Technical Market Report For June 24, 2023

The good news is:

  • Extremely high downside volume on the Nasdaq may indicate a climactic downside event.

 

The Negatives

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 first 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.  Dashed vertical lines have been drawn on the 1st trading day of each month.

NYSE SI’s momentum indicators all turned downward last week.

 

The next chart is similar to the one above, except is shows the OTC, in blue, as the index and the SI’s have been generated from Nasdaq data.  

All of Nasdaq SI momentum indicators also turned downward. 

 

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 turned downward 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 turned downward last week.

 

The next chart covers the last 6 months showing the SPX in red and a 10% trend (19 day EMA) of NYSE new highs (NY NH) in green.  

NY NH failed to confirm the recent SPX high.

 

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 fell into negative territory last week. 

 

The Positives

There was huge downside volume on the Nasdaq Friday (over 5 billion shares) which could be indicative of a climactic low.

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 fell sharply, but remained in positive territory.  

 

The next chart is similar to the one showing NY NH above except it shows the OTC in green and OTC NH, in green, has been calculated with Nasdaq data.

OTC NH confirmed the recent OTC high suggesting a higher high in the near future..

 

Seasonality

Next week includes the last 5 trading days 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 1928 to 2022.  There are summaries for both the 3rd year of the Presidential Cycle and all years combined.  

Average returns for the coming week have been modest and mixed. 

Report for the last 5 days of June.

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 3 (PY3)

               Day5      Day4      Day3      Day2      Day1      Totals

 1963-3       0.41% 1   0.20% 2  -0.41% 3  -0.79% 4  -0.35% 5    -0.94%

 1967-3       0.30% 1  -0.62% 2  -0.07% 3   0.22% 4   0.47% 5     0.30%

 1971-3       0.36% 4   0.18% 5  -0.10% 1   0.72% 2   0.54% 3     1.70%

 1975-3       0.54% 2   0.08% 3   0.17% 4   0.06% 5   0.60% 1     1.45%

 1979-3      -0.26% 1  -0.26% 2   0.64% 3   0.49% 4   0.04% 5     0.65%


 Avg          0.27%    -0.08%     0.05%     0.14%     0.26%       0.63%


 1983-3       0.48% 5  -1.39% 1  -2.61% 2   0.12% 3   0.78% 4    -2.62%

 1987-3      -0.17% 3  -0.01% 4  -0.12% 5  -0.05% 1  -0.42% 2    -0.78%

 1991-3      -2.18% 1  -0.41% 2  -0.05% 3   0.67% 4  -0.07% 5    -2.03%

 1995-3      -1.27% 1  -0.80% 2   0.10% 3   0.68% 4   0.72% 5    -0.56%

 1999-3      -1.70% 4  -0.05% 5   1.95% 1   1.53% 2   1.65% 3     3.37%


 Avg         -0.97%    -0.53%    -0.14%     0.59%     0.53%      -0.52%


 2003-3      -0.32% 2  -0.18% 3   1.96% 4  -0.54% 5  -0.15% 1     0.77%

 2007-3      -0.46% 1  -0.11% 2   1.21% 3   0.12% 4  -0.20% 5     0.56%

 2011-3      -1.26% 5   1.33% 1   1.53% 2   0.41% 3   1.21% 4     3.21%

 2015-3      -0.73% 3  -0.20% 4  -0.62% 5  -2.40% 1   0.57% 2    -3.38%

 2019-3      -0.32% 1  -1.51% 2   0.32% 3   0.73% 4   0.48% 5    -0.30%


 Avg         -0.62%    -0.13%     0.88%    -0.34%     0.38%       0.17%


OTC summary for PY3 1963 - 2019

Averages     -0.44%    -0.25%     0.26%     0.13%     0.39%       0.09%

% Winners       33%       27%       53%       73%       67%         53%

MDD  6/28/1983  3.96% --  6/29/2015  3.91% --  6/26/1991  2.62%


OTC summary for all years 1963 - 2022

Averages     -0.26%    -0.09%     0.02%     0.12%     0.27%       0.05%

% Winners       40%       45%       55%       63%       63%         58%

MDD 6/30/2010  6.43% --  6/27/2016  6.43% --  6/30/1970  6.40%


SPX PY3

               Day5      Day4      Day3      Day2      Day1      Totals

 1931-3      -0.66% 4   2.40% 5   0.98% 6  -2.65% 1  -1.72% 2    -1.65%

 1935-3      -1.43% 2  -1.16% 3  -0.49% 4   0.89% 5  -0.10% 6    -2.30%

 1939-3      -2.01% 1   0.44% 2  -2.04% 3  -2.44% 4   0.65% 5    -5.39%


 1943-3       2.18% 5   0.33% 6   0.57% 1  -0.32% 2   0.57% 3     3.32%

 1947-3      -1.97% 2   0.80% 3   0.40% 4   0.00% 5   0.60% 1    -0.17%

 1951-3      -1.21% 1   0.05% 2   0.33% 3  -1.26% 4  -0.66% 5    -2.76%

 1955-3       0.52% 5   0.07% 1  -0.54% 2   0.05% 3   0.59% 4     0.69%

 1959-3       0.51% 3   0.03% 4   0.96% 5   0.67% 1   0.17% 2     2.34%


 Avg          0.00%     0.26%     0.34%    -0.17%     0.25%       0.68%


 1963-3      -0.07% 1  -0.23% 2  -0.90% 3  -0.49% 4   0.43% 5    -1.25%

 1967-3      -0.39% 1  -0.37% 2   0.01% 3  -0.50% 4  -0.23% 5    -1.49%

 1971-3      -0.24% 4  -0.18% 5  -0.26% 1   1.10% 2   0.89% 3     1.31%

 1975-3       0.61% 2   0.46% 3   0.20% 4   0.00% 5   0.40% 1     1.67%

 1979-3      -0.54% 1  -0.42% 2   0.60% 3   0.52% 4   0.11% 5     0.27%


 Avg         -0.13%    -0.15%    -0.07%     0.13%     0.32%       0.10%


 1983-3      -0.10% 5  -1.14% 1  -1.65% 2   0.58% 3   0.88% 4    -1.43%

 1987-3      -0.51% 3   0.68% 4  -0.58% 5   0.24% 1  -1.27% 2    -1.43%

 1991-3      -1.80% 1  -0.08% 2   0.25% 3   0.76% 4  -0.87% 5    -1.74%

 1995-3      -1.02% 1  -0.31% 2   0.42% 3  -0.16% 4   0.16% 5    -0.90%

 1999-3      -1.30% 4  -0.04% 5   1.22% 1   1.51% 2   1.57% 3     2.97%


 Avg         -0.94%    -0.18%    -0.07%     0.59%     0.10%      -0.51%


 2003-3       0.18% 2  -0.83% 3   1.08% 4  -0.97% 5  -0.18% 1    -0.72%

 2007-3      -0.32% 1  -0.32% 2   0.90% 3  -0.04% 4  -0.16% 5     0.06%

 2011-3      -1.17% 5   0.92% 1   1.29% 2   0.83% 3   1.01% 4     2.88%

 2015-3      -0.74% 3  -0.30% 4  -0.04% 5  -2.09% 1   0.27% 2    -2.89%

 2019-3      -0.17% 1  -0.95% 2  -0.12% 3   0.38% 4   0.58% 5    -0.29%


 Avg         -0.44%    -0.30%     0.62%    -0.38%     0.30%      -0.19%


SPX summary for PY3 1931 - 2019

Averages     -0.51%    -0.01%     0.11%    -0.15%     0.16%      -0.39%

% Winners       22%       43%       61%       48%       65%         39%

MDD  6/29/1939  5.93% --  6/30/1931  4.32% --  6/29/2015  3.13%


SPX summary for all years 1928 - 2022

Averages     -0.24%    -0.01%    -0.08%     0.13%     0.16%      -0.06%

% Winners       42%       46%       50%       59%       59%         48%

MDD 6/29/1950  8.88% --  6/29/1939  5.93% --  6/30/2010  5.62%

 

Conclusion

After hitting new highs for the year, all of the major indices retreated.

Volume and especially downside volume was spectacular last Friday.  That could be indicative of a climactic low.

The strongest sectors last week were Health care and Retail while the weakest were Utilities and Precious Metals (for the 6th week in a row).

I expect the major averages to be lower on Friday June 30 than they were on Friday June 23.

Last week's positive forecast was a miss.


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