The good news is:

• New lows have disappeared.

 

The Negatives

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 first trading day of each month.  

NY NH; No sign of life here.

 

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

OTC NH; There is a hint of life here.

 

The Positives

New lows have declined to the point of insignificance.

The next chart covers the past 6 months showing the SPX in red and a 40% trend (4 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 (equal numbers of new highs and new lows).

 

NY HL ratio made it into positive territory last week. 

 

The next chart is similar to the one above except it shows the OTC in blue and OTC HL ratio, in red, has been calculated with Nasdaq data.

OTC HL Ratio ditto.

 

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; New lows have declined to non threatening levels.

 

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; NYSE new lows have become insignificant.

 

Seasonality

Next week includes the last 3 trading of April and the first 2 trading days of May during the first 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 2024 while SPX data runs from 1928 to 2024.  There are summaries for both the first year of the Presidential Cycle and all years combined.  

Seasonally for next week has been positive by all measures and stronger during the first year of the Presidential Cycle than other years.

 

Report for the last 3 days of April and the first 2 days of May.

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 1 (PY1)

                   Day3      Day2      Day1          Day1      Day2          Totals

 1965-1       0.37% 3   0.56% 4  -0.31% 5   0.27% 1  -0.04% 2     0.86%

 1969-1       0.68% 1   1.06% 2   1.81% 3   0.26% 4   0.12% 5     3.93%

 1973-1       0.32% 4  -1.20% 5  -0.51% 1   0.10% 2   1.01% 3    -0.28%

 1977-1       0.71% 3   0.28% 4   0.44% 5   0.37% 1   0.40% 2     2.20%

 1981-1      -1.02% 2  -0.65% 3   0.24% 4  -0.03% 5  -1.55% 1    -3.01%

 

 Avg          0.21%     0.01%     0.34%     0.19%    -0.01%       0.74%

 

 1985-1       0.06% 5  -0.71% 1  -0.55% 2  -0.33% 3  -0.22% 4    -1.76%

 1989-1       0.16% 3   0.66% 4   0.32% 5  -0.02% 1   0.13% 2     1.25%

 1993-1       0.86% 3   0.04% 4   0.45% 5   0.80% 1   1.72% 2     3.88%

 1997-1       0.64% 1   2.10% 2   1.46% 3   0.77% 4   2.74% 5     7.71%

 2001-1      -1.21% 4   2.01% 5   1.95% 1   2.46% 2   2.42% 3     7.62%

 

 Avg          0.10%     0.82%     0.73%     0.74%     1.36%       3.74%

 

 2005-1       0.16% 3  -1.36% 4   0.92% 5   0.36% 1   0.23% 2     0.31%

 2009-1      -0.33% 2   2.28% 3   0.31% 4   0.11% 5   2.58% 1     4.95%

 2013-1      -0.33% 5   0.85% 1   0.66% 2  -0.89% 3   1.26% 4     1.55%

 2017-1       0.00% 3   0.39% 4  -0.02% 5   0.73% 1   0.06% 2     1.16%

 2021-1      -0.28% 3   0.22% 4  -0.85% 5  -0.48% 1  -1.88% 2    -3.27%

 

 Avg         -0.16%     0.48%     0.20%    -0.03%     0.45%       0.94%

 

OTC summary for PY1 1965 - 2021

Averages      0.05%     0.44%     0.42%     0.30%     0.60%       1.81%

% Winners       60%       73%       67%       67%       73%         73%

MDD  5/4/2021  3.24% --  5/4/1981  2.98% --  5/2/1985  1.81%

 

OTC summary for all years 1963 - 2024

Averages      0.03%     0.32%     0.02%     0.26%     0.13%       0.76%

% Winners      65%       69%       58%       61%       66%         65%

MDD 4/30/2004  5.53% --  4/29/1970  4.61% --  5/4/1999  4.51%

 

SPX PY1

                  Day3        Day2        Day1      Day1         Day2      Totals

 1929-1       0.27% 6  -0.47% 1   1.61% 2   0.19% 3   0.46% 4     2.07%

 1933-1      -0.90% 4   1.69% 5   6.26% 6   1.32% 1   0.36% 2     8.72%

 1937-1      -2.68% 3   0.00% 4   2.75% 5   0.00% 6   0.24% 1     0.32%

 1941-1       0.32% 1   0.21% 2  -1.38% 3  -0.11% 4   0.32% 5    -0.63%

 

 1945-1       0.41% 5   0.61% 6   0.34% 1  -0.34% 2  -0.14% 3     0.89%

 1949-1      -0.47% 4   0.14% 5   0.20% 6   0.27% 1   0.47% 2     0.61%

 1953-1       0.74% 2   0.65% 3  -0.24% 4   0.45% 5   1.09% 1     2.69%

 1957-1      -0.13% 5   0.51% 1   0.02% 2   0.61% 3   0.80% 4     1.81%

 1961-1       0.38% 3  -0.14% 4  -0.23% 5  -0.21% 1   0.72% 2     0.52%

 

 Avg          0.19%     0.35%     0.02%     0.16%     0.59%       1.30%

 

 1965-1      -0.04% 3  -0.08% 4   0.20% 5   0.13% 1   0.31% 2     0.53%

 1969-1       0.30% 1   0.74% 2   0.88% 3  -0.17% 4   0.47% 5     2.22%

 1973-1       0.51% 4  -1.52% 5  -0.24% 1   0.12% 2   1.24% 3     0.10%

 1977-1       0.88% 3   0.24% 4   0.24% 5   0.50% 1   0.51% 2     2.37%

 1981-1      -0.85% 2  -0.95% 3  -0.18% 4  -0.07% 5  -1.54% 1    -3.59%

 

 Avg          0.16%    -0.31%     0.18%     0.10%     0.20%       0.33%

 

 1985-1      -0.68% 5  -0.85% 1  -0.44% 2  -0.81% 3   0.36% 4    -2.43%

 1989-1       0.06% 3   0.86% 4   0.02% 5  -0.17% 1  -0.32% 2     0.45%

 1993-1       0.00% 3   0.20% 4   0.30% 5   0.52% 1   0.36% 2     1.37%

 1997-1       0.99% 1   2.73% 2   0.92% 3  -0.35% 4   1.81% 5     6.09%

 2001-1       0.47% 4   1.50% 5  -0.29% 1   1.36% 2   0.08% 3     3.12%

 

 Avg          0.17%     0.89%     0.10%     0.11%     0.46%       1.72%

 

 2005-1       0.40% 3  -1.14% 4   1.19% 5   0.46% 1  -0.09% 2     0.83%

 2009-1      -0.27% 2   2.16% 3  -0.10% 4   0.54% 5   3.39% 1     5.72%

 2013-1      -0.25% 5   0.72% 1   0.25% 2  -0.93% 3   0.94% 4     0.73%

 2017-1      -0.05% 3   0.06% 4  -0.19% 5   0.17% 1   0.12% 2     0.11%

 2021-1      -0.08% 3   0.68% 4  -0.72% 5   0.27% 1  -0.67% 2    -0.52%

 

 Avg         -0.05%     0.49%     0.09%     0.10%     0.74%       1.37%

 

SPX summary for PY1 1929 - 2021

Averages     -0.03%     0.36%     0.47%     0.16%     0.47%       1.42%

% Winners       54%       67%       58%       58%       79%         83%

MDD  5/4/1981  3.55% --  5/1/1985  2.76% --  4/28/1937  2.68%

 

SPX summary for all years 1928 - 2024

Averages     -0.06%     0.07%     0.14%     0.08%     0.14%       0.35%

% Winners       52%       55%       55%       55%       67%         65%

MDD 5/3/1932  9.73% --  5/2/1930  7.10% --  5/2/1934  5.09%

 

May

Since 1963, over all years, the OTC in May has been up 61% of the time with an average gain of 0.8%.  During the first year of the Presidential Cycle the OTC in May has been up 73% of the time with an average gain of 2.4%.  The best May ever for the OTC was 1997 (+11.1%), the worst 1970 (-13.0%).

The average month has 21 trading days.  The chart below has been calculated by averaging the daily percentage change for each of the first 11 trading days and each of the last 10.  In months when there were more than 21 trading days some of the days in the middle were not counted.  In months when there were less than 21 trading days some of the days in the middle of the month were counted twice.  Dashed vertical lines have been drawn after the first trading day and at 5 trading day intervals after that.  The line is solid on the 11^th trading day, the dividing point.

In the chart below the blue line shows the average daily performance of the OTC in May over all years since 1963, while the green line shows the average during the first year of the Presidential Cycle over the same period.

 

Since 1928 the SPX has been up 30% of the time in May with an average loss of -0.1%.  During the first year of the Presidential Cycle the SPX has been up 63% of the time with an average gain of 1.6%.  The best May ever for the SPX was 1933 (+15.9%) the worst 1940 (-24.0%).

The chart below is similar to the one above except it shows the average daily performance over all years since 1928 for the SPX in May in red and the average daily performance during the first year of the Presidential Cycle, over the same period, in green.

 

Since 1979 the Russell 2000 (R2K) has been up 63% of the time in May with an average gain of 1.3%.  During the first year of the Presidential Cycle the R2K has been up 91% of the time with an average gain of 3.6%. The best May ever for the R2K 1997 (+11.0%), the worst 2019 (-7.9%)

The chart below is similar to those above except it shows the average daily performance of the R2K over all years since 1979 in magenta and the average daily performance during the first year of the Presidential Cycle in green.

 

Since 1885 the Dow Jones Industrial Average (DJIA) has been up 53% of the time in May with an average loss of -0.1%.  During the first year of the Presidential Cycle the DJIA has been up 60% of the time in May with an average gain of 1.0%.  The best May ever for the DJIA 1898 (+14.7%), the worst 1940 (-21.7%)

The chart below is similar to those above except it shows the average daily performance over all years for the DJIA in May in grey and the average performance during the first year of the Presidential Cycle in green.

Conclusion

The market had a good week.  New lows declined to insignificant levels on both the NYSE and Nasdaq.  Seasonality for the coming week has been strong.

The strongest sectors last week were Technology and Basic Materials while the weakest were Utilities (down from the top last week) and Precious Metals.

I expect the major averages to be higher on Friday May 2 than they were on Friday April 25. 

Last week's negative forecast was a miss.

---

More By This Author:

Technical Market Report For April 19, 2025
Technical Market Report For April 12, 2025
Technical Market Report For April 5, 2025