Technical Market Report For July 12, 2025
The good news is:
- The S&P 500 (SPX) and Nasdaq composite (OTC) both closed at all time highs last Thursday.
The Negatives
Strong seasonality did not help the major averages last week.
The Positives
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 confirmed the new high for the SPX last Thursday.
The next chart is similar to the 1st one except it shows the OTC in blue and OTC NH in green has been calculated with Nasdaq data.
OTC NH, by a small margin, failed to confirm the OTC all time high last Thursday.
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 fell a little bit to a still strong 75%.
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 HLR fell a little bit to a still strong 85%.
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 remained in low double digits last week.
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.
OTC NL continued moving upward.
Seasonality
Next week includes the 5 trading days prior to the 3rd Friday of July 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 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 July.
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 -1.67% 0.12% -1.20% -0.46% -0.42% -3.63%
1969-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
1973-1 0.07% 0.50% 0.83% -0.02% 0.17% 1.55%
1977-1 0.59% 0.36% 0.05% 0.26% 0.40% 1.67%
1981-1 0.68% -0.24% 0.02% 0.52% 0.76% 1.74%
Avg -0.08% 0.19% -0.08% 0.08% 0.23% 0.33%
1985-1 -0.30% -0.20% -0.82% 0.24% 0.06% -1.02%
1989-1 -0.74% 0.11% 0.59% 0.75% 0.08% 0.79%
1993-1 -0.56% 0.87% -0.26% -0.65% 0.68% 0.08%
1997-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2001-1 -2.01% -1.47% 1.28% 1.95% 0.30% 0.04%
Avg -0.90% -0.17% 0.20% 0.57% 0.28% -0.03%
2005-1 -0.55% 1.32% 0.71% -0.46% 0.05% 1.07%
2009-1 0.10% 0.39% -0.39% 0.84% -0.29% 0.64%
2013-1 0.36% -0.59% 0.01% 0.71% 0.22% 0.71%
2017-1 0.36% 0.02% 0.16% -0.63% -0.12% -0.20%
2021-1 -1.06% 1.57% 0.92% 0.36% 1.04% 2.83%
Avg -0.16% 0.54% 0.28% 0.17% 0.18% 1.01%
OTC summary for PY1 1965 - 2021
Avg -0.36% 0.21% 0.15% 0.26% 0.23% 0.48%
Win% 46% 69% 69% 62% 77% 77%
OTC summary for all years 1963 - 2024
Avg -0.22% -0.01% 0.16% 0.05% 0.06% 0.04%
Win% 47% 57% 58% 60% 62% 57%
SPX PY1
Year Mon Tue Wed Thur Fri Totals
1953-1 -0.53% -0.25% 0.12% 0.17% 0.00% -0.49%
1957-1 -0.23% 0.19% 0.10% 0.00% -0.33% -0.27%
1961-1 0.02% 0.55% 0.94% 1.17% 0.15% 2.83%
1965-1 -0.07% -1.26% -0.57% -0.26% 0.26% -1.90%
1969-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
1973-1 0.35% 0.58% 1.39% 0.19% -0.24% 2.27%
1977-1 0.77% 0.83% -0.06% -0.14% 0.08% 1.48%
1981-1 1.12% -0.59% 0.02% 0.66% 0.70% 1.91%
Avg 0.54% -0.11% 0.19% 0.11% 0.20% 0.94%
1985-1 -0.40% -0.93% -0.50% 0.25% 0.18% -1.40%
1989-1 -0.66% 0.06% 1.25% 1.17% 0.05% 1.86%
1993-1 0.06% 0.29% -0.03% -0.60% 0.58% 0.31%
1997-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2001-1 -1.64% -1.63% 1.61% 1.04% 0.24% -0.37%
Avg -0.66% -0.55% 0.58% 0.47% 0.26% 0.10%
2005-1 -0.55% 0.67% 0.48% -0.66% 0.54% 0.48%
2009-1 0.30% -0.26% -0.46% 1.19% 0.07% 0.84%
2013-1 0.20% -0.19% -0.38% 0.26% 0.08% -0.02%
2017-1 -0.11% 0.29% 0.03% -0.10% -0.13% -0.02%
2021-1 -1.59% 1.52% 0.82% 0.20% 1.01% 1.97%
Avg -0.35% 0.41% 0.10% 0.18% 0.32% 0.65%
SPX summary for PY1 1953 - 2021
Avg -0.18% -0.01% 0.30% 0.30% 0.22% 0.59%
Win% 44% 56% 63% 67% 80% 56%
SPX summary for all years 1953 - 2024
Avg -0.16% 0.00% 0.30% 0.14% 0.05% 0.32%
Win% 37% 55% 63% 59% 62% 60%
Conclusion
I think the market, if not influenced by strong outside forces, follows its usual seasonal pattern. That said, last week's negative return by all of the major indices during one of the historically strongest weeks of the year is troublesome.
New highs have been increasing over the past 3 months pushing, the indicators representing them upward. However, those numbers are modest for all time index highs.
The strongest sectors last week were Transportation (for the 3rd week in a row) and Energy (up from the bottom last week) while the weakest were Internet and Telecom. .
I expect the major averages to be higher on Friday July 18 than they were on Thursday July 11.
Last week's positive forecast was a miss.
More By This Author:
Technical Market Report For July 5, 2025
Technical Market Report For June 28, 2025
Technical Market Report For June 21, 2025
Comments
