• 4 days 3 Restaurant Stocks In Full Recovery Mode
  • 4 days Bitcoin Is Driven By Testosterone
  • 9 days Quantum Computing Is The Newest Megatrend In Silicon Valley
  • 10 days How To Invest In The Cybersecurity Boom
  • 12 days Investors Are Patient With Unprofitable Giants
  • 14 days Wells Fargo Back In The Scandal Spotlight Once Again
  • 16 days 5 Stocks To Keep A Close Eye On This Year
  • 17 days As Auto Giants Flail, Look To Chip Stocks For Gains
  • 18 days Central America Is Ready For The Bitcoin Hustle
  • 20 days China’s Video Game Restrictions Unlikely To Slow Down Booming Industry
  • 21 days Top Performing Stocks As Inflation Fears Grow
  • 22 days US Airline Stocks Take A Beating On New EU Restrictions
  • 23 days This IPO Could Open Sustainable Fashion Floodgates
  • 24 days Crypto Crime Nets Another $2B Fraudster
  • 26 days This Week’s Hottest Meme Stocks
  • 27 days Why World Markets Should Be Watching Germany Closely
  • 29 days Could ‘Cultured’ Meat Rival The Plant-Based Megatrend?
  • 32 days ‘Easy Money’: Crypto Is Still Attracting Newbie Investors
  • 33 days Foreign Syndicates May Have Stolen Up To $400B In COVID Benefits
  • 34 days Gold Jumps Above $1800 Ahead Of Jackson Hole Summit
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…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

  1. Home
  2. Markets
  3. Other

Technical Market Report for March 18, 2017

The good news is:
• The breadth indicators improved significantly last week.


The Negatives

The breadth indicators improved last week, but, with the major indices only slightly off their all time highs, the breadth indicators are not confirming the index levels.

The first chart covers the past 6 months showing the NASDAQ composite (OTC) in blue and a 10% trend (19 day EMA) of NASDAQ new highs (OTC NH) in green. Dashed vertical lines have been drawn on the 1st trading day of each month.

OTC NH turned upward last week, but, while the index is only slightly off its all time high, OTC NH is far from confirming that high.

OTC and OTC NH

The next chart is similar to the one above except it shows the S&P 500 (SPX) in red and NY NH, in green, has been calculated with NYSE data.

The pattern is similar to the chart above.

SPX and NY NH


The Positives

Last week new highs increased, new lows decreased and the secondaries outperformed the blue chips. If that pattern continues the bull will be revived.

The next chart covers the past 6 months showing the 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 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 comfortable 78%.

OTC and OTC HL ratio

The next chart is similar to the one above one except it shows the SPX in red and NY HL Ratio, in blue, has been calculated from NYSE data.

NY HL Ratio shot up to 80% on Friday.

SPX and NY HL Ratio


Seasonality

Next week includes the 5 trading days prior to the 4th Friday of March during the 1st 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 2016 while SPX data runs from 1953 to 2016. There are summaries for both the 1st 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 positive by most measures and a little stronger during the 1st year of the Presidential Cycle than average.

Report for the week before the 4th Friday of March.
The number following the year is the position in the Presidential Cycle.
Daily returns from Monday through the 4th Friday.

OTC Presidential Year 1
Year Mon Tue Wed Thur Fri Totals
1965-1 0.02% -0.25% -0.10% 0.08% -0.14% -0.39%
1969-1 0.06% -0.10% -0.29% 0.15% 0.34% 0.16%
1973-1 -1.06% -0.57% -1.17% -1.85% -0.19% -4.83%
 
1977-1 -0.19% -0.22% -0.30% -0.23% -0.27% -1.21%
1981-1 0.64% 0.04% 0.78% 0.11% -0.34% 1.22%
1985-1 -0.30% 0.62% -0.03% 0.09% -0.04% 0.34%
1989-1 -0.09% 0.51% 0.27% 0.21% 0.54% 1.44%
1993-1 -0.89% -0.23% -0.10% 0.99% 0.08% -0.16%
Avg -0.17% 0.14% 0.12% 0.23% -0.01% 0.33%
 
1997-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2001-1 3.19% -4.81% -1.46% 3.69% 1.63% 2.24%
2005-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2009-1 6.76% -2.52% 0.82% 3.80% -2.63% 6.22%
2013-1 -0.35% -0.26% 0.78% -0.97% 0.70% -0.11%
Avg 3.20% -2.53% 0.04% 2.17% -0.10% 2.78%
 
OTC summary for Presidential Year 1 1965 - 2013
Avg 0.71% -0.71% -0.07% 0.55% -0.03% 0.45%
Win% 45% 27% 36% 73% 45% 55%
 
OTC summary for all years 1965 - 2013
Avg 0.00% -0.20% 0.08% 0.17% 0.04% 0.09%
Win% 50% 41% 52% 54% 54% 57%
 
SPX Presidential Year 1
Year Mon Tue Wed Thur Fri Totals
1953-1 -0.61% 0.58% -0.27% -0.57% 0.15% -0.72%
 
1957-1 -0.45% 0.43% 0.14% 0.02% -0.11% 0.02%
1961-1 0.40% -0.19% -0.06% -0.26% -0.17% -0.28%
1965-1 -0.01% 0.12% 0.18% -0.29% -0.74% -0.74%
1969-1 -0.13% 0.16% 0.73% 0.71% 0.41% 1.88%
1973-1 -1.21% -0.20% -1.30% -1.49% 0.04% -4.16%
Avg -0.28% 0.07% -0.06% -0.26% -0.12% -0.66%
 
1977-1 -0.54% -0.31% -0.79% -0.50% -0.64% -2.78%
1981-1 1.20% -0.75% 1.81% -0.61% -1.19% 0.46%
1985-1 0.20% 1.50% -0.26% 0.15% -0.17% 1.42%
1989-1 0.55% 0.35% 0.26% 0.06% 0.80% 2.02%
1993-1 -0.29% -0.03% -0.15% 0.63% -0.69% -0.53%
Avg 0.22% 0.15% 0.17% -0.06% -0.38% 0.12%
 
1997-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2001-1 1.76% -2.41% -1.79% -0.41% 1.99% -0.85%
2005-1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2009-1 7.08% -5.97% 5.18% 2.33% -2.03% 6.59%
2013-1 -0.55% -0.24% 0.67% -0.83% 0.72% -0.23%
Avg 2.76% -2.87% 1.35% 0.37% 0.23% 1.83%
 
SPX summary for Presidential Year 1 1953 - 2013
Avg 0.53% -0.50% 0.31% -0.08% -0.12% 0.15%
Win% 43% 43% 50% 43% 43% 43%
 
SPX summary for all years 1953 - 2016
Avg 0.07% -0.12% 0.06% -0.02% -0.06% -0.08%
Win% 42% 45% 44% 40% 55% 38%


Money supply (M2) and Interest Rates

The following charts were supplied by Gordon Harms. M2 growth continued to level off, but remains well above its elevated trend.

SPX and M2 Money Supply

Interest rates did not move much in the past month.

Yield Curve


Conclusion

The breadth indicators recovered a bit last week, but, with the major indices only slightly off their all time highs, there is little chance of new index highs being confirmed by anything.

I expect the major averages to be lower on Friday March 24 than they were on Friday March 17.

Last weeks positive forecast was a miss.

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

Good Luck,

YTD W 2 / L 5 / T 4

 

Back to homepage

Leave a comment

Leave a comment