• 210 days Could Crypto Overtake Traditional Investment?
  • 214 days Americans Still Quitting Jobs At Record Pace
  • 216 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 219 days Is The Dollar Too Strong?
  • 220 days Big Tech Disappoints Investors on Earnings Calls
  • 221 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 222 days China Is Quietly Trying To Distance Itself From Russia
  • 223 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 226 days Crypto Investors Won Big In 2021
  • 227 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 228 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 230 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 230 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 233 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 234 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 234 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 236 days Are NFTs About To Take Over Gaming?
  • 237 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 240 days What’s Causing Inflation In The United States?
  • 241 days Intel Joins Russian Exodus as Chip Shortage Digs In
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

  1. Home
  2. Markets
  3. Other

Technical Market Report

The good news is:
 • The value of the NYSE new high indicator, a 10% trend (19day EMA) of NYSE new highs, is 195. Well above the most conservative levels ofsystems that use this indicator as a No Sell Filter (NSF).

The short term rally that began two weeks ago ended last Wednesday with 7 consecutive up days on the NASDAQ composite. This is the third time in the past year that we have seen seven consecutive up days on this index. The chart below plots the percentage of the last seven trading days that have been up in the past year. The indicator, in blue, reaches the top of the chart when there have been seven consecutive up days. Each occurrence was followed by a brief decline then a rally to higher highs.

You have to go back to April of 2000 (about 1 month prior to the all time high in the NASDAQ composite to find another period when there were seven consecutive up days. Interestingly, it was the third of three as is the current occurrence. The chart below shows the period from late October 1999 to early late March 2000.

The chart below shows the Russell 2000 (R2K) in red and the S&P 500 (SPX) in green along with a FastTrack relative strength indicator called Accutrack. Accutrack rose sharply from mid August to mid September, declined slightly into late September then rose to a higher high last week.

The chart below shows a similar pattern last year when Accutrack rose from late March to mid May, declined into late May then rose to a higher high in early June. After digesting its gains for a couple weeks the advance resumed. There are enough similarities between June 2003 and October 2004 that it is reasonable to expect a similar pattern implying a resumption of the rally later this month.

Seasonally the week prior to options expiration in October is strong with a slight advantage for the blue chips.

Report for the week prior to witching Friday during October.
Witching is futures and options expiration the 3rd Friday of the month.
The number following the year is the position in the presidential cycle.
Daily returns from the Monday before to the witching Friday.

R2K Mon Tue Wed Thur *Fri* Totals
1988-4 -0.03% 0.38% -0.07% 0.36% -0.13% 0.51%
1989-1 -1.48% -0.18% 0.58% 1.40% -0.06% 0.26%
1990-2 0.00% -0.93% 0.13% 1.24% 0.96% 1.40%
1991-3 0.85% 1.19% 1.25% -0.01% 0.32% 3.60%
1992-4 0.49% 0.48% 0.17% -0.65% 1.31% 1.80%
1993-1 0.42% 0.58% 0.54% 0.44% 0.37% 2.35%
1994-2 0.04% -0.37% 0.31% -0.47% -0.30% -0.79%
1995-3 0.04% 0.17% 0.45% -0.21% -0.20% 0.25%
1996-4 0.32% 0.00% -0.19% -0.04% -0.10% -0.01%
1997-1 0.04% -0.27% -0.27% -1.21% -1.72% -3.42%
1998-2 2.27% -1.62% 1.45% 3.02% 2.41% 7.53%
1999-3 0.58% -1.28% -1.26% 0.00% -1.10% -3.06%
2000-4 0.28% -2.26% -0.99% 3.23% 1.28% 1.55%
2001-1 0.35% 1.03% -2.31% -0.81% 1.10% -0.63%
2002-2 0.46% 4.04% -2.68% 3.34% 0.22% 5.38%
2003-3 1.64% 0.81% -0.84% 0.43% -1.75% 0.29%
Avg 0.42% 0.11% -0.23% 0.63% 0.16% 1.06%
Win% 87% 56% 50% 50% 50% 69%
 
SPX Mon Tue Wed Thur *Fri* Totals
1988-4 0.33% 1.07% -0.86% 2.13% 0.28% 2.95%
1989-1 2.76% -0.49% 0.18% 1.57% 0.01% 4.02%
1990-2 1.07% -1.42% -0.05% 2.34% 2.20% 4.13%
1991-3 1.32% 1.17% 0.46% -0.22% 0.15% 2.87%
1992-4 1.19% 0.46% 0.02% 0.06% 0.52% 2.24%
1993-1 0.12% 0.05% 0.08% 1.16% 0.57% 1.99%
1994-2 -0.03% -0.28% 0.56% -0.73% -0.42% -0.90%
1995-3 -0.25% 0.64% 0.11% 0.55% -0.54% 0.51%
1996-4 0.41% -0.14% 0.26% 0.37% 0.54% 1.44%
1997-1 0.12% 0.23% -0.47% -1.09% -1.16% -2.37%
1998-2 1.35% -0.29% 1.08% 4.17% 0.85% 7.17%
1999-3 -0.06% -1.66% -2.09% -0.17% -2.81% -6.79%
2000-4 0.03% -1.79% -0.58% 3.47% 0.59% 1.72%
2001-1 -0.15% 0.69% -1.86% -0.79% 0.46% -1.65%
2002-2 0.73% 4.73% -2.41% 2.23% 0.59% 5.88%
2003-3 0.70% 0.40% -0.26% 0.32% -1.02% 0.13%
Avg 0.60% 0.21% -0.37% 0.96% 0.05% 1.46%
Win% 75% 56% 50% 69% 69% 75%

Thursday and Friday of last week provided and appropriate sell off for the extreme rally that preceded it. With seasonal strength coming next week, last Friday is likely to mark the low for the foreseeable future.

I expect the major indices to be higher on Friday October 16 than they were on Friday October 9.

Last week did not follow the script very well. Too much of a good thing going into Wednesday followed by a sell off that took all of the major indices to losses for the week.

Gordon Harms produces a power point for our local FastTrack users group meeting. You can get it at: http://www.guaranteed-profits.com.

Back to homepage

Leave a comment

Leave a comment