The good news is:

• The Russell 2000 (R2K) all closed at an all time high last Thursday.

 

The Negatives

Not much to see here.

 

The Positives

The first chart covers the last 6 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 1^st trading day of each month.  

OTC NH continued its rapid rise since the 1^st of the year.

 

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

NY NH also continued rising in spite of declining prices.

 

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 has flattened out.

 

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 has also flattened out at a low level.

 

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 took a dip early in the week, then finished near where it started the week. 

 

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 took a dip early in the week then finished approximately where it had began.

 

Seasonality

Next week includes the last 5 trading days of January during the 2^nd 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 2025 while SPX data runs from 1928 to 2025.  There are summaries for both the 2^nd year of the Presidential Cycle and all years combined.  

Seasonality for the coming week has been, on average, modestly positive by all measures.

 

Report for the last 5 days of January.

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 2 (PY2)

               Day5      Day4      Day3      Day2      Day1      Totals

 1966-2      -0.07% 2   0.27% 3  -0.08% 4   0.02% 5   0.27% 1     0.40%

 1970-2      -0.20% 1  -0.84% 2  -0.73% 3  -1.14% 4  -1.94% 5    -4.85%

 1974-2      -0.22% 5  -0.40% 1  -0.48% 2   0.65% 3  -0.25% 4    -0.71%

 1978-2       0.33% 3  -0.34% 4   0.09% 5   0.35% 1  -0.13% 2     0.30%

 1982-2      -1.24% 1  -0.06% 2   0.09% 3   1.44% 4   1.17% 5     1.39%

 

 Avg         -0.28%    -0.27%    -0.22%     0.26%    -0.18%      -0.69%

 

 1986-2       0.41% 1   0.74% 2   0.63% 3  -0.12% 4   0.43% 5     2.09%

 1990-2      -0.10% 4  -0.92% 5  -0.76% 1  -1.77% 2   1.24% 3    -2.31%

 1994-2      -0.54% 2   0.31% 3   0.52% 4   0.46% 5   0.49% 1     1.24%

 1998-2      -0.91% 1   1.08% 2   2.05% 3   0.53% 4   0.00% 5     2.76%

 2002-2      -0.25% 5   0.32% 1  -2.62% 2   1.08% 3   1.08% 4    -0.39%

 

 Avg         -0.28%     0.31%    -0.04%     0.04%     0.65%       0.68%

 

 2006-2      -0.20% 3   0.99% 4   0.93% 5   0.11% 1  -0.04% 2     1.78%

 2010-2       0.25% 1  -0.32% 2   0.80% 3  -1.91% 4  -1.45% 5    -2.63%

 2014-2      -1.08% 1   0.35% 2  -1.14% 3   1.77% 4  -0.47% 5    -0.56%

 2018-2      -0.05% 4   1.27% 5  -0.52% 1  -0.85% 2   0.12% 3    -0.03%

 2022-2      -2.28% 2   0.02% 3  -1.40% 4   3.13% 5   3.41% 1     2.88%

 

 Avg         -0.67%     0.46%    -0.26%     0.45%     0.31%       0.29%

 

OTC summary for PY2 1966 - 2022

Averages     -0.41%     0.16%    -0.18%     0.25%     0.26%       0.09%

% Winners       20%       60%       47%       67%       53%         53%

MDD  1/30/1970  4.76% --  1/27/2022  3.63% --  1/30/1990  3.51%

 

OTC summary for all years 1963 - 2025

Averages     -0.12%     0.22%     0.01%     0.03%     0.22%       0.35%

% Winners       45%       60%       57%       56%       62%         56%

MDD 1/28/2000  6.73% --  1/30/2009  5.26% --  1/30/1970  4.76%

 

SPX PY2

               Day5      Day4      Day3      Day2      Day1      Totals

 1930-2      -0.09% 1  -0.50% 2   1.13% 3   0.54% 4   1.42% 5     2.51%

 1934-2      -0.90% 5  -0.09% 6   1.63% 1   1.25% 2  -1.41% 3     0.48%

 1938-2      -3.83% 3  -1.39% 4  -0.85% 5  -0.38% 6   1.71% 1    -4.73%

 1942-2       0.22% 2  -0.67% 3  -0.22% 4  -0.67% 5  -0.45% 6    -1.79%

 

 1946-2       0.06% 6   2.87% 1   0.27% 2  -0.59% 3   0.05% 4     2.66%

 1950-2      -0.06% 4   0.54% 5   0.48% 6   0.71% 1   0.18% 2     1.84%

 1954-2       0.31% 1   0.62% 2  -0.31% 3   0.04% 4   0.23% 5     0.89%

 1958-2      -0.29% 1   0.10% 2   0.60% 3  -0.48% 4   0.05% 5    -0.02%

 1962-2      -0.07% 4  -0.32% 5  -0.34% 1   0.40% 2   0.98% 3     0.65%

 

 Avg         -0.01%     0.76%     0.14%     0.02%     0.30%       1.20%

 

 1966-2       0.15% 2  -0.16% 3  -0.03% 4  -0.38% 5  -0.46% 1    -0.89%

 1970-2      -1.01% 1  -0.62% 2  -0.95% 3  -1.27% 4  -0.78% 5    -4.63%

 1974-2      -0.20% 5  -0.56% 1  -0.08% 2   1.09% 3  -0.50% 4    -0.25%

 1978-2       0.16% 3  -0.91% 4   0.00% 5   0.86% 1  -0.10% 2     0.01%

 1982-2       0.03% 1  -0.19% 2   0.48% 3   2.75% 4   1.24% 5     4.30%

 

 Avg         -0.17%    -0.49%    -0.12%     0.61%    -0.12%      -0.29%

 

 1986-2       0.47% 1   1.17% 2   0.23% 3  -0.46% 4   1.17% 5     2.57%

 1990-2      -1.27% 4  -0.09% 5  -0.18% 1  -0.68% 2   1.89% 3    -0.33%

 1994-2      -0.22% 2   0.48% 3   0.81% 4   0.35% 5   0.61% 1     2.03%

 1998-2      -0.07% 1   1.26% 2   0.87% 3   0.82% 4  -0.53% 5     2.36%

 2002-2       0.10% 5  -0.02% 1  -2.86% 2   1.17% 3   1.49% 4    -0.11%

 

 Avg         -0.20%     0.56%    -0.23%     0.24%     0.93%       1.30%

 

 2006-2      -0.17% 3   0.72% 4   0.78% 5   0.12% 1  -0.40% 2     1.04%

 2010-2       0.46% 1  -0.42% 2   0.49% 3  -1.18% 4  -0.98% 5    -1.64%

 2014-2      -0.49% 1   0.61% 2  -1.02% 3   1.13% 4  -0.65% 5    -0.41%

 2018-2       0.06% 4   1.18% 5  -0.67% 1  -1.09% 2   0.05% 3    -0.47%

 2022-2      -1.22% 2  -0.15% 3  -0.54% 4   2.43% 5   1.89% 1     2.42%

 

 Avg         -0.27%     0.39%    -0.19%     0.28%    -0.02%       0.19%

 

SPX summary for PY2 1930 - 2022

Averages     -0.33%     0.14%    -0.01%     0.27%     0.28%       0.35%

% Winners       42%       42%       46%       58%       58%         54%

MDD  1/29/1938  6.33% --  1/30/1970  4.55% --  1/29/2002  2.88%

 

SPX summary for all years 1928 - 2025

Averages     -0.06%     0.16%    -0.01%     0.11%     0.21%       0.42%

% Winners       52%       52%       46%       60%       60%         55%

MDD 1/29/1938  6.33% --  1/30/2009  5.52% --  1/30/1932  5.05%

 

Conclusion

Market breadth has remained strong in spite of the pull back in prices.

The strongest sectors last week were Energy (for the 2^nd week in a row) and Precious Metals while the weakest were Finance care and Internet (for the 2^nd week in a row.

I expect the major averages to be higher on Friday January 30 than they were on Friday January 23. 

Last week's positive forecast was a miss.

 

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More By This Author:

Technical Market Report For January 17, 2026
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