• 1 day Bitcoin Lives Up To Its Safe Haven Status In A Big Way
  • 2 days 14 Million People Will Lose Unemployment Benefits On December 31st
  • 3 days Why 12 Million American Millionaires Isn’t Good News
  • 4 days Big Oil Is Paying The Price For Investing In Renewables
  • 5 days The Banking Industry’s $35 Billion Gravy Train Could Disappear
  • 6 days Did Amazon Just Democratize Prescription Drugs?
  • 8 days The Private Space Race Just Got Very Real
  • 9 days Short Sellers Are Willing Big In This Turbulent Market
  • 11 days SpaceX Gets Go-Ahead To Send Humans Into Space
  • 12 days Saudi Arabia Lost $27 Billion In Oil Crash
  • 12 days China’s Big Tech Takes A Hit As Regulators Crack Down
  • 13 days Black Friday Could Be Retailers’ Only Hope
  • 14 days Why You Should Not Dump Your Stay At Home Stocks Just Yet
  • 15 days The Real Reason Why Uber And Lyft Stocks Have Soared Nearly 50%
  • 17 days Bitcoin Heads Towards $16,000 And No One’s Cashing In
  • 18 days Elon Musk’s $250 Tesla Tequila Is Already Sold Out
  • 19 days Will The San Francisco Wealth Tax Spark An Exodus Of The Rich?
  • 20 days The Fin-Tech IPO Of The Century Just Got Crushed
  • 21 days UK Bookies Report Largest-Ever Political Bet Ahead Of Election Results
  • 22 days Better Safe Than Sorry: 5 Alternative Investment Plays
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…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

Technical Market Report for January 16, 2016

The good news is:
• The declines last week were only about 1/3 of what they were the week before.


The negatives

New lows are at dangerous levels.

The chart below covers the past 6 months showing the S&P 500 (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). Dashed vertical lines have been drawn on the 1st trading day of each month.

NY NL is at its lowest level since March 2009 and moving downward.

SPX and NY NL Chart

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

OTC NL looks a little worse then NY NL and is also at its lowest level since 2009.

OTC and OTC NL Chart

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 the 50%, neutral level.

At 2.3% NY HL Ratio is about as low as it can go.

SPX and NY HL Ratio Chart

The next chart 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 is also about as low as it can go.

OTC and OTC HL Ratio Chart


The positives

It will be easy to identify when this period of weakness is over. New lows will quickly disappear.


Seasonality

Next Friday is the 4th Friday of the month, but since the 1st Friday was a holiday, I am showing the report which includes the 5 trading days prior to the 3rd Friday of January during the 4th year of the Presidential Cycle. The tables below show the daily change, on a percentage basis for that period.

OTC data covers the period from 1963 to 2014 while SPX data runs from 1953 to 2014 There are summaries for both the 4th 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 mixed.

Checking seasonality now is like checking the weather during an earth quake.

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

OTC Presidential Year 4
Year Mon Tue Wed Thur Fri Totals
1964-4 -0.19% 0.14% 0.38% 0.14% -0.22% 0.25%
1968-4 0.43% 0.18% -0.85% 0.36% 0.16% 0.28%
1972-4 0.16% 0.62% -0.18% -0.11% -0.09% 0.40%
1976-4 0.49% -1.56% 2.70% 0.13% 0.68% 2.44%
 
1980-4 0.34% 0.36% 0.66% -0.12% 0.21% 1.47%
1984-4 -0.20% 0.20% 0.12% -0.25% -0.73% -0.85%
1988-4 0.11% -0.05% -1.96% 0.17% 1.00% -0.73%
1992-4 0.31% 1.31% 0.81% -0.55% -0.08% 1.81%
1996-4 -1.95% 0.74% 0.24% 0.89% 1.12% 1.05%
Avg -0.27% 0.51% -0.02% 0.03% 0.31% 0.55%
 
2000-4 0.00% 1.64% 0.50% 0.92% 1.10% 4.15%
2004-4 1.19% -0.73% 0.70% -0.10% 1.49% 2.56%
2008-4 1.57% -2.45% -0.95% -1.99% -0.29% -4.11%
2012-4 0.00% 0.64% 1.53% 0.67% -0.06% 2.78%
2016-4 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Avg 1.38% -0.22% 0.44% -0.12% 0.56% 1.34%
 
OTC summary for Presidential Year 4 1964 - 2016
Avg 0.21% 0.08% 0.28% 0.01% 0.33% 0.88%
Win% 73% 69% 69% 54% 54% 77%
 
OTC summary for all years 1963 - 2015
Avg -0.03% 0.25% 0.03% 0.22% 0.00% 0.48%
Win% 58% 60% 58% 66% 57% 68%
 
SPX Presidential Year 4
Year Mon Tue Wed Thur Fri Totals
1956-4 -1.19% 0.75% -0.67% -1.02% -1.14% -3.28%
 
1960-4 -0.84% -1.07% -0.35% 0.25% 0.30% -1.72%
1964-4 -0.03% 0.18% 0.37% -0.12% 0.01% 0.42%
1968-4 -0.31% -0.62% -0.19% -0.08% -0.33% -1.54%
1972-4 0.30% 0.34% -0.16% 0.00% -0.22% 0.25%
1976-4 1.45% -0.79% 1.63% -0.54% 0.40% 2.17%
Avg 0.12% -0.39% 0.26% -0.12% 0.03% -0.08%
 
1980-4 0.42% 0.69% -0.08% -0.32% 0.33% 1.05%
1984-4 0.10% 0.39% -0.17% -0.30% -0.50% -0.48%
1988-4 -0.07% -1.02% -2.68% 0.21% 1.38% -2.17%
1992-4 -0.18% 1.47% 0.08% -0.61% 0.16% 0.91%
1996-4 -0.33% 1.44% -0.34% 0.31% 0.59% 1.66%
Avg -0.01% 0.59% -0.64% -0.14% 0.39% 0.19%
 
2000-4 0.00% -0.69% 0.05% -0.71% -0.29% -1.63%
2004-4 0.48% -0.53% 0.83% 0.14% 0.69% 1.60%
2008-4 1.09% -2.49% -0.56% -2.91% -0.60% -5.48%
2012-4 0.00% 0.36% 1.11% 0.49% 0.07% 2.03%
2016-4 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Avg 0.78% -0.84% 0.36% -0.75% -0.04% -0.87%
 
SPX summary for Presidential Year 4 1956 - 2016
Avg 0.07% -0.11% -0.08% -0.37% 0.06% -0.41%
Win% 46% 53% 40% 36% 60% 53%
 
SPX summary for all years 1953 - 2015
Avg -0.09% 0.12% -0.05% 0.04% -0.09% -0.06%
Win% 43% 60% 54% 58% 54% 49%


Money supply (M2) & Yield curve

The charts were provided by Gordon Harms. Money supply growth declined a bit.

M2 Money Supply and S&P500 Daily Chart


Conclusion

The market remains in free fall.

New lows are the only measure that matters and they will quickly disappear when this period of weakness ends.

I expect the major averages to be lower on Friday January 22 than they were on Friday January 15.

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 2 / L 0 / T 0

 

Back to homepage

Leave a comment

Leave a comment