• 288 days Will The ECB Continue To Hike Rates?
  • 288 days Forbes: Aramco Remains Largest Company In The Middle East
  • 290 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 690 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 700 days Big Tech Disappoints Investors on Earnings Calls
  • 701 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 703 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 707 days Crypto Investors Won Big In 2021
  • 707 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 708 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 710 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 714 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 715 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 717 days Are NFTs About To Take Over Gaming?
How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

  1. Home
  2. Markets
  3. Other

Technical Market Report

The good news is:
 • The NASDAQ composite (OTC), S&P 500 (SPX) and Wilshire 5000all closed at multi year highs on Friday. By itself, that defines a bull market.

Short term

Last week we finally saw new lows dry up.

New lows on the NASDAQ fell from 34 on Monday to 8 on Friday, the lowest number in a long time.

As of last Friday the Wilshire 5000 (WIL5) and several other indices including the OTC, Russell 3000, SPX and S&P Mid cap had been up for 7 consecutive days.

Including last Friday the WIL5 has managed to rise for 7 or more consecutive days 6 times since 1998 and the index has always continued to move higher after a brief pull back.

The occurrences and their dates are listed below along with the depth of the pull back that followed and the number of days that it lasted.

8/8/2000 -1.5% 2 days
3/21/2003 -4.9% 6 days
9/4/2003 -2.2% 4 days
6/2/2004(9) -0.9% 1 day 9 consecutive up days
7/15/2005 -0.5% 1 day
11/25/2005

The chart below shows past 9 months with the WIL5 in red and an indicator that shows the percentage of the 7 previous trading days that were up, vertical dashed lines are drawn on the 1st trading day of each month. To reach the top of the screen there must have been 7 consecutive up days. The last occurrence was on July 15, 2005 about 2 weeks before and 2% below the early August high.

Intermediate term

Summation indices (SI) are running totals of oscillator values.
The chart below shows the OTC in red, OTC AD SI calculated from NASDAQ advancing issues - declining issues, OTC HL SI calculated from NASDAQ new highs - new lows and OTC UD SI calculated from NASDAQ upside - downside volume. The direction of SI's make good intermediate term indicators as of Friday they were all moving sharply upward.

Seasonality

Next week includes the last 3 trading days of November and the first 2 trading days of December. The OTC during this period has been up 70% of the time since 1963, the SPX has been up about 60% of the time since 1928.

The tables below show daily performance during the 1st year of the Presidential Cycle. There are summaries for both the 1st year of the Presidential Cycle and all years combined. Data for the OTC covers the period from 1963 - 2004 while SPX data runs from 1928 - 2004.

Last 3 days of November and first 2 days of December.
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 1
  Day3 Day2 Day1 Day1 Day2 Totals
1965-1 0.47% 5 0.47% 1 0.11% 2 0.52% 3 0.21% 4 1.78%
1969-1 -1.24% 2 0.05% 3 -0.11% 5 0.16% 1 -0.55% 2 -1.70%
1973-1 0.86% 3 -0.34% 4 -1.17% 5 -1.65% 1 -0.45% 2 -2.74%
1977-1 -0.26% 1 -0.83% 2 -0.05% 3 0.51% 4 0.41% 5 -0.21%
1981-1 0.49% 3 0.50% 5 0.17% 1 -0.12% 2 -0.39% 3 0.66%
Avg 0.06% -0.03% -0.21% -0.11% -0.15% -0.44%
 
1985-1 0.24% 2 0.81% 3 0.30% 5 -0.32% 1 0.06% 2 1.09%
1989-1 0.11% 2 -0.19% 3 0.06% 4 0.22% 5 0.26% 1 0.46%
1993-1 0.22% 5 -0.44% 1 0.38% 2 1.25% 3 0.38% 4 1.79%
1997-1 0.13% 2 0.35% 3 0.38% 5 1.88% 1 -1.49% 2 1.25%
2001-1 -2.48% 3 2.40% 4 -0.14% 5 -1.33% 1 3.06% 2 1.51%
Avg -0.36% 0.59% 0.20% 0.34% 0.45% 1.22%
 
OTC summary for Presidential year 1 1965 - 2001
Averages -0.15% 0.28% -0.01% 0.11% 0.15% 0.39%
% Winners 70% 60% 60% 60% 60% 70%
MDD 12/4/1973 3.56% -- 11/28/2001 2.48% -- 12/2/1969 1.69%
 
OTC summary for all years 1963 - 2004
Averages 0.01% 0.36% -0.10% 0.37% 0.09% 0.74%
% Winners 67% 71% 67% 67% 62% 71%
MDD 11/30/2000 9.81% -- 11/30/1987 3.97% -- 12/3/1974 3.89%
 
SPX Presidential Year 1
  Day3 Day2 Day1 Day1 Day2 Totals
1929-1 -1.16% 1 -2.91% 2 1.26% 3 0.14% 1 3.34% 2 0.67%
1933-1 -3.49% 1 0.10% 2 1.86% 3 0.30% 5 0.10% 6 -1.12%
1937-1 4.78% 6 -1.97% 1 1.37% 2 -1.26% 3 2.01% 4 4.93%
1941-1 -0.65% 4 -0.98% 5 -0.22% 6 -0.33% 1 2.09% 2 -0.08%
 
1945-1 -0.52% 3 -0.18% 4 0.94% 5 0.58% 6 0.87% 1 1.69%
1949-1 -0.56% 1 -0.19% 2 0.25% 3 0.56% 4 0.80% 5 0.87%
1953-1 0.08% 3 0.57% 5 0.41% 1 0.08% 2 0.69% 3 1.82%
1957-1 -2.65% 2 2.89% 3 1.14% 5 -0.86% 1 0.02% 2 0.55%
1961-1 -0.14% 2 -0.07% 3 -0.53% 4 0.64% 5 0.32% 1 0.23%
Avg -0.76% 0.61% 0.44% 0.20% 0.54% 1.03%
 
1965-1 0.10% 5 -0.25% 1 -0.21% 2 -0.12% 3 -0.32% 4 -0.80%
1969-1 -0.32% 2 0.36% 3 0.58% 5 -0.63% 1 -0.61% 2 -0.63%
1973-1 2.04% 3 -0.35% 4 -1.39% 5 -2.15% 1 -0.33% 2 -2.17%
1977-1 -0.67% 1 -1.55% 2 0.30% 3 -0.15% 4 -0.02% 5 -2.10%
1981-1 0.44% 3 0.84% 5 1.01% 1 -0.20% 2 -1.12% 3 0.97%
Avg 0.32% -0.19% 0.06% -0.65% -0.48% -0.95%
 
1985-1 0.16% 2 0.93% 3 -0.18% 5 -0.85% 1 0.20% 2 0.26%
1989-1 0.05% 2 -0.63% 3 0.70% 4 1.34% 5 0.22% 1 1.68%
1993-1 0.15% 5 -0.25% 1 -0.02% 2 0.02% 3 0.26% 4 0.16%
1997-1 0.44% 2 0.09% 3 0.40% 5 2.03% 1 -0.32% 2 2.63%
2001-1 -1.83% 3 1.03% 4 -0.07% 5 -0.84% 1 1.32% 2 -0.38%
Avg -0.21% 0.24% 0.16% 0.34% 0.34% 0.87%
 
SPX summary for Presidential year 1 1929 - 2001
Averages -0.20% -0.13% 0.40% -0.09% 0.50% 0.48%
% Winners 47% 42% 63% 47% 68% 63%
MDD 12/4/1973 4.16% -- 11/26/1929 4.04% -- 11/27/1933 3.49%
 
SPX summary for all years 1928 - 2004
Averages -0.05% 0.00% 0.15% 0.06% 0.09% 0.25%
% Winners 49% 52% 55% 52% 56% 58%
MDD 11/30/1987 6.53% -- 12/2/1931 5.04% -- 12/2/1932 4.99%

December

On average December is usually up, however Decembers have been weakest during the 1st year of the Presidential cycle.

The chart below shows the OTC average December for all years in yellow and the average for the 1st year of the Presidential Cycle in white. Dates covered are 1963 - 2004.

The next chart shows the SPX average December for all years in grey and the average for the 1st year of the Presidential Cycle in white. Dates covered are 1928 - 2004.

Conclusion

Seasonally Thanksgiving week is usually strong and last week was stronger than usual and breadth indicators confirmed the strength in prices. This strength suggests more to come on the upside.

I expect the major indices to be higher on Friday December 2 than they were on Friday November 25.

This report is free to anyone who wants it, so please tell your friends. They can sign up at: http://alphaim.net/signup.html. If it is not for you, reply with REMOVE in the subject line.

Back to homepage

Leave a comment

Leave a comment