The good news is:the Federal Reserve Bank has decided to buy everything including junk bonds.Your investments are safe until they change their minds.

The Negatives

Leadership continues to narrow; there have been very few new highs considering the major indices are near their all time highs.

The first chart covers the past 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 of the 1st trading day of each month.

The lack of broad market support continues.

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. NYSE is a little worse.

Typically, when the major indices hit a bottom new lows and volume of issues moving downward diminish quickly.New lows have disappeared, but downside volume has not.

The chart below covers the past six months showing the OTC in blue and a 5% trend (39 day EMA) of NASDAQ downside volume (OTC DV) in brown.OTC DV has been plotted on an inverted Y axis so diminishing downside volume move the indicator upward (Up is good).

Downside volume diminished a bit following the March bottom, but has maintained extremely high levels.

I did not show NYSE DV because it is not as dramatic.

The Positives

The Plunge Protection Team (PPT) AKA Presidents Working Group on Financial Markets woke up with a jolt Monday morning to see the major indices down 5% - 7%.They got their act together and all of the major indices finished the day with a comfortable gain.They did not want a replay of the previous week.

The next chart covers the past 6 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 Radio finished the week at an extremely strong 92%. 

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 an extremely strong 94%.

Seasonality

Next week includes the five trading days prior to the fourth Friday of June 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 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.

Next week has been a good representation of the summer doldrums.On average not much has happened.

Report for the week before the fourth Friday of June

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

Daily returns from Monday through the 4th Friday.

OTC Presidential Year 4 (PY4)

 Year Mon Tue Wed Thur Fri Totals

 1964-4 0.33% 0.05%-0.13% 0.38% 0.28% 0.91%

 1968-4 0.19% 0.39% 0.00%-0.33%-0.22% 0.03%

 1972-4-0.40% 0.24% 0.24%-0.45%-0.44%-0.81%

 1976-4 0.11%-0.68%-0.39% 0.68% 0.28% 0.01%

 1980-4 0.31% 0.43% 0.69% 0.16% 0.11% 1.70%

 1984-4 0.50% 0.44% 0.20% 0.59% 0.57% 2.30%

 1988-4-0.24% 0.46% 0.72% 0.13% 0.15% 1.21%

 1992-4-0.81% 0.66%-0.36%-0.58%-0.07%-1.15%

 1996-4 0.64%-0.87%-1.65% 1.10% 1.63% 0.85%

 Avg0.08% 0.22%-0.08% 0.28% 0.48% 0.98%

 2000-4 3.35% 0.59% 1.26%-3.13%-2.32%-0.26%

 2004-4 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

 2008-4-0.85%-0.73% 1.39%-3.33%-0.25%-3.76%

 2012-4 0.78% 1.19% 0.02%-2.44% 1.17% 0.73%

 2016-4 0.77% 0.14%-0.22% 1.59%-4.12%-1.84%

 Avg1.01% 0.30% 0.62%-1.83%-1.38%-1.28%

OTC summary for PY4 1964 - 2016 

 Avg0.36% 0.18% 0.15%-0.43%-0.25%-0.01%

 Win% 69% 77% 58% 54% 54% 62%

OTC summary for all years 1963 - 2019

 Avg -0.11% 0.02% 0.13%-0.06%-0.15%-0.17%

 Win% 45% 59% 55% 59% 54% 50%

SPX PY4

 Year Mon Tue Wed Thur Fri Totals

 1956-4-0.43% 0.11% 0.41% 0.69%-0.30% 0.48%

 1960-4-0.49%-0.09% 0.30% 0.54% 0.16% 0.42%

 1964-4 0.27%-0.42% 0.36% 0.19% 0.31% 0.70%

 1968-4-0.27%-0.31% 0.00%-0.10%-0.40%-1.08%

 1972-4-0.23% 0.42% 0.21%-0.10%-0.38%-0.08%

 1976-4 0.50%-0.78%-0.21% 0.52%-0.07%-0.03%

 Avg -0.04%-0.24% 0.16% 0.21%-0.08%-0.01%

 1980-4 0.39% 0.55% 1.37%-0.45%-0.16% 1.70%

 1984-4 1.81% 0.58% 1.46%-0.21%-0.03% 3.61%

 1988-4-0.64% 1.02% 1.47%-0.30%-0.38% 1.16%

 1992-4-0.07% 0.16%-0.05%-0.18% 0.08%-0.05%

 1996-4 0.30%-0.05%-0.61% 0.63% 0.31% 0.57%

 Avg0.36% 0.45% 0.73%-0.10%-0.04% 1.40%

 2000-4 1.47%-0.67% 0.21%-1.82%-0.74%-1.55%

 2004-4 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

 2008-4 0.01%-0.28% 0.58%-2.94%-0.37%-3.00%

 2012-4 0.14% 0.98%-0.17%-2.23% 0.72%-0.55%

 2016-4 0.58% 0.27%-0.17% 1.34%-3.59%-1.57%

 Avg0.55% 0.07% 0.12%-1.41%-1.00%-1.67%

SPX summary for PY4 1956 - 2016 

 Avg0.22% 0.10% 0.37%-0.30%-0.32% 0.05%

 Win% 60% 53% 64% 40% 33% 47%

SPX summary for all years 1953 - 2019

 Avg -0.17% 0.10% 0.04%-0.06%-0.17%-0.26%

 Win% 40% 55% 51% 50% 45% 48%

Conclusion

We do not have markets these days.The Fed is buying everything.

The strongest sectors last week were Electronics and Internet; the weakest were Energy Services (down from the strongest last week) and Utilities. 

I expect the major averages to be higher on Friday June 26 than they were on Friday June 19.In the PPT I trust.