Technical Market Report for April 1, 2017

By: Mike Burk | Sat, Apr 1, 2017
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The good news is:
• The NASDAQ composite (OTC) hit an all time high last week.


The Negatives

In spite of a strong week for the indices, new highs continued to deteriorate.

The first chart covers the past 6 months showing the 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 1st trading day of each month.

OTC NH continued to decline as the index hit a new high.

OTC and OTC NH

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.

The pattern is similar to the chart above.

SPX and NY NH


The Positives

New lows decreased and the secondaries outperformed the blue chips.

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 recovered nicely last week.

OTC and OTC HL Ratio

The next chart is similar to the one above one except it shows the SPX in red and NY HL Ratio, in blue, has been calculated from NYSE data.

NY HL Ratio also recovered, finishing the week at a very strong 88%.

SPX and NY HL Ratio


Seasonality

Next week includes the first 5 trading days of April 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 2016 while SPX data runs from 1928 to 2016. There are summaries for both the 1st year of the Presidential Cycle and all years combined.

Average returns for the coming week have been mixed, but a little weaker during the 1st year of the Presidential Cycle than average.

Report for the first 5 days of April.
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
  Day1 Day2 Day3 Day4 Day5 Totals
1965-1 0.27% 4 0.21% 5 0.37% 1 0.18% 2 0.16% 3 1.20%
1969-1 0.74% 2 0.26% 3 -0.18% 4 -0.79% 1 -0.71% 2 -0.69%
1973-1 -1.42% 1 -1.14% 2 -1.38% 3 -0.77% 4 1.12% 5 -3.60%
 
1977-1 0.44% 5 -0.68% 1 -0.26% 2 0.25% 3 0.15% 4 -0.10%
1981-1 0.55% 3 0.29% 4 0.33% 5 -0.65% 1 0.23% 2 0.75%
1985-1 0.40% 1 -0.39% 2 -0.49% 3 -0.15% 4 -0.72% 1 -1.35%
1989-1 0.23% 1 -0.12% 2 0.28% 3 -0.02% 4 0.61% 5 0.98%
1993-1 -0.51% 4 -2.45% 5 0.13% 1 -0.98% 2 0.71% 3 -3.09%
Avg 0.22% -0.67% 0.00% -0.31% 0.20% -0.56%
 
1997-1 -0.39% 2 -1.31% 3 1.07% 4 1.89% 5 1.19% 1 2.44%
2001-1 -3.11% 1 -6.17% 2 -2.04% 3 8.92% 4 -3.62% 5 -6.03%
2005-1 -0.72% 5 0.32% 1 0.41% 2 -0.01% 3 0.98% 4 0.98%
2009-1 1.51% 3 3.29% 4 1.20% 5 -0.93% 1 -2.81% 2 2.25%
2013-1 -0.87% 1 0.48% 2 -1.11% 3 0.20% 4 -0.65% 5 -1.95%
Avg -0.72% -0.68% -0.10% 2.01% -0.98% -0.46%
 
OTC summary for Presidential Year 1 1965 - 2013
Averages -0.22% -0.57% -0.13% 0.55% -0.26% -0.63%
% Winners 54% 46% 54% 38% 62% 46%
MDD 4/4/2001 10.95% -- 4/5/1973 4.63% -- 4/6/1993 3.77%
 
OTC summary for all years 1963 - 2016
Averages 0.02% 0.18% 0.11% 0.15% -0.15% 0.31%
% Winners 54% 65% 69% 57% 50% 59%
MDD 4/4/2001 10.95% -- 4/4/2000 9.27% -- 4/5/2002 4.97%
 
SPX Presidential Year 1
  Day1 Day2 Day3 Day4 Day5 Totals
1929-1 -2.55% 1 1.17% 2 -1.23% 3 1.77% 4 -0.99% 5 -1.83%
1933-1 0.51% 6 -0.17% 1 0.51% 2 0.85% 3 1.68% 4 3.38%
 
1937-1 -1.17% 4 -1.24% 5 0.29% 6 0.46% 1 -0.91% 2 -2.58%
1941-1 0.10% 2 0.40% 3 1.50% 4 -0.20% 5 -0.30% 6 1.51%
1945-1 0.95% 1 0.15% 2 -0.15% 3 -0.73% 4 0.73% 5 0.96%
1949-1 -0.80% 5 0.40% 6 -0.13% 1 -0.13% 2 -0.27% 3 -0.93%
1953-1 -0.16% 3 -0.08% 4 -2.46% 1 0.41% 2 0.89% 3 -1.40%
Avg -0.21% -0.07% -0.19% -0.04% 0.03% -0.49%
 
1957-1 0.07% 1 0.63% 2 0.27% 3 -0.22% 4 0.11% 5 0.86%
1961-1 0.83% 1 0.09% 2 -0.30% 3 0.23% 4 0.53% 5 1.38%
1965-1 0.19% 4 0.24% 5 0.00% 1 -0.03% 2 0.06% 3 0.45%
1969-1 -0.09% 2 -0.63% 3 -0.10% 4 -0.78% 1 0.25% 2 -1.35%
1973-1 -1.20% 1 -0.85% 2 -0.43% 3 -0.23% 4 0.70% 5 -2.01%
Avg -0.04% -0.10% -0.11% -0.21% 0.33% -0.14%
 
1977-1 0.80% 5 -0.99% 1 -0.22% 2 -0.10% 3 0.35% 4 -0.16%
1981-1 0.42% 3 -0.18% 4 -0.61% 5 -1.15% 1 -0.01% 2 -1.54%
1985-1 0.34% 1 -0.41% 2 -0.79% 3 -0.04% 4 -0.56% 1 -1.46%
1989-1 0.52% 1 -0.36% 2 0.31% 3 -0.32% 4 0.63% 5 0.78%
1993-1 -0.30% 4 -1.98% 5 0.20% 1 -0.26% 2 0.36% 3 -1.98%
Avg 0.35% -0.78% -0.22% -0.37% 0.15% -0.87%
 
1997-1 0.33% 2 -1.25% 3 0.03% 4 1.01% 5 0.56% 1 0.67%
2001-1 -1.25% 1 -3.44% 2 -0.29% 3 4.37% 4 -2.00% 5 -2.61%
2005-1 -0.65% 5 0.27% 1 0.45% 2 0.23% 3 0.60% 4 0.90%
2009-1 1.66% 3 2.87% 4 0.97% 5 -0.83% 1 -2.39% 2 2.28%
2013-1 -0.45% 1 0.52% 2 -1.05% 3 0.40% 4 -0.43% 5 -1.01%
Avg -0.07% -0.21% 0.02% 1.03% -0.73% 0.05%
 
SPX summary for Presidential Year 1 1929 - 2013
Averages -0.09% -0.22% -0.15% 0.21% -0.02% -0.26%
% Winners 55% 45% 41% 41% 59% 45%
MDD 4/4/2001 4.92% -- 4/7/2009 3.20% -- 4/5/1973 2.69%
 
SPX summary for all years 1928 - 2016
Averages 0.17% 0.19% 0.08% 0.15% -0.15% 0.44%
% Winners 63% 58% 54% 60% 52% 62%
MDD 4/6/1932 10.67% -- 4/6/1939 5.33% -- 4/4/2001 4.92%


April

Since 1963, over all years, the OTC in April has been up 67% of the time with an average gain of 1.5%. During the 1st year of the Presidential Cycle April has been up 77% of the time with an average gain of 2.8% (helped considerably by a 15% gain in 2001 and a 12.3% gain in 2009). The best April ever for the OTC was 2001 (+15.0%), the worst 1970 (-18.5%).

The average month has 21 trading days. The chart below has been calculated by averaging the daily percentage change for each of the 1st 11 trading days and each of the last 10. In months when there were more than 21 trading days some of the days in the middle were not counted. In months when there were less than 21 trading days some of the days in the middle of the month were counted twice. Dashed vertical lines have been drawn after the 1st trading day and at 5 trading day intervals after that. The line is solid on the 11th trading day, the dividing point.

In the chart below the blue line shows the average daily performance of the OTC in April over all years since 1963 in blue, while the green line shows the average during the 1st year of the Presidential Cycle over the same period.

OTC April, All Year 1 1963-2017

Since 1928 the SPX has been up 63% of the time in April with an average gain of 1.3%. During the 1st year of the Presidential Cycle the SPX has been up 59% of the time with an average gain of 2.8%. The best April for the SPX was 1933 (+42.2%) the worst 1932 (-20.2%).

The chart below is similar to the one above except it shows the average daily average performance over all years since 1928 for the SPX in April in red and the average daily performance during the 1st year of the Presidential Cycle, over the same period, in green.

SPX April, All Year 1 1928-2017

Since 1979 the Russell 2000 (R2K) has been up 61% of the time in April with an average gain of 1.5%. During the 1st year of the Presidential Cycle the R2K has been up 56% of the time with an average gain of 2.2%. The best April for the R2K 2009 (+15.3%), the worst 2000 (-6.1%)

The chart below is similar to those above except it shows the average daily performance of the R2K, over all years since 1979, in April in magenta and the average daily performance during the 1st year of the Presidential Cycle in green.

Russell 2000 April, All Year 1 1979-2017

Since 1885 the Dow Jones Industrial Average (DJIA) has been up 60% of the time in April with an average gain of 1.3%. During the 1st year of the Presidential Cycle the DJIA has been up 58% of the time in April with an average gain of 2.4%. The best April for the DJIA 1933 (+40.2%), the worst 1932 (-23.4%)

The chart below is similar to those above except it shows the average daily performance over all years for the DJIA in April in grey and the average performance during the 1st year of the Presidential Cycle in green.

Dow Industrials April, All Year 1 1885-2017


Conclusion

The market had a good week and is a little overbought while seasonality for the coming week is mixed.

I expect the major averages to be higher on Friday April 7 than they were on Friday March 31.

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

Good Luck,

YTD W 4 / L 5 / T 4

 


 

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

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