Technical Market Report

The good news is:​ The breadth indicators held up well during the recent period of weakness.

The Negatives

Nasdaq breadth indicators have been weaker than the NYSE breath indicators. 

The Positives

The breadth indicators have been holding up well and March is one of the strongest months in the strongest year of the Presidential Cycle. New lows have remained insignificant. The recent period of weakness has attenuated the recent overbought condition.

The first chart covers the past 6 months showing the Nasdaq composite (OTC) in blue and a 10% trend (19 day EMA) of Nasdaq new highs (OTC NH) in green. Dashed vertical lines have been drawn on the first trading day of each month.

 OTC NH stalled along with prices last week.

The next chart is similar to the one above, except, it shows the S&P 500 (SPX) in red and NY NH, in green has been calculated with NYSE data.

NY NH continued moving upward.

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.

 NY HL Ratio finished the week at 90%, very strong. 

The next chart is similar to the one above except it shows the NASDAQ composite (OTC) in blue and OTC HL Ratio, in red, has been calculated with NASDAQ data.

OTC HL Ratio fell last week finishing the week at a respectable 75%

Seasonality

Next week includes the 5 trading days prior to the 2nd Friday of March 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 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.

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