• 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
  • 696 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
  • 710 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?
Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

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:
 • All of the short and intermediate term indicators are movingupward.

The NASDAQ new high indicator ( OTC NH) is a 10% trend (19 day EMA) of NASDAQ new highs. Its direction, not level is a good short term indicator. The chart below shows the NASDAQ composite (OTC) in red and OTC NH in green, dashed vertical lines are drawn on the first trading day of each month. It is reassuring to see OTC NH continued moving upward last Thursday which was a down day for the index.

Summation indices (SI) are running totals of oscillator values.

The chart below shows the OTC in red, OTC AD SI calculated from NASDAQ advancing issues - declining issues, OTC HL SI calculated from NASDAQ new highs - new lows and OTC UD SI calculated from NASDAQ upside - downside volume. When all of the SI's are headed in the same direction it is imprudent to bet against them. OTC HL SI is moving sharply upward while the other two are moving modestly upward.

The current rally is broad based, the only sector that appears to be having trouble is transportation. The chart below shows the Dow Jones Transportation average (DJT) along with SI's calculated from its component issues. For HL SI new highs and lows were calculated over the trailing 6 weeks rather than 52 weeks as reported by the exchanges.

The table below shows daily returns for the week prior to options expiration during the 1 st year of the Presidential cycle for the SPX from 1929 and OTC from 1965 with summaries for all years 1963 - 2004 for the OTC and 1928 - 2004 for the S&P500 (SPX).

Options were not an issue prior to the mid 80's and then more important to the SPX than the OTC. If options are a factor their effect has been mixed. In the past 20 years during the 1 st year of the Presidential cycle the SPX has been up 40% of the time with an average return of +1.67%. The good years have been great while the down years have been not so bad.

OTC Pres Year 1
Year Mon Tue Wed Thur Fri Totals
1965-1 0.51% 0.32% -0.19% 0.38% 0.70% 1.72%
1969-1 0.25% 1.42% 0.67% 0.26% 0.18% 2.79%
1973-1 0.19% 0.03% 1.51% 0.79% 0.64% 3.16%
1977-1 -0.31% -0.14% 0.15% 0.36% -0.23% -0.17%
1981-1 -0.10% -0.03% -0.92% -1.12% -0.78% -2.95%
Avg 0.11% 0.32% 0.25% 0.13% 0.10% 0.91%
 
1985-1 -0.64% -1.51% -0.01% 0.91% 0.27% -0.98%
1989-1 -0.19% 0.31% -0.01% -0.65% -0.26% -0.79%
1993-1 -0.54% -1.04% 0.94% 0.03% 0.04% -0.55%
1997-1 -0.87% 2.06% -0.13% 0.22% 0.61% 1.90%
2001-1 2.00% 0.15% -2.50% -0.23% 2.61% 2.03%
Avg -0.05% -0.01% -0.34% 0.06% 0.65% 0.32%
 
OTC summary for Pres Yr 1
Avg 0.03% 0.16% -0.05% 0.09% 0.38% 0.61%
Win% 40% 60% 40% 70% 70% 50%
 
OTC summary for all years 1963 - 2004
Avg -0.01% 0.03% 0.04% 0.10% 0.29% 0.44%
Win% 43% 50% 56% 64% 69% 60%
 
SPX Pres Year 1
Year Mon Tue Wed Thur Fri Totals
1929-1 1.24% -0.82% 0.25% 0.16% -1.07% -0.24%
1933-1 4.41% -0.63% 0.45% 0.18% -2.79% 1.63%
1937-1 -1.39% 3.16% -0.48% 1.92% -2.15% 1.07%
1941-1 -0.10% 0.49% 1.75% -0.76% -0.96% 0.41%
 
1945-1 -0.32% 2.00% 0.95% 0.38% -0.50% 2.50%
1949-1 0.78% 1.42% -0.06% -0.76% 0.32% 1.69%
1953-1 -1.86% 0.84% 0.48% 0.26% -0.52% -0.80%
1957-1 -0.49% 0.13% 0.11% -0.65% -1.60% -2.49%
1961-1 -0.88% 1.01% 0.07% -0.71% 0.18% -0.33%
Avg -0.56% 1.08% 0.31% -0.30% -0.42% 0.11%
 
1965-1 0.29% -0.39% 0.55% 0.56% 0.03% 1.04%
1969-1 0.55% 0.08% -0.34% 0.29% 0.31% 0.89%
1973-1 -0.28% -0.36% 2.03% 0.83% 0.41% 2.63%
1977-1 -0.35% 0.06% 0.48% 0.26% -0.33% 0.12%
1981-1 -0.78% -0.74% -0.75% -1.45% -0.76% -4.48%
Avg -0.11% -0.27% 0.39% 0.10% -0.07% 0.04%
 
1985-1 -0.02% -0.83% 0.19% 0.92% -0.73% -0.46%
1989-1 -0.32% 0.30% -0.93% -0.67% 0.55% -1.06%
1993-1 0.07% -0.47% 0.37% -0.47% -0.13% -0.62%
1997-1 -0.45% 2.81% -0.28% 0.45% 0.34% 2.88%
2001-1 3.90% 0.88% -0.52% 1.15% 2.19% 7.60%
Avg 0.64% 0.54% -0.23% 0.28% 0.44% 1.67%
 
SPX summary for Pres Yr 1
Avg 0.21% 0.47% 0.23% 0.10% -0.38% 0.63%
Win% 37% 63% 63% 63% 42% 58%
 
SPX summary for all years 1928 - 2004
Avg 0.10% 0.06% 0.06% 0.13% -0.08% 0.26%
Win% 47% 54% 59% 58% 51% 60%

During the past week the market established a broad based up trend and next week has a positive seasonal bias.

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

This report is free to anyone who wants it, so please tell your friends. If it is not for you, reply with REMOVE in the subject line.

Last weeks negative forecast was a miss. My expectation that the previous week's strength would be no more than a seasonally induced rally in a continuing down market was overly pessimistic.

Back to homepage

Leave a comment

Leave a comment