• 47 mins The History Of Oil Markets
  • 18 hours Three Stocks To Watch Ahead Of Earnings Season
  • 22 hours Markets Flat As Bulls And Bears Battle It Out
  • 24 hours The Mining Industry Still Has a Human Rights Problem
  • 2 days 5 Billionaires Booted From Their Own Companies
  • 2 days Can Toyota's Hydrogen Car Take On Tesla?
  • 3 days Why Universal Basic Income Won't Work
  • 4 days Is This The Real Golden State?
  • 4 days Blockchain Firm Pushes For Ethical Mining
  • 5 days America’s Working Class Are Footing All The Bills
  • 5 days Market Volatility Sends Investors Scrambling Into This Asset Class
  • 5 days How Much Energy Would It Take To Power The Death Star?
  • 6 days A Tweet About Hong Kong Could Cost The NBA $4 Billion
  • 6 days World's Largest Miner Doubles Down On Renewables
  • 6 days Nasdaq Cracks Down On Small Chinese IPOs
  • 7 days Is There Any Reason To Be Bullish About Netflix?
  • 7 days Precious Metals See Record Inflows As Investors Hedge Against Teetering Economy
  • 7 days NYU Professor: Tesla Could Lose 80% Of Its Value
  • 8 days Uber To Offer On Demand Employment
  • 8 days SoftBank Reeling After Questionable WeWork Investment
Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

  1. Home
  2. Markets
  3. Other

Technical Market Report for May 9, 2015

The good news is:
• The S&P 100 (OEX) closed at a all time high Friday while the Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) closed less than 1% from their all time highs.


The negatives

Last week new lows outnumbered new highs for 3 of the 5 trading days and the secondaries continue to lag.

The chart below covers the past month showing the broad based indices on Log scales to illustrate their relative performance. Dashed vertical lines have been drawn on the first trading day of the week.

The chart shows the SPX, in red and NASDAQ composite (OTC), in blue, the S&P Mid cap (MID), in green and the small cap Russell 2000 (R2K) , in magenta is at the bottom. The small caps usually lead both up and down and they have been underperforming the large caps.

SPX, NASDAQ, S&P Mid-Cap and R2K Chart

The next chart covers the past 6 months showing the SPX in red and a 10% trend (19 day EMA) of NYSE new highs (NY NH), in green. Dashed vertical lines have been drawn on the 1st trading day of each month.

NY NH continued falling as the SPX neared its all time high.

NY NH Chart

The next chart is similar to the one above except is shows the OTC in blue and OTC NH, in green, has been calculated from NASDAQ data.

OTC NH also fell sharply last week.

OTC NH Chart

Diminishing new highs near all time index highs indicate narrowing leadership.


The positives

Positives are coming up a bit short, but, on Friday, new highs outnumbered new lows so the rally might continue for a few more days.

The next chart covers the past 6 months showing the SPX in red and a 40% trend (4 day EMA) of NYSE new highs divided by new highs + new lows (NY HL Ratio), in blue. Dashed horizontal lines have been drawn at 10% levels for the indicator, the line is solid at 50%, neutral level.

NY HL Ratio rallied to finish the week at a positive 53%.

NY HL Ratio Chart

The chart below is similar to the one above except it shows the OTC in blue and OTC HL Ratio, in red has been calculated from NASDAQ data.

OTC HL Ratio also rallied on Friday, but finished a little below the neutral level at 49%.

OTC HL Ratio Chart


Seasonality

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

The tables below show the daily change, on a percentage basis for the 5 trading days prior to the 3rd Friday of May during the 3rd year of the Presidential Cycle.

OTC data covers the period from 1963 to 2014 while SPX data runs from 1953 through 2014. There are summaries for both the 3rd year of the Presidential Cycle and all years combined. Prior to 1953 the market traded 6 days a week so that data has been ignored.

Average returns for the coming week have been modestly negative by all measures and weaker during the 3rd year of the Presidential Cycle than other years.

Report for the week before the 3rd Friday of May.
The number following the year is the position in the Presidential Cycle.
Daily returns from Monday through 3rd Friday.

OTC Presidential Year 3
Year Mon Tue Wed Thur Fri Totals
1963-3 -0.06% 0.09% 0.06% 0.18% -0.06% 0.21%
1967-3 -0.35% -0.52% 0.78% 0.23% 0.03% 0.16%
1971-3 -1.44% -0.69% -0.06% 0.36% 0.12% -1.71%
 
1975-3 -0.63% 1.28% -0.53% -0.14% -0.42% -0.45%
1979-3 -0.54% 0.02% 0.26% 0.84% 0.44% 1.02%
1983-3 -1.43% 0.47% 0.83% -0.23% 0.24% -0.11%
1987-3 -0.24% -0.39% 0.33% 0.18% -0.89% -1.01%
1991-3 0.10% -1.04% -2.19% 0.77% -0.08% -2.44%
Avg -0.55% 0.07% -0.26% 0.28% -0.14% -0.60%
 
1995-3 0.48% 0.60% 0.42% -0.90% 0.06% 0.66%
1999-3 1.34% -0.13% 0.74% -1.37% -0.87% -0.28%
2003-3 1.40% -0.11% -0.31% 1.07% -0.83% 1.22%
2007-3 -0.62% -0.83% 0.88% -0.32% 0.75% -0.13%
2011-3 -1.63% 0.03% 1.14% 0.30% -0.71% -0.87%
Avg 0.19% -0.09% 0.57% -0.24% -0.32% 0.12%
 
OTC summary for Presidential Year 3 1963 - 2011
Avg -0.28% -0.09% 0.18% 0.07% -0.17% -0.29%
Win% 31% 46% 69% 62% 46% 38%
 
OTC summary for all years 1963 - 2014
Avg -0.03% 0.02% 0.02% -0.05% -0.21% -0.24%
Win% 48% 46% 58% 50% 43% 48%
 
SPX Presidential Year 3
Year Mon Tue Wed Thur Fri Totals
1955-3 -1.12% -0.14% 0.84% 0.56% 0.67% 0.81%
1959-3 0.42% 0.16% 0.56% 0.69% -0.36% 1.46%
1963-3 -0.06% -0.38% 0.31% -0.26% 0.06% -0.33%
1967-3 -0.82% 0.46% -0.39% -0.27% -0.50% -1.51%
1971-3 -1.49% 0.14% 0.24% 0.24% -0.32% -1.19%
Avg -0.61% 0.05% 0.31% 0.19% -0.09% -0.15%
 
1975-3 0.09% 1.07% 0.75% -0.93% -1.07% -0.09%
1979-3 -0.47% 0.08% 0.29% 1.54% -0.01% 1.43%
1983-3 -0.91% 0.19% -0.27% -0.78% 0.09% -1.68%
1987-3 -0.61% 0.59% 0.23% 0.09% -2.31% -2.01%
1991-3 0.27% -1.36% -0.82% 0.98% 0.05% -0.88%
Avg -0.33% 0.11% 0.04% 0.18% -0.65% -0.65%
 
1995-3 0.42% 0.09% -0.21% -1.42% -0.08% -1.21%
1999-3 0.13% -0.46% 0.82% -0.39% -0.64% -0.55%
2003-3 1.25% -0.30% -0.32% 0.79% -0.25% 1.17%
2007-3 -0.18% -0.13% 0.86% -0.09% 0.66% 1.12%
2011-3 -0.62% -0.04% 0.88% 0.22% -0.77% -0.33%
Avg 0.20% -0.17% 0.41% -0.18% -0.22% 0.04%
 
SPX summary for Presidential Year 3 1955 - 2011
Avg -0.25% 0.00% 0.25% 0.06% -0.32% -0.25%
Win% 40% 53% 67% 53% 33% 33%
 
SPX summary for all years 1953 - 2014
Avg -0.03% 0.07% 0.05% -0.08% -0.11% -0.11%
Win% 51% 53% 50% 50% 50% 48%


Money supply (M2)

The money supply chart was provided by Gordon Harms. Money supply growth has been falling at the fastest rate in the past 2 years.

SPX and M2 Money Supply


Conclusion

Breadth deterioration is accelerating. Seasonality indicates a final top is still 2 months away.

I expect the major averages to be lower on Friday May 15 than they were on Friday May 8.

Last week the OTC was down a little while the other major indices were up a little so I am calling last weeks negative forecast a tie.

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

These reports are archived at: http://www.safehaven.com/

Good Luck,

YTD W 8 / L 6 / T 4

 

Back to homepage

Leave a comment

Leave a comment