Technical Market Report

The good news is:
Most of the major indices are near their all-time highs.

?The Negatives

The breadth indicators deteriorated while the indices rose last week.

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 fell while the index rose last week. 

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

The SPX had a good week, but, NY NH went nowhere. 

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 went negative last week.

The Positives

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

NY HL Ratio fell slightly but remained positive at 68%.

Seasonality

Next week includes the 5 trading days prior to the 2nd Friday of August during the 2nd 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 2018 while SPX data runs from 1953 to 2018. There are summaries for both the 2nd 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 over all years and modestly negative during the 2nd year of the Presidential Cycle.