The good news is:

• The S&P 500 (SPX) and Nasdaq composite (OTC) both closed at all time highs last Wednesday.

 

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 1^st trading day of each month.  

OTC NH failed to confirm last Wednesday’s all time index high. 

 

The next chart is similar to the one above except it shows the S&P 500 in red and OTC NH in green has been calculated with NYSE data.  

NY NH also failed to confirm the all time index high.  

 

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 sharply downward 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 also turned downward.

 

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 turned downward, but remained slightly above the neutral line. 

 

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 also moved downward and also ended the week slightly above the neutral line..

 

Seasonality

Next week includes the first 5 trading days of November 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 the coming week has been mostly positive, but 1929 and 1937 had really bad weeks for the SPX that skewed the averages..

 

Report for the first 5 days of November.

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       0.29% 1   0.36% 3   0.22% 4   0.29% 5  -0.13% 1     1.04%

 1969-1       0.08% 1  -0.18% 2   0.11% 3   0.62% 4   1.24% 5     1.87%

 1973-1      -0.50% 4  -0.63% 5  -1.66% 1  -0.77% 2   0.40% 3    -3.16%

 1977-1      -0.80% 2  -0.24% 3  -0.02% 4   0.75% 5   0.66% 1     0.35%

 1981-1       1.03% 1   0.78% 2   0.48% 3   0.15% 4  -0.02% 5     2.40%

 

 Avg          0.02%     0.02%    -0.17%     0.20%     0.43%       0.50%

 

 1985-1       0.54% 5   0.04% 1   0.35% 2   0.50% 3   0.25% 4     1.67%

 1989-1       0.22% 3  -0.77% 4  -0.04% 5  -1.09% 1   0.31% 2    -1.37%

 1993-1       0.58% 1   0.24% 2  -1.62% 3  -2.03% 4   0.76% 5    -2.07%

 1997-1       2.28% 1   0.07% 2   0.37% 3  -0.85% 4  -1.29% 5     0.59%

 2001-1       3.32% 4  -0.03% 5   2.74% 1   2.31% 2   0.13% 3     8.47%

 

 Avg          1.39%    -0.09%     0.36%    -0.23%     0.03%       1.46%

 

 2005-1      -0.29% 2   1.43% 3   0.74% 4   0.43% 5   0.41% 1     2.71%

 2009-1       0.20% 1   0.40% 2  -0.09% 3   2.42% 4   0.34% 5     3.27%

 2013-1       0.06% 5   0.37% 1   0.08% 2  -0.20% 3  -1.90% 4    -1.59%

 2017-1      -0.16% 3  -0.02% 4   0.73% 5   0.32% 1  -0.27% 2     0.60%

 2021-1       0.63% 1   0.34% 2   1.04% 3   0.81% 4   0.20% 5     3.02%

 

 Avg          0.09%     0.50%     0.50%     0.76%    -0.25%       1.60%

 

OTC summary for PY1 1965 - 2021

Averages      0.50%     0.14%     0.23%     0.24%     0.07%       1.19%

% Winners       73%       60%       67%       67%       67%         73%

MDD  11/4/1993  3.61% --  11/6/1973  3.52% --  11/7/1997  2.13%

 

OTC summary for all years 1963 - 2024

Averages      0.30%     0.19%     0.31%     0.28%     0.06%       1.13%

% Winners       66%       53%       66%       62%       58%         73%

MDD 11/6/2008  9.63% --  11/3/2022  5.87% --  11/7/2007  3.86%

 

Year  1

               Day1      Day2      Day3      Day4      Day5      Totals

 1929-1      -5.26% 1  -9.92% 3   3.69% 4  -0.89% 5  -6.23% 1   -18.61%

 1933-1       1.79% 3   1.10% 4   3.47% 5  -0.31% 6  -0.63% 1     5.41%

 1937-1      -2.27% 1  -4.64% 3  -0.52% 4   0.00% 5  -2.88% 6   -10.30%

 1941-1       0.42% 6   0.52% 1   0.73% 3  -0.83% 4  -0.31% 5     0.53%

 

 1945-1       1.32% 4  -0.06% 5  -0.06% 6   0.53% 1   1.18% 3     2.92%

 1949-1       1.00% 2   0.80% 3  -0.24% 4  -0.49% 5   0.06% 6     1.13%

 1953-1       0.49% 1  -0.61% 3   0.53% 4  -0.12% 5   0.20% 1     0.49%

 1957-1      -1.51% 5  -0.17% 1   0.15% 3   0.59% 4  -1.18% 5    -2.12%

 1961-1       0.16% 3   0.55% 4   0.52% 5   0.78% 1   1.23% 3     3.24%

 

 Avg          0.29%     0.10%     0.18%     0.26%     0.30%       1.13%

 

 1965-1      -0.21% 1   0.09% 3   0.16% 4  -0.10% 5  -0.15% 1    -0.21%

 1969-1      -0.09% 1   0.06% 2   0.44% 3   0.03% 4   0.60% 5     1.05%

 1973-1      -0.55% 4  -0.58% 5  -1.45% 1  -0.53% 2   0.80% 3    -2.31%

 1977-1      -1.07% 2  -0.70% 3   0.06% 4   0.90% 5   0.78% 1    -0.04%

 1981-1       1.90% 1   0.48% 2  -0.05% 3  -0.96% 4  -0.70% 5     0.66%

 

 Avg         -0.01%    -0.13%    -0.17%    -0.13%     0.26%      -0.17%

 

 1985-1       0.90% 5  -0.15% 1   0.59% 2   0.20% 3  -0.07% 4     1.47%

 1989-1       0.25% 3  -0.80% 4  -0.25% 5  -1.48% 1   0.66% 2    -1.63%

 1993-1       0.27% 1  -0.14% 2  -1.16% 3  -1.19% 4   0.45% 5    -1.77%

 1997-1       2.66% 1   0.19% 2   0.21% 3  -0.50% 4  -1.12% 5     1.44%

 2001-1       2.29% 4   0.29% 5   1.44% 1   1.45% 2  -0.27% 3     5.20%

 

 Avg          1.28%    -0.12%     0.17%    -0.31%    -0.07%       0.94%

 

 2005-1      -0.35% 2   1.00% 3   0.43% 4   0.02% 5   0.22% 1     1.31%

 2009-1       0.65% 1   0.24% 2   0.10% 3   1.92% 4   0.25% 5     3.17%

 2013-1       0.29% 5   0.36% 1  -0.28% 2   0.43% 3  -1.32% 4    -0.52%

 2017-1       0.16% 3   0.02% 4   0.31% 5   0.13% 1  -0.02% 2     0.60%

 2021-1       0.18% 1   0.37% 2   0.65% 3   0.42% 4   0.37% 5     1.99%

 

 Avg          0.18%     0.40%     0.24%     0.58%    -0.10%       1.31%

 

SPX summary for PY1 1929 - 2021

Averages      0.14%    -0.49%     0.39%     0.00%    -0.34%      -0.29%

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

MDD  11/11/1929  17.76% --  11/6/1937  9.95% --  11/6/1973  3.08%

 

SPX summary for all years 1928 - 2024

Averages      0.25%    -0.01%     0.29%     0.12%    -0.03%       0.62%

% Winners       64%       57%       66%       57%       53%         68%

MDD 11/11/1929  17.76% --  11/6/2008  10.03% --  11/6/1937  9.95%

 

November

Since 1963, over all years, the OTC in November has been up 74% of the time with an average gain of 2.1%.  During the 1^st year of the Presidential Cycle November has been up 87% time with an average gain of 2.1% The best November ever for the OTC was 2001 (+14.2%), the worst 2000 (-22.9%).

The average month has 21 trading days.  The chart below has been calculated by averaging the daily percentage change of the OTC 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 of the OTC in November 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 62% of the time in November with an average gain of 1.0%.  During the 1^st year of the Presidential Cycle the SPX has been up 67% of the time with an average gain of 0.7%.  The best November ever for the SPX was 1928 +12.0% the worst 1929 -13.4%.

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

 

Since 1979 the Russell 2000 (R2K) has been up 70% of the time in November with an average gain of 2.6%.  During the 1^st year of the Presidential Cycle the R2K has been up 73% of the time in November with an average gain of 2.1%.  The best November ever for the R2K was 2020 +18.3%, the worst 2008 -12.0%.

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

 

Since 1885 the DJIA has been up 61% of the time in November with an average gain of 1.1%.  During the 1^st year of the Presidential Cycle the DJIA has been up 63% of the time in November with an average gain of 0.5%.  The best November ever for the DJIA was 1928 +16.3%, the worst 1973 -14.0%.

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

 

Conclusion

The blue chip averages had a pretty good week until Thursday.

Breadth suffered last week.  Leadership has been deteriorating.

Seasonality for the coming week has been pretty good. 

The strongest sectors last week were Energy (for the 2^nd week) and Telecomm the weakest were Leisure and Utilities.

I expect the major averages to be higher on Friday November 7 than they were on Friday October 30.

All of the major averages, except the Russell 2000, were up last week.  I am calling last week's positive forecast a tie.

 

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