The good news is:

• Seasonality for next week has been positive.

The Negatives

The first chart covers the last 6 months showing the S&P 500 (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 1^st trading day of each month.  

NY NH remained flat at a low level.  Leadership is very narrow.

 

The next chart is similar to the 1^st one except it shows the Nasdaq composite (OTC) in blue and OTC NH in green has been calculated with Nasdaq data.  

OTC NH; Ditto.

 

The Positives

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 finished the week slightly positive.

 

The next chart is similar to the one above except it shows the S&P 500 (SPX) in red and NY HL ratio, in blue, has been calculated with NYSE data.

NY HLR recovered to a comfortable 67%. 

 

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 turned back upward last week.

 

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 has remained positive.

 

Seasonality

Next week includes the first 5 trading days of June during the 1^st 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 1928 to 2024.  There are summaries for both the 1^st year of the Presidential Cycle and all years combined.  

Seasonality for next week has been positive by all measures.

 

Report for the first 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 1 (PY1)

               Day1      Day2      Day3      Day4      Day5      Totals

 1965-1       0.40% 2  -1.17% 3  -0.50% 4  -0.38% 5   0.14% 1    -1.52%

 1969-1       0.28% 1  -0.49% 2  -0.15% 3  -0.52% 4   0.44% 5    -0.45%

 1973-1      -0.33% 5  -1.50% 1   0.93% 2  -0.01% 3   0.86% 4    -0.05%

 1977-1       0.28% 3  -0.06% 4   0.41% 5  -0.08% 1   0.06% 2     0.61%

 1981-1      -0.20% 1  -1.54% 2  -0.32% 3   0.36% 4   0.74% 5    -0.96%

 

 Avg          0.09%    -0.95%     0.07%    -0.13%     0.45%      -0.47%

 

 1985-1      -0.07% 1   0.14% 2   0.27% 3   0.03% 4  -0.28% 5     0.08%

 1989-1       0.48% 4   0.74% 5  -0.84% 1   0.03% 2   0.95% 3     1.35%

 1993-1       0.54% 2   0.22% 3   0.05% 4  -0.60% 5  -1.05% 1    -0.84%

 1997-1       0.32% 1  -1.42% 2  -0.38% 3   0.75% 4   1.06% 5     0.34%

 2001-1       1.84% 5   0.30% 1   3.61% 2  -0.72% 3   2.09% 4     7.13%

 

 Avg          0.62%     0.00%     0.54%    -0.10%     0.55%       1.61%

 

 2005-1       0.95% 3   0.48% 4  -1.26% 5   0.21% 1  -0.41% 2    -0.04%

 2009-1       3.06% 1   0.44% 2  -0.59% 3   1.32% 4  -0.03% 5     4.20%

 2013-1       0.27% 1  -0.58% 2  -1.27% 3   0.66% 4   1.32% 5     0.41%

 2017-1       0.78% 4   0.94% 5  -0.16% 1  -0.33% 2   0.36% 3     1.59%

 2021-1      -0.09% 2   0.14% 3  -1.03% 4   1.47% 5   0.49% 1     0.98%

 

 Avg          1.00%     0.29%    -0.86%     0.67%     0.34%       1.43%

 

OTC summary for PY1 1965 - 2021

Averages      0.57%    -0.22%    -0.08%     0.15%     0.45%       0.86%

% Winners       73%       53%       33%       53%       73%         60%

MDD  6/3/1981  2.05% --  6/4/1965  2.05% --  6/5/2013  1.84%

 

OTC summary for all years 1963 - 2024

Averages      0.17%     0.45%     0.12%     0.11%     0.08%       0.92%

% Winners       59%       73%       58%       58%       52%         68%

MDD 6/7/2010  5.61% --  6/7/2002  4.97% --  6/7/2011  4.72%

 

SPX PY1

               Day1      Day2      Day3      Day4      Day5      Totals

 1929-1       0.36% 6   1.40% 1   1.46% 2  -0.20% 3   0.20% 4     3.23%

 1933-1       1.04% 4   4.00% 5  -2.76% 6   2.23% 1  -0.30% 2     4.21%

 1937-1      -1.85% 2   0.69% 3   0.19% 4   1.12% 5  -0.18% 6    -0.04%

 1941-1       0.11% 1   1.18% 2  -0.11% 3   0.42% 4  -0.11% 5     1.49%

 

 1945-1       0.13% 5   0.20% 6  -0.07% 1  -0.13% 2  -0.47% 3    -0.33%

 1949-1      -0.35% 3   0.00% 4  -0.64% 5  -1.64% 1   0.14% 2    -2.48%

 1953-1      -1.59% 1   0.29% 2  -0.17% 3  -0.62% 4   0.25% 5    -1.84%

 1957-1      -0.13% 1  -0.19% 2  -0.02% 3   0.70% 4   0.11% 5     0.47%

 1961-1       0.00% 4   0.26% 5   0.52% 1  -0.28% 2  -0.37% 3     0.12%

 

 Avg         -0.39%     0.11%    -0.07%    -0.40%    -0.07%      -0.81%

 

 1965-1      -0.79% 2  -0.72% 3  -0.22% 4   0.24% 5  -0.26% 1    -1.75%

 1969-1      -0.50% 1  -0.30% 2  -0.04% 3   0.17% 4  -0.62% 5    -1.30%

 1973-1      -0.97% 5  -0.92% 1   1.60% 2  -0.30% 3   1.47% 4     0.88%

 1977-1       0.84% 3  -0.20% 4   0.98% 5  -0.47% 1   0.51% 2     1.67%

 1981-1      -0.14% 1  -1.35% 2   0.07% 3   0.19% 4   0.96% 5    -0.27%

 

 Avg         -0.31%    -0.70%     0.48%    -0.03%     0.41%      -0.15%

 

 1985-1      -0.12% 1   0.38% 2   0.06% 3   0.47% 4  -0.72% 5     0.07%

 1989-1       0.45% 4   1.10% 5  -1.07% 1   0.69% 2   0.84% 3     2.00%

 1993-1       0.81% 2   0.00% 3  -0.30% 4  -0.54% 5  -0.53% 1    -0.55%

 1997-1      -0.23% 1  -0.10% 2  -0.63% 3   0.39% 4   1.73% 5     1.16%

 2001-1       0.39% 5   0.51% 1   1.30% 2  -1.05% 3   0.55% 4     1.69%

 

 Avg          0.26%     0.38%    -0.13%    -0.01%     0.37%       0.87%

 

 2005-1       0.90% 3   0.17% 4  -0.69% 5   0.12% 1  -0.02% 2     0.49%

 2009-1       2.58% 1   0.20% 2  -1.37% 3   1.15% 4  -0.25% 5     2.30%

 2013-1       0.59% 1  -0.55% 2  -1.38% 3   0.85% 4   1.28% 5     0.80%

 2017-1       0.76% 4   0.37% 5  -0.12% 1  -0.28% 2   0.16% 3     0.89%

 2021-1      -0.05% 2   0.14% 3  -0.36% 4   0.88% 5  -0.08% 1     0.54%

 

 Avg          0.96%     0.07%    -0.78%     0.55%     0.22%       1.00%

 

SPX summary for PY1 1929 - 2021

Averages      0.09%     0.27%    -0.16%     0.17%     0.18%       0.56%

% Winners       50%       63%       33%       58%       50%         67%

MDD  6/3/1933  2.76% --  6/6/1949  2.61% --  6/4/1953  2.08%

 

SPX summary for all years 1928 - 2024

Averages      0.00%     0.26%     0.19%     0.22%     0.03%       0.68%

% Winners       53%       64%       53%       55%       49%         63%

MDD 6/2/1931  6.30% --  6/7/2010  4.75% --  6/7/2011  4.48%

 

June

Since 1963, over all years, the OTC in June has been up 58% of the time with an average gain of 0.7%.  During the 1^st year of the Presidential Cycle the OTC in June has been up 47% of the time with an average loss of -0.4% (helped considerably by 9.2% & 7.1% losses in 1965 & 1969 respectively).  The best June ever for the OTC was 2000 (+16.6%), the worst 2002 (-9.4%).

The average month has 21 trading days.  The chart below has been calculated by averaging the daily percentage change for each of the 1^st 11 trading days and each of the last 10.  In months when there were more than 21 trading days some of the days in the middle were not counted.  In months when there were less than 21 trading days some of the days in the middle of the month were counted twice.  Dashed vertical lines have been drawn after the 1^st trading day and at 5 trading day intervals after that.  The line is solid on the 11^th trading day, the dividing point.

In the chart below the blue line shows the average daily performance of the OTC in June over all years since 1963, while the green line shows the average during the 1^st year of the Presidential Cycle over the same period.

 

Since 1928 the SPX has been up 58% of the time in June with an average gain of 0.8%.  During the 1^st year of the Presidential Cycle the SPX has been up 42% of the time with an average gain of 0.6%.  The best June ever for the SPX was 1938 (+24.7%) the worst 1930 (-16.5%).

The chart below is similar to the one above except it shows the average daily performance over all years since 1928 for the SPX in June in red and the average daily performance during the 1^st year of the Presidential Cycle, over the same period, in green.

 

Since 1979 the Russell 2000 (R2K) has been up 63% of the time in June with an average gain of 0.8%.  During the 1^st year of the Presidential Cycle the R2K has been up 73% of the time with an average gain of 1.2%.  The best June ever for the R2K, 2000 (+8.6%), the worst 2022 (-8.4%)

The chart below is similar to those above except it shows the average daily performance of the R2K, over all years since 1979, in June in magenta and the average daily performance during the 1^st year of the Presidential Cycle in green.

 

Since 1885 the Dow Jones Industrial Average (DJIA) has been up 47% of the time in June with an average gain of 0.2%.  During the 1^st year of the Presidential Cycle the DJIA has been up 37% of the time in June with an average gain of 0.2%.  The best June ever for the DJIA 1938 (+24.3%), the worst 1930 (-17.7%)

The chart below is similar to those above except it shows the average daily performance over all years for the DJIA in June in grey and the average performance during the 1^st year of the Presidential Cycle in green.

 

Conclusion

The market indices had a mixed week; 2 days up and 2 days down for most of them..

The strongest sectors last week were Precious Metals and Utilities (both on top for the 2^nd week in a row) while the weakest were Energy and Electronics (for the 2^nd week).

I expect the major averages to be higher on Friday June 6 than they were on Friday May 30.

Last week's negative forecast was a miss. 

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