Technical Market Report For June 15, 2024

The good news is

The Nasdaq composite (OTC) closed at an all time high last Friday and the S&P 500 (SPX) closed at an all time high last Thursday.

 

The Negatives

The first chart covers the last 6 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 on the 1st trading day of each month.  

OTC NH failed to confirm the, all time, new index 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 failed to confirm the SPX all time high.

(Click on image to enlarge)

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 continued its decline as the index hit an all time high.

(Click on image to enlarge)

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 falling while the SPX hit its all time high.

(Click on image to enlarge)

Summation indices are running totals of oscillator values.

Short term momentum indicators applied to summation indices make them nearly binary.

The next chart covers the past 6 months showing the SPX in red and momentum of summation indices of oscillators of advancing and declining issues, new highs and new lows and upside and downside volume on the NYSE.  

All the NY SI’s are heading south.

(Click on image to enlarge)

The next chart is similar to the one above; except it shows the OTC, in blue and the SI’s have been generated from Nasdaq breadth data. 

OTC HL SI turned upward last week then turned downward on Friday. 

(Click on image to enlarge)

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 popped up into positive territory one day last week, but finished the week negative.

(Click on image to enlarge)

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 finished the week in negative territory.

(Click on image to enlarge)

 

The Positives

There are no positives to report.  Leadership has narrowed to the point there are only a few issues holding the major capitalization weighted indices up.

 

Seasonality

Next week includes the 5 trading days prior to the 3rd Friday of June during the 4th 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 2023 while SPX data runs from 1953 to 2023.  There are summaries for both the 4th 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.

 

Average returns for the coming week have been modest, mixed and weaker during the 4th year of the Presidential Cycle than other years. 

 

Report for the week before the 3rd Friday of June.

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

Daily returns from Monday through 3rd Friday.

 

OTC Presidential Year 4 (PY4)

 Year       Mon     Tue     Wed    Thur    Fri    Totals

 1964-4  -0.13%   0.18%   0.46%   0.69%   0.05%   1.25%

 1968-4  -0.34%  -1.15%   0.00%  -0.76%  -0.14%  -2.40%

 1972-4  -0.15%   0.31%   0.51%  -0.12%  -0.01%   0.54%

 1976-4   0.79%   0.06%   0.54%   0.89%   0.37%   2.64%

 1980-4   0.13%   0.12%   0.13%  -0.29%  -0.14%  -0.05%

 

 Avg      0.06%  -0.10%   0.41%   0.08%   0.03%   0.40%

 

 1984-4  -0.93%  -0.45%   0.31%  -0.91%   0.01%  -1.97%

 1988-4   0.14%   0.44%   0.14%  -0.51%  -0.05%   0.18%

 1992-4  -0.09%  -0.87%  -1.92%  -0.74%   0.92%  -2.70%

 1996-4  -0.42%  -2.07%  -0.51%  -0.83%   0.69%  -3.14%

 2000-4  -2.76%   2.21%  -1.39%   1.27%   0.39%  -0.29%

 

 Avg     -0.81%  -0.15%  -0.67%  -0.34%   0.39%  -1.58%

 

 2004-4  -0.62%   1.00%   1.35%  -0.27%   0.49%   1.95%

 2008-4   0.83%  -0.69%  -1.14%   1.33%  -2.27%  -1.94%

 2012-4  -1.70%   1.19%  -0.86%   0.63%   1.29%   0.54%

 2016-4  -0.94%  -0.10%  -0.18%   0.21%  -0.92%  -1.93%

 2020-4   1.43%   1.75%   0.15%   0.33%   0.03%   3.68%

 

 Avg     -0.20%   0.63%  -0.14%   0.45%  -0.28%   0.46%

 

 OTC summary for PY4 1964 - 2020

 Avg     -0.32%   0.13%  -0.17%   0.06%   0.05%  -0.24%

 Win%       33%     60%     57%     47%     60%     47%

 

OTC summary for all years 1963 - 2023

 Avg     -0.18%   0.19%   0.06%  -0.03%  -0.02%   0.01%

 Win%       46%     62%     62%     51%     53%     52%


 

SPX PY4

 Year       Mon     Tue     Wed    Thur    Fri    Totals

 1956-4   1.26%   1.42%   0.13%  -0.24%   0.13%   2.71%

 1960-4   0.03%  -0.14%  -0.59%  -0.12%  -0.10%  -0.92%

 

 1964-4   0.46%   0.54%   0.51%  -0.02%   0.12%   1.61%

 1968-4  -0.99%  -0.14%   0.00%   0.52%   0.15%  -0.46%

 1972-4   0.14%   0.50%   0.78%   0.05%  -0.07%   1.40%

 1976-4   1.02%  -0.48%   0.54%   1.57%   0.14%   2.80%

 1980-4   0.24%  -0.05%   0.20%  -1.38%  -0.52%  -1.51%

 

 Avg      0.18%   0.07%   0.51%   0.15%  -0.04%   0.77%

 

 1984-4  -1.36%  -0.57%  -0.04%  -1.14%  -0.90%  -4.02%

 1988-4   0.06%   1.06%   0.05%  -1.71%   0.34%  -0.19%

 1992-4   0.13%  -0.48%  -1.48%  -0.32%   0.68%  -1.48%

 1996-4  -0.10%  -0.47%  -0.02%   0.02%   0.72%   0.15%

 2000-4  -0.75%   1.62%   0.07%   0.55%  -0.95%   0.54%

 

 Avg     -0.40%   0.23%  -0.28%  -0.52%  -0.03%  -1.00%

 

 2004-4  -0.42%   0.36%   0.85%  -0.30%  -0.55%  -0.04%

 2008-4   0.01%  -0.68%  -0.97%   0.38%  -1.85%  -3.12%

 2012-4  -1.26%   1.17%  -0.70%   1.08%   1.03%   1.32%

 2016-4  -0.81%  -0.18%  -0.18%   0.31%  -0.33%  -1.19%

 2020-4   0.83%   1.90%  -0.36%   0.06%  -0.56%   1.86%

 

 Avg     -0.33%   0.51%  -0.27%   0.31%  -0.45%  -0.23%

 

SPX summary for PY4 1956 - 2020 

 Avg     -0.09%   0.32%  -0.08%  -0.04%  -0.15%  -0.03%

 Win%       59%     47%     50%     53%     47%     47%

 

SPX summary for all years 1953 - 2023

 Avg     -0.10%   0.19%   0.00%  -0.14%  -0.04%  -0.09%

 Win%       58%     58%     47%     49%     55%     55%

 

Money supply (M2) and Interest Rates

The following charts were supplied by Gordon Harms.

The first chart, made with FastTrack, covers the past 4 years showing the SPX in red and M2 money supply in green.

Money supply has remained constant for several months.

(Click on image to enlarge)

Treasury rates at their close last Friday and their changes from last month:

2yr yield 4.715% down from 4.837%

5yr yield 4.247% down from 4.452%

10yr yield 4.228% down from 4.426% 

30yr yield 4.350% down from 4.563%

All rates declined from their levels of last month.

All the rates are inverted (shorter term maturities yield more than longer term maturities) relative to the 2 year.

The next chart covers the past 15 months showing the 30 year yield over the 5 year yield on top, The 1, 2, 5, 10 & 30 year treasury rates in the middle group and the SPX with a 50 day simple moving average on the bottom.

(Click on image to enlarge)


 

Conclusion

The SPX and OTC closed at all time highs last week while breadth was lousy.

Leadership has narrowed to the point that the capitalization weighted indices are supported by only a few issues.  We are at or near the high for this cycle.

Seasonality for the coming week has been a little weak.

The strongest sectors last week were Internet and Electronics (for the 2nd week) while the weakest were Precious metals (for the 2nd week) and Banks.

I expect the major averages to be lower on Friday June 21 than they were on Friday June 14. 

Last week the R2K  and DJIA down while the SPX and OTC were up.  So I am calling last weeks negative forecast a tie.

 


More By This Author:

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Technical Market Report For June 1, 2024
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