Technical Market Report For January 10, 2026
The good news is:
- The Dow Jones Industrial Average (DJIA), S&P 500 (SPX) and Russell 2000 (R2K) all closed at all time highs last Friday.
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 first trading day of each month.
OTC NH turned upward last week, but remains far below its recent high.
The next chart is similar to the one above except it shows the SPX in red and NY NH in green has been calculated with NYSE data.
NY NH also turned upward, but failed to confirm the new all time high of the SPX.
The Positives
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 sharply upward last week.
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 slowly upward.
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 moved sharply upward into positive territory.
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 moved upward, finishing the week at a strong 84%.
Seasonality
Next week includes the 5 trading days prior to the 3rd Friday of January during the 2nd year of the Presidential Cycle.
OTC data covers the period from 1963 to 2025 while SPX data runs from 1953 to 2025. There are summaries for both the 2nd 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, on average, positive over all years, and modestly negative during the 2nd year of the Presidential Cycle.
Report for the week before the 3rd Friday of January.
The number following the year is the position in the Presidential Cycle.
Daily returns from Monday through 3rd Friday.
OTC Presidential Year 2 (PY2)
Year Mon Tue Wed Thur Fri Totals
1966-2 0.56% 0.31% -0.03% 0.41% 0.41% 1.65%
1970-2 0.01% 0.65% 0.30% -0.27% -0.02% 0.67%
1974-2 0.18% 0.73% 1.53% 1.55% -0.66% 3.32%
1978-2 -0.41% 0.62% 0.44% 0.16% 0.05% 0.86%
1982-2 0.00% -0.62% -0.24% 0.37% -0.31% -0.80%
Avg 0.09% 0.34% 0.40% 0.44% -0.11% 1.14%
1986-2 0.02% 0.19% 1.05% 0.58% 0.19% 2.02%
1990-2 -0.70% 0.81% -0.34% -0.26% 0.77% 0.27%
1994-2 -0.02% 0.11% -0.47% 0.48% 0.16% 0.25%
1998-2 0.29% 2.26% 0.43% -0.07% 1.02% 3.93%
2002-2 -1.57% 0.51% -2.82% 2.13% -2.79% -4.55%
Avg -0.40% 0.77% -0.43% 0.57% -0.13% 0.38%
2006-2 0.00% -0.62% -1.00% 0.97% -2.35% -3.00%
2010-2 0.00% 1.42% -1.26% -1.12% -2.67% -3.62%
2014-2 -1.47% 1.69% 0.76% 0.09% -0.50% 0.58%
2018-2 0.00% -0.51% 1.03% -0.03% 0.55% 1.04%
2022-2 0.00% -2.60% -1.15% -1.30% -2.72% -7.77%
Avg -1.47% -0.12% -0.32% -0.28% -1.54% -2.55%
OTC summary for PY2 1966 - 2022
Avg -0.31% 0.33% -0.12% 0.24% -0.59% -0.34%
Win% 50% 73% 47% 60% 47% 67%
OTC summary for all years 1963 - 2025
Avg -0.03% 0.19% 0.08% 0.19% 0.13% 0.56%
Win% 57% 56% 59% 63% 62% 70%
SPX PY2
Year Mon Tue Wed Thur Fri Totals
1954-2 0.00% 0.98% 0.27% 0.16% 0.23% 1.64%
1958-2 0.30% 0.44% 0.79% 0.17% 0.10% 1.80%
1962-2 -0.20% -0.58% -1.09% 0.10% 0.53% -1.23%
1966-2 0.29% 0.19% -0.28% -0.35% 0.12% -0.03%
1970-2 -0.76% 0.10% -0.15% 0.03% -0.83% -1.61%
1974-2 -0.26% 0.87% 1.53% 1.70% -1.79% 2.05%
1978-2 -0.29% 0.50% 0.76% -0.52% -0.22% 0.23%
1982-2 1.64% -1.07% -0.60% 0.42% -0.32% 0.07%
Avg 0.12% 0.12% 0.25% 0.26% -0.61% 0.14%
1986-2 0.37% -0.04% 0.78% 0.44% -0.35% 1.20%
1990-2 -0.86% 1.11% -0.98% 0.23% 0.28% -0.21%
1994-2 -0.34% 0.20% 0.01% 0.14% -0.05% -0.04%
1998-2 1.24% 1.38% 0.61% -0.75% 1.13% 3.61%
2002-2 -0.63% 0.68% -1.62% 1.00% -0.99% -1.56%
Avg -0.04% 0.67% -0.24% 0.21% 0.00% 0.60%
2006-2 0.00% -0.36% -0.39% 0.56% -1.83% -2.03%
2010-2 0.00% 1.25% -1.06% -1.89% -2.21% -3.92%
2014-2 -1.26% 1.08% 0.52% -0.13% -0.39% -0.18%
2018-2 0.00% -0.35% 0.94% -0.16% 0.44% 0.87%
2022-2 0.00% -1.84% -0.97% -1.10% -1.89% -5.80%
Avg -1.26% -0.04% -0.19% -0.55% -1.18% -2.21%
SPX summary for PY2 1954 - 2022
Avg -0.06% 0.25% -0.05% 0.00% -0.45% -0.29%
Win% 38% 67% 50% 61% 39% 44%
SPX summary for all years 1953 - 2025
Avg -0.08% 0.08% -0.04% 0.04% 0.01% 0.04%
Win% 45% 58% 55% 57% 58% 52%
Conclusion
The market turned sharply upward last week. There were numerous all time index highs with good breadth support.
The market has been doing a poor job of following the average seasonal patterns which have been negative since the first two days of January.
The strongest sectors last week were Precious Metals (up from the bottom last week) and Basic Materials (for the 3rd week in a row) while the weakest were Telecomm and Biotech.
I expect the major averages to be higher on Friday January 16 than they were on Friday January 9.
Last week's negative forecast was a miss.
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