Technical Market Report For Saturday, Oct. 30

The good news is:

  • The Dow Jones Industrial Average (DJIA), S&P 500 (SPX) and NASDAQ composite (OTC) all closed at all time highs last Friday on a spike in volume.

The Negatives

The market is overbought.

There are numerous non confirmations by the breadth indicators.

 

The first chart covers the past 6 months showing the OTC in blue and a 10% trend (19 day EMA) of NASDAQ new highs (OTC NH) in green.  Dashed vertical lines have been drawn on the 1st trading day of each month. 

OTC NH fell short of confirming the new all time high for the OTC.

 

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

NY NH also failed to confirm the new SPX all time high by a wide margin.

 

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).

The sharp upward move of OTC_NL has been arrested while the index moved to an all time high.

 

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

NY NL turned downward as the index moved to a new all time high. 

 

The Positives

A massive jump in volume pushed the tech sector upward taking all of the major indices to all time highs.

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.

OTC HL Ratio declined as the index moved to an all time high.

 

The next chart is similar to the previous one except it shows the SPX in red and NY HL ratio, in blue, has been calculated with NYSE data.

NY HL Ratio also declined as the index moved to an all time high. 

 

There was a big spike in volume on the NASDAQ last week that pushed the indices to new highs.

The chart below covers the past 6 months showing the OTC in blue and a 5% trend (39 day EMA) of NASDAQ upside volume (OTC UV) in green.

 

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

NY UV declined while OTC UV exploded.

 

Seasonality

Next week includes the first 5 trading days of November during the 1st year of the Presidential Cycle.  The tables below show the daily change, on a percentage basis, for that period. 

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