Technical Market Report - Saturday, April 20

The good news is:

  • New lows on the NYSE declined from a high last Tuesday of 118 to a low on Friday of 39.

 

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 are sitting on the bottom; 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 continued falling,

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 HLR I looked back many years and could not find any time when this indicator has fallen this far this fast.  This appears to be a record decline.

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 sharply last week and the actual value of the indicator at 186 is troubling.

 

The Positives

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 downward, however the actual value of the indicator at 46 is not threatening.

 

Seasonality

Next week includes the 5 trading days prior to the 4th 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 as can be seen by all of the 0’s in the table in the years Good Friday occurred in April.  

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.  

In the little data there is average returns for the coming week have been weak by all measures. 

 

Report for the week before the 4th Friday of April.

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

Daily returns from Monday through the 4th Friday.

 

OTC Presidential Year 4 (PY4)

 Year       Mon     Tue     Wed    Thur    Fri    Totals

 1964-4   0.54%   0.38%   0.08%   0.00%  -0.20%   0.79%

 

 Avg      0.54%   0.38%   0.08%   0.00%  -0.20%   0.79%

 

 1968-4   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 1972-4  -0.83%  -0.80%   0.06%   0.07%   0.24%  -1.26%

 1976-4  -0.03%  -0.65%   0.36%   0.28%  -0.52%  -0.57%

 1980-4   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 1984-4   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 

 Avg     -0.43%  -0.73%   0.21%   0.17%  -0.14%  -0.92%

 

 1988-4   0.33%   0.68%   0.22%   0.03%   0.12%   1.38%

 1992-4   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 1996-4   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 2000-4   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 2004-4  -0.63%  -0.21%  -2.12%  -1.55%  -1.97%  -6.48%

 

 Avg     -0.15%   0.24%  -0.95%  -0.76%  -0.93%  -2.55%

 

 2008-4   0.21%  -1.29%   1.19%   0.99%  -0.25%   0.85%

 2012-4   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 2016-4   0.44%  -0.40%   0.16%  -0.05%  -0.80%  -0.64%

 2020-4   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 

OTC summary for PY4 1964 - 2020

 Avg      0.00%  -0.33%  -0.01%  -0.04%  -0.48%  -0.85%

 Win%       57%     29%     86%     67%     29%     43%

 

OTC summary for all years 1963 - 2023

 Avg      0.01%  -0.28%  -0.01%   0.24%  -0.46%  -0.51%

 Win%       59%     44%     68%     68%     47%     56%


 

SPX PY4

 Year       Mon     Tue     Wed    Thur    Fri    Totals

 1956-4  -0.23%  -0.82%  -0.36%   0.85%   1.05%   0.49%

 1960-4  -1.01%   0.33%   0.00%  -0.87%  -0.35%  -1.90%

 

 1964-4  -0.06%   0.05%  -0.06%  -0.14%  -0.78%  -0.99%

 1968-4   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 1972-4  -0.64%  -0.99%  -0.21%   0.15%   0.58%  -1.12%

 1976-4   0.14%  -0.56%   0.27%   0.00%  -0.48%  -0.63%

 1980-4   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 

 Avg     -0.19%  -0.50%   0.00%   0.01%  -0.23%  -0.92%

 

 1984-4   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 1988-4   0.89%   0.56%  -0.05%  -0.45%  -0.49%   0.46%

 1992-4   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 1996-4   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 2000-4   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 

 Avg      0.89%   0.56%  -0.05%  -0.45%  -0.49%   0.46%

 

 2004-4  -0.44%   0.23%  -1.38%  -0.76%  -0.59%  -2.95%

 2008-4  -0.16%  -0.88%   0.29%   0.64%   0.65%   0.55%

 2012-4   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 2016-4   0.65%   0.31%   0.08%  -0.52%   0.00%   0.52%

 2020-4   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 

 Avg      0.02%  -0.12%  -0.34%  -0.21%   0.02%  -0.63%

 

SPX summary for PY4 1956 - 2020 

 Avg     -0.10%  -0.20%  -0.18%  -0.14%  -0.04%  -0.62%

 Win%       33%     56%     38%     38%     44%     44%

 

SPX summary for all years 1953 - 2023

 Avg     -0.01%  -0.08%  -0.17%   0.09%  -0.13%  -0.28%

 Win%       54%     50%     43%     46%     53%     50%
 

Conclusion

The market had another rough week and there were no signs of capitulation.

After peaking last Tuesday new lows declined for the rest of the week as prices continued to fall.  

The SPX had a confirmed high about a month ago.  The implication of that is likely to return to its previous within a few months.  If the return high is confirmed by breadth the market is likely to continue upward.  If the return high is not confirmed by breadth it is likely to mark the top of the cycle.

The strongest sectors last week were Precious Metals (for the 4th week in a row) and Utilities while the weakest were Health and Technology.

I expect the major averages to be higher on Friday April 26 than they were on Friday April 19.

 


More By This Author:

Technical Market Report - Saturday, April 13
Technical Market Report - Saturday, April 6
Technical Market Report - Saturday, March 30
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.