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

Technical Market Report

The good news is the same as last week, by nearly every intermediate term technical measure, the market is in good shape.

  • The NYSE AD line made new cycle highs last week.
  • There have been virtually no new lows on either the NYSE or NASDAQ.
  • The 10% trend (19 day EMA) of NYSE new highs hit an all time high last week.

All of this implies new highs in the blue chip indices in the next 2 to 6 weeks.

The list of positives is a little shorter this week. Most significant, the NASDAQ new high indicator turned downward last week.

The NASDAQ new high indicator, shown in the chart below is not predictive and it often has a day or two lag, but it does a good job of smoothing out the wiggles. As of Thursday's close, it turned downward. The current value of the indicator is 286 so any number of NASDAQ new highs greater than 286 will turn the indicator upward while any number less than 286 will pull it downward.

There has been a lot of research on levels of the NYSE new high indicator that indicate there is little intermediate term risk when the value of the indicator is above 100. The current value of that indicator is just off its all time high at 446. The previous all time high of 273 was reached March 24, 1998.

The current levels of the new high indicators suggest very little intermediate term risk, however, with both indicators heading downward, their current direction implies short term risk.

Seasonality for next week is interesting because, although it nearly always favors the small caps, for the past 15 years at least, the tables below indicate the large caps have decisively outperformed the small caps during the last 5 trading days of January.

Last 5 days of January
The number following the daily return represents the day of the week;
= Monday, 2 = Tuesday etc.
The number following the year is its position in the presidential cycle.

Russell2K Day5 Day4 Day3 Day2 Day1 Totals
1989-1 0.22% 3 0.49% 4 0.27% 5 0.06% 1 0.54% 2 1.58%
1990-2 -0.11% 4 -0.87% 5 -1.07% 1 -1.50% 2 0.42% 3 -3.13%
1991-3 1.07% 5 0.96% 1 1.05% 2 2.01% 3 1.51% 4 6.59%
1992-4 -0.18% 1 -0.04% 2 -0.54% 3 0.49% 4 0.15% 5 -0.12%
1993-1 0.80% 1 0.52% 2 -1.11% 3 -0.35% 4 0.40% 5 0.26%
1994-2 -0.32% 2 0.30% 3 0.31% 4 0.52% 5 0.56% 1 1.38%
1995-3 -0.06% 3 -0.29% 4 0.16% 5 -0.77% 1 0.12% 2 -0.84%
1996-4 0.04% 4 0.21% 5 0.19% 1 0.50% 2 0.64% 3 1.59%
1997-1 -0.71% 1 0.26% 2 -0.06% 3 0.56% 4 0.31% 5 0.36%
1998-2 -0.89% 1 0.36% 2 1.44% 3 0.79% 4 -0.45% 5 1.24%
1999-3 -0.08% 1 0.76% 2 -0.99% 3 0.68% 4 0.77% 5 1.14%
2000-4 -0.26% 2 -0.11% 3 -0.77% 4 -2.40% 5 -1.66% 1 -5.20%
2001-1 -0.65% 4 -0.06% 5 1.85% 1 0.74% 2 -0.65% 3 1.23%
2002-2 -0.08% 5 0.40% 1 -1.52% 2 1.21% 3 0.70% 4 0.72%
2003-3 -1.73% 1 1.25% 2 0.45% 3 -1.93% 4 1.24% 5 -0.72%
Averages -0.19% 0.28% -0.02% 0.04% 0.31% 0.41%
Winners 27% 67% 53% 67% 80%  
 
S&P 500 Day5 Day4 Day3 Day2 Day1 Totals
1989-1 0.23% 3 0.88% 4 0.73% 5 0.40% 1 0.84% 2 3.08%
1990-2 -1.27% 4 -0.09% 5 -0.18% 1 -0.68% 2 1.89% 3 -0.33%
1991-3 0.39% 5 -0.01% 1 -0.06% 2 1.51% 3 0.89% 4 2.71%
1992-4 -0.12% 1 -0.01% 2 -1.11% 3 0.31% 4 -0.69% 5 -1.62%
1993-1 0.89% 1 -0.01% 2 -0.42% 3 0.13% 4 0.03% 5 0.62%
1994-2 -0.22% 2 0.48% 3 0.81% 4 0.35% 5 0.61% 1 2.03%
1995-3 0.34% 3 0.19% 4 0.44% 5 -0.40% 1 0.41% 2 0.98%
1996-4 -0.47% 4 0.74% 5 0.42% 1 0.95% 2 0.93% 3 2.57%
1997-1 -0.71% 1 0.00% 2 0.98% 3 1.51% 4 0.25% 5 2.03%
1998-2 -0.07% 1 1.26% 2 0.87% 3 0.82% 4 -0.53% 5 2.36%
1999-3 0.72% 1 1.49% 2 -0.73% 3 1.79% 4 1.13% 5 4.39%
2000-4 0.61% 2 -0.42% 3 -0.39% 4 -2.75% 5 2.52% 1 -0.43%
2001-1 -0.50% 4 -0.19% 5 0.68% 1 0.70% 2 -0.56% 3 0.13%
2002-2 0.10% 5 -0.02% 1 -2.86% 2 1.17% 3 1.49% 4 -0.11%
2003-3 -1.62% 1 1.31% 2 0.68% 3 -2.28% 4 1.31% 5 -0.60%
Averages -0.11% 0.40% -0.01% 0.23% 0.70% 1.19%
Winners 47% 50% 53% 73% 80%  

Weakness in the DJIA and NASDAQ last week relieved some of their overbought condition and end of January seasonal strength should help next week.

I expect the major indices will be higher at the close Friday January 30 than they were at the close Friday January 23.

Last week the DJIA and NASDAQ composite were down while the S&P 500 and Russell 2000 were up so I am calling my forecast for last week a tie.

Back to homepage

Leave a comment

Leave a comment