Technical Market Report – Monday, December 25

The good news is:
All of the major averages closed at all time highs last Monday.

The Negatives

52 week new highs have not been confirming all time new index highs.

The first chart covers the past 6 months showing the S&P 500 (SPX) in red and a 10% trend (19 day EMA) of NYSE new highs (NY NH) in green.  Dashed vertical lines have been drawn on the 1st trading day of each month.

The new high for the SPX was unconfirmed by NY NH.

The next chart is similar to the one above except it shows the Nasdaq composite (OTC) in blue and OTC NH, in green, has been calculated using Nasdaq data.

OTC NH also failed to confirm the new index high.

The Positives

Seasonality for next week is positive.
Recently the secondaries have been outperforming the blue chips.

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 last week finishing the week at a comfortable 72%.

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 with NYSE data.

NY HL Ratio finished the week at a strong 82%.

Seasonality
Next week includes the last 4 trading days of 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 positive by all measures.