The good news is the Nasdaq composite (OTC) finished the week at a new all time high.

The Negatives

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

The weakness of OTC NH indicates minimal broad market support. All that matters politically is the index is going up.

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. Ditto the NYSE.

The next chart covers the past two years showing the OTC in blue and a 5% trend (39 day EMA) of Nasdaq down side volume (OTC DV 5%), in orange. OTC DV 5% has been plotted on an inverted Y axis so diminishing down side volume moves the indicator upward (up is good).  

What is interesting here is selling volume has been holding at a higher level than it was at its peak during the market collapse in late December 2018. This time the index is hitting an all time high. Everything is fake.

The Positives

There were literally no new lows on the NYSE last Friday. I did not look carefully, but that could be a first.

The Fed is buying everything including junk.

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 is high because there are no new lows.  

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.

Ditto OTC HL Ratio..

Seasonality

Next week includes the five trading days prior to the second 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 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 the coming week have been mixed.

Report for the week before the seconnd Friday of June.

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

Daily returns from Monday to 2nd Friday.

OTC Presidential Year 4 (PY4)

 Year Mon Tue Wed Thur Fri Totals

 1964-4-0.03%-0.46% 0.44% 0.41% 0.13% 0.49%

 1968-4 0.38%-0.71% 0.00% 0.21%-0.32%-0.44%

 1972-4-0.58%-0.56%-0.76% 0.05%-0.38%-2.23%

 1976-4-0.60%-0.11%-0.20% 0.41% 0.46%-0.04%

 1980-4 0.21% 0.75% 0.69% 0.06% 0.82% 2.54%

 1984-4 1.21%-0.13% 0.44% 0.17% 0.19% 1.88%

 1988-4 0.77%-0.11% 1.08% 0.31% 0.43% 2.47%

 1992-4-0.58%-1.41%-0.71%-0.36% 0.32%-2.74%

 1996-4 0.02% 0.07% 0.37%-0.79%-1.01%-1.35%

 Avg0.32%-0.17% 0.38%-0.12% 0.15% 0.56%

 2000-4 0.22%-1.71% 2.21%-0.36% 1.29% 1.65%

 2004-4-1.49% 1.30% 0.13%-0.73% 0.15%-0.64%

 2008-4-0.61%-0.43%-2.24% 0.43% 2.09%-0.76%

 2012-4 0.46% 0.66% 2.40%-0.48% 0.97% 4.00%

 2016-4 0.53%-0.14% 0.26%-0.32%-1.29%-0.96%

 Avg -0.18%-0.06% 0.55%-0.29% 0.64% 0.66%

OTC summary for PY4 1964 - 2016 

 Avg -0.01%-0.21% 0.32%-0.07% 0.27% 0.27%

 Win% 57% 29% 69% 57% 71% 43%

OTC summary for all years 1963 - 2019

 Avg -0.17%-0.17% 0.05% 0.06% 0.02%-0.22%

 Win% 51% 30% 54% 64% 58% 39%

 

SPX PY4

 Year Mon Tue Wed Thur Fri Totals

 1956-4 0.59% 0.02%-0.50% 0.79%-1.85%-0.95%

 1960-4 1.17% 0.95% 0.80% 0.19%-0.05% 3.06%

 1964-4-0.48% 0.64% 0.38% 0.37%-0.16% 0.74%

 1968-4 0.14% 0.25% 0.00%-0.40%-0.12%-0.14%

 1972-4-0.83%-0.56%-0.52%-0.34%-0.39%-2.64%

 1976-4-0.52% 0.17%-0.06% 0.83% 1.37% 1.78%

 Avg -0.10% 0.29% 0.15% 0.13% 0.13% 0.56%

 1980-4 0.45% 0.84% 1.19%-0.43% 0.25% 2.29%

 1984-4 0.72%-0.45% 0.89%-0.06% 0.16% 1.26%

 1988-4 0.23%-0.70% 2.39%-0.49% 0.39% 1.82%

 1992-4-0.03%-0.80%-0.69% 0.44% 0.17%-0.90%

 1996-4-0.17%-0.18%-0.29%-0.17%-0.31%-1.11%

 Avg0.24%-0.26% 0.70%-0.14% 0.13% 0.67%

 2000-4-0.66%-0.67% 0.93%-0.66%-0.32%-1.37%

 2004-4-0.98% 0.60% 0.14%-0.13% 0.26%-0.12%

 2008-4 0.08%-0.24%-1.69% 0.33% 1.50%-0.02%

 2012-4 0.01% 0.57% 2.30%-0.01% 0.81% 3.69%

 2016-4 0.49% 0.13% 0.33%-0.17%-0.92%-0.14%

 Avg -0.21% 0.08% 0.40%-0.13% 0.27% 0.41%

SPX summary for PY4 1956 - 2016 

 Avg0.01% 0.03% 0.37% 0.01% 0.05% 0.45%

 Win% 56% 56% 60% 38% 50% 44%

SPX summary for all years 1953 - 2019

 Avg -0.20%-0.06% 0.05% 0.09% 0.13% 0.01%

 Win% 46% 43% 48% 58% 58% 46%

Conclusion

The strongest sectors last week were Transportation and Banks (same as last week); the weakest were Health and Precious metals.

I expect the major averages to be higher on Friday, June 12, than they were on Friday, June 5.In the PPT I trust.