Technical Market Report For March 22, 2025
The good news is:
- New lows declined a bit last week.
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 rose last week, but remained in negative territory.
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 rose last week, but remained in negative territory.
The Positives
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 moved sharply upward.
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.
Seasonality
Next week includes the 5 trading days prior to the 4th 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 distorted by a huge gain in 2009.
Report for the week before the 4th Friday of March.
The number following the year is the position in the Presidential Cycle.
Daily returns from Monday through the 4th Friday.
OTC Presidential Year 1 (PY1)
Year Mon Tue Wed Thur Fri Totals
1965-1 0.02% -0.25% -0.10% 0.08% -0.14% -0.39%
1969-1 0.06% -0.10% -0.29% 0.15% 0.34% 0.16%
1973-1 -1.06% -0.57% -1.17% -1.85% -0.19% -4.83%
1977-1 -0.19% -0.22% -0.30% -0.23% -0.27% -1.21%
1981-1 0.64% 0.04% 0.78% 0.11% -0.34% 1.22%
Avg -0.10% -0.22% -0.22% -0.35% -0.12% -1.01%
1985-1 -0.30% 0.62% -0.03% 0.09% -0.04% 0.34%
1989-1 -0.09% 0.51% 0.27% 0.21% 0.54% 1.44%
1993-1 -0.89% -0.23% -0.10% 0.99% 0.08% -0.16%
1997-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2001-1 3.19% -4.81% -1.46% 3.69% 1.63% 2.24%
Avg 0.48% -0.98% -0.33% 1.24% 0.55% 0.96%
2005-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2009-1 6.76% -2.52% 0.82% 3.80% -2.63% 6.22%
2013-1 -0.35% -0.26% 0.78% -0.97% 0.70% -0.11%
2017-1 0.01% -1.83% 0.48% -0.07% 0.19% -1.21%
2021-1 1.23% -1.12% -2.01% 0.12% 1.24% -0.54%
Avg 1.91% -1.43% 0.02% 0.72% -0.13% 1.09%
OTC summary for PY1 1965 - 2021
Avg 0.69% -0.83% -0.18% 0.47% 0.08% 0.24%
Win% 54% 23% 38% 69% 54% 46%
OTC summary for all years 1963 - 2024
Avg 0.01% 0.00% 0.00% 0.29% -0.09% 0.20%
Win% 52% 46% 50% 57% 54% 56%
SPX PY1
Year Mon Tue Wed Thur Fri Totals
1953-1 -0.61% 0.58% -0.27% -0.57% 0.15% -0.72%
1957-1 -0.45% 0.43% 0.14% 0.02% -0.11% 0.02%
1961-1 0.40% -0.19% -0.06% -0.26% -0.17% -0.28%
1965-1 -0.01% 0.12% 0.18% -0.29% -0.74% -0.74%
1969-1 -0.13% 0.16% 0.73% 0.71% 0.41% 1.88%
1973-1 -1.21% -0.20% -1.30% -1.49% 0.04% -4.16%
1977-1 -0.54% -0.31% -0.79% -0.50% -0.64% -2.78%
1981-1 1.20% -0.75% 1.81% -0.61% -1.19% 0.46%
Avg -0.14% -0.20% 0.13% -0.44% -0.43% -1.07%
1985-1 0.20% 1.50% -0.26% 0.15% -0.17% 1.42%
1989-1 0.55% 0.35% 0.26% 0.06% 0.80% 2.02%
1993-1 -0.29% -0.03% -0.15% 0.63% -0.69% -0.53%
1997-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2001-1 1.76% -2.41% -1.79% -0.41% 1.99% -0.85%
Avg 0.56% -0.14% -0.49% 0.11% 0.48% 0.52%
2005-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2009-1 7.08% -5.97% 5.18% 2.33% -2.03% 6.59%
2013-1 -0.55% -0.24% 0.67% -0.83% 0.72% -0.23%
2017-1 -0.20% -1.24% 0.19% -0.11% -0.08% -1.44%
2021-1 0.70% -0.76% -0.55% 0.52% 1.66% 1.58%
Avg 1.76% -2.05% 1.37% 0.48% 0.07% 1.62%
SPX summary for PY1 1953 - 2021
Avg 0.49% -0.56% 0.25% -0.04% 0.00% 0.14%
Win% 44% 38% 50% 44% 44% 44%
SPX summary for all years 1953 - 2024
Avg 0.03% 0.06% 0.03% 0.10% -0.14% 0.08%
Win% 43% 48% 43% 44% 52% 41%
Money supply (M2) and Interest Rates
The charts below were provided by Gordon Harms and produced with FastTrack.
The chart below shows the SPX in red and M2 money supply in green. They have been plotted using the same scaling so the movement in M2 does not show up very well. M2 has been rising slowly for the past several months, however the Fed announced last week that they would be reducing QT substantially.
Treasury rates at their close last Friday and their changes from last month:
2yr yield 3.967% down from 4.202%
5yr yield 4.003% down from 4.275%
10yr yield 4.258% down from 4.430%
30yr yield 4.593% down from 4.683%
Many economists consider the un-inverting of the yield curve a bad sign for the economy.
The chart below covers the past 3 years showing the 30 year treasury rate in red, 10 year in green, 5 year in yellow and the 2 year in purple.
Conclusion
New lows declined nicely at the beginning of last week, but moved up to uncomfortable levels at the end of the week..
The strongest sectors last week were Energy (for the 2nd week) and Precious Metals, while the weakest were Electronics and Basic Materials.
I expect the major averages to be lower on Friday March 28 than they were on Friday March 21.
Last weeks negative forecast was a miss. My forecasts continue to be reliably wrong.
More By This Author:
Technical Market Report For March 15, 2025
Technical Market Report For March 8, 2025
Technical market report for March 1, 2025
Disclosure: None
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