Technical Market Report For June 10, 2023
The good news is:
- The Nasdaq composite (OTC) closed at its high for the year last Thursday while the S&P 500 (SPX) closed at its high for this year on Friday.
The Negatives
The new high indicators moved sharply upward last week, but the raw numbers were short of what you would expect with new index highs.
The first chart covers the last 6 months showing the OTC in blue and a 10% trend (19 day EMA) of Nasdaq new highs (OTC NH) in brown. Dashed vertical lines have been drawn on the 1st trading day of the month.
OTC NH moved sharply upward, but remains short of confirming the new OTC high.
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 moved sharply upward last week, but remains a long way from confirming the new SPX high.
The Positives
New lows declined significantly on both markets last week.
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 moved into positive territory last 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 made a sharp move into positive territory.
The next chart covers the last 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 moved sharply upward last week.
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 also moved sharply upward last week.
Summation indices are running totals of oscillator values.
Short term momentum indicators applied to summation indices make them binary so position is most important.
The next chart covers the past 6 months showing momentum of summation indices of oscillators of advancing and declining issues, new highs and new lows and upside and downside volume on the NYSE.
NYSE SI’s momentum indicators made a sharp reversal and went positive last week.
The next chart is similar to the one above, except is shows the OTC as the index and the SI’s have been generated from Nasdaq data.
All of Nasdaq SI’s turned upward last week.
Seasonality
Next week includes the 5 trading days prior to the 3rd Friday of June during the 3rd 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 2022 while SPX data runs from 1953 to 2022. There are summaries for both the 3rd 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; very strong during the 3rd week of the Presidential Cycle and weak all of the other years.
Report for the week before the 3rd Friday of June. The number following the year is the position in the Presidential Cycle. Daily returns from Monday through 3rd Friday. OTC Presidential Year 3 (PY3) Year Mon Tue Wed Thur Fri Totals 1963-3 -0.03% 0.03% 0.44% 0.27% 0.24% 0.94% 1967-3 0.73% 0.67% 0.64% 0.15% 0.62% 2.81% 1971-3 -0.57% -0.19% 0.07% 0.00% -1.17% -1.86% 1975-3 0.70% -0.69% 0.05% 1.29% 0.82% 2.16% 1979-3 0.06% 0.65% 0.07% 0.01% 0.17% 0.95% Avg 0.18% 0.09% 0.25% 0.43% 0.13% 1.00% 1983-3 0.89% 0.63% 0.62% 1.38% -0.12% 3.41% 1987-3 0.00% 0.50% 0.21% 0.12% 0.03% 0.87% 1991-3 -0.15% -0.55% -1.27% 0.11% -0.01% -1.88% 1995-3 0.41% 0.70% 0.17% 0.78% 0.66% 2.72% 1999-3 -2.03% 0.68% 4.27% 1.04% 0.76% 4.73% Avg -0.18% 0.39% 0.80% 0.69% 0.26% 1.97% 2003-3 2.46% 0.11% 0.52% -1.70% -0.24% 1.16% 2007-3 -0.05% -0.87% 1.28% 0.66% 1.05% 2.06% 2011-3 -0.15% 1.48% -1.76% -0.29% -0.28% -1.01% 2015-3 -0.42% 0.51% 0.18% 1.34% -0.31% 1.31% 2019-3 0.62% 1.39% 0.42% 0.80% -0.24% 2.99% Avg 0.49% 0.52% 0.13% 0.16% 0.00% 1.30% OTC summary for PY3 1963 - 2019 Avg 0.16% 0.34% 0.39% 0.43% 0.13% 1.42% Win% 53% 73% 87% 86% 53% 80% OTC summary for all years 1963 - 2022 Avg -0.21% 0.18% 0.05% -0.05% -0.01% -0.04% Win% 45% 62% 61% 50% 54% 52% SPX PY3 Year Mon Tue Wed Thur Fri Totals 1955-3 0.94% -0.13% 0.81% 0.18% 0.35% 2.15% 1959-3 -0.52% -0.75% 0.94% -0.07% 0.14% -0.27% 1963-3 -0.44% 0.11% 0.10% -0.11% 0.34% 0.00% 1967-3 0.52% 0.63% -0.24% 0.10% 0.05% 1.07% 1971-3 -0.84% 0.10% 0.20% -0.02% -1.52% -2.08% 1975-3 1.04% -0.96% -0.21% 1.80% 0.64% 2.31% 1979-3 0.41% 0.92% -0.53% -0.11% -0.11% 0.60% Avg 0.14% 0.16% -0.13% 0.33% -0.12% 0.38% 1983-3 1.33% 0.42% 0.96% 1.21% -0.01% 3.91% 1987-3 0.35% 0.68% 0.02% 0.29% 0.42% 1.76% 1991-3 -0.57% -0.41% -0.92% 0.09% 0.62% -1.19% 1995-3 0.56% 0.97% 0.08% 0.12% 0.50% 2.23% 1999-3 0.02% 0.56% 2.24% 0.71% 0.22% 3.76% Avg 0.34% 0.45% 0.47% 0.48% 0.35% 2.10% 2003-3 2.24% 0.09% -0.16% -1.52% 0.00% 0.65% 2007-3 0.10% -1.07% 1.52% 0.48% 0.65% 1.68% 2011-3 0.07% 1.26% -1.74% 0.18% 0.30% 0.06% 2015-3 -0.46% 0.57% 0.20% 0.99% -0.53% 0.76% 2019-3 0.09% 0.97% 0.30% 0.95% -0.13% 2.18% Avg 0.41% 0.36% 0.02% 0.21% 0.08% 1.07% SPX summary for PY3 1955 - 2019 Avg 0.28% 0.23% 0.21% 0.31% 0.12% 1.15% Win% 71% 71% 65% 71% 69% 82% SPX summary for all years 1953 - 2022 Avg -0.12% 0.18% 0.00% -0.16% -0.04% -0.13% Win% 57% 57% 46% 49% 56% 54%
Conclusion
Last week the indices took off and new lows disappeared, here we go.
The strongest sectors last week were Energy and Finance while the weakest were Telecom and Precious Metals (for the 4th week in a row).
I expect the major averages to be higher on Friday, June 16 than they were on Friday, June 9.
Last week's negative forecast was a miss.
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