The good news is:the Nasdaq composite (OTC) closed at an all time high Friday.

The Negatives

The US dollar and every other major currency is being debased at a rapidly accelerating rate to support the illusion of prosperity.I cannot imagine how this will end.  

The first chart covers the past six months showing the OTC in blue and a 10% trend (19 day EMA) of Nasdaq new highs (OTC NH) in green.Dashed vertical lines have been drawn of the first trading day of each month.

This is a major non confirmation; both over the past 3.5 months and the past 1.5 weeks.Will it matter; probably not.

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.

Nothing pretty about this chart either.

The Positives

The Plunge Protection Team (PPT) AKA Presidents Working Group on Financial Markets got back to work last week. 

The next chart covers the past six 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.

NY HL Ratio closed above 90%, very strong. 

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 finished the week at a very strong 89%.

Seasonality

Next week includes the five trading days prior to the second Friday of July during the fourth 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 2019 while SPX data runs from 1953 to 2019. There are summaries for both the fourth year of the Presidential Cycle and all years combined.Prior to 1953 the market traded six days a week so that data has been ignored.

Returns for next week have, on average, been positive by all measures.

Report for the week before the second Friday of July.

The number following the year is the position in the Presidential Cycle.

Daily returns from Monday to second Friday.

OTC Presidential Year 4 (PY4)

 Year Mon Tue Wed Thur Fri Totals

 1964-4 0.05% 0.15% 0.22% 0.20% 0.37% 0.98%

 1968-4-0.06% 0.19% 0.00%-0.20%-0.28%-0.35%

 1972-4-0.49%-0.29%-0.28%-0.83% 0.27%-1.62%

 1976-4 0.00%-0.29%-0.02% 0.21% 0.76% 0.66%

 1980-4 1.03% 0.32% 0.03% 0.94% 0.78% 3.10%

 1984-4 0.11%-0.31%-0.61%-0.26% 0.19%-0.87%

 1988-4 0.00% 0.36%-0.17%-0.01%-0.28%-0.09%

 1992-4 0.43% 0.88% 0.05% 0.13%-0.98% 0.49%

 1996-4-0.83% 0.42%-1.06%-3.08%-0.25%-4.80%

 Avg 0.19% 0.33%-0.35%-0.45%-0.11%-0.43%

 2000-4-1.07%-0.60% 3.62% 1.84% 1.71% 5.50%

 2004-4 0.00%-2.15% 0.13%-1.56% 0.57%-3.01%

 2008-4-1.17% 0.13% 3.12% 1.20%-1.28% 2.00%

 2012-4-0.19%-1.00%-0.49%-0.75% 1.48%-0.97%

 2016-4 0.00%-0.82% 0.75% 0.36% 1.64% 1.94%

 Avg -0.81%-0.89% 1.43% 0.22% 0.82% 1.09%

OTC summary for PY4 1964 - 2016 

 Avg -0.22%-0.22% 0.41%-0.13% 0.33% 0.21%

 Win% 40% 50% 54% 50% 64% 50%

OTC summary for all years 1963 - 2019

 Avg0.10%-0.10% 0.35% 0.32% 0.44% 1.07%

 Win% 68% 53% 61% 67% 77% 70%

SPX PY4

 Year Mon Tue Wed Thur Fri Totals

 1956-4 0.44% 0.60% 0.31%-0.23% 0.29% 1.41%

 1960-4 0.00%-0.07%-0.14% 0.53% 0.24% 0.56%

 1964-4-0.06%-0.30% 0.34% 0.36% 0.44% 0.78%

 1968-4-0.08%-0.55% 0.00%-0.26%-0.97%-1.85%

 1972-4-0.53%-0.73%-0.40%-0.57% 0.49%-1.75%

 1976-4 0.00%-0.55% 0.28% 0.14% 0.96% 0.84%

 Avg -0.22%-0.44% 0.02% 0.04% 0.23%-0.28%

 1980-4 1.84%-0.59% 0.28% 1.51% 0.49% 3.53%

 1984-4 0.74%-0.31%-1.52%-0.35% 0.57%-0.88%

 1988-4 0.00% 1.48%-1.37%-0.09%-0.65%-0.63%

 1992-4 0.06% 0.68%-0.14% 0.11%-0.46% 0.24%

 1996-4-0.75% 0.34% 0.20%-1.59% 0.08%-1.71%

 Avg0.47% 0.32%-0.51%-0.08% 0.01% 0.11%

 2000-4-0.22% 0.36% 0.81% 0.19% 0.95% 2.09%

 2004-4 0.00%-0.81% 0.19%-0.82% 0.33%-1.12%

 2008-4-0.90%-1.09% 2.51% 1.20% 0.03% 1.74%

 2012-4-0.16%-0.81% 0.00%-0.50% 1.65% 0.17%

 2016-4 0.00%-0.68% 0.54%-0.09% 1.53% 1.29%

 Avg -0.43%-0.61% 0.81% 0.00% 0.90% 0.84%

SPX summary for PY4 1956 - 2016 

 Avg0.03%-0.19% 0.12%-0.03% 0.37% 0.30%

 Win% 36% 31% 60% 44% 81% 63%

SPX summary for all years 1953 - 2019

 Avg0.06%-0.03% 0.26% 0.18% 0.31% 0.76%

 Win% 60% 46% 59% 62% 70% 70%

Conclusion

The PPT gave us a new all time OTC high to celebrate on the July 4th weekend.

The strongest sectors last week were precious metals and basic materials; the weakest were energy, energy services and banks. 

I expect the major averages to be higher on Friday July 10 than they were on Friday July 2. In the PPT I trust.