Technical Market Report For July 5, 2025
The good news is:
- The S&P 500 (SPX) and Nasdaq composite (OTC) both closed at all time highs last Thursday.
The Negatives
Negatives are hard to find.
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.
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; Confirmed the OTC all time high.
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 up to 80; a strong level.
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 moved up to 90, the best level we have seen in a while.
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; there were 7 new lows on the NYSE last Thursday, an insignificant number.
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; there were 38 new lows on the Nasdaq last Thursday, the lowest number we have seen in quite a while.
Seasonality
Next week includes the 5 trading days prior to the 2nd 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.
Seasonally for the coming week has been one of the strongest of the year.
Report for the week before the 2nd Friday of July.
The number following the year is the position in the Presidential Cycle. Daily returns from Monday to 2nd Friday.
OTC Presidential Year 1 (PY1)
Year Mon Tue Wed Thur Fri Totals
1965-1 0.00% 0.82% -0.28% -0.06% 0.83% 1.31%
1969-1 -0.01% -0.87% -0.44% 0.37% 0.79% -0.15%
1973-1 0.53% 1.17% 1.49% 0.47% -0.14% 3.53%
1977-1 0.00% 0.22% -0.16% 0.32% 0.53% 0.91%
1981-1 0.15% -0.46% 0.46% 0.56% 0.35% 1.05%
Avg 0.22% 0.17% 0.21% 0.33% 0.47% 1.33%
1985-1 -0.26% -0.22% 0.46% 0.67% 0.62% 1.27%
1989-1 0.06% 0.41% 0.52% 0.24% 0.23% 1.46%
1993-1 0.00% -0.32% -0.49% 0.56% 0.44% 0.19%
1997-1 1.42% 1.19% 2.50% -0.74% -1.33% 3.04%
2001-1 1.13% -3.15% 0.47% 5.26% 0.44% 4.14%
Avg 0.59% -0.42% 0.69% 1.20% 0.08% 2.02%
2005-1 0.00% 1.04% -0.49% 0.34% 1.79% 2.69%
2009-1 2.12% 0.36% 3.51% 1.19% 0.08% 7.26%
2013-1 0.16% 0.56% 0.47% 1.63% 0.61% 3.43%
2017-1 0.38% 0.27% 1.09% 0.21% 0.60% 2.55%
2021-1 0.00% 0.17% 0.01% -0.72% 0.98% 0.43%
Avg 0.88% 0.48% 0.92% 0.53% 0.81% 3.27%
OTC summary for PY1 1965 - 2021
Avg 0.57% 0.08% 0.61% 0.69% 0.45% 2.21%
Win% 80% 67% 67% 80% 87% 93%
OTC summary for all years 1963 - 2024
Avg 0.05% -0.03% 0.38% 0.30% 0.43% 1.11%
Win% 68% 56% 64% 65% 77% 71%
SPX PY1
Year Mon Tue Wed Thur Fri Totals
1953-1 0.08% 0.53% -0.04% -0.29% -0.08% 0.21%
1957-1 0.43% -0.37% 0.68% -0.39% 0.45% 0.80%
1961-1 -0.09% -0.03% -0.56% -0.70% 0.65% -0.74%
1965-1 0.00% -0.20% -0.38% 0.85% 0.37% 0.65%
1969-1 -1.27% -0.33% 1.00% 0.61% -0.85% -0.84%
1973-1 0.85% 1.35% 2.20% -0.28% -1.34% 2.78%
1977-1 0.00% -0.01% -0.51% 0.35% -0.14% -0.31%
1981-1 0.21% 0.01% 0.46% 0.07% 0.32% 1.07%
Avg -0.07% 0.16% 0.56% 0.32% -0.33% 0.67%
1985-1 -0.31% -0.46% 0.69% 0.30% 0.18% 0.40%
1989-1 0.65% 0.54% 0.31% 0.04% 0.57% 2.12%
1993-1 0.00% -0.99% 0.32% 1.31% -0.11% 0.53%
1997-1 0.19% 0.80% 1.17% -0.53% -1.75% -0.12%
2001-1 0.69% -1.44% -0.11% 2.37% 0.62% 2.13%
Avg 0.30% -0.31% 0.48% 0.70% -0.10% 1.01%
2005-1 0.00% 0.88% -0.83% 0.25% 1.17% 1.46%
2009-1 2.49% 0.53% 2.96% 0.86% -0.04% 6.81%
2013-1 0.53% 0.72% 0.02% 1.36% 0.31% 2.93%
2017-1 0.09% -0.08% 0.73% 0.19% 0.47% 1.40%
2021-1 0.00% -0.20% 0.34% -0.86% 1.13% 0.41%
Avg 1.04% 0.37% 0.64% 0.36% 0.61% 2.60%
SPX summary for PY1 1953 - 2021
Avg 0.35% 0.07% 0.47% 0.31% 0.11% 1.20%
Win% 77% 44% 67% 67% 61% 78%
SPX summary for all years 1953 - 2024
Avg 0.05% 0.01% 0.29% 0.17% 0.31% 0.80%
Win% 61% 49% 62% 61% 69% 72%
Conclusion
New lows have disappeared.
All of the breadth indicators were strong as the market finished the week at all time highs.
I view the market as moving in cycles defined by peaks in the number of new lows. New lows peaked April 7 on the NYSE and April 8 on the Nasdaq.
Seasonality for next week has been very strong.
The strongest sectors last week were Transportation (for the 2nd week in a row) and Basic Materials while the weakest were Energy (for the 2nd week) and Biotech.
I expect the major averages to be higher on Friday July 11 than they were on Thursday July 3
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