Technical Market Report for November 5, 2016

By: Mike Burk | Mon, Nov 7, 2016
Print Email

The good news is:
•The end is near and it should be easy to spot when it comes.


The Negatives

We are nearing the point where the Fed steps in and props up the market.

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 lows (NY NL) in blue. Dashed vertical lines have been drawn on the 1st trading day of each month. NY NL has been plotted on an inverted Y axis so decreasing numbers of new lows move the indicator upward. Up is good.

The current value of the indicator is 56 and that number has been exceeded every day since October 26.

SPX and NY NL 6-Month Chart

The next chart is similar to the one above except it covers the past year.

Last January the value of the indicator hit 544, nearly 10 times what it is now, but the current value is at its highest level since the indicator recovered from its low last spring. This indicator is easy to read because it is not subtle.

SPX and NY NL 1-Year Chart

The next chart is similar to the first one except it shows the NASDAQ composite (OTC) in blue and OTC NL, in orange has been calculated with NASDAQ data.

Patterns of the two charts are similar.

OTC and OTC NL 6-Month Chart

The next chart is similar to the one above except covers the past year.

The pattern is similar to the NYSE chart.

OTC and OTC NL 1-Year Chart

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.

At 18% the indicator is at its lowest level in the past 6 months.

There is nothing pretty about this chart.

OTC and OTC HL Ratio Chart

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 from NYSE data.

NY HL Ratio went negative for the first time in over 6 months.

SPX and NY HL Ratio Chart


The Positives

The market will be in freefall until the new low indicators turn sharply upward. Fortunately that is easy to spot.


Seasonality

Next week includes the 5 trading days prior to the 2nd Friday of November during the 4th 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 2015 while SPX data runs from 1953 to 2015. There are summaries for both the 4th 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 mostly negative.

Report for the week before the 2nd Friday of November.
The number following the year is the position in the Presidential Cycle.
Daily returns from Monday to 2nd Friday.

OTC Presidential Year 4
Year Mon Tue Wed Thur Fri Totals
1964-4 0.25% 0.25% -0.27% 0.16% 0.30% 0.68%
1968-4 -0.68% 0.00% -0.54% 0.06% -0.09% -1.25%
1972-4 0.18% 0.00% -0.39% -0.18% 0.23% -0.16%
 
1976-4 -0.82% -0.74% -0.30% 0.38% -0.06% -1.54%
1980-4 -0.21% 0.99% 1.42% 1.25% 0.75% 4.20%
1984-4 0.20% 0.86% -0.32% -0.10% 0.00% 0.64%
1988-4 -1.18% 0.62% -0.29% 0.17% -1.23% -1.91%
1992-4 0.85% 0.92% 1.14% -0.09% 0.44% 3.26%
Avg -0.23% 0.53% 0.33% 0.32% -0.02% 0.93%
 
1996-4 -0.11% 0.70% 1.37% 0.66% 0.27% 2.89%
2000-4 -1.03% -0.01% -5.39% -0.97% -5.36% -12.75%
2004-4 0.02% 0.20% -0.43% 1.31% 1.17% 2.27%
2008-4 -1.86% -2.22% -5.17% 6.50% -5.00% -7.74%
2012-4 0.59% 0.41% -2.48% -1.42% 0.32% -2.58%
Avg -0.48% -0.18% -2.42% 1.22% -1.72% -3.58%
 
OTC summary for Presidential Year 4 1964 - 2012
Avg -0.29% 0.18% -0.90% 0.60% -0.69% -1.08%
Win% 46% 73% 23% 62% 58% 46%
 
OTC summary for all years 1963 - 2015
Avg -0.01% 0.13% -0.21% 0.15% -0.09% -0.03%
Win% 49% 60% 53% 57% 60% 49%
 
SPX Presidential Year 4
Year Mon Tue Wed Thur Fri Totals
1956-4 1.32% 0.00% -1.03% -0.81% -0.83% -1.35%
1960-4 0.38% 0.00% 0.44% 1.41% -0.46% 1.76%
1964-4 -0.05% -0.41% 0.28% 0.13% 0.02% -0.02%
1968-4 0.04% 0.00% 0.16% 0.22% 0.43% 0.86%
1972-4 -0.21% 0.00% -0.55% 0.13% 0.20% -0.43%
Avg 0.30% -0.41% -0.14% 0.22% -0.13% 0.16%
 
1976-4 -1.21% -0.28% -0.51% 0.84% -0.40% -1.57%
1980-4 0.23% 1.37% 2.54% 1.41% 0.48% 6.04%
1984-4 0.69% 1.09% -0.73% -0.29% -0.64% 0.12%
1988-4 -0.86% 0.45% -0.66% 0.13% -2.11% -3.05%
1992-4 0.24% 0.01% 0.86% 0.16% -0.10% 1.16%
Avg -0.18% 0.53% 0.30% 0.45% -0.55% 0.54%
 
1996-4 0.42% 1.05% 1.46% 0.42% 0.44% 3.79%
2000-4 0.39% -0.02% -1.58% -0.65% -2.44% -4.30%
2004-4 -0.11% -0.07% -0.10% 0.91% 0.91% 1.54%
2008-4 -1.24% -2.20% -5.19% 6.92% -4.17% -5.88%
2012-4 0.22% 0.79% -2.37% -1.22% 0.17% -2.42%
Avg -0.07% -0.09% -1.56% 1.28% -1.02% -1.45%
 
SPX summary for Presidential Year 4 1956 - 2012
Avg 0.02% 0.16% -0.47% 0.65% -0.57% -0.25%
Win% 60% 55% 40% 73% 47% 47%
 
SPX summary for all years 1953 - 2015
Avg -0.02% 0.10% -0.10% 0.19% -0.04% 0.11%
Win% 52% 52% 56% 57% 58% 56%


Conclusion

The market is having a well deserved hissy fit. The country has been run by Globalists for the past 50 years and that might change next week.

I expect the major averages to be lower on Friday November 11 than they were on Friday November 4.

Last weeks positive forecast was a miss.

These reports are archived at: http://www.safehaven.com/

Good Luck,

YTD W 17 / L 18 / T 9

 


 

Author: Mike Burk

Mike Burk

Mike Burk independently publishes a weekly newsletter on the stock market from a technical perspective.

Charts and figures presented herein are believed to be reliable but we cannot attest to their accuracy. Recent (last 10-15 yrs.) data has been supplied by CSI (csidata.com), FastTrack (fasttrack.net), Quotes Plus (qp2.com) and the Wall Street Journal (wsj.com). Historical data is from Barron's and ISI price books. The views expressed are provided for information purposes only and should not be construed in any way as investment advice. Furthermore, the opinions expressed may change without notice.

Copyright © 2003-2017 Mike Burk

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com