The good news is:
 • Seasonally, next week is one of the strongest and most consistentof the year.

The chart below is an update of one from last week showing the NASDAQ composite in red and a 4% trend (55 day EMA) of NASDAQ downside volume (DV) in brown. DV is on an inverted Y axis so decreasing DV moves the indicator upward while increasing DV moves the indicator downward. DV took its cue and dried up last week. This pattern should continue through next week.

For next week there is little benefit to any analysis other than seasonality.

Since 1885 the Dow Jones Industrial Average (DJIA) has been up 81% of the time during the last 5 trading days of the year with an average gain of 1.23%. The fourth year of the presidential cycle has been consistent with the average, up 79% of the time with an average gain of 1.28%.

The S&P 500 (SPX) was initiated in 1954 or 1955. For research purposes it has been assembled as a 90 issue average with data going back to 1928.

The NASDAQ composite was initiated in 1970. For research purposes figures for the average have been assembled going back to 1963.

The reports below include all of the SPX and NASDAQ data that I have. Daily percentage change figures are given with a mean of the previous 5 periods market Avg. In the year over year part of the report this is an average of the previous 5 years. In the presidential year 4 part of the breakdown this is an average of the previous 5 presidential 4^th years. The row labeled Averages is the mean for that day in the entire database. The row labeled Winners shows the percentage that day was up over the entire database. The totals column shows the totals for the week. The three largest draw downs in the database for this period are listed with their dates, in the line that begins MDD. Looking at the summaries, the only day that has been up less than 50% of the time is 3^rd day of the 4^th presidential year for the NASDAQ. The only day that has been down on average is the 5^th day of the 4th presidential year for the SPX.

Report includes the last 5 trading days of December.
The number following the year represents its position in the presidential Cycle.
The number following the daily return represents the day of the week;
1 = Monday, 2 = Tuesday etc.

OTC	Day5	Day4	Day3	Day2	Day1	Totals
1963-3	-0.46% 2	0.20% 4	0.83% 5	0.34% 1	0.96% 2	1.88%
1964-4	0.59% 4	-0.23% 1	-0.70% 2	-0.07% 3	0.27% 4	-0.13%
1965-1	-1.05% 1	-0.75% 2	-0.63% 3	0.35% 4	0.09% 5	-1.98%
1966-2	0.34% 5	0.04% 2	-0.09% 3	0.07% 4	-0.14% 5	0.21%
1967-3	-0.25% 5	-0.17% 2	0.08% 3	-0.05% 4	-0.16% 5	-0.55%
1968-4	-0.31% 2	-0.41% 4	-0.01% 5	-0.27% 1	-1.01% 2	-2.02%
Avg	-0.14%	-0.30%	-0.27%	0.01%	-0.19%	-0.89%
1969-1	-0.42% 3	0.51% 5	0.46% 1	-0.15% 2	0.38% 3	0.78%
1970-2	0.13% 4	0.44% 1	0.35% 2	0.57% 3	0.12% 4	1.62%
1971-3	-0.21% 1	0.21% 2	0.57% 3	0.36% 4	1.02% 5	1.94%
1972-4	-0.64% 4	0.15% 5	-0.08% 2	0.57% 3	1.36% 5	1.37%
1973-1	-0.95% 1	1.71% 3	1.18% 4	0.47% 5	0.56% 1	2.97%
Avg	-0.42%	0.60%	0.50%	0.37%	0.69%	1.73%
1974-2	0.76% 2	0.99% 4	-0.24% 5	0.07% 1	1.77% 2	3.35%
1975-3	0.65% 3	1.00% 5	-0.25% 1	-0.35% 2	1.24% 3	2.28%
1976-4	0.48% 1	0.56% 2	0.07% 3	0.79% 4	0.86% 5	2.76%
1977-1	0.51% 5	0.02% 2	0.08% 3	0.37% 4	0.60% 5	1.58%
1978-2	0.93% 5	0.64% 2	-0.30% 3	-0.03% 4	0.58% 5	1.83%
Avg	0.67%	0.64%	-0.13%	0.17%	1.01%	2.36%
1979-3	-0.13% 1	0.03% 3	0.15% 4	0.40% 5	0.21% 1	0.65%
1980-4	0.14% 3	0.57% 5	-0.72% 1	0.31% 2	0.77% 3	1.07%
1981-1	0.13% 4	-0.29% 1	-0.63% 2	0.39% 3	0.61% 4	0.20%
1982-2	0.37% 1	-0.43% 2	0.03% 3	-0.43% 4	0.49% 5	0.04%
1983-3	0.12% 5	0.05% 2	-0.04% 3	0.18% 4	0.56% 5	0.86%
Avg	0.13%	-0.01%	-0.24%	0.17%	0.52%	0.56%
1984-4	0.63% 1	0.10% 3	-0.17% 4	0.18% 5	0.52% 1	1.25%
1985-1	-0.38% 2	-0.02% 4	0.77% 5	0.12% 1	0.39% 2	0.87%
1986-2	0.25% 3	0.11% 5	-0.57% 1	-0.20% 2	0.43% 3	0.02%
1987-3	0.52% 4	-2.28% 1	-0.02% 2	1.28% 3	0.23% 4	-0.27%
1988-4	0.22% 5	-0.19% 2	0.03% 3	0.61% 4	0.61% 5	1.29%
Avg	0.25%	-0.46%	0.01%	0.40%	0.44%	0.63%
1989-1	0.79% 5	0.16% 2	0.80% 3	0.26% 4	1.08% 5	3.08%
1990-2	-0.32% 1	0.00% 3	-0.36% 4	0.04% 5	0.71% 1	0.07%
1991-3	1.04% 2	1.77% 4	1.14% 5	2.48% 1	1.14% 2	7.58%
1992-4	0.44% 4	0.06% 1	0.41% 2	0.42% 3	0.76% 4	2.09%
1993-1	0.31% 1	0.46% 2	0.36% 3	0.49% 4	0.74% 5	2.36%
Avg	0.45%	0.49%	0.47%	0.74%	0.88%	3.04%
1994-2	0.39% 5	0.54% 2	-0.50% 3	0.95% 4	0.32% 5	1.70%
1995-3	0.61% 5	0.24% 2	-0.12% 3	-0.56% 4	0.95% 5	1.11%
1996-4	0.63% 2	0.54% 4	-0.25% 5	-0.28% 1	0.25% 2	0.90%
1997-1	-0.69% 3	0.79% 5	1.73% 1	1.79% 2	0.35% 3	3.97%
1998-2	-0.44% 4	0.80% 1	0.04% 2	-0.65% 3	1.19% 4	0.93%
Avg	0.10%	0.58%	0.18%	0.25%	0.61%	1.72%
1999-3	0.15% 1	-0.08% 2	1.75% 3	-0.11% 4	0.80% 5	2.50%
2000-4	2.00% 5	-0.93% 2	1.84% 3	0.72% 4	-3.41% 5	0.22%
2001-1	-0.07% 1	0.83% 3	0.80% 4	0.55% 5	-1.85% 1	0.26%
2002-2	-0.67% 2	-0.33% 4	-1.43% 5	-0.65% 1	-0.30% 2	-3.38%
2003-3	-0.28% 3	0.20% 5	1.69% 1	0.17% 2	-0.32% 3	1.45%
Avg	0.23%	-0.06%	0.93%	0.14%	-1.02%	0.21%
Averages 0.14% 0.19% 0.20% 0.28% 0.38% 1.19% Winners 61% 68% 54% 68% 83% 85% MDD 12/29/2000 3.41% -- 12/31/2002 3.34% -- 12/29/1965 2.40%
Presidential year 4
	Day5	Day4	Day3	Day2	Day1	Totals
1964-4	0.59% 4	-0.23% 1	-0.70% 2	-0.07% 3	0.27% 4	-0.13%
1968-4	-0.31% 2	-0.41% 4	-0.01% 5	-0.27% 1	-1.01% 2	-2.02%
1972-4	-0.64% 4	0.15% 5	-0.08% 2	0.57% 3	1.36% 5	1.37%
1976-4	0.48% 1	0.56% 2	0.07% 3	0.79% 4	0.86% 5	2.76%
1980-4	0.14% 3	0.57% 5	-0.72% 1	0.31% 2	0.77% 3	1.07%
Avg	0.05%	0.13%	-0.29%	0.27%	0.45%	0.61%
1984-4	0.63% 1	0.10% 3	-0.17% 4	0.18% 5	0.52% 1	1.25%
1990-4	0.22% 5	-0.19% 2	0.03% 3	0.61% 4	0.61% 5	1.29%
1992-4	0.44% 4	0.06% 1	0.41% 2	0.42% 3	0.76% 4	2.09%
1996-4	0.63% 2	0.54% 4	-0.25% 5	-0.28% 1	0.25% 2	0.90%
2000-4	2.00% 5	-0.93% 2	1.84% 3	0.72% 4	-3.41% 5	0.22%
Avg	0.79%	-0.08%	0.37%	0.33%	-0.25%	1.15%
Averages 0.42% 0.02% 0.04% 0.30% 0.10% 0.88% Winners 80% 60% 40% 70% 80% 80%
SPX	Day5	Day4	Day3	Day2	Day1	Totals
1928-4	-0.42% 3	0.85% 4	1.44% 5	0.29% 6	1.25% 1	3.41%
1929-1	2.21% 4	-0.10% 5	-0.77% 6	1.11% 1	2.68% 2	5.14%
1930-2	-2.04% 5	-0.61% 6	-0.27% 1	2.31% 2	1.86% 3	1.25%
1931-3	0.13% 4	-2.51% 1	2.58% 2	1.76% 3	0.25% 4	2.20%
1932-4	-0.60% 2	-0.15% 3	2.27% 4	2.52% 5	-0.43% 6	3.60%
1933-1	-1.94% 2	1.36% 3	2.88% 4	-0.20% 5	1.30% 6	3.40%
Avg	-0.45%	-0.40%	1.34%	1.50%	1.13%	3.12%
1934-2	-0.55% 3	0.11% 4	3.75% 5	0.32% 6	0.64% 1	4.26%
1935-3	0.23% 4	-0.08% 5	-0.61% 6	2.07% 1	0.98% 2	2.59%
1936-2	0.18% 4	-0.70% 1	0.41% 2	1.53% 3	-0.52% 4	0.89%
1937-3	-3.35% 1	-3.55% 2	1.07% 3	1.34% 4	-0.09% 5	-4.58%
1938-4	-1.01% 2	1.18% 3	1.94% 4	0.08% 5	0.53% 6	2.72%
Avg	-0.90%	-0.61%	1.31%	1.07%	0.31%	1.18%
1939-1	-0.56% 2	-0.57% 3	0.89% 4	0.32% 5	0.24% 6	0.33%
1940-2	-0.10% 4	0.48% 5	0.57% 6	0.67% 1	0.09% 2	1.72%
1941-3	0.36% 5	0.36% 6	-0.95% 1	4.42% 2	-0.57% 3	3.62%
1942-4	0.21% 6	-1.13% 1	0.00% 2	1.14% 3	0.10% 4	0.32%
1943-1	-0.17% 1	-0.95% 2	0.00% 3	1.83% 4	-0.17% 5	0.54%
Avg	-0.05%	-0.36%	0.17%	1.68%	-0.06%	1.30%
1944-4	-0.91% 2	-0.46% 3	1.00% 4	1.37% 5	0.00% 6	1.00%
1945-1	1.40% 3	-0.75% 4	0.17% 5	0.29% 6	0.00% 1	1.11%
1946-2	-1.04% 4	-0.13% 5	0.20% 6	-0.33% 1	0.86% 2	-0.45%
1947-3	-0.85% 5	-0.13% 6	-0.40% 1	1.20% 2	0.53% 3	0.34%
1948-4	-0.39% 1	-0.72% 2	1.33% 3	0.00% 4	-0.52% 5	-0.31%
Avg	-0.36%	-0.44%	0.46%	0.63%	0.29%	0.34%
1949-1	-0.36% 2	0.48% 3	0.12% 4	0.66% 5	-0.18% 6	0.72%
1950-2	-0.75% 2	1.91% 3	0.39% 4	0.25% 5	-0.10% 6	1.70%
1951-3	-0.42% 3	0.90% 4	0.17% 5	0.00% 6	0.34% 1	0.98%
1952-4	0.08% 3	0.15% 5	0.57% 1	0.72% 2	-0.08% 3	1.44%
1953-1	0.45% 4	-0.36% 1	-0.65% 2	0.86% 3	0.20% 4	0.49%
Avg	-0.20%	0.62%	0.12%	0.62%	0.04%	1.07%
1954-2	-0.85% 1	1.03% 2	0.87% 3	0.00% 4	0.67% 5	1.72%
1955-3	0.20% 5	-0.62% 2	-0.38% 3	0.22% 4	0.73% 5	0.16%
1956-4	0.65% 5	0.04% 3	-0.09% 4	0.45% 5	0.24% 1	1.30%
1957-1	0.10% 2	1.01% 4	-0.35% 5	-0.50% 1	1.04% 2	1.30%
1958-2	-0.54% 2	1.29% 3	1.16% 1	0.35% 2	0.51% 3	2.77%
Avg	-0.09%	0.55%	0.25%	0.13%	0.64%	1.45%
1959-3	0.07% 4	-0.03% 1	0.54% 2	0.79% 3	0.20% 4	1.57%
1960-4	0.09% 5	0.14% 2	0.45% 3	0.47% 4	0.10% 5	1.25%
1961-1	0.07% 5	0.16% 2	0.89% 3	0.06% 4	-0.20% 5	0.97%
1962-2	-0.02% 1	0.62% 3	-0.14% 4	0.05% 5	0.22% 1	0.73%
1963-3	0.22% 2	0.47% 4	0.16% 5	0.16% 1	0.62% 2	1.63%
Avg	0.09%	0.27%	0.38%	0.30%	0.19%	1.23%
1964-4	0.00% 4	-0.10% 1	-0.31% 2	0.58% 3	0.53% 4	0.71%
1965-1	-0.73% 1	0.01% 2	0.31% 3	0.42% 4	0.25% 5	0.26%
1966-2	-0.27% 5	-0.58% 2	-0.48% 3	-0.30% 4	-0.05% 5	-1.68%
1967-3	-0.19% 5	0.06% 2	0.68% 3	-0.02% 4	0.60% 5	1.14%
1968-4	-0.16% 2	0.10% 4	-0.39% 5	-0.90% 1	0.06% 2	-1.29%
Avg	-0.34%	-0.10%	-0.04%	-0.04%	0.28%	-0.17%
1969-1	1.05% 3	0.78% 5	-0.70% 1	0.38% 2	0.50% 3	2.02%
1970-2	0.57% 4	0.53% 1	1.09% 2	0.21% 3	-0.13% 4	2.26%
1971-3	0.21% 1	0.99% 2	0.26% 3	-0.42% 4	0.30% 5	1.34%
1972-4	-0.72% 4	0.63% 5	0.41% 2	0.54% 3	0.96% 5	1.81%
1973-1	-0.68% 1	3.06% 3	2.09% 4	-0.20% 5	0.01% 1	4.27%
Avg	0.08%	1.20%	0.63%	0.10%	0.33%	2.34%
1974-2	1.39% 2	0.84% 4	-0.44% 5	0.03% 1	2.08% 2	3.90%
1975-3	0.82% 3	0.88% 5	-0.13% 1	-0.40% 2	0.47% 3	1.64%
1976-4	1.16% 1	0.67% 2	-0.40% 3	0.51% 4	0.54% 5	2.48%
1977-1	0.95% 5	0.00% 2	0.06% 3	0.20% 4	0.17% 5	1.38%
1978-2	1.69% 5	1.26% 2	-0.88% 3	-0.39% 4	-0.18% 5	1.49%
Avg	1.20%	0.91%	-0.36%	-0.01%	0.62%	2.18%
1979-3	0.07% 1	0.11% 3	0.17% 4	-0.11% 5	0.09% 1	0.33%
1980-4	0.43% 3	0.51% 5	-1.13% 1	0.22% 2	0.32% 3	0.35%
1981-1	0.19% 4	-0.22% 1	-0.49% 2	0.52% 3	0.20% 4	0.20%
1982-2	1.76% 1	-0.99% 2	0.33% 3	-0.64% 4	0.22% 5	0.68%
1983-3	-0.03% 5	0.94% 2	0.35% 3	-0.29% 4	0.04% 5	1.02%
Avg	0.48%	0.07%	-0.15%	-0.06%	0.18%	0.51%
1984-4	0.76% 1	-0.17% 3	-0.43% 4	0.31% 5	0.59% 1	1.05%
1985-1	-0.69% 2	0.25% 4	0.94% 5	0.51% 1	0.28% 2	1.30%
1986-2	0.17% 3	0.07% 5	-0.91% 1	-0.53% 2	-0.49% 3	-1.70%
1987-3	-0.45% 4	-2.56% 1	-0.40% 2	1.34% 3	-0.31% 4	-2.39%
1988-4	0.36% 5	-0.37% 2	0.09% 3	0.84% 4	-0.60% 5	0.31%
Avg	0.03%	-0.56%	-0.14%	0.49%	-0.11%	-0.29%
1989-1	0.77% 5	-0.18% 2	0.58% 3	0.53% 4	0.78% 5	2.48%
1990-2	-0.56% 1	0.29% 3	-0.77% 4	0.13% 5	0.46% 1	-0.46%
1991-3	0.63% 2	1.38% 4	0.40% 5	2.14% 1	0.47% 2	5.02%
1992-4	0.17% 4	-0.14% 1	-0.27% 2	0.19% 3	-0.71% 4	-0.76%
1993-1	0.68% 1	0.09% 2	-0.08% 3	-0.41% 4	-0.47% 5	-0.19%
Avg	0.34%	0.29%	-0.03%	0.52%	0.11%	1.22%
1994-2	0.03% 5	0.57% 2	-0.35% 3	0.07% 4	-0.41% 5	-0.09%
1995-3	0.24% 5	0.38% 2	0.04% 3	-0.07% 4	0.29% 5	0.89%
1996-4	0.55% 2	0.64% 4	0.13% 5	-0.39% 1	-1.74% 2	-0.81%
1997-1	-0.68% 3	0.40% 5	1.80% 1	1.83% 2	-0.04% 3	3.31%
1998-2	-0.18% 4	-0.07% 1	1.33% 2	-0.80% 3	-0.22% 4	0.07%
Avg	-0.01%	0.39%	0.59%	0.13%	-0.42%	0.68%
1999-3	-0.09% 1	0.04% 2	0.40% 3	0.07% 4	0.33% 5	0.75%
2000-4	2.44% 5	0.71% 2	1.04% 3	0.40% 4	-1.04% 5	3.54%
2001-1	-0.02% 1	0.41% 3	0.68% 4	0.34% 5	-1.11% 1	0.29%
2002-2	-0.55% 2	-0.31% 4	-1.60% 5	0.46% 1	0.05% 2	-1.96%
2003-3	-0.18% 3	0.17% 5	1.24% 1	0.01% 2	0.21% 3	1.45%
Avg	0.32%	0.20%	0.35%	0.25%	-0.32%	0.81%
Averages 0.01% 0.13% 0.34% 0.49% 0.22% 1.16% Winners 52% 61% 62% 75% 68% 83% MDD 12/28/1937 6.78% -- 12/29/1987 3.39% -- 12/29/1930 2.90%
Presidential year 4
	Day5	Day4	Day3	Day2	Day1	Totals
1928-4	-0.42% 3	0.85% 4	1.44% 5	0.29% 6	1.25% 1	3.41%
1932-4	-0.60% 2	-0.15% 3	2.27% 4	2.52% 5	-0.43% 6	3.60%
1936-4	0.18% 4	-0.70% 1	0.41% 2	1.53% 3	-0.52% 4	0.89%
1940-4	-0.10% 4	0.48% 5	0.57% 6	0.67% 1	0.09% 2	1.72%
1944-4	-0.91% 2	-0.46% 3	1.00% 4	1.37% 5	0.00% 6	1.00%
1948-4	-0.39% 1	-0.72% 2	1.33% 3	0.00% 4	-0.52% 5	-0.31%
1952-4	0.08% 3	0.15% 5	0.57% 1	0.72% 2	-0.08% 3	1.44%
1956-4	0.65% 5	0.04% 3	-0.09% 4	0.45% 5	0.24% 1	1.30%
1960-4	0.09% 5	0.14% 2	0.45% 3	0.47% 4	0.10% 5	1.25%
Avg	-0.10%	-0.17%	0.65%	0.60%	-0.05%	0.94%
1964-4	0.00% 4	-0.10% 1	-0.31% 2	0.58% 3	0.53% 4	0.71%
1968-4	-0.16% 2	0.10% 4	-0.39% 5	-0.90% 1	0.06% 2	-1.29%
1972-4	-0.72% 4	0.63% 5	0.41% 2	0.54% 3	0.96% 5	1.81%
1976-4	1.16% 1	0.67% 2	-0.40% 3	0.51% 4	0.54% 5	2.48%
1980-4	0.43% 3	0.51% 5	-1.13% 1	0.22% 2	0.32% 3	0.35%
Avg	0.14%	0.36%	-0.36%	0.19%	0.48%	0.81%
1984-4	0.76% 1	-0.17% 3	-0.43% 4	0.31% 5	0.59% 1	1.05%
1988-4	0.36% 5	-0.37% 2	0.09% 3	0.84% 4	-0.60% 5	0.31%
1992-4	0.17% 4	-0.14% 1	-0.27% 2	0.19% 3	-0.71% 4	-0.76%
1996-4	0.55% 2	0.64% 4	0.13% 5	-0.39% 1	-1.74% 2	-0.81%
2000-4	2.44% 5	0.71% 2	1.04% 3	0.40% 4	-1.04% 5	3.54%
Avg	0.85%	0.13%	0.11%	0.27%	-0.70%	0.67%
Averages 0.19% 0.11% 0.35% 0.54% -0.05% 1.14% Winners 58% 58% 63% 84% 53% 79%

The odds of next week being up are about 80%.

I expect the major indices to be higher on Friday December 31 than they were on Thursday December 23.