Technical Market Report For March 15, 2025
The good news is:
- When this decline hits bottom it should be easy to identify.
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 1st trading day of each month.
NY NH continued to deteriorate hitting its low for the period shown.
The next chart is similar to the 1st one except it shows the Nasdaq composite (OTC) in blue and OTC NH in green has been calculated with Nasdaq data.
OTC NH also fell to a new low for the past 6 months.
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 continued to deteriorate.
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 also continued to deteriorate.
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 resumed its downward move.
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 resumed its downward move.
The Positives
The market is oversold and due for a bounce.
If the bounce is going to have any legs, new lows will have to decline significantly (50<).
Seasonality
Next week includes the 5 trading days prior to the 3rd Friday of March during the 1st 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 1953 to 2024. There are summaries for both the 1st 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.
Seasonally for next week has been mixed and weaker during the 1st year of the Presidential Cycle than other years.
Report for the week before the 3rd Friday of March.
The number following the year is the position in the Presidential Cycle.
Daily returns from Monday through 3rd Friday.
OTC Presidential Year 1 (PY1)
Year Mon Tue Wed Thur Fri Totals
1965-1 0.62% 0.08% 0.14% 0.04% -0.27% 0.62%
1969-1 -0.44% -0.22% 0.01% 0.47% 0.60% 0.43%
1973-1 -0.11% 0.19% 0.01% 0.41% -1.13% -0.63%
1977-1 0.12% 0.21% 0.20% -0.17% 0.02% 0.39%
1981-1 0.63% -0.12% 0.40% 0.22% 0.90% 2.02%
Avg 0.17% 0.03% 0.15% 0.20% 0.03% 0.57%
1985-1 -0.41% 0.08% -1.14% -0.27% 0.18% -1.56%
1989-1 0.16% -0.14% 0.24% 0.62% -1.79% -0.90%
1993-1 0.35% 0.04% -1.16% 0.00% -0.68% -1.45%
1997-1 -1.05% -0.75% -1.60% 0.78% -0.41% -3.03%
2001-1 -6.30% 4.75% -2.12% -1.59% -2.57% -7.83%
Avg -1.45% 0.80% -1.16% -0.09% -1.05% -2.95%
2005-1 0.46% -0.78% -0.94% 0.03% -0.43% -1.66%
2009-1 -1.92% 4.14% 1.99% -0.52% -1.77% 1.92%
2013-1 0.26% -0.32% 0.09% 0.43% -0.30% 0.15%
2017-1 0.24% -0.32% 0.74% 0.01% 0.00% 0.67%
2021-1 1.05% 0.09% 0.40% -3.02% 0.76% -0.73%
Avg 0.02% 0.56% 0.45% -0.61% -0.35% 0.07%
OTC summary for PY1 1965 - 2021
Avg -0.42% 0.46% -0.18% -0.17% -0.46% -0.77%
Win% 60% 53% 67% 67% 40% 47%
OTC summary for all years 1963 - 2024
Avg -0.29% 0.27% 0.02% 0.19% -0.12% 0.08%
Win% 53% 58% 65% 71% 52% 58%
SPX PY1
Year Mon Tue Wed Thur Fri Totals
1953-1 0.15% 0.42% -0.34% -0.08% -0.15% 0.00%
1957-1 -0.66% -0.07% 0.66% 0.07% -0.05% -0.04%
1961-1 0.28% -0.44% 0.30% 1.01% 0.61% 1.76%
1965-1 0.03% -0.13% -0.13% -0.24% 0.03% -0.42%
1969-1 0.26% 0.24% 0.73% 0.64% -0.21% 1.66%
1973-1 0.06% 0.54% 0.44% -0.75% -0.51% -0.21%
1977-1 0.77% 0.55% 0.19% -0.09% -0.22% 1.20%
1981-1 1.18% -0.56% 0.22% -0.57% 0.46% 0.74%
Avg 0.46% 0.13% 0.29% -0.20% -0.09% 0.59%
1985-1 -0.17% 0.49% -0.82% -0.20% -0.74% -1.44%
1989-1 0.83% -0.06% 0.52% 0.93% -2.25% -0.03%
1993-1 0.36% -0.01% -0.68% 0.80% -0.38% 0.08%
1997-1 0.32% -0.76% -0.49% -0.40% 0.19% -1.14%
2001-1 -4.32% 1.48% -2.58% 0.59% -1.96% -6.79%
Avg -0.60% 0.23% -0.81% 0.34% -1.03% -1.86%
2005-1 0.56% -0.75% -0.81% 0.18% -0.05% -0.87%
2009-1 -0.35% 3.21% 2.09% -1.30% -1.98% 1.67%
2013-1 0.32% -0.24% 0.13% 0.56% -0.16% 0.61%
2017-1 0.04% -0.34% 0.84% -0.16% -0.13% 0.24%
2021-1 0.65% -0.16% 0.29% -1.48% -0.06% -0.76%
Avg 0.24% 0.35% 0.51% -0.44% -0.48% 0.18%
SPX summary for PY1 1953 - 2021
Avg 0.02% 0.19% 0.03% -0.03% -0.42% -0.21%
Win% 78% 39% 61% 44% 22% 50%
SPX summary for all years 1953 - 2024
Avg -0.11% 0.32% 0.09% 0.21% -0.05% 0.45%
Win% 61% 57% 58% 57% 56% 63%
Conclusion
At this point the only indicator that matters is new lows and they need to decline significantly for 5 consecutive days before any rally should be taken seriously.
The strongest sectors last week were Energy (up from the bottom last week) and Utilities while the weakest were Leisure and Transportation.
I expect the major averages to be lower on Friday, March 21 than they were on Friday, March 14.
Last week's positive forecast was a miss. I have been pretty reliably wrong so far this year.
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Disclosure: None
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