Technical Market Report For September 28, 2024
The good news is:
- The Dow Jones Industrial Average (DJIA) closed at an all time high last Friday and the S&P 500 (SPX) closed at an all time high last Thursday. Same as last week.
The Negatives
Negatives are difficult to find.
The Positives
The first chart covers the last 6 months showing the Nasdaq composite (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 continued to lead prices upward last week.
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.
NY NH declined a little failing to confirm the index all time high by a small margin.
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 was pretty flat last week.
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 moving upward.
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.
NY HL & UD SI MoM’s turned downward while the AD remained strong last week.
The next chart is similar to the NYSE chart above; except it shows the OTC, in blue and the SI MoM’s have been generated from Nasdaq breadth data.
OTC AD SI MoM turned downward while the others remained strong.
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 remained in positive territory.
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 remained very strong.
Seasonality
Next week includes the last trading day of September and the 1st 4 trading days of October 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 mixed and weaker during the 4th year of the Presidential Cycle than other years,
Report for the last day of September and first 4 days of October.
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)
Day1 Day1 Day2 Day3 Day4 Totals
1964-4 0.26% 3 0.09% 4 -0.25% 5 0.07% 1 0.19% 2 0.35%
1968-4 -0.04% 1 0.20% 2 0.61% 4 0.37% 5 -0.12% 1 1.02%
1972-4 0.37% 5 -0.24% 1 0.14% 2 -0.15% 3 -0.99% 4 -0.87%
1976-4 -0.01% 4 -0.90% 5 0.02% 1 -0.78% 2 -0.80% 3 -2.47%
1980-4 1.06% 2 0.99% 3 0.63% 4 1.37% 5 1.33% 1 5.39%
Avg 0.33% 0.03% 0.23% 0.18% -0.08% 0.68%
1984-4 -0.14% 5 -0.83% 1 -0.71% 2 -0.52% 3 0.16% 4 -2.05%
1988-4 0.43% 5 -0.83% 1 -0.07% 2 0.08% 3 0.16% 4 -0.23%
1992-4 0.98% 3 -0.85% 4 -1.16% 5 -1.12% 1 0.94% 2 -1.21%
1996-4 -0.26% 1 -0.44% 2 1.20% 3 -0.23% 4 1.17% 5 1.43%
2000-4 -2.79% 5 -2.83% 1 -3.17% 2 1.95% 3 -1.45% 4 -8.29%
Avg -0.36% -1.16% -0.78% 0.03% 0.20% -2.07%
2004-4 0.15% 4 2.39% 5 0.53% 1 0.16% 2 0.79% 3 4.02%
2008-4 4.97% 2 -0.62% 3 -4.48% 4 -1.48% 5 -4.34% 1 -5.95%
2012-4 -0.65% 5 -0.09% 1 0.21% 2 0.49% 3 0.45% 4 0.41%
2016-4 0.81% 5 -0.21% 1 -0.21% 2 0.50% 3 -0.17% 4 0.72%
2020-4 0.74% 3 1.42% 4 -2.22% 5 2.32% 1 -1.57% 2 0.70%
Avg 1.21% 0.58% -1.24% 0.40% -0.97% -0.02%
OTC summary for PY4 1964 - 2020
Averages 0.39% -0.18% -0.60% 0.20% -0.28% -0.47%
% Winners 60% 33% 47% 60% 53% 53%
MDD 10/6/2008 10.53% -- 10/3/2000 8.54% -- 10/5/1992 3.10%
OTC summary for all years 1963 - 2023
Averages -0.02% -0.02% -0.10% 0.27% 0.04% 0.17%
% Winners 49% 53% 52% 64% 59% 62%
MDD 10/6/1998 12.87% -- 10/6/2008 10.53% -- 10/3/2000 8.54%
SPX PY4
Day1 Day1 Day2 Day3 Day4 Totals
1928-4 1.09% 6 -0.05% 1 -0.47% 2 -0.33% 3 0.33% 4 0.57%
1932-4 -0.25% 5 0.87% 6 -1.10% 1 -0.12% 2 -8.20% 3 -8.81%
1936-4 -0.31% 3 0.19% 4 1.93% 5 0.98% 6 0.12% 1 2.91%
1940-4 0.09% 1 1.41% 2 0.46% 3 0.09% 4 -0.83% 5 1.23%
1944-4 0.31% 6 0.16% 1 0.00% 2 0.55% 3 0.62% 4 1.64%
1948-4 -0.39% 4 1.16% 5 0.51% 6 0.63% 1 -0.19% 2 1.73%
1952-4 -0.57% 2 -0.24% 3 0.16% 4 -0.08% 5 -0.24% 1 -0.97%
1956-4 -0.55% 5 -1.43% 1 1.83% 2 1.67% 3 0.02% 4 1.54%
1960-4 1.71% 5 -0.30% 1 -0.69% 2 0.75% 3 0.62% 4 2.09%
Avg 0.10% -0.13% 0.36% 0.70% 0.17% 1.21%
1964-4 -0.07% 3 -0.12% 4 0.33% 5 0.45% 1 0.06% 2 0.65%
1968-4 0.35% 1 0.19% 2 0.47% 4 0.36% 5 -0.01% 1 1.35%
1972-4 0.18% 5 -0.35% 1 0.13% 2 -0.19% 3 -1.09% 4 -1.32%
1976-4 -0.12% 4 -1.02% 5 -0.13% 1 -0.77% 2 -0.25% 3 -2.30%
1980-4 1.55% 2 1.33% 3 0.76% 4 0.97% 5 1.86% 1 6.46%
Avg 0.38% 0.01% 0.31% 0.16% 0.11% 0.97%
1984-4 -0.52% 5 -0.89% 1 -0.63% 2 -0.70% 3 0.30% 4 -2.44%
1988-4 -0.25% 5 -0.19% 1 -0.28% 2 0.46% 3 0.19% 4 -0.07%
1992-4 0.24% 3 -0.36% 4 -1.40% 5 -0.71% 1 -0.10% 2 -2.32%
1996-4 0.17% 1 0.26% 2 0.71% 3 -0.18% 4 1.25% 5 2.21%
2000-4 -1.49% 5 -0.02% 1 -0.68% 2 0.55% 3 0.14% 4 -1.51%
Avg -0.37% -0.24% -0.45% -0.12% 0.36% -0.82%
2004-4 -0.02% 4 1.52% 5 0.32% 1 -0.06% 2 0.67% 3 2.43%
2008-4 5.27% 2 -0.32% 3 -4.03% 4 -1.35% 5 -3.85% 1 -4.27%
2012-4 -0.45% 5 0.27% 1 0.09% 2 0.36% 3 0.72% 4 0.98%
2016-4 0.80% 5 -0.33% 1 -0.50% 2 0.43% 3 0.05% 4 0.45%
2020-4 0.83% 3 0.53% 4 -0.96% 5 1.80% 1 -1.40% 2 0.80%
Avg 1.29% 0.33% -1.01% 0.24% -0.76% 0.08%
SPX summary for PY4 1928 - 2020
Averages 0.32% 0.09% -0.13% 0.23% -0.38% 0.13%
% Winners 50% 46% 50% 58% 58% 63%
MDD 10/5/1932 9.33% -- 10/6/2008 9.26% -- 10/3/1984 2.71%
SPX summary for all years 1928 - 2023
Averages -0.02% 0.09% 0.13% 0.23% -0.13% 0.29%
% Winners 45% 52% 63% 57% 54% 60%
MDD 10/5/1931 12.33% -- 10/5/1932 9.33% -- 10/6/2008 9.26%
October
Since 1963, over all years, the OTC in October has been up 56% of the time with an average gain of 0.9% During the 4th year of the Presidential Cycle October has been up 33% time with an average loss of -1.9 (helped considerably by a 17.4% loss in 2008). The best October ever for the OTC was 1974 (+17.2%), the worst 1987 (-27.2%).
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 1st 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 1st trading day and at 5 trading day intervals after that. The line is solid on the 11th trading day, the dividing point.
In the chart below the blue line shows the average of the OTC in October over all years since 1963 while the green line shows the average during the 4th year of the Presidential Cycle over the same period.
Since 1928 the SPX has been up 59% of the time in October with an average gain of 0.5%. During the 4th year of the Presidential Cycle the SPX has been up 57% of the time with an average loss of -0.4% (helped by losses of 13.9% in 1932 and 16.8% in 2008). The best October ever for the SPX was 1974 (+16.3%), the worst 1987 (-21.8%).
The chart below is similar to the one above except it shows the average daily performance over all years for the SPX in October in red and the performance during the 4th year of the Presidential Cycle in green.
Since 1979 the Russell 2000 (R2K) has been up 58% of the time in October with an average loss of -0.2%. During the 4th year of the Presidential Cycle the R2K has been up 36% of the time with an average loss of -2.4%. The best October ever for the R2K, 2011 (+15.0%), the worst 1987 (-30.7%)
The chart below is similar to those above except it shows the daily performance over all years of the R2K in October in magenta and the performance during the 4th year of the Presidential Cycle in green.
Since 1885 the Dow Jones Industrial Average (DJIA) has been up 56% of the time in October with an average gain of 0.4%. During the 4th year of the Presidential Cycle the DJIA has been up 59% of the time in October with an average gain of 0.6%. The best October ever for the DJIA was 2022 (+14.0%), the worst 1987 (-23.2%).
The chart below is similar to those above except it shows the daily performance over all years of the DJIA in October in blue and the performance during the 4th year of the Presidential Cycle in green.
Conclusion
Again the blue chip indices closed at all time highs on Thursday and Friday.
Seasonality for the coming week has been mixed.
The strongest sectors last week were Precious Metals (for the 3rd week in a row) and Basic Materials while the weakest were Energy and Health Care (for the 2nd week).
I expect the major averages to be higher on Friday October 4 than they were on Friday September 2Last weeks negative forecast was a miss.
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Disclosure: None