Technical Market Report For Saturday, Sept. 26

The good news is the President’s Working Group on Financial Markets, A.K.A., the Plunge Protection Team (PPT), should be vigilant, at least until the election. 

The Negatives

During the last week, new lows exceeded new highs every day on the NASDAQ, and four out of five days on the NYSE.

The first chart covers the past six months, showing the NASDAQ composite (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 first trading day of each month. New highs have all but disappeared.

The next chart is similar to the first one, except it shows the S&P 500 (SPX) in red and the NY NH in green. The information has been calculated with NYSE data. No new highs here, either.

The next chart covers the past nine months, showing the SPX in red and a 40% trend (four-day EMA) of NYSE new highs divided by new highs + new lows (NY HL Ratio) in blue. Dashed horizontal lines have been drawn at 10% levels for the indicator; the line is solid at the 50% neutral level.

The NY HL Ratio collapsed to 36%. I extended the length of these charts so you could see how this indicator worked last spring.

The next chart is similar to the one above, except it shows the OTC in blue and the OTC HL Ratio in red. The information has been calculated with NASDAQ data. The OTC HL Ratio collapsed to 40%. 

The Positives

Positives are hard to find. Everything, including gold, took a hit last week.

Seasonality

Next week includes the last three trading days of September and the first two trading days of October, all during the fourth year of the Presidential Cycle. The tables below show the daily change on a percentage basis for that period.

The OTC data covers the period from 1963 to 2019, while the SPX data runs from 1928 to 2019. There are summaries for both the fourth year of the Presidential Cycle, and all years combined. Returns for coming week have been mostly negative.

The number following the year represents its position in the Presidential Cycle. The number following the daily return represents the day of the week; 1 = Monday, 2 = Tuesday, etc.

OTC Presidential Year 4 (PY4)

  •                      Day3         Day2       Day1        Day1        Day2       Totals
  •  1964-4      -0.05% 1   0.00% 2   0.26% 3   0.09% 4  -0.25% 5     0.05%
  •  1968-4      -0.09% 4  -0.08% 5  -0.04% 1   0.20% 2   0.61% 4     0.60%
  •  1972-4       1.16% 3   0.45% 4   0.37% 5  -0.24% 1   0.14% 2     1.89%
  •  1976-4      -0.87% 2  -0.40% 3  -0.01% 4  -0.90% 5   0.02% 1    -2.16%
  •  1980-4      -1.69% 5  -2.61% 1   1.06% 2   0.99% 3   0.63% 4    -1.62%
  •  1984-4       0.09% 3   0.02% 4  -0.14% 5  -0.83% 1  -0.71% 2    -1.57%
  •  1988-4       0.28% 3   0.72% 4   0.43% 5  -0.83% 1  -0.07% 2     0.52%
  •  1992-4      -0.32% 1   0.40% 2   0.98% 3  -0.85% 4  -1.16% 5    -0.95%
  •  1996-4       0.27% 4   0.17% 5  -0.26% 1  -0.44% 2   1.20% 3     0.94%
  •  Avg               -0.28%    -0.26%     0.41%    -0.39%    -0.02%      -0.54%
  •  2000-4      -0.89% 3   3.34% 4  -2.79% 5  -2.83% 1  -3.17% 2    -6.34%
  •  2004-4       0.54% 2   1.29% 3   0.15% 4   2.39% 5   0.53% 1     4.89%
  •  2008-4      -0.15% 5  -9.14% 1   4.97% 2  -0.62% 3  -4.48% 4    -9.42%
  •  2012-4      -0.77% 3   1.39% 4  -0.65% 5  -0.09% 1   0.21% 2     0.09%
  •  2016-4       0.24% 3  -0.93% 4   0.81% 5  -0.21% 1  -0.21% 2    -0.29%
  •  Avg               -0.21%    -0.81%     0.50%    -0.27%    -1.42%      -2.21%
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William K. 4 weeks ago Member's comment

Interesting article with a whole lot of historical data. So te future is not looking as happy as many wish.