Technical Market Report - Saturday, February 10
The good news is
The S&P 500 (SPX) closed at an time high Friday while the Dow Jones Industrial Average closed at an all time high Thursday. The NASDAQ composite (OTC) closed at a multi year high Friday; just 0.4% off its all time high.
The Negatives
The first chart covers the last 6 months showing the SPX in red and a 10% trend (19 day EMA) of NYSE new highs (NY NH) in green. Dashed vertical lines have been drawn on the 1st trading day of each month.
NY NH did not confirm the new SPX high.
(Click on image to enlarge)
The next chart is similar to the one above except it shows the OTC in blue and OTC NH, in green, has been calculated with NASDAQ data.
OTC NH also failed to confirm the multi year index high.
(Click on image to enlarge)
The Positives
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 returned to positive territory after a brief fall,
(Click on image to enlarge)
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 also headed back upward after a brief decline finishing the week exactly where it finished the previous week at 83%.
(Click on image to enlarge)
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 turned modestly upward as the index hit a new multi year high.
(Click on image to enlarge)
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 was pretty flat for the week.
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.
The NY SI Mom’s all headed downward.
(Click on image to enlarge)
The next chart is similar to the one above; except it shows the OTC, in blue and the SI’s have been generated from NASDAQ breadth data.
NASDAQ SI’s are mixed.
(Click on image to enlarge)
Seasonality
Next week includes the 5 trading days prior to the 3rd Friday of February 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 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 modestly positive by all measures.
Report for the week before the 3rd Friday of February.
The number following the year is the position in the Presidential Cycle.
Daily returns from Monday through 3rd Friday.
OTC Presidentia Year 4 (PY4)
Year Mon Tue Wed Thur Fri Totals
1964-4 0.46% -0.05% -0.05% 0.32% -0.27% 0.41%
1968-4 0.00% -1.11% -0.91% 0.21% 0.34% -1.47%
1972-4 -0.49% 0.29% 0.60% 0.07% -0.03% 0.44%
1976-4 0.00% -0.16% -1.79% 2.00% 0.98% 1.03%
1980-4 -0.48% 0.07% 0.25% -0.87% -0.60% -1.63%
Avg -0.17% -0.19% -0.38% 0.35% 0.08% -0.24%
1984-4 -1.37% 0.74% 0.12% -0.35% -0.20% -1.06%
1988-4 0.00% 0.42% 0.15% 0.10% 0.42% 1.09%
1992-4 0.00% -1.57% -0.64% 1.58% -0.39% -1.03%
1996-4 0.07% -0.75% 0.07% 0.23% 0.02% -0.35%
2000-4 0.53% 0.05% 0.16% 2.00% -2.00% 0.73%
Avg -0.26% -0.22% -0.03% 0.71% -0.43% -0.12%
2004-4 0.00% 1.30% -0.19% -1.47% -0.39% -0.74%
2008-4 0.66% 0.00% 2.00% -1.74% -0.46% 0.46%
2012-4 0.95% 0.02% -0.55% 1.51% -0.27% 1.65%
2016-4 0.00% 2.00% 2.00% -1.03% 0.38% 3.35%
2020-4 0.00% 0.02% 0.87% -0.67% -1.79% -1.58%
Avg 0.80% 0.67% 0.83% -0.68% -0.51% 0.63%
OTC summary for PY4 1964 - 2020
Avg 0.04% 0.08% 0.14% 0.13% -0.29% 0.09%
Win% 63% 60% 60% 60% 33% 53%
OTC summary for all years 1963 - 2023
Avg 0.17% 0.06% 0.14% 0.04% -0.10% 0.24%
Win% 61% 53% 59% 59% 48% 61%
SPX PY4
Year Mon Tue Wed Thur Fri Totals
1956-4 -0.14% -0.37% 1.43% -0.50% 1.60% 2.02%
1960-4 -0.52% -0.80% 0.55% 1.40% 0.79% 1.42%
1964-4 0.08% 0.00% 0.24% -0.32% 0.23% 0.23%
1968-4 0.00% -0.88% 1.20% 0.18% -0.38% 0.12%
1972-4 -0.47% 0.42% 0.56% -0.03% -0.29% 0.19%
1976-4 0.00% -0.62% 0.81% 1.56% 0.68% 2.43%
1980-4 -0.70% 0.67% 0.46% -1.45% -1.12% -2.15%
Avg -0.36% -0.10% 0.65% -0.01% -0.18% 0.16%
1984-4 -0.86% 1.07% -0.23% -0.08% -0.25% -0.35%
1988-4 0.00% 0.85% -0.24% -0.50% 1.43% 1.55%
1992-4 0.00% -1.24% 0.22% 1.38% -0.59% -0.23%
1996-4 0.77% -0.14% -0.74% -0.65% -0.51% -1.28%
2000-4 0.20% 0.88% -1.03% 0.04% -2.00% -1.90%
Avg 0.04% 0.28% -0.40% 0.04% -0.38% -0.44%
2004-4 0.00% 0.98% -0.45% -0.41% -0.26% -0.14%
2008-4 0.59% 0.73% 1.36% -1.34% 0.08% 1.42%
2012-4 0.68% -0.09% -0.54% 1.10% 0.23% 1.39%
2016-4 0.00% 1.65% 1.65% -0.47% 0.00% 2.83%
2020-4 0.00% -0.29% 0.47% -0.38% -1.05% -1.25%
Avg 0.63% 0.59% 0.50% -0.30% -0.20% 0.85%
SPX summary for PY4 1956 - 2020
Avg -0.04% 0.18% 0.34% -0.03% -0.08% 0.37%
Win% 50% 50% 65% 35% 41% 59%
SPX summary for all years 1953 - 2023
Avg 0.05% 0.12% 0.21% -0.06% 0.00% 0.30%
Win% 50% 56% 61% 46% 46% 59%
Conclusion
Breadth improved last week as the blue chip indices hit new all time highs.
The strongest sectors last week were Transportation and Retail (both for the 2nd week in a row) while the weakest were Energy (for the 2nd week) and Utilities.
I expect the major averages to be higher on Friday February 16 than they were on Friday February 9.
Last week negative forecast was a miss.
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Technical Market Report For Saturday, January 27
Technical Market Report For Saturday, January 20
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