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

Technical Market Report

The good news is:
 •  The weakness of the past week appears to be nothing more than an overdue rest for the market.
 •  On Friday, a down day for the NASDAQ composite, new highs increased and new lows decreased. A very positive condition.

On the other hand, the recent soft patch does not appear to be over. The chart below shows the Russell 2000 (R2K) in red and an indicator showing momentum of new lows subtracted from momentum of new highs. New highs and new lows have been calculated from the component issues of the R2K over the past 6 weeks rather than the past 52 weeks as reported by the exchanges.

The indicator which usually heads upward a little ahead of price lows is still heading sharply downward.

Another indicator that has been doing a pretty good job of forecasting turning points this year is momentum of the McClellan oscillator. In the chart below the McClellan oscillator is calculated from component issues of the S&P 500 (SPX). This indicator is also headed sharply downward.

Since the low in late March each successive (and lower) price high has generated more new highs in the component issues of the SPX. The chart below shows the SPX in red and a 10% trend of new highs of the component issues of the SPX. New highs have been calculated over the trailing 6 weeks rather than 52 weeks as reported by the exchanges. I have drawn a crude line across the tops of this indicator to show the uptrend. Building new highs suggests the downtrend should be broken soon.

The seasonal bias for next week is slightly positive and favors the blue chips over the small caps.

Last 4 days of September and first day of October.
The number following the daily return represents the day of the week; 1= Monday, 2 = Tuesday etc.
The number following the year is its position in the presidential cycle.

R2K Day4 Day3 Day2 Day1 Day1 Totals
1988-4 -0.24% 2 0.14% 3 0.69% 4 0.74% 5 -0.87% 1 0.46%
1989-1 0.26% 2 -0.12% 3 0.65% 4 0.47% 5 0.35% 1 1.61%
1990-2 0.11% 2 -1.43% 3 -1.92% 4 0.44% 5 1.33% 1 -1.48%
1991-3 -0.04% 3 0.09% 4 -0.25% 5 0.82% 1 -0.03% 2 0.59%
1992-4 -1.05% 5 -0.21% 1 0.12% 2 1.15% 3 -0.81% 4 -0.81%
1993-1 0.50% 1 0.28% 2 0.33% 3 0.57% 4 0.02% 5 1.70%
1994-2 -0.06% 2 0.52% 3 -0.09% 4 0.76% 5 -0.52% 1 0.62%
1995-3 -0.39% 2 -1.01% 3 0.85% 4 0.62% 5 -1.09% 1 -1.01%
1996-4 0.31% 3 0.37% 4 0.15% 5 0.25% 1 -0.31% 2 0.78%
1997-1 -0.15% 4 0.21% 5 0.54% 1 0.56% 2 0.19% 3 1.36%
1998-2 -0.33% 5 -0.27% 1 -0.60% 2 -0.60% 3 -3.73% 4 -5.54%
1999-3 1.14% 1 -0.80% 2 0.72% 3 1.37% 4 -0.88% 5 1.56%
2000-4 -1.07% 2 -0.35% 3 3.09% 4 -0.47% 5 -1.86% 1 -0.65%
2001-1 0.61% 2 -1.61% 3 0.81% 4 3.03% 5 -1.80% 1 1.04%
2002-2 2.40% 3 1.52% 4 -2.40% 5 0.14% 1 1.61% 2 3.26%
2003-3 -2.52% 4 -1.97% 5 1.53% 1 -1.02% 2 2.59% 3 -1.39%
Averages -0.03% -0.29% 0.26% 0.55% -0.36% 0.13%
Winners 44% 44% 69% 81% 38% 63%
 
SPX Day4 Day3 Day2 Day1 Day1 Totals
1988-4 -0.23% 2 0.31% 3 1.30% 4 -0.25% 5 -0.19% 1 0.94%
1989-1 0.03% 2 0.22% 3 1.01% 4 0.16% 5 0.49% 1 1.92%
1990-2 1.20% 2 -1.04% 3 -1.34% 4 1.69% 5 2.90% 1 3.42%
1991-3 -0.21% 3 -0.10% 4 -0.15% 5 0.51% 1 0.35% 2 0.39%
1992-4 -0.98% 5 0.55% 1 0.04% 2 0.24% 3 -0.36% 4 -0.51%
1993-1 0.91% 1 -0.06% 2 -0.31% 3 -0.26% 4 0.51% 5 0.80%
1994-2 0.27% 2 0.60% 3 -0.56% 4 0.10% 5 -0.21% 1 0.20%
1995-3 -0.07% 2 -0.06% 3 0.83% 4 -0.25% 5 -0.46% 1 -0.01%
1996-4 0.03% 3 0.00% 4 0.05% 5 0.16% 1 0.26% 2 0.51%
1997-1 -0.70% 4 0.78% 5 0.86% 1 -0.64% 2 0.86% 3 1.17%
1998-2 0.19% 5 0.38% 1 0.03% 2 -3.05% 3 -3.01% 4 -5.46%
1999-3 0.47% 1 -0.09% 2 -1.08% 3 1.13% 4 0.01% 5 0.44%
2000-4 -0.82% 2 -0.04% 3 2.22% 4 -1.49% 5 -0.02% 1 -0.16%
2001-1 0.88% 2 -0.52% 3 1.15% 4 2.19% 5 -0.23% 1 3.47%
2002-2 2.49% 3 1.82% 4 -3.23% 5 -1.46% 1 4.00% 2 3.62%
2003-3 -0.61% 4 -0.64% 5 0.98% 1 -1.05% 2 2.23% 3 0.91%
Averages 0.18% 0.13% 0.11% -0.14% 0.45% 0.73%
Winners 56% 50% 63% 50% 56% 75%

The pullback that began last week does not appear to be complete.

I expect the major indices to be lower on Friday October 1 than they were on Friday September 24.

Back to homepage

Leave a comment

Leave a comment