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Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

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How Millennials Are Reshaping Real Estate

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Technical Market Report for April 22, 2017

The good news is:
• The NASDAQ composite (OTC) closed at an all time high last Thursday.

The market had a good week.

New highs increased, new lows remained insignificant and the secondaries outperformed the blue chips.


The Negatives

Whether or not last week was the beginning of a new leg up or just a rally in a deteriorating market remains to be seen. Total volume continued to decline.

The first chart covers the past 6 months showing the 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 up last week, but was far from confirming the index 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

New lows remained at non threatening levels.

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 rose finishing the week at a comfortable 68%.

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 finished the week at a very strong 86%.

SPX and NY HL Ratio


Seasonality

Next week includes the last 5 trading days of April 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 1928 to 2016. There are summaries for both the 1st year of the Presidential Cycle and all years combined.

Average returns for the coming week have been very strong during the 1st year of the Presidential Cycle than average.

Report for the last 5 days of April.
The number following the year represents its position in the Presidential Cycle.
The number following the daily return represents the day of the week;
1 = Monday, 2 = Tuesday etc.

OTC Presidential Year 1
  Day5 Day4 Day3 Day2 Day1 Totals
1965-1 0.35% 1 0.33% 2 0.37% 3 0.56% 4 -0.31% 5 1.31%
1969-1 0.50% 4 -0.19% 5 0.68% 1 1.06% 2 1.81% 3 3.86%
1973-1 -1.58% 2 -1.67% 3 0.32% 4 -1.20% 5 -0.51% 1 -4.65%
 
1977-1 -0.90% 1 -0.15% 2 0.71% 3 0.28% 4 0.44% 5 0.39%
1981-1 0.71% 5 0.15% 1 -1.02% 2 -0.65% 3 0.24% 4 -0.58%
1985-1 0.44% 3 0.32% 4 0.06% 5 -0.71% 1 -0.55% 2 -0.44%
1989-1 -0.14% 1 -0.11% 2 0.16% 3 0.66% 4 0.32% 5 0.89%
1993-1 -1.90% 1 1.03% 2 0.86% 3 0.04% 4 0.45% 5 0.48%
Avg -0.36% 0.25% 0.15% -0.07% 0.18% 0.15%
 
1997-1 0.08% 4 -1.53% 5 0.64% 1 2.10% 2 1.46% 3 2.76%
2001-1 -2.07% 2 2.14% 3 -1.21% 4 2.01% 5 1.95% 1 2.82%
2005-1 0.96% 1 -1.20% 2 0.16% 3 -1.36% 4 0.92% 5 -0.52%
2009-1 2.55% 5 -0.88% 1 -0.33% 2 2.28% 3 0.31% 4 3.93%
2013-1 0.01% 3 0.62% 4 -0.33% 5 0.85% 1 0.66% 2 1.81%
Avg 0.31% -0.17% -0.22% 1.17% 1.06% 2.16%
 
OTC summary for Presidential Year1 1965 - 2013
Averages -0.08% -0.09% 0.08% 0.46% 0.55% 0.93%
% Winners 62% 46% 69% 69% 77% 69%
MDD 4/30/1973 4.57% -- 4/28/2005 2.39% -- 4/24/2001 2.07%
 
OTC summary for all years 1963 - 2016
Averages -0.10% -0.02% -0.01% 0.17% 0.18% 0.22%
% Winners 56% 46% 67% 65% 65% 57%
MDD 4/29/1970 7.72% -- 4/30/2004 6.32% -- 4/29/1999 4.66%
 
SPX Presidential Year 1
  Day5 Day4 Day3 Day2 Day1 Totals
1929-1 -0.47% 4 -0.20% 5 0.27% 6 -0.47% 1 1.61% 2 0.75%
1933-1 -2.40% 2 0.65% 3 -0.90% 4 1.69% 5 6.26% 6 5.29%
 
1937-1 -3.46% 1 1.67% 2 -2.68% 3 0.00% 4 2.75% 5 -1.72%
1941-1 -0.74% 5 -0.11% 6 0.32% 1 0.21% 2 -1.38% 3 -1.69%
1945-1 -0.20% 3 -0.20% 4 0.41% 5 0.61% 6 0.34% 1 0.95%
1949-1 0.54% 2 0.00% 3 -0.47% 4 0.14% 5 0.20% 6 0.41%
1953-1 0.04% 5 0.58% 1 0.74% 2 0.65% 3 -0.24% 4 1.77%
Avg -0.76% 0.39% -0.34% 0.32% 0.33% -0.06%
 
1957-1 0.15% 3 -0.35% 4 -0.13% 5 0.51% 1 0.02% 2 0.20%
1961-1 -2.08% 1 1.40% 2 0.38% 3 -0.14% 4 -0.23% 5 -0.67%
1965-1 0.01% 1 0.17% 2 -0.04% 3 -0.08% 4 0.20% 5 0.26%
1969-1 0.47% 4 0.44% 5 0.30% 1 0.74% 2 0.88% 3 2.84%
1973-1 -1.42% 2 -1.50% 3 0.51% 4 -1.52% 5 -0.24% 1 -4.18%
Avg -0.57% 0.03% 0.20% -0.10% 0.13% -0.31%
 
1977-1 -1.31% 1 -0.04% 2 0.88% 3 0.24% 4 0.24% 5 0.01%
1981-1 0.90% 5 0.25% 1 -0.85% 2 -0.95% 3 -0.18% 4 -0.83%
1985-1 0.21% 3 0.64% 4 -0.68% 5 -0.85% 1 -0.44% 2 -1.12%
1989-1 -0.30% 1 -0.63% 2 0.06% 3 0.86% 4 0.02% 5 0.02%
1993-1 -0.80% 1 1.03% 2 0.00% 3 0.20% 4 0.30% 5 0.73%
Avg -0.26% 0.25% -0.12% -0.10% -0.01% -0.24%
 
1997-1 -0.32% 4 -0.75% 5 0.99% 1 2.73% 2 0.92% 3 3.57%
2001-1 -1.22% 2 1.59% 3 0.47% 4 1.50% 5 -0.29% 1 2.06%
2005-1 0.87% 1 -0.89% 2 0.40% 3 -1.14% 4 1.19% 5 0.43%
2009-1 1.68% 5 -1.01% 1 -0.27% 2 2.16% 3 -0.10% 4 2.47%
2013-1 0.00% 3 0.47% 4 -0.25% 5 0.72% 1 0.25% 2 1.19%
Avg 0.20% -0.12% 0.27% 1.19% 0.40% 1.94%
 
SPX summary for Presidential Year 1 1929 - 2013
Averages -0.45% 0.15% -0.02% 0.36% 0.55% 0.58%
% Winners 45% 50% 59% 64% 64% 73%
MDD 4/28/1937 4.48% -- 4/30/1973 4.12% -- 4/27/1933 2.65%
 
SPX summary for all years 1928 - 2016
Averages -0.19% 0.05% -0.09% -0.02% 0.24% -0.02%
% Winners 48% 57% 52% 51% 58% 56%
MDD 4/29/1932 7.02% -- 4/29/1936 6.82% -- 4/29/1931 6.02%


Conclusion

The market turned up nicely last week and seasonally the short term future has been strong.

I expect the major averages to be higher on Thursday April 28 than they were on Thursday April 21.

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

Good Luck,

YTD W 5 / L 7 / T 4

 

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