• 272 days Could Crypto Overtake Traditional Investment?
  • 276 days Americans Still Quitting Jobs At Record Pace
  • 278 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 281 days Is The Dollar Too Strong?
  • 282 days Big Tech Disappoints Investors on Earnings Calls
  • 283 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 284 days China Is Quietly Trying To Distance Itself From Russia
  • 285 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 289 days Crypto Investors Won Big In 2021
  • 289 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 290 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 292 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 292 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 296 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 296 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 297 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 299 days Are NFTs About To Take Over Gaming?
  • 299 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 302 days What’s Causing Inflation In The United States?
  • 303 days Intel Joins Russian Exodus as Chip Shortage Digs In
  1. Home
  2. Markets
  3. Other

Technical Market Report

The good news is the market is behaving as expected, i.e., rising on low volume.

Except for Friday, next week should follow the same pattern.

Friday offers a mixed bag:

The last day of the week following a holiday you would expect to be up.

The first day of the new year, however, has a pretty poor record.

There has only been one Friday January 2 in the past 15 years (1998) so we do not have a good sampling do draw from.

The tables below show the performance of the Russell 2000 (R2K) and the S&P 500 (SPX) for the last 3 trading days of December and the first Trading day of January.

The year indicated in the tables below is for the following January.

R2K Day3 Day2 Day1 Day1 Totals
1989-1 0.19% 3 0.52% 4 1.14% 5 -0.39% 2 1.46%
1990-2 0.37% 3 0.15% 4 1.23% 5 0.98% 2 2.73%
1991-3 -0.16% 4 -0.12% 5 1.33% 1 -0.41% 3 0.63%
1992-4 1.03% 5 1.96% 1 1.11% 2 0.02% 4 4.12%
1993-1 0.44% 2 -0.25% 3 2.17% 4 -0.57% 1 1.80%
1994-2 0.90% 3 0.07% 4 0.94% 5 -0.80% 1 1.11%
1995-3 -0.27% 3 0.66% 4 1.41% 5 -1.25% 2 0.55%
1996-4 0.40% 3 -0.03% 4 0.63% 5 0.27% 2 1.27%
1997-1 0.41% 5 0.23% 1 0.73% 2 -1.01% 4 0.35%
1998-2 1.23% 1 1.72% 2 0.69% 3 -0.11% 5 3.53%
1999-3 0.52% 2 0.37% 3 2.44% 4 -0.17% 1 3.16%
2000-4 1.75% 3 -0.09% 4 1.64% 5 -1.53% 1 1.78%
2001-1 2.72% 3 3.07% 4 -2.13% 5 -4.35% 2 -0.69%
2002-2 0.50% 4 0.20% 5 -1.04% 1 -0.27% 3 -0.61%
2003-3 -1.35% 5 -0.50% 1 0.22% 2 2.48% 4 0.85%
Averages 0.58% 0.53% 0.83% -0.47% 1.47%
% Winners 80% 67% 87% 27%  
 
SPX Day3 Day2 Day1 Day1 Totals
1989-1 0.09% 3 0.84% 4 -0.60% 5 -0.87% 2 -0.54%
1990-2 0.58% 3 0.53% 4 0.78% 5 1.78% 2 3.67%
1991-3 -0.77% 4 0.13% 5 0.46% 1 -1.14% 3 -1.33%
1992-4 0.40% 5 2.14% 1 0.47% 2 0.04% 4 3.05%
1993-1 -0.27% 2 0.19% 3 -0.71% 4 -0.08% 1 -0.86%
1994-2 -0.08% 3 -0.41% 4 -0.47% 5 -0.22% 1 -1.17%
1995-3 -0.35% 3 0.07% 4 -0.41% 5 -0.03% 2 -0.73%
1996-4 0.04% 3 -0.07% 4 0.29% 5 0.78% 2 1.04%
1997-1 0.13% 5 -0.39% 1 -1.74% 2 -0.50% 4 -2.50%
1998-2 1.80% 1 1.83% 2 -0.04% 3 0.48% 5 4.07%
1999-3 1.33% 2 -0.80% 3 -0.22% 4 -0.09% 1 0.23%
2000-4 0.40% 3 0.07% 4 0.33% 5 -0.95% 1 -0.16%
2001-1 1.04% 3 0.40% 4 -1.04% 5 -2.80% 2 -2.41%
2002-2 0.68% 4 0.34% 5 -1.11% 1 0.57% 3 0.47%
2003-3 -1.60% 5 0.46% 1 0.05% 2 3.32% 4 2.22%
Averages 0.23% 0.36% -0.26% 0.02% 0.34%
% Winners 67% 73% 40% 40%  

Typically of all seasonally strong periods the returns have been much better for the small caps. The historical performance for the last three trading days of the year has been extraordinarily good while the first trading day of the year has been extraordinarily bad.

The NASDAQ new high indicator (a 10% trend of NASDAQ 52 week new highs) has been a remarkably good indicator of the direction of the overall market. It lags by a day or two, but smoothes out most of the price gyrations leaving a smooth indicator of direction. The indicator is shown in green on the chart below along with the NASDAQ composite in red. The vertical dashed lines are drawn on the first trading day each month on the chart. You can see for the past two weeks, while the index has been rising, the new high indicator has been falling.

The weakness indicated in the chart above makes me a little uneasy about next week, but seasonally strong periods often appear to defy gravity.

I expect the major indices to be higher at the close Friday January 2 than they were at the close December 26.

Back to homepage

Leave a comment

Leave a comment