• 288 days Will The ECB Continue To Hike Rates?
  • 288 days Forbes: Aramco Remains Largest Company In The Middle East
  • 290 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 690 days Could Crypto Overtake Traditional Investment?
  • 695 days Americans Still Quitting Jobs At Record Pace
  • 697 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 700 days Is The Dollar Too Strong?
  • 700 days Big Tech Disappoints Investors on Earnings Calls
  • 701 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 703 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 707 days Crypto Investors Won Big In 2021
  • 707 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 708 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 710 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 711 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 714 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 715 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 715 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 717 days Are NFTs About To Take Over Gaming?
Tesla Struggles To Compete In European Market

Tesla Struggles To Compete In European Market

Tesla continues to catch the…

Trade In Counterfeit Goods Hits Half A Trillion Dollars

Trade In Counterfeit Goods Hits Half A Trillion Dollars

The counterfeit market has breached…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

  1. Home
  2. Markets
  3. Other

Technical Market Report

The good news is:
• Many of the major indices hit multi month highs last week.

Short Term

NASDAQ new highs tumbled to 15 on Friday, the lowest number since July 13, the beginning of the monster rally in late July.

The chart below is an update from last week covering the past 6 months showing the NASDAQ composite (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.

The current value of the indicator is 51. The rally will not resume until NASDAQ new highs consistently exceed 51.

Intermediate term

New highs continued to decline last week week, but, there were no new lows (only 1 on Friday). The market will not be in any real trouble until new lows begin to expand.

The chart below covers the past 6 months showing the OTC in blue and a 40% trend (4 day EMA) of NASDAQ (new highs / (new highs + new lows)) (OTC HL Ratio) in red. Dashed horizontal lines have been draws at 10% increments for the indicator, the line is solid at the neutral 50% level.

Risk will be limited as long as the indicator remains above the 50% level.

Seasonality

Next week includes the 5 trading days prior to the 3rd Friday of August during the 1st year of the Presidential Cycle.

The tables show the daily return on a percentage basis for the 5 trading days prior to the 3rd Friday of August during the 1st year of the Presidential Cycle. OTC data covers the period from 1963 - 2008 and S&P 500 (SPX) data from 1953 - 2008. Prior to 1953 the market traded 6 days a week so that data has been ignored. There are summaries for both the 1st year of the Presidential Cycle and all years combined.

Over all years the average returns have been modestly positive, however, during the 1st year of the Presidential Cycle average returns have been extremely negative. Seasonally, next week is one of the worst weeks of the year.

Report for the week before the 3rd Friday of August.
The number following the year is the position in the presidential cycle.
Daily returns from Monday through 3rd Friday.

OTC Presidential Year 1
Year Mon Tue Wed Thur Fri Totals
1965-1 0.70% -0.22% 0.26% 0.24% -0.26% 0.72%
 
1969-1 -0.29% -0.79% -0.94% -0.10% 0.42% -1.71%
1973-1 -0.92% -0.73% -0.23% -0.04% 0.39% -1.53%
1977-1 0.13% -0.24% 0.07% 0.14% -0.01% 0.09%
1981-1 -1.16% -1.26% 0.10% 0.36% -0.58% -2.54%
1985-1 -0.28% -0.43% 0.21% -0.01% -0.39% -0.90%
Avg -0.51% -0.69% -0.16% 0.07% -0.03% -1.32%
 
1989-1 -1.40% 1.08% -0.03% 0.01% 0.25% -0.09%
1993-1 1.20% 0.57% 0.52% -0.59% 0.07% 1.76%
1997-1 -0.73% -0.67% 0.46% 0.21% -1.56% -2.29%
2001-1 1.32% -0.89% -2.32% 0.60% -3.28% -4.58%
2005-1 0.47% -1.38% 0.38% -0.42% -0.02% -0.98%
Avg 0.17% -0.26% -0.20% -0.04% -0.91% -1.24%
 
OTC summary for Presidential Year 1 1965 - 2005
Avg -0.09% -0.45% -0.14% 0.03% -0.45% -1.10%
Win% 45% 18% 64% 55% 36% 27%
 
OTC summary for all years 1963 - 2008
Avg 0.24% -0.04% 0.24% 0.02% -0.08% 0.36%
Win% 65% 49% 61% 53% 54% 54%
 
SPX Presidential Year 1
Year Mon Tue Wed Thur Fri Totals
1953-1 -0.24% -0.41% -0.61% -0.08% 0.25% -1.10%
1957-1 -1.26% -0.06% -1.23% 0.04% 0.17% -2.33%
1961-1 -0.50% -0.25% 0.27% 0.56% 0.26% 0.34%
1965-1 0.12% 0.20% -0.06% -0.23% -0.12% -0.09%
 
1969-1 -0.62% -0.78% 0.08% 0.69% 0.71% 0.07%
1973-1 -1.01% -0.96% 0.29% -0.70% 0.02% -2.36%
1977-1 0.31% -0.46% 0.01% -0.06% -0.17% -0.38%
1981-1 -0.96% -0.85% 0.29% 0.15% -1.12% -2.48%
1985-1 -0.37% -0.18% 0.06% -0.08% -0.62% -1.18%
Avg -0.53% -0.65% 0.15% 0.00% -0.24% -1.27%
 
1989-1 -0.49% 0.48% 0.28% -0.35% 0.46% 0.38%
1993-1 0.50% 0.17% 0.64% 0.09% -0.06% 1.33%
1997-1 0.37% -1.12% -0.49% 0.30% -2.59% -3.53%
2001-1 0.09% -0.38% -0.73% 0.31% -1.67% -2.38%
2005-1 0.28% -1.18% 0.07% -0.10% 0.06% -0.86%
Avg 0.15% -0.41% -0.05% 0.05% -0.76% -1.01%
 
SPX summary for Presidential Year 1 1953 - 2005
Avg -0.27% -0.41% -0.08% 0.04% -0.32% -1.04%
Win% 43% 21% 64% 50% 50% 29%
 
SPX summary for all years 1953 - 2008
Avg 0.19% -0.02% -0.02% 0.03% 0.07% 0.24%
Win% 66% 50% 55% 50% 63% 54%

Money supply (M2)

The money supply chart was provided by Gordon Harms. Money supply growth fell back last week.

Conclusion

Intermediate term, there are no significant negatives for the market, however, short term the market has nothing going for it. New highs are falling, seasonally next week is terrible and money supply growth is falling.

I expect the major indices to be lower on Friday August 21 than they were on Friday August 14.

Gordon Harms produces a Power Point for our local timing group meetings. You can get a copy of that at: http://www.stockmarket-ta.com/.

This report is free to anyone who wants it, so please tell your friends. They can sign up at: http://alphaim.net/signup.html. If it is not for you, reply with REMOVE in the subject line.

Thank you,

 

Back to homepage

Leave a comment

Leave a comment