Technical Market Report For September 20, 2025
The good news is:
- The Russell 2000 (R2K) closed at an all time high last Thursday for the 1st time in nearly a year. The S&P 500 (SPX), Dow Jones Industrial Average (DJIA) and the Nasdaq composite (OTC) closed at all time highs last Friday.
The Negatives
On Friday the NYSE recorded its largest daily downside volume since December 2023.
The Positives
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 confirmed the OTC all time high last Friday.
The next chart is similar to the one above except it shows the SPX in red and OTC NH in green has been calculated with NYSE data.
The SPX all time high last Friday was confirmed by NY NH.
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; NYSE new lows remained at insignificant levels.
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.
Nasdaq new lows also remained at unthreatening levels.
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 continued rising, finishing the week at a strong 82%.
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 fell slightly, finishing the week at a strong 80%.
Seasonality
Next week includes the 5 trading days prior to the 4th Friday of September during the 1st 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 1953 to 2024. There are summaries for both the 1st 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.
Seasonality for the coming week has been negative by all measures.
Report for the week before the 4th Friday of September.
The number following the year is the position in the Presidential Cycle.
Daily returns from Monday through the 4th Friday.
OTC Presidential Year 1 (PY1)
Year Mon Tue Wed Thur Fri Totals
1965-1 0.30% 0.26% -0.22% 0.26% -0.69% -0.09%
1969-1 0.40% 0.41% 0.77% -0.17% -0.27% 1.14%
1973-1 0.21% 0.10% 0.75% 0.59% -0.06% 1.58%
1977-1 -0.39% -0.12% -0.47% -0.29% 0.10% -1.17%
1981-1 0.08% -0.62% -1.78% 0.22% -2.92% -5.03%
Avg 0.12% 0.01% -0.19% 0.12% -0.77% -0.71%
1985-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
1989-1 -0.15% 0.03% -0.07% 0.06% 0.23% 0.11%
1993-1 0.01% -0.90% 1.63% 0.90% 0.32% 1.97%
1997-1 0.54% 0.47% -0.59% -0.50% 0.20% 0.11%
2001-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Avg 0.14% -0.13% 0.32% 0.15% 0.25% 0.73%
2005-1 -0.70% -0.65% -1.16% 0.20% 0.29% -2.02%
2009-1 0.24% 0.39% -0.69% -1.12% -0.79% -1.97%
2013-1 -0.25% 0.08% -0.19% 0.70% -0.15% 0.18%
2017-1 0.10% 0.10% -0.08% -0.51% 0.07% -0.33%
2021-1 -2.19% 0.22% 1.02% 1.04% -0.03% 0.06%
Avg -0.56% 0.03% -0.22% 0.06% -0.12% -0.82%
OTC summary for PY1 1965 - 2021
Avg -0.14% -0.02% -0.08% 0.11% -0.29% -0.42%
Win% 62% 69% 31% 62% 46% 54%
OTC summary for all years 1963 - 2024
Avg -0.26% -0.08% -0.02% -0.33% -0.14% -0.83%
Win% 42% 52% 53% 40% 45% 43%
SPX PY1
Year Mon Tue Wed Thur Fri Totals
1953-1 -0.31% 1.40% 0.13% 0.04% 0.26% 1.52%
1957-1 -2.29% 0.68% -1.21% 0.26% -0.05% -2.61%
1961-1 -0.65% -0.79% 0.42% 0.04% -0.40% -1.38%
1965-1 0.03% -0.30% 0.46% -0.40% 0.18% -0.03%
1969-1 0.46% 0.00% -0.14% -0.76% -0.64% -1.08%
1973-1 0.15% 0.64% 0.72% 0.23% -0.60% 1.15%
1977-1 -0.65% 0.04% -0.82% -0.01% -0.05% -1.50%
1981-1 0.84% -0.48% -0.88% -0.55% -1.95% -3.02%
Avg 0.17% -0.02% -0.13% -0.30% -0.61% -0.90%
1985-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
1989-1 0.48% -0.05% -0.02% -0.22% 0.39% 0.58%
1993-1 -0.82% -0.46% 0.72% 0.34% -0.02% -0.25%
1997-1 0.52% -0.37% -0.78% -0.70% 0.78% -0.55%
2001-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Avg 0.06% -0.29% -0.03% -0.19% 0.38% -0.07%
2005-1 -0.56% -0.79% -0.91% 0.37% 0.06% -1.83%
2009-1 -0.34% 0.66% -1.01% -0.95% -0.61% -2.25%
2013-1 -0.47% -0.26% -0.27% 0.35% -0.41% -1.06%
2017-1 0.15% 0.11% 0.06% -0.30% 0.06% 0.08%
2021-1 -1.70% -0.08% 0.95% 1.21% 0.15% 0.53%
Avg -0.58% -0.07% -0.24% 0.13% -0.15% -0.91%
SPX summary for PY1 1953 - 2021
Avg -0.32% 0.00% -0.16% -0.07% -0.18% -0.73%
Win% 44% 40% 44% 50% 44% 31%
SPX summary for all years 1953 - 2024
Avg -0.40% -0.06% -0.09% -0.21% -0.14% -0.89%
Win% 33% 45% 49% 41% 40% 36%
Conclusion
Confirmed all time highs for all of the major indices, higher prices in the near future.
Seasonality next week is the weakest we have seen in a while.
We had the largest NYSE downside volume number in nearly 2 years; someone big got out.
The strongest sectors last week were Precious Metals (for the 4th week) and Electronics while the weakest were Transportation and Leisure (both for the 2nd week).
I expect the major averages to be higher on Friday September 26 than they were on Friday September 19.
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