• 406 days Will The ECB Continue To Hike Rates?
  • 406 days Forbes: Aramco Remains Largest Company In The Middle East
  • 408 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 808 days Could Crypto Overtake Traditional Investment?
  • 813 days Americans Still Quitting Jobs At Record Pace
  • 815 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 818 days Is The Dollar Too Strong?
  • 818 days Big Tech Disappoints Investors on Earnings Calls
  • 819 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 821 days China Is Quietly Trying To Distance Itself From Russia
  • 821 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 825 days Crypto Investors Won Big In 2021
  • 825 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 826 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 828 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 829 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 832 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 833 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 833 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 835 days Are NFTs About To Take Over Gaming?
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

  1. Home
  2. Markets
  3. Other

Technical Market Report

The good news is:
There are 3 trading days remaining in the seasonally strong period that began last week.

In a rising market I look to the down days for clues about the market's strength and, for all practical purposes, there have been no down days in the past week. The typically low volume of Thanksgiving week compounds the difficulty analyzing the market's technical condition.

Nearly all of the broad market indicators headed sharply upward all week. Usually I try to balance the positive vs. negative indicators to get a perspective as to what is really going on.

The chart below is the most negative one I could find. The green line plots a 10% trend (19 day exponential moving average (EMA)) of new highs of the component issues of the S&P 500 (SPX). New highs in this chart have been calculated on a trailing 6 week basis (rather than a trailing 52 week basis as reported by the exchanges). The chart shows there have been fewer new highs while the index is only 0.1% off its cycle high. The implication is the index has been carried to new highs by fewer issues.

Unpleasant as the chart is, keep in mind, it is the worst one I could find.

Like last week, the big story is seasonality.

The tables below show the first 5 trading days of December for the past 14 years for the Russell 2000 (R2K), Wilshire 5000 and the S&P 500.

Typical of all seasonally strong periods the small cap R2K has the best record followed by the Wilshire 5000 and SPX.

This period of seasonal strength ends Wednesday.

First 5 days of December:
• The number following the daily return represents the day of theweek;
• 1 = Monday, 2 = Tuesday etc.
• The number following the year is its position in the 4 year presidentialcycle.

R2K Day1 Day2 Day3 Day4 Day5 Totals
1989-1 0.20% 5 0.05% 1 -0.09% 2 0.26% 3 -0.17% 4 0.24% 
1990-2 0.50% 1 0.45% 2 1.53% 3 0.33% 4 -0.14% 5 2.68% 
1991-3 0.16% 1 0.42% 2 0.24% 3 -0.33% 4 0.18% 5 0.67% 
1992-4 0.00% 2 0.19% 3 0.27% 4 0.00% 5 1.23% 1 1.68% 
1993-1 0.88% 3 0.12% 4 0.38% 5 0.05% 1 0.02% 2 1.44% 
1994-2 -0.91% 4 0.32% 5 0.05% 1 -0.38% 2 -0.76% 3 -1.68% 
1995-3 0.38% 5 0.89% 1 0.19% 2 -0.14% 3 -0.55% 4 0.77% 
1996-4 0.35% 1 0.70% 2 0.08% 3 0.27% 4 -0.99% 5 0.40% 
1997-1 0.99% 1 -0.39% 2 0.31% 3 0.25% 4 0.72% 5 1.88% 
1998-2 0.25% 2 -0.31% 3 -0.63% 4 0.85% 5 0.70% 1 0.87% 
1999-3 -0.09% 3 1.49% 4 0.90% 5 0.25% 1 -0.01% 2 2.54% 
2000-4 2.44% 5 -1.41% 1 4.61% 2 -1.62% 3 -0.53% 4 3.50% 
2001-1 -0.81% 1 2.37% 2 2.48% 3 0.59% 4 -0.21% 5 4.40% 
2002-2 0.54% 1 -1.89% 2 -0.82% 3 -0.77% 4 0.58% 5 -2.37% 
Averages 0.35% 0.22% 0.68% -0.03% 0.01% 1.22% 
% Winners 71% 71% 79% 62% 43%  
 
Wilshire 5K Day1 Day2 Day3 Day4 Day5 Totals
1989-1 1.07% 5 0.18% 1 -0.39% 2 -0.12% 3 -0.22% 4 0.52% 
1990-2 0.59% 1 0.68% 2 1.23% 3 -0.11% 4 -0.34% 5 2.06% 
1991-3 1.35% 1 0.03% 2 -0.08% 3 -0.52% 4 0.36% 5 1.13% 
1992-4 -0.06% 2 -0.19% 3 0.10% 4 0.47% 5 0.70% 1 1.01% 
1993-1 0.32% 3 0.22% 4 0.36% 5 0.27% 1 0.09% 2 1.26% 
1994-2 -1.01% 4 0.72% 5 0.01% 1 -0.14% 2 -0.47% 3 -0.90% 
1995-3 0.18% 5 1.05% 1 0.49% 2 0.16% 3 -0.63% 4 1.25% 
1996-4 0.05% 1 -0.62% 2 -0.42% 3 -0.01% 4 -0.70% 5 -1.71% 
1997-1 1.80% 1 -0.25% 2 0.50% 3 -0.13% 4 0.97% 5 2.88% 
1998-2 0.76% 2 -0.27% 3 -1.49% 4 1.90% 5 0.98% 1 1.89% 
1999-3 0.56% 3 1.11% 4 1.64% 5 -0.46% 1 -0.44% 2 2.41% 
2000-4 0.51% 5 0.39% 1 4.41% 2 -1.73% 3 -0.56% 4 3.02% 
2001-1 -0.83% 1 1.45% 2 2.26% 3 -0.11% 4 -0.71% 5 2.05% 
2002-2 -0.06% 1 -1.53% 2 -0.40% 3 -1.08% 4 0.60% 5 -2.47% 
Averages 0.37% 0.21% 0.59% -0.11% -0.03% 1.03% 
% Winners 71% 64% 64% 29% 43%  
 
S&P 500 Day1 Day2 Day3 Day4 Day5 Totals
1989-1 1.34% 5 0.22% 1 -0.52% 2 -0.29% 3 -0.28% 4 0.47% 
1990-2 0.58% 1 0.69% 2 1.09% 3 -0.26% 4 -0.40% 5 1.71% 
1991-3 1.65% 1 -0.12% 2 -0.23% 3 -0.71% 4 0.45% 5 1.05% 
1992-4 -0.13% 2 -0.21% 3 0.00% 4 0.50% 5 0.75% 1 0.92% 
1993-1 0.02% 3 0.26% 4 0.38% 5 0.33% 1 0.07% 2 1.07% 
1994-2 -1.05% 4 0.98% 5 0.00% 1 -0.05% 2 -0.41% 3 -0.53% 
1995-3 0.27% 5 1.10% 1 0.65% 2 0.40% 3 -0.65% 4 1.78% 
1996-4 -0.06% 1 -1.09% 2 -0.42% 3 -0.10% 4 -0.64% 5 -2.32% 
1997-1 2.03% 1 -0.32% 2 0.52% 3 -0.38% 4 1.10% 5 2.96% 
1998-2 1.00% 2 -0.34% 3 -1.80% 4 2.31% 5 0.93% 1 2.10% 
1999-3 0.63% 3 0.81% 4 1.72% 5 -0.70% 1 -0.99% 2 1.48% 
2000-4 0.02% 5 0.74% 1 3.89% 2 -1.82% 3 -0.59% 4 2.25% 
2001-1 -0.84% 1 1.32% 2 2.23% 3 -0.28% 4 -0.75% 5 1.68% 
2002-2 -0.19% 1 -1.47% 2 -0.35% 3 -1.20% 4 0.63% 5 -2.58% 
Averages 0.38% 0.18% 0.51% -0.16% -0.06% 0.86% 
% Winners 64% 57% 64% 29% 43%  

My forecast for next week is a seasonal bet.  During the first 5 trading days of December, the R2K has been up 86% of the time in the past 14 years while the Wilshire 5K and SPX have been up 79% of the time. Those are odds I will take.

I expect the major averages to be higher at the close Friday December 5 than they were at the close Friday November 28.

Back to homepage

Leave a comment

Leave a comment