• 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
  • 697 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
  • 703 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
  • 711 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?
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Trade In Counterfeit Goods Hits Half A Trillion Dollars

Trade In Counterfeit Goods Hits Half A Trillion Dollars

The counterfeit market has breached…

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 for March 5, 2016

The good news is:
• The market has had 3 consecutive winning weeks with the secondaries outperforming the blue chips.


The Negatives

The market is overbought.

The Dow Jones Industrial Average (DJIA) has been the worst performer of the major indices and it has been up 8.6% in the past 3 weeks.

The Russell 2000 (R2K) has been the best performer of the major indices, up 13.4% in the past 3 weeks.

There are no visible negatives, it is all seashells and balloons.


The positives

New lows declined to benign levels last week.

The first chart covers the past 6 months showing the NASDAQ composite (OTC) in blue and a 40% trend (4 day EMA) of NASDAQ new highs divided by new highs + new lows (OTC HL Ratio), in red. 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.

OTC HL Ratio hit positive territory for the 1st time in 3 months.

OTC and OTC HL ratio Chart

The chart below is similar to the one above except it shows the S&P 500 (SPX) in red and NY HL Ratio, in blue, has been calculated from NYSE data.

NY HL Ratio hit a very comfortable 83% Friday, its highest level in nearly a year.

SPX and NY HL Ratio Chart

The next chart 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 continued its sharp move upward.

SPX and NY NL Chart

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

OTC NL is showing a similar pattern to NY NL.

OTC and OTC NL Chart


Seasonality

Next week includes the 5 trading days prior to the 2nd Friday of March 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 2015 while SPX data runs from 1953 to 2015. 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.

The coming week has, on average had modest gains over all years and modest losses during the 4th year of the Presidential Cycle. Also, neither index has had more than 2 consecutive up periods over the time measured.

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

OTC Presidential Year 4
Year Mon Tue Wed Thur Fri Totals
1964-4 0.61% -0.05% 0.32% -0.24% 0.24% 0.88%
1968-4 -0.63% 0.59% -3.92% 1.27% -0.15% -2.84%
1972-4 0.54% -0.04% 0.45% 0.35% -0.23% 1.07%
 
1976-4 0.56% 0.01% 0.24% 1.12% -0.24% 1.69%
1980-4 -1.67% 0.56% 0.05% 0.24% -0.37% -1.19%
1984-4 -0.66% -0.64% -1.22% 0.20% -0.26% -2.58%
1988-4 0.32% 0.64% 0.89% -0.93% -0.34% 0.58%
1992-4 -0.02% 1.24% -1.01% -0.20% 0.44% 0.45%
Avg -0.29% 0.36% -0.21% 0.09% -0.15% -0.21%
 
1996-4 -0.11% 1.10% -0.46% 0.12% -2.69% -2.04%
2000-4 -0.20% -1.16% 1.02% 3.06% 0.03% 2.74%
2004-4 -1.90% -0.68% -1.55% -1.03% 2.10% -3.06%
2008-4 -1.95% 3.98% -0.53% 0.88% -2.26% 0.13%
2012-4 -0.86% -1.36% 0.87% 1.18% 0.60% 0.43%
Avg -1.00% 0.38% -0.13% 0.84% -0.44% -0.36%
 
OTC summary for Presidential Year 4 1964 - 2012
Avg -0.46% 0.32% -0.37% 0.46% -0.24% -0.29%
Win% 31% 54% 54% 69% 38% 62%
 
OTC summary for all years 1963 - 2015
Avg -0.05% 0.35% 0.02% 0.31% -0.08% 0.55%
Win% 47% 58% 60% 66% 51% 68%
 
SPX Presidential Year 4
Year Mon Tue Wed Thur Fri Totals
1956-4 0.55% -0.04% -0.07% 0.24% 1.26% 1.93%
1960-4 -1.01% -1.02% 1.07% -0.39% 0.76% -0.59%
1964-4 0.03% 0.33% 0.46% 0.16% 0.08% 1.06%
1968-4 -1.34% -0.23% 1.76% -0.18% -0.08% -0.07%
1972-4 0.77% 0.09% 0.08% -0.02% -0.52% 0.40%
Avg -0.20% -0.17% 0.66% -0.04% 0.30% 0.55%
 
1976-4 1.09% 0.39% 0.36% 0.94% -1.01% 1.77%
1980-4 -0.36% 1.19% -0.84% -1.17% -0.18% -1.37%
1984-4 -0.85% -1.04% -1.08% 0.40% -0.54% -3.10%
1988-4 0.03% 0.77% -0.14% -1.94% 0.42% -0.86%
1992-4 0.19% 0.41% -0.70% -0.03% 0.48% 0.35%
Avg 0.02% 0.34% -0.48% -0.36% -0.17% -0.64%
 
1996-4 1.00% 0.77% -0.58% 0.25% -3.08% -1.64%
2000-4 -1.27% -2.57% 0.82% 2.56% -0.47% -0.93%
2004-4 -0.84% -0.58% -1.46% -1.52% 1.25% -3.15%
2008-4 -1.55% 3.71% -0.90% 0.51% -2.08% -0.30%
2012-4 -0.39% -1.54% 0.69% 0.98% 0.36% 0.11%
Avg -0.61% -0.04% -0.29% 0.56% -0.80% -1.18%
 
SPX summary for Presidential Year 4 1956 - 2012
Avg -0.26% 0.04% -0.04% 0.05% -0.22% -0.43%
Win% 47% 53% 47% 53% 47% 40%
 
SPX summary for all years 1953 - 2015
Avg -0.04% 0.21% 0.06% 0.18% -0.06% 0.35%
Win% 52% 56% 56% 61% 45% 59%


Money supply (M2)

The charts were provided by Gordon Harms. Money supply growth picked up a little last week.

S&P500 and M2 Money Supply Charts


Conclusion

Over the past 3 weeks the market has gained on average about 10% and is overbought. Seasonally next week has been mixed and never up for more than 2 consecutive periods and the OTC was up the last 2 periods so, by that measure, is due for a down week.

I expect the major averages to be lower on Friday March 11 than they were on Friday March 4.

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 6 / L 3 / T 0

 

Back to homepage

Leave a comment

Leave a comment