"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 6 hours OPEC ‘Supergroup’ Keeps Oil Exports Subdued
  • 7 hours One Belt, One Road, One Direction for Precious Metals
  • 9 hours Vicious Trio Keeps Bitcoin in Chokehold
  • 11 hours How Infrastructure Is Driving A Commodity Boom
  • 12 hours What’s Really Happening With Venezuela’s “El Petro?”
  • 14 hours Gold Bull and Bear Markets
  • 1 day 5 Big Drivers of Higher Inflation Rates Ahead
  • 1 day U.S. And China To Face Off Over Aramco IPO
  • 1 day Gold Bulls, Brace Yourselves – Fed Hikes Are Coming!
  • 2 days Stocks Fail to Hold Gains, But Still No Correction
  • 2 days Cryptojacking: A New Threat Vector To Critical Infrastructure
  • 2 days Why The Next Oil Boom Will Be Fueled By Blockchain
  • 2 days 5 Things Investors Should Know About China this New Year
  • 3 days Is The South Korean Crypto-Drama Finally Over?
  • 3 days Miners’ Rally? What Rally? Watch Out for More Fake Moves!
  • 3 days Four Percent 10-year Note Yield Will Be a Floor Not a Ceiling
  • 3 days The End Is Near
  • 3 days 5 Record Breaking Gemstones Even Billionaires Can’t Buy
  • 3 days Irredeemable Currency De-tooths Savers
  • 4 days CFTC Offers Bounty For Crypto Pump And Dump Whistleblowers
Stocks Fail to Hold Gains, But Still No Correction

Stocks Fail to Hold Gains, But Still No Correction

The U.S stock market indexes…

Why The Next Oil Boom Will Be Fueled By Blockchain

Why The Next Oil Boom Will Be Fueled By Blockchain

As blockchain tech works its…

U.S. Dollar Bull and Bear Markets

U.S. Dollar Bull and Bear Markets

The idea of endlessly repeated…

Technical Market Report for August 8, 2015

The good news is:
• The market is oversold and next week seasonality turns positive.


The negatives

New highs disappeared last week while new lows returned to threatening levels.

The first chart covers the past 6 months showing the S&P 500 (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 vertical lines have been drawn on the 1st trading day of each month. Dashed horizontal lines have been drawn at 10% levels for the indicator, the line is solid at the 50%, neutral level.

NY HL Ratio moved downward finishing the week at a very weak 22% and is in a clearly defined down trend.

NY HL Ratio

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

OTC HL Ratio declined to 27%.

OTC HL Ratio


The positives

The market weakness of the past several weeks has been consistent with a negative seasonal pattern that ends early next week. New lows increased last week, but, so far, have not reached the levels of 2 weeks ago.

The chart below covers the past 6 months showing the SPX in red and a 10% trend (19 day EMA) of NYSE new lows (NY NL), in blue. NY NL has been plotted on an inverted Y axis so decreasing new lows move the indicator upward (up is good).

NY NL turned downward last week, but stopped, possibly initiating a pattern of higher lows.

NY NL

Most of the breadth indicators were moving downward as of Friday's close. However, this period of weakness has been right on schedule with the average seasonal pattern and that pattern turns positive on Tuesday.


Seasonality

Next week includes the 5 trading days prior to the 2nd Friday of August 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 2nd Friday of August during the 3rd year of the Presidential Cycle.

OTC data covers the period from 1963 to 2014 while SPX data runs from 1953 to 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 positive by all measures.

Report for the week before the 2nd Friday of August.
The number following the year is the position in the Presidential Cycle.
Daily returns from Monday to 2nd Friday.

OTC Presidential Year 3
Year Mon Tue Wed Thur Fri Totals
1963-3 0.24% 0.33% 0.41% 0.03% 0.50% 1.51%
1967-3 0.05% 0.23% 0.50% 0.72% -0.13% 1.36%
1971-3 -0.58% -0.14% 1.01% 1.09% 0.22% 1.60%
 
1975-3 -1.03% -1.00% 0.09% -0.81% -0.05% -2.80%
1979-3 -0.15% 0.62% 0.53% 0.15% 0.55% 1.70%
1983-3 -1.76% -0.23% 0.81% 0.31% 0.68% -0.18%
1987-3 0.61% 0.69% -0.03% 0.52% 0.01% 1.80%
1991-3 -0.61% 0.52% 0.45% 0.38% -0.21% 0.53%
Avg -0.59% 0.12% 0.37% 0.11% 0.20% 0.21%
 
1995-3 0.42% 0.19% 0.80% -0.45% 0.35% 1.31%
1999-3 -1.14% -1.15% 3.01% -0.60% 3.46% 3.58%
2003-3 -0.09% -2.37% -1.24% -0.03% -0.49% -4.22%
2007-3 1.44% 0.56% 2.01% -2.16% -0.45% 1.39%
2011-3 -6.90% 5.29% -4.09% 4.69% 0.61% -0.39%
Avg -1.25% 0.51% 0.10% 0.29% 0.70% 0.33%
 
OTC summary for Presidential Year 3 1963 - 2011
Avg -0.73% 0.27% 0.33% 0.29% 0.39% 0.55%
Win% 38% 62% 77% 62% 62% 69%
 
OTC summary for all years 1963 - 2014
Avg -0.32% 0.16% 0.12% 0.07% 0.03% 0.06%
Win% 44% 54% 61% 63% 48% 58%
 
SPX Presidential Year 3
Year Mon Tue Wed Thur Fri Totals
1955-3 -0.59% -1.32% -0.02% 0.93% 0.19% -0.81%
1959-3 -2.09% 1.31% -0.24% -0.17% 0.24% -0.94%
1963-3 0.59% 0.66% -0.30% 0.09% 0.66% 1.69%
1967-3 -0.26% 0.12% 0.09% -0.26% -0.40% -0.71%
1971-3 -0.76% 0.01% 1.20% 1.42% -0.32% 1.54%
Avg -0.62% 0.16% 0.15% 0.40% 0.07% 0.15%
 
1975-3 -0.95% -1.06% 0.02% 0.06% -0.32% -2.25%
1979-3 0.25% 1.29% 0.31% -0.46% 0.86% 2.26%
1983-3 -1.58% 0.60% 0.88% 0.01% 0.38% 0.28%
1987-3 1.55% 1.62% -0.28% 0.68% -0.20% 3.37%
1991-3 -0.55% 1.44% -0.02% -0.32% -0.57% 0.00%
Avg -0.26% 0.78% 0.18% -0.01% 0.03% 0.73%
 
1995-3 0.20% 0.06% -0.12% -0.40% -0.42% -0.69%
1999-3 -0.19% -1.26% 1.61% -0.29% 2.27% 2.13%
2003-3 0.27% -1.77% 0.17% 0.73% 0.36% -0.24%
2007-3 2.42% 0.62% 1.41% -2.96% 0.04% 1.51%
2011-3 -6.66% 4.74% -4.42% 4.63% 0.53% -1.18%
Avg -0.79% 0.48% -0.27% 0.34% 0.55% 0.31%
 
SPX summary for Presidential Year 3 1955 - 2011
Avg -0.56% 0.47% 0.02% 0.24% 0.22% 0.40%
Win% 40% 73% 53% 53% 60% 47%
 
SPX summary for all years 1953 - 2014
Avg -0.31% 0.20% 0.07% 0.07% 0.07% 0.09%
Win% 40% 60% 54% 50% 53% 56%


Money supply (M2)

The money supply chart was provided by Gordon Harms. M2 growth has been holding at its trend.

SPX and M2 Money Supply Charts


Conclusion

The recent period of weakness has been consistent with the average seasonal pattern and that pattern turns positive next Tuesday.

I expect the major averages to be higher on Friday August 14 than they were on Friday August 7.

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 11 / L 12 / T 8

 

Back to homepage

Leave a comment

Leave a comment




Don't Miss A Single Story