Technical Market Report For June 22, 2024
The good news is
- The Nasdaq composite (OTC) and the S&P 500 (SPX) closed at all time highs last Tuesday.
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 latest all time index high.
(Click on image to enlarge)
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 MoM’s are at or near their lows.
(Click on image to enlarge)
The next chart is similar to the one above; except it shows the OTC, in blue and the SI MoM’s have been generated from Nasdaq breadth data.
OTC SI’s are also at or near their lows.
(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 moved more deeply into negative territory.
(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 modestly 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 last 5 trading days 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 1928 to 2023. There are summaries for both the 4th year of the Presidential Cycle and all years combined.
Average returns for the coming week have been modest and mixed.
Report for the last 5 days of June.
The number following the year represents its position in the Presidential Cycle.
The number following the daily return represents the day of the week;
1 = Monday, 2 = Tuesday etc.
OTC Presidential Year 4 (PY4)
Day5 Day4 Day3 Day2 Day1 Totals
1964-4 -0.13% 3 0.38% 4 0.28% 5 0.40% 1 -0.05% 2 0.88%
1968-4 -0.14% 5 0.19% 1 0.39% 2 -0.33% 4 -0.22% 5 -0.11%
1972-4 -0.70% 1 0.37% 2 -0.16% 3 -0.18% 4 0.56% 5 -0.10%
1976-4 0.68% 4 0.28% 5 -0.20% 1 0.27% 2 0.23% 3 1.26%
1980-4 0.43% 2 0.69% 3 0.16% 4 0.11% 5 -0.88% 1 0.51%
Avg 0.03% 0.38% 0.09% 0.05% -0.07% 0.49%
1984-4 -0.11% 1 -0.82% 2 -0.70% 3 0.47% 4 0.56% 5 -0.60%
1988-4 0.15% 5 -0.67% 1 0.69% 2 0.00% 3 0.77% 4 0.93%
1992-4 -0.36% 3 -0.58% 4 -0.07% 5 2.00% 1 0.86% 2 1.86%
1996-4 0.64% 1 -0.87% 2 -1.65% 3 1.10% 4 1.63% 5 0.85%
2000-4 1.74% 1 -1.36% 2 2.11% 3 -1.60% 4 2.29% 5 3.18%
Avg 0.41% -0.86% 0.08% 0.39% 1.22% 1.24%
2004-4 -0.27% 4 0.49% 5 -0.28% 1 0.75% 2 0.63% 3 1.32%
2008-4 -0.73% 2 1.39% 3 -3.33% 4 -0.25% 5 -0.98% 1 -3.89%
2012-4 -1.95% 1 0.63% 2 0.74% 3 -0.90% 4 3.00% 5 1.54%
2016-4 -4.12% 5 -2.41% 1 2.12% 2 1.86% 3 1.33% 4 -1.22%
2020-4 -2.19% 3 1.09% 4 -2.59% 5 1.20% 1 1.87% 2 -0.63%
Avg -1.85% 0.24% -0.67% 0.53% 1.17% -0.58%
OTC summary for PY4 1964 - 2020
Averages -0.47% -0.08% -0.17% 0.33% 0.77% 0.39%
% Winners 33% 60% 47% 60% 73% 60%
MDD 6/27/2016 6.43% -- 6/30/2008 4.51% -- 6/26/2020 3.69%
OTC summary for all years 1963 - 2023
Averages -0.28% -0.06% 0.03% 0.11% 0.29% 0.09%
% Winners 39% 46% 56% 62% 64% 59%
MDD 6/30/2010 6.43% -- 6/27/2016 6.43% -- 6/30/1970 6.40%
SPX PY4
Day5 Day4 Day3 Day2 Day1 Totals
1928-4 1.14% 2 0.96% 3 1.11% 4 0.37% 5 0.26% 6 3.84%
1932-4 -0.22% 6 -3.27% 1 0.00% 2 1.58% 3 -1.77% 4 -3.68%
1936-4 -1.06% 4 -0.33% 5 0.13% 6 -0.53% 1 -0.34% 2 -2.13%
1940-4 -2.87% 2 -0.61% 3 1.03% 4 1.32% 5 0.00% 6 -1.14%
1944-4 0.54% 1 0.31% 2 -0.54% 3 -0.08% 4 0.31% 5 0.54%
1948-4 -0.24% 4 -0.36% 5 -1.31% 1 0.48% 2 0.30% 3 -1.12%
1952-4 0.16% 2 0.24% 3 0.36% 4 0.32% 5 0.52% 1 1.62%
1956-4 -0.39% 1 0.67% 2 0.75% 3 0.13% 4 -0.34% 5 0.82%
1960-4 0.16% 5 -0.61% 1 -0.68% 2 0.00% 3 -0.04% 4 -1.17%
Avg 0.05% 0.05% -0.28% 0.17% 0.15% 0.14%
1964-4 0.36% 3 0.19% 4 0.31% 5 0.22% 1 0.06% 2 1.13%
1968-4 0.15% 5 -0.27% 1 -0.31% 2 -0.10% 4 -0.40% 5 -0.93%
1972-4 -0.73% 1 -0.10% 2 -0.33% 3 -0.19% 4 0.30% 5 -1.05%
1976-4 0.52% 4 -0.07% 5 -0.28% 1 0.42% 2 0.40% 3 1.00%
1980-4 0.55% 2 1.37% 3 -0.45% 4 -0.16% 5 -1.52% 1 -0.21%
Avg 0.17% 0.22% -0.21% 0.04% -0.23% -0.01%
1984-4 -0.32% 1 -0.82% 2 -0.70% 3 0.79% 4 0.22% 5 -0.82%
1988-4 -0.38% 5 -1.72% 1 1.21% 2 -0.49% 3 0.93% 4 -0.45%
1992-4 -0.05% 3 -0.18% 4 0.08% 5 1.36% 1 -0.20% 2 1.02%
1996-4 0.30% 1 -0.05% 2 -0.61% 3 0.63% 4 0.31% 5 0.57%
2000-4 0.96% 1 -0.32% 2 0.29% 3 -0.85% 4 0.85% 5 0.92%
Avg 0.10% -0.62% 0.05% 0.29% 0.42% 0.25%
2004-4 -0.30% 4 -0.55% 5 -0.10% 1 0.25% 2 0.41% 3 -0.28%
2008-4 -0.28% 2 0.58% 3 -2.94% 4 -0.37% 5 0.13% 1 -2.88%
2012-4 -1.60% 1 0.48% 2 0.90% 3 -0.21% 4 2.49% 5 2.06%
2016-4 -3.59% 5 -1.81% 1 1.78% 2 1.70% 3 1.36% 4 -0.56%
2020-4 -2.59% 3 1.10% 4 -2.42% 5 1.47% 1 1.54% 2 -0.90%
Avg -1.67% -0.04% -0.56% 0.57% 1.18% -0.51%
SPX summary for PY4 1928 - 2020
Averages -0.41% -0.22% -0.11% 0.34% 0.24% -0.16%
% Winners 42% 38% 46% 58% 67% 42%
MDD 6/27/2016 5.34% -- 6/26/2020 3.90% -- 6/30/1932 3.70%
SPX summary for all years 1928 - 2023
Averages -0.25% 0.00% -0.08% 0.13% 0.17% -0.03%
% Winners 42% 46% 49% 59% 59% 49%
MDD 6/29/1950 8.88% -- 6/29/1939 5.93% -- 6/30/2010 5.62%
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 modest and mixed.
The strongest sectors last week were Technology and Finance while the weakest were Basic Materials and Utilities.
I expect the major averages to be lower on Friday June 28 than they were on Friday June 21.
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