The good news is:​ All of the major averages closed at all-time highs last Friday.

The Negatives

Not much to report here; the only sector having any difficulty is Precious Metals.

The first chart covers the past 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 unambiguously failed to confirm the new SPX high; however, it is moving sharply upward.

​​​​​​The Positives

Not much to say here either. The only important index or indicator failing to confirm the new highs was NY NH and it is moving sharply upward.

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

OTC NH continued its moon shot confirming the new OTC 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.

OTC HL Ratio rose to its highest level since last February.

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 rose to its highest level in over 2 years.

Seasonality

Next week includes the 4 trading days prior to the 4th Friday of December during the 3rd year of the Presidential Cycle. Christmas often falls on this week so there are a lot of 0’s in the tables.

OTC data covers the period from 1963 to 2018 while SPX data runs from 1953 to 2018. 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 positive by all measures.

Report for the week before the 4th Friday of December.
The number following the year is the position in the Presidential Cycle.
Daily returns from Monday through the 4th Friday.

OTC Presidential Year 3 (PY3)
 Year       Mon     Tue     Wed    Thur    Fri    Totals
 1963-3  -0.14%  -0.46%   0.00%   0.20%   0.83%   0.43%
 1967-3  -0.30%  -0.49%  -0.35%  -0.65%  -0.25%  -2.05%
 1971-3  -0.21%   0.21%   0.57%   0.36%   1.02%   1.94%
 1975-3  -0.43%   0.38%   0.65%   0.00%   1.00%   1.59%

 1979-3  -0.13%   0.00%   0.03%   0.15%   0.40%   0.44%
 1983-3  -0.16%  -0.39%   0.41%   0.21%   0.12%   0.19%
 1987-3   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%
 1991-3   1.52%   1.04%   0.00%   1.77%   1.14%   5.48%
 1995-3  -2.71%   2.37%  -0.11%   1.49%   0.61%   1.66%

 Avg     -0.37%   1.01%   0.11%   0.91%   0.57%   1.94%

 1999-3   0.15%  -0.08%   1.75%  -0.11%   0.80%   2.50%
 2003-3   0.25%   0.97%  -0.28%   0.00%   0.20%   1.13%
 2007-3   0.80%   0.00%   0.40%  -1.75%  -0.09%  -0.63%
 2011-3  -1.26%   3.19%  -0.99%   0.83%   0.74%   2.52%
 2015-3   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 Avg     -0.02%   1.36%   0.22%  -0.34%   0.41%   1.38%

OTC summary for PY3 1963 - 2015 
 Avg     -0.22%   0.68%   0.21%   0.25%   0.54%   1.27%
 Win%       33%     60%     60%     70%     83%     83%

OTC summary for all years 1963 - 2018
 Avg     -0.29%  -0.03%   0.13%   0.22%   0.43%   0.41%
 Win%       42%     43%     60%     65%     75%     63%


SPX PY3
 Year       Mon     Tue     Wed    Thur    Fri    Totals
 1955-3  -0.24%  -0.16%   0.87%   0.15%   0.20%   0.82%

 1959-3   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%
 1963-3  -0.63%   0.22%   0.00%   0.47%   0.16%   0.22%
 1967-3  -0.27%  -0.15%   0.55%   0.24%  -0.19%   0.18%
 1971-3   0.21%   0.99%   0.26%  -0.42%   0.30%   1.34%
 1975-3  -0.74%   0.67%   0.82%   0.00%   0.88%   1.63%

 Avg     -0.36%   0.43%   0.54%   0.10%   0.29%   0.84%

 1979-3   0.07%   0.00%   0.11%   0.17%  -0.11%   0.23%
 1983-3  -0.04%  -0.20%   0.96%  -0.18%  -0.03%   0.51%
 1987-3   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%
 1991-3   2.53%   0.63%   0.00%   1.38%   0.40%   4.94%
 1995-3  -1.55%   0.84%  -0.98%   0.75%   0.24%  -0.69%

 Avg      0.25%   0.43%   0.03%   0.53%   0.12%   1.25%

 1999-3  -0.09%   0.04%   0.40%   0.07%   0.33%   0.75%
 2003-3   0.39%   0.28%  -0.18%   0.00%   0.17%   0.66%
 2007-3   0.81%   0.00%   0.08%  -1.42%   0.14%  -0.39%
 2011-3  -1.17%   2.98%   0.19%   0.83%   0.90%   3.73%
 2015-3   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%

 Avg     -0.02%   1.10%   0.12%  -0.18%   0.39%   1.19%

SPX summary for PY3 1955 - 2015 
 Avg     -0.06%   0.56%   0.28%   0.19%   0.26%   1.07%
 Win%       38%     73%     82%     73%     77%     85%

SPX summary for all years 1953 - 2018
 Avg     -0.21%   0.02%   0.30%   0.17%   0.21%   0.43%
 Win%       37%     49%     65%     61%     71%     69%

Conclusion

The last half of December is a time equities usually drift upward on low volume. The difference this year is volume has been huge.

I expect the major averages to be higher on Friday, December 27 than they were on Friday, December 20.