 1.59%
1969-1 -1.19% 1 -0.63% 2 0.48% 3 -0.31% 4 -0.01% 5 -1.67%
1973-1 -0.22% 4 -1.12% 5 -0.86% 1 -1.15% 2 0.70% 3 -2.64%
1977-1 0.00% 2 -0.30% 3 -0.59% 4 -0.12% 5 0.34% 1 -0.67%
1981-1 0.61% 1 0.03% 2 0.89% 3 1.23% 4 0.90% 5 3.66%
Avg -0.12% -0.30% 0.11% -0.06% 0.44% 0.06%
1985-1 -0.46% 5 -0.07% 1 1.08% 2 -0.25% 3 0.26% 4 0.56%
1989-1 -1.71% 3 0.39% 4 -1.68% 5 0.24% 1 0.36% 2 -2.40%
1993-1 0.23% 1 -0.10% 2 1.40% 3 0.33% 4 0.24% 5 2.10%
1997-1 1.06% 1 0.21% 2 -0.78% 3 -1.32% 4 -0.54% 5 -1.35%
2001-1 -0.20% 4 -0.56% 5 1.75% 1 -0.77% 2 -1.43% 3 -1.20%
Avg -0.21% -0.02% 0.35% -0.35% -0.22% -0.46%
2005-1 -1.45% 2 0.56% 3 0.79% 4 0.93% 5 -0.64% 1 0.19%
2009-1 -3.47% 1 4.01% 2 -1.07% 3 -1.58% 4 -2.36% 5 -4.46%
2013-1 0.88% 5 -1.83% 1 0.61% 2 1.27% 3 -0.09% 4 0.84%
2017-1 -0.11% 3 0.04% 4 0.15% 5 0.10% 1 -0.26% 2 -0.07%
2021-1 -0.77% 1 0.13% 2 1.14% 3 -2.45% 4 -0.48% 5 -2.44%
Avg -0.98% 0.58% 0.32% -0.34% -0.76% -1.19%
SPX summary for PY1 1929 - 2021
Averages -0.53% 0.25% -0.03% -0.08% 0.13% -0.27%
% Winners 38% 58% 63% 54% 58% 46%
MDD 2/27/1933 7.21% -- 2/27/2009 4.92% -- 2/27/1973 3.30%
SPX summary for all years 1928 - 2024
Averages -0.22% -0.09% 0.10% -0.07% 0.00% -0.29%
% Winners 46% 45% 55% 53% 52% 47%
MDD 2/28/2020 11.49% -- 2/27/1933 7.21% -- 2/26/1934 6.47%
Money supply (M2) and Interest Rates
Gordon Harms got a new computer and his transition to it is a work in progress.
I have updated the rates in the table below.
Treasury rates at their close last Friday and their changes from last month:
2yr yield 4.202% down from 4.291%
5yr yield 4.275% down from 4.438%
10yr yield 4.430% down from 4.630%
30yr yield 4.683% down from 4.860%
There are currently no inversions.
Many economists consider the un inverting of the yield curve a bad sign for the economy.
Conclusion
The market fell last week; consistent with its seasonal profile.
Seasonality has been weak during the last week of February.
The modest build up of new lows last week has me optimistic about the period following this seasonal dip.
The strongest sectors last week were Utilities and Biotech while the weakest were Banks (for the 2nd week) and Basic Materials.
I expect the major averages to be lower on Friday February 28 than they were on Friday February 21.
More By This Author:
Technical market report for February 15, 2025
Technical market report for February 8, 2025
Technical Market Report For February 1, 2025
Disclosure: None
Comments
