Technical Market Report - Saturday, April 13

The good news is:

  • Seasonality for the coming week has been very strong.

 

The Negatives

Summation indices are running totals of oscillator values.

Short term momentum indicators applied to summation indices make them nearly binary.

The first chart covers the past 6 months showing the S&P 500 (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.  Dashed vertical lines have been drawn on the 1st trading day of each month.

The NY SI Mom’s all continued moving downward; no ambiguity here.

The next chart is similar to the one above; except it shows the NASDAQ composite (OTC), in blue and the SI’s have been generated from NASDAQ breadth data. 

NASDAQ SI’s ditto. 

The next 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.    

OTC NH continued falling after failing to confirm the recent index high.  

The next chart is similar to the one above except it shows the SPX in red and NY NH in green has been calculated with NYSE data.  

NY NH has been falling sharply since confirming the recent all time SPX high.

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 has fallen to well below the neutral line,

 

The Positives

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 fell sharply last week, but remained in positive territory Friday. 

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 fell a bit last week and the actual value of the indicator at 126 is troubling.

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 turned slightly downward, however the actual value of the indicator at 30 is not threatening.


 

Seasonality

Next week includes the 5 trading days prior to the 3rd Friday of April during the 4th year of the Presidential Cycle. The tables below show the daily change, on a percentage basis for that period.  Good Friday usually appears in April and the program is counting Fridays so the data presentation will be less than ideal this month.  

OTC data covers the period from 1963 to 2023 while SPX data runs from 1953 to 2023.  There are summaries for both the 4th 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.  

Average returns for the coming week have been strong by all measures. 

 

Report for the week before the 3rd Friday of April.

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

Daily returns from Monday through 3rd Friday.

 

OTC Presidential Year 4 (PY4)

 Year       Mon     Tue     Wed    Thur    Fri    Totals

 1964-4   0.00%   0.23%   0.26%   0.31%   0.39%   1.19%

 1968-4   0.13%  -0.17%   0.25%   0.95%   1.87%   3.05%

 1972-4  -0.10%   0.27%  -1.06%   0.14%   0.11%  -0.65%

 1976-4   0.47%   1.14%   0.18%   0.21%  -0.40%   1.60%

 1980-4  -1.17%   1.98%   0.89%   1.29%  -0.56%   2.43%

 Avg     -0.17%   0.69%   0.10%   0.58%   0.28%   1.52%

 1984-4  -0.64%   0.05%  -0.07%   0.83%   0.39%   0.57%

 1988-4   0.32%   0.47%  -0.70%  -0.28%   0.23%   0.04%

 1992-4  -2.47%  -0.37%   0.55%  -0.38%  -0.55%  -3.21%

 1996-4   1.30%   1.15%   0.86%   0.63%   0.23%   4.17%

 2000-4  -4.43%   6.57%  -2.19%   3.96%   2.30%   6.21%

 Avg     -1.18%   1.57%  -0.31%   0.95%   0.52%   1.56%

 2004-4   1.24%  -2.07%   0.86%   1.87%   0.83%   2.72%

 2008-4  -0.63%   0.45%   2.80%  -0.35%   2.61%   4.88%

 2012-4  -1.00%  -0.30%   2.30%   0.69%   0.61%   2.30%

 2016-4  -0.36%   0.80%   1.55%  -0.03%  -0.16%   1.80%

 2020-4  -1.03%  -3.48%   2.81%  -0.01%   1.65%  -0.06%

 Avg     -0.36%  -0.92%   2.06%   0.43%   1.11%   2.33%

 

OTC summary for PY4 1964 - 2020 

 Avg     -0.60%   0.45%   0.62%   0.66%   0.64%   1.80%

 Win%       36%     67%     73%     67%     73%     80%

 

OTC summary for all years 1963 - 2023

 Avg     -0.35%   0.27%   0.29%   0.21%   0.14%   0.57%

 Win%       45%     58%     69%     61%     62%     67%


 

SPX PY4

 Year       Mon     Tue     Wed    Thur    Fri    Totals

 1956-4   0.02%  -0.06%  -0.40%  -0.36%   0.40%  -0.39%

 1960-4   0.28%  -0.81%  -1.23%   0.27%  -0.31%  -1.79%

 1964-4  -0.10%   0.28%   0.13%   0.14%   0.44%   0.87%

 1968-4  -0.55%   1.22%   0.15%   0.31%   0.30%   1.42%

 1972-4  -0.30%   0.24%  -0.52%  -0.15%  -0.14%  -0.87%

 1976-4   0.76%   1.41%   0.44%  -0.33%  -0.67%   1.61%

 1980-4  -0.75%   3.64%   0.29%   0.65%   0.73%   4.56%

 Avg     -0.19%   1.36%   0.10%   0.12%   0.13%   1.52%

 1984-4  -0.77%   0.81%   0.37%   1.04%  -0.26%   1.19%

 1988-4  -0.22%  -0.50%  -0.69%   0.11%   1.45%   0.16%

 1992-4  -1.42%   0.02%  -0.11%   0.44%  -0.63%  -1.69%

 1996-4   0.44%   0.57%  -0.22%   0.42%   0.09%   1.30%

 2000-4  -0.32%   3.30%  -1.09%   0.27%  -0.85%   1.30%

 Avg     -0.46%   0.84%  -0.35%   0.45%  -0.04%   0.45%

 2004-4   0.11%  -1.56%   0.53%   1.41%   0.06%   0.55%

 2008-4  -0.34%   0.46%   2.27%   0.06%   1.81%   4.27%

 2012-4  -0.84%   0.37%   1.36%   0.67%   0.24%   1.80%

 2016-4  -0.27%   0.97%   1.00%   0.02%  -0.10%   1.62%

 2020-4  -1.79%  -3.07%   2.29%  -0.05%   1.39%  -1.22%

 Avg     -0.63%  -0.57%   1.49%   0.42%   0.68%   1.40%

SPX summary for PY4 1956 - 2020 

 Avg     -0.36%   0.43%   0.27%   0.29%   0.23%   0.86%

 Win%       29%     71%     59%     76%     59%     71%

SPX summary for all years 1953 - 2023

 Avg     -0.14%   0.26%   0.12%   0.09%  -0.03%   0.30%

 

Money supply (M2) and Interest Rates

The following charts were supplied by Gordon Harms.

The first chart, made with FastTrack, covers the past 4 years showing the SPX in red and M2 money supply in green.

Money supply has remained constant for several months.

Treasury rates at their close last Friday and their changes from last month:

2yr yield 4.914% up from 4.736%

5yr yield 4.569% up from 4.326%

10yr yield 4.532% up from 4.318% 

30yr yield 4.630% up from 4.431%

All the rates are inverted (shorter term maturities yield more than longer term maturities) relative to the 2 year.

The next chart covers the past 15 months showing the 30 year yield over the 5 year yield on top, The 1, 2, 5, 10 & 30 year treasury rates in the middle group and the SPX with a 50 day simple moving average on the bottom.



 

Conclusion

The market had another rough week.  Breadth numbers were weak, but better on the NYSE than the NASDAQ.  The bull market will remain intact as long there is no significant build up of NYSE new lows.

Seasonally we are near a turning point.  On average the 1st half of April is weak and the 2nd half strong.

The strongest sectors last week were Precious Metals (for the 3rd week in a row) and Energy (for the 9th week in a row), while the weakest were Banks and Finance.

I expect the major averages to be higher on Friday April 19 than they were on Friday April 12. 


More By This Author:

Technical Market Report - Saturday, April 6
Technical Market Report - Saturday, March 30
Technical Market Report - Saturday, March 23
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