The good news is:

All of the major averages, except the Dow Jones Industrial Average closed at an all time or multi year highs on Thursday.

 

The Negatives

The negatives are hard to find.

Most economists have been saying the economy world wide is no the brink of collapse, but, so far, the US stock market does not agree.

 

The Positives

The first chart covers the last 6 months showing the S&P 500 (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 1^st trading day of each month.

NY NH confirmed the all time SPX high on Thursday and continued rising to another high on Friday as the index declined.

(Click on image to enlarge)

The next chart is similar to the one above except it shows the NASDAQ composite (OTC) in blue and OTC NH, in green, has been calculated with NASDAQ data.

OTC NH confirmed the index all time high on Thursday.  

(Click on image to enlarge)

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 finishing the week at the same level it was a week ago, a comfortable 76%,

(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 rose slightly finishing the week at a very strong 90%. 

(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 was pretty flat as the index hit its new all time high.  However, the numeric level of OTC NL remained a bit high at 101.

(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 remained flat at a low level while the index closed at another all time high.

(Click on image to enlarge)

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 improved and are all solidly positive.

(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 less clear, but the weakest (OTC UD SI Mom) appears to have turned upward again last Friday.

(Click on image to enlarge)

 

Seasonality

Next week includes the 5 trading days prior to the 3^rd Friday of March during the 4^th 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 4^th 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 mixed.  The 4^th year returns were weakened by a really bad week in 2020.

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

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   0.05%  -0.03%   0.08%  -0.40%  -0.24%  -0.53%

 1968-4  -0.06%   0.92%   0.47%   0.18%  -2.16%  -0.65%

 1972-4  -0.94%   0.31%   0.32%  -0.29%   0.19%  -0.41%

 1976-4  -1.40%   0.16%   0.28%  -0.62%  -0.01%  -1.59%

 1980-4  -3.28%  -0.56%   0.76%  -0.24%  -0.60%  -3.92%

 

 Avg     -1.13%   0.16%   0.38%  -0.27%  -0.57%  -1.42%

 

 1984-4   0.29%   0.37%  -0.17%   0.32%   0.92%   1.74%

 1988-4   0.32%  -0.03%   0.52%   0.57%   0.23%   1.62%

 1992-4  -0.11%   0.86%   0.27%   0.16%  -0.27%   0.92%

 1996-4   1.58%  -0.68%   1.44%   0.23%   0.78%   3.35%

 2000-4  -2.80%  -4.09%  -2.63%   2.94%   1.71%  -4.87%

 

 Avg     -0.14%  -0.71%  -0.11%   0.84%   0.68%   0.55%

 

 2004-4  -2.29%   0.20%   1.73%  -0.72%  -1.12%  -2.20%

 2008-4   3.04%   0.61%  -0.71%  -1.87%  -0.86%   0.21%

 2012-4  -0.16%   1.88%   0.03%   0.51%  -0.04%   2.23%

 2016-4   0.04%  -0.45%   0.75%   0.23%   0.43%   0.99%

 2020-4 -12.32%   6.23%  -4.70%   2.30%  -3.79% -12.28%

 

 Avg     -2.34%   1.70%  -0.58%   0.09%  -1.08%  -2.21%

 

OTC summary for PY4 1964 - 2020 

 Avg     -1.20%   0.38%  -0.10%   0.22%  -0.32%  -1.03%

 Win%       40%     60%     73%     60%     40%     47%

 

OTC summary for all years 1963 - 2023

 Avg     -0.29%   0.25%   0.03%   0.20%  -0.10%   0.09%

 Win%       54%     57%     66%     72%     52%     59%

 

SPX PY4

 Year       Mon     Tue     Wed    Thur    Fri    Totals

 1956-4   0.92%  -0.15%   1.00%   0.97%   0.31%   3.05%

 1960-4   0.15%   0.77%   0.55%  -0.15%   0.09%   1.41%

 

 1964-4   0.00%   0.23%   0.08%  -0.10%  -0.48%  -0.28%

 1968-4   1.24%   0.11%  -0.22%  -1.90%   0.88%   0.11%

 1972-4  -0.96%   0.26%   0.13%  -0.23%   0.39%  -0.41%

 1976-4  -1.05%   1.12%  -0.06%  -0.41%   0.13%  -0.27%

 1980-4  -3.01%   1.80%   0.20%  -1.14%  -0.79%  -2.93%

 

 Avg     -0.95%   0.70%   0.03%  -0.76%   0.03%  -0.76%

 

 1984-4   1.29%   0.28%  -0.01%   0.41%   1.18%   3.15%

 1988-4   0.54%  -0.09%   0.95%   0.96%  -0.04%   2.32%

 1992-4   0.14%   0.78%  -0.10%   0.16%   0.37%   1.34%

 1996-4   1.03%  -0.46%   0.23%   0.36%   0.09%   1.25%

 2000-4  -0.82%  -1.76%   2.42%   4.77%   0.41%   5.01%

 

 Avg      0.43%  -0.25%   0.70%   1.33%   0.40%   2.61%

 

 2004-4  -1.43%   0.56%   1.17%  -0.13%  -1.12%  -0.94%

 2008-4   1.29%   0.23%  -0.88%  -1.15%  -0.80%  -1.30%

 2012-4   0.02%   1.81%  -0.12%   0.60%   0.11%   2.42%

 2016-4  -0.13%  -0.18%   0.56%   0.66%   0.44%   1.35%

 2020-4 -11.98%   6.00%  -5.18%   0.47%  -4.34% -15.04%

 

 Avg     -2.45%   1.68%  -0.89%   0.09%  -1.14%  -2.70%

 

SPX summary for PY4 1956 - 2020

 Avg     -0.80%   0.67%   0.04%   0.24%  -0.18%   0.02%

 Win%       56%     71%     59%     53%     65%     59%

 

SPX summary for all years 1953 - 2023

 Avg     -0.11%   0.31%   0.09%   0.21%  -0.04%   0.46%

 Win%       61%     56%     59%     58%     56%     63%

 

Conclusion

Breadth was strong last week, lets hope it continues.

The strongest sectors last week were Precious Metals and Energy (For the 4^th week in a row) while the weakest were Internet and Telecomm.

I expect the major averages to be higher on Friday March 15 than they were on Friday March 8. 

Last week the Russell 2000 was up while other indices were down; so I am calling last weeks positive forecast a tie.

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More By This Author:

Technical Market Report - Saturday, March 2
Technical Market Report - Saturday, February 24
Technical Market Report - Saturday, February 17