Technical Market Report - Saturday, April 6

The good news is:

  • The breadth indicators held up pretty well considering the bad week prices had .

 

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 headed south last week.

(Click on image to enlarge)

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 did not confirm the new index high a couple weeks ago and has continued falling.  

 

The Positives

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 confirmed the all time SPX high a week ago implying higher highs ahead.

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 fell to slightly below 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 fell a little last week, but is still very strong at 83%. 

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 is relatively strong, however, the actual value of the indicator at 109 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 also appears strong and the actual value of the indicator at 28 is not threatening.


Seasonality

Next week includes the 5 trading days prior to the 2nd 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 will be ignored.  

Average returns for the coming week have been mixed and degraded significantly by the very bad week in 2000. 

Report for the week before the 2nd Friday of April.

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

Daily returns from Monday to 2nd Friday.

 

OTC Presidential Year 4 (PY4)

 Year       Mon     Tue     Wed    Thur    Fri    Totals

 1964-4   0.37%   0.47%  -0.31%   0.50%   0.08%   1.10%

 1968-4   1.66%   1.09%   0.19%   1.00%  -0.55%   3.40%

 1972-4  -0.03%   0.54%   0.53%  -0.08%   0.62%   1.57%

 1976-4   0.88%   0.13%  -0.82%  -0.84%  -1.28%  -1.92%

 1980-4  -0.78%  -0.20%  -0.46%  -0.89%   0.08%  -2.26%

 

 Avg      0.42%   0.41%  -0.17%  -0.06%  -0.21%   0.38%

 

 1984-4  -0.45%   0.25%  -0.68%   0.32%   0.60%   0.03%

 1988-4   0.18%   0.22%   0.01%  -2.32%  -0.17%  -2.07%

 1992-4   1.06%  -2.46%  -1.36%   2.28%  -0.43%  -0.91%

 1996-4   0.86%   1.31%  -0.36%   1.37%   0.21%   3.40%

 2000-4  -5.81%  -3.16%  -7.06%  -2.46%  -9.67% -28.16%

 

 Avg     -0.83%  -0.77%  -1.89%  -0.16%  -1.89%  -5.54%

 

 2004-4   0.61%  -1.71%  -0.26%  -1.12%  -0.32%  -2.80%

 2008-4  -0.26%  -0.68%  -1.13%   1.27%  -2.61%  -3.41%

 2012-4  -0.76%   1.82%  -0.37%  -0.79%  -0.24%  -0.34%

 2016-4  -0.46%  -0.98%   1.59%  -1.47%   0.05%  -1.28%

 2020-4   0.48%   3.95%  -1.44%   1.66%   1.38%   6.02%

 

 Avg     -0.08%   0.48%  -0.32%  -0.09%  -0.35%  -0.36%

 

 OTC summary for PY4 1964 - 2020

 Avg     -0.16%   0.04%  -0.80%  -0.10%  -0.82%  -1.84%

 Win%       53%     60%     27%     47%     47%     40%

 

OTC summary for all years 1963 - 2023

 Avg      0.04%   0.03%  -0.05%   0.16%  -0.26%  -0.08%

 Win%       61%     52%     56%     56%     52%     59%


 

SPX PY4

 Year       Mon     Tue     Wed    Thur    Fri    Totals

 1956-4  -0.49%  -1.40%   0.79%  -0.60%  -0.15%  -1.84%

 1960-4   0.20%   0.59%   1.15%   0.02%  -0.23%   1.73%

 

 1964-4   0.10%  -0.35%   0.01%  -0.06%   0.19%  -0.11%

 1968-4   0.06%   0.03%   0.20%   0.28%  -1.27%  -0.70%

 1972-4  -0.16%   0.28%   0.38%  -0.25%  -0.06%   0.20%

 1976-4   1.23%  -0.14%  -1.11%  -0.91%  -0.92%  -1.85%

 1980-4  -0.92%  -0.20%  -1.06%  -0.48%  -0.49%  -3.16%

 

 Avg      0.06%  -0.08%  -0.32%  -0.28%  -0.51%  -1.12%

 

 1984-4  -0.02%   0.27%  -0.56%   1.76%  -0.27%   1.19%

 1988-4   0.27%   0.45%   0.07%  -4.35%   0.01%  -3.55%

 1992-4   1.01%  -1.86%  -0.89%   1.56%   0.91%   0.72%

 1996-4   0.91%   0.39%  -0.53%   0.31%   0.23%   1.31%

 2000-4  -0.78%  -0.26%  -2.23%  -1.82%  -5.78% -10.87%

 

 Avg      0.28%  -0.20%  -0.83%  -0.51%  -0.98%  -2.24%

 

 2004-4   0.52%  -1.38%  -0.11%   0.06%   0.51%  -0.40%

 2008-4   0.16%  -0.51%  -0.81%   0.45%  -2.04%  -2.75%

 2012-4  -0.05%   1.55%  -0.41%  -0.59%   0.12%   0.62%

 2016-4  -0.32%  -1.01%   1.05%  -1.20%   0.28%  -1.20%

 2020-4  -1.01%   3.06%  -2.20%   0.58%   2.68%   3.10%

 

 Avg     -0.14%   0.34%  -0.50%  -0.14%   0.31%  -0.13%

 

SPX summary for PY4 1956 - 2020 

 Avg      0.04%  -0.03%  -0.37%  -0.31%  -0.37%  -1.03%

 Win%       53%     47%     41%     47%     47%     41%

 

SPX summary for all years 1953 - 2023

 Avg      0.13%   0.12%   0.03%   0.00%  -0.06%   0.22%

 Win%       60%     56%     54%     55%     52%     56%

 

Conclusion

The market had a rough week.  Breadth numbers were 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.

The strongest sectors last week were Precious Metals (for the 2nd week in a row) and Energy (for the 8th week in a row), while the weakest were Electronics and Telecomm (for the 4th week in a row).

I expect the major averages to be higher on Friday April 12 than they were on Friday April 5. 


More By This Author:

Technical Market Report - Saturday, March 30
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