• 2 days New Study Equates Luxury Cars With Low Self-Esteem
  • 2 days Rio Tinto To Spend $1 Billion To Reduce Its Carbon Footprint
  • 3 days The Ultra-Wealthy Lost $140 Billion In One Day
  • 3 days Three Energy Casualties In The Coronavirus Crisis
  • 4 days Markets Crumble As Coronavirus Panic Peaks
  • 4 days Cobalt May Be The Key To Clean Hydrogen Fuel
  • 6 days How Taxpayers Are Bankrolling The EV Revolution
  • 7 days The Coronavirus Is Crushing China’s Car Market
  • 8 days Fighting For Survival In The Streaming War
  • 9 days Want A Job? Forget About A Bachelor’s Degree
  • 9 days Another Major Car Maker Is Backing Hydrogen
  • 10 days Are Americans Finally Sold On Soccer?
  • 10 days Is The Tech Bubble About To Burst?
  • 11 days Coronavirus Could Cost Tourism Industry $80 Billion
  • 11 days What Web Traffic Trends Can Tell Us About The World
  • 11 days Miners Face Greater Headwinds
  • 12 days Boris Johnson Proposes Billion Dollar Bridge To Northern Ireland
  • 13 days Goldman Slashes Oil Price Forecast By $10
  • 14 days Tesla Raises $2 Billion In Share Selloff
  • 15 days What The T-Mobile Takeover Of Sprint Really Means For Markets
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 July 2, 2016

The good news is:
• The market has recovered from its BREXIT calamity.


The Negatives

The market is overbought.

Over the last 4 trading days of last week the major indices were up 5% - 6%.

After hitting record low yields earlier in the week, 10 year treasuries finished the week yielding 1.44%.


The positives

New highs reached significant numbers by the end of last week while new lows disappeared.

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 finished the week at a strong 69%.

OTC and OTC HL Ratio Chart

The next chart 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 finished the week at 93% very strong.

SPX and NY HL Ratio Chart


Seasonality

Next week includes the 4 trading days prior to the 2nd Friday of July 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.

Average returns for the coming week have been positive by all measures, but weaker during the 4th year of the Presidential Cycle than other years.

Report for the week before the 2nd Friday of July.
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 0.05% 0.15% 0.22% 0.20% 0.37% 0.98%
1968-4 -0.06% 0.19% 0.00% -0.20% -0.28% -0.35%
1972-4 -0.49% -0.29% -0.28% -0.83% 0.27% -1.62%
 
1976-4 0.00% -0.29% -0.02% 0.21% 0.76% 0.66%
1980-4 1.03% 0.32% 0.03% 0.94% 0.78% 3.10%
1984-4 0.11% -0.31% -0.61% -0.26% 0.19% -0.87%
1988-4 0.00% 0.36% -0.17% -0.01% -0.28% -0.09%
1992-4 0.43% 0.88% 0.05% 0.13% -0.98% 0.49%
Avg 0.52% 0.19% -0.14% 0.20% 0.09% 0.66%
 
1996-4 -0.83% 0.42% -1.06% -3.08% -0.25% -4.80%
2000-4 -1.07% -0.60% 3.62% 1.84% 1.71% 5.50%
2004-4 0.00% -2.15% 0.13% -1.56% 0.57% -3.01%
2008-4 -1.17% 0.13% 3.12% 1.20% -1.28% 2.00%
2012-4 -0.19% -1.00% -0.49% -0.75% 1.48% -0.97%
Avg -0.81% -0.64% 1.06% -0.47% 0.44% -0.26%
 
OTC summary for Presidential Year 4 1964 - 2012
Avg -0.22% -0.17% 0.38% -0.17% 0.23% 0.08%
Win% 40% 54% 50% 46% 62% 46%
 
OTC summary for all years 1963 - 2015
Avg 0.09% -0.11% 0.34% 0.31% 0.42% 1.02%
Win% 68% 51% 60% 66% 75% 68%
 
SPX Presidential Year 4
Year Mon Tue Wed Thur Fri Totals
1956-4 0.44% 0.60% 0.31% -0.23% 0.29% 1.41%
1960-4 0.00% -0.07% -0.14% 0.53% 0.24% 0.56%
1964-4 -0.06% -0.30% 0.34% 0.36% 0.44% 0.78%
1968-4 -0.08% -0.55% 0.00% -0.26% -0.97% -1.85%
1972-4 -0.53% -0.73% -0.40% -0.57% 0.49% -1.75%
Avg -0.06% -0.21% 0.03% -0.03% 0.10% -0.17%
 
1976-4 0.00% -0.55% 0.28% 0.14% 0.96% 0.84%
1980-4 1.84% -0.59% 0.28% 1.51% 0.49% 3.53%
1984-4 0.74% -0.31% -1.52% -0.35% 0.57% -0.88%
1988-4 0.00% 1.48% -1.37% -0.09% -0.65% -0.63%
1992-4 0.06% 0.68% -0.14% 0.11% -0.46% 0.24%
Avg 0.88% 0.14% -0.50% 0.26% 0.18% 0.62%
 
1996-4 -0.75% 0.34% 0.20% -1.59% 0.08% -1.71%
2000-4 -0.22% 0.36% 0.81% 0.19% 0.95% 2.09%
2004-4 0.00% -0.81% 0.19% -0.82% 0.33% -1.12%
2008-4 -0.90% -1.09% 2.51% 1.20% 0.03% 1.74%
2012-4 -0.16% -0.81% 0.00% -0.50% 1.65% 0.17%
Avg -0.51% -0.40% 0.74% -0.30% 0.61% 0.24%
 
SPX summary for Presidential Year 4 1956 - 2012
Avg 0.03% -0.16% 0.10% -0.02% 0.30% 0.23%
Win% 36% 33% 57% 47% 80% 60%
 
SPX summary for all years 1953 - 2015
Avg 0.06% -0.02% 0.26% 0.17% 0.29% 0.73%
Win% 60% 46% 58% 61% 68% 68%


Conclusion

The market is overbought after an interesting 2 weeks. Next week is likely to be dull and without much help from seasonality probably down a little.

I expect the major averages to be lower on Friday July 8 than they were on Friday July 1.

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 12 / L 11 / T 3

 

Back to homepage

Leave a comment

Leave a comment