Technical Market Report For September 28, 2024

The good news is:

 The NegativesNegatives are difficult to find. The PositivesThe first chart covers the last 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 1^st trading day of each month.  OTC NH continued to lead prices upward last week.  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.  NY NH declined a little failing to confirm the index all time high by a small margin. The next chart covers the past 6 months showing the OTC in blue and a 10% trend (19 day EMA) of Nasdaq new lows (OTC NL) in brown.  OTC NL has been plotted on an inverted Y axis so decreasing numbers of new lows move the indicator upward (up is good).  OTC NL was pretty flat last week. The next chart is similar to the one above except it shows the SPX in red and NY NL, in blue, has been calculated with NYSE data.NY NL continued moving upward. Summation indices are running totals of oscillator values.Short term momentum indicators applied to summation indices make them nearly binary.The next chart covers the past 6 months showing the SPX in red and momentum of summation indices of oscillators of advancing and declining issues, new highs and new lows and upside and downside volume on the NYSE.  NY HL & UD SI MoM’s turned downward while the AD remained strong last week. The next chart is similar to the NYSE chart above; except it shows the OTC, in blue and the SI MoM’s have been generated from Nasdaq breadth data. OTC AD SI MoM turned downward while the others remained strong.  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 (equal numbers of new highs and new lows).OTC HL Ratio remained in positive territory. 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 remained very strong. 
 SeasonalityNext week includes the last trading day of September and the 1^st 4 trading days of October during the 4^th 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 2023 while SPX data runs from 1928 to 2023.  There are summaries for both the 4^th year of the Presidential Cycle and all years combined.  Average returns for the coming week have been mixed and weaker during the 4^th year of the Presidential Cycle than other years,  Report for the last day of September and first 4 days of October.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 4 (PY4)               Day1      Day1      Day2      Day3      Day4      Totals 1964-4       0.26% 3   0.09% 4  -0.25% 5   0.07% 1   0.19% 2     0.35% 1968-4      -0.04% 1   0.20% 2   0.61% 4   0.37% 5  -0.12% 1     1.02% 1972-4       0.37% 5  -0.24% 1   0.14% 2  -0.15% 3  -0.99% 4    -0.87% 1976-4      -0.01% 4  -0.90% 5   0.02% 1  -0.78% 2  -0.80% 3    -2.47% 1980-4       1.06% 2   0.99% 3   0.63% 4   1.37% 5   1.33% 1     5.39%  Avg          0.33%     0.03%     0.23%     0.18%    -0.08%       0.68%  1984-4      -0.14% 5  -0.83% 1  -0.71% 2  -0.52% 3   0.16% 4    -2.05% 1988-4       0.43% 5  -0.83% 1  -0.07% 2   0.08% 3   0.16% 4    -0.23% 1992-4       0.98% 3  -0.85% 4  -1.16% 5  -1.12% 1   0.94% 2    -1.21% 1996-4      -0.26% 1  -0.44% 2   1.20% 3  -0.23% 4   1.17% 5     1.43% 2000-4      -2.79% 5  -2.83% 1  -3.17% 2   1.95% 3  -1.45% 4    -8.29%  Avg         -0.36%    -1.16%    -0.78%     0.03%     0.20%      -2.07%  2004-4       0.15% 4   2.39% 5   0.53% 1   0.16% 2   0.79% 3     4.02% 2008-4       4.97% 2  -0.62% 3  -4.48% 4  -1.48% 5  -4.34% 1    -5.95% 2012-4      -0.65% 5  -0.09% 1   0.21% 2   0.49% 3   0.45% 4     0.41% 2016-4       0.81% 5  -0.21% 1  -0.21% 2   0.50% 3  -0.17% 4     0.72% 2020-4       0.74% 3   1.42% 4  -2.22% 5   2.32% 1  -1.57% 2     0.70%  Avg          1.21%     0.58%    -1.24%     0.40%    -0.97%      -0.02% OTC summary for PY4 1964 – 2020Averages      0.39%    -0.18%    -0.60%     0.20%    -0.28%      -0.47%% Winners       60%       33%       47%       60%       53%         53%MDD  10/6/2008  10.53% —  10/3/2000  8.54% —  10/5/1992  3.10% OTC summary for all years 1963 – 2023Averages     -0.02%    -0.02%    -0.10%     0.27%     0.04%       0.17%% Winners       49%       53%       52%       64%       59%         62%MDD 10/6/1998  12.87% —  10/6/2008  10.53% —  10/3/2000  8.54%
 SPX PY4               Day1      Day1      Day2      Day3      Day4      Totals 1928-4       1.09% 6  -0.05% 1  -0.47% 2  -0.33% 3   0.33% 4     0.57% 1932-4      -0.25% 5   0.87% 6  -1.10% 1  -0.12% 2  -8.20% 3    -8.81% 1936-4      -0.31% 3   0.19% 4   1.93% 5   0.98% 6   0.12% 1     2.91% 1940-4       0.09% 1   1.41% 2   0.46% 3   0.09% 4  -0.83% 5     1.23%  1944-4       0.31% 6   0.16% 1   0.00% 2   0.55% 3   0.62% 4     1.64% 1948-4      -0.39% 4   1.16% 5   0.51% 6   0.63% 1  -0.19% 2     1.73% 1952-4      -0.57% 2  -0.24% 3   0.16% 4  -0.08% 5  -0.24% 1    -0.97% 1956-4      -0.55% 5  -1.43% 1   1.83% 2   1.67% 3   0.02% 4     1.54% 1960-4       1.71% 5  -0.30% 1  -0.69% 2   0.75% 3   0.62% 4     2.09%  Avg          0.10%    -0.13%     0.36%     0.70%     0.17%       1.21%  1964-4      -0.07% 3  -0.12% 4   0.33% 5   0.45% 1   0.06% 2     0.65% 1968-4       0.35% 1   0.19% 2   0.47% 4   0.36% 5  -0.01% 1     1.35% 1972-4       0.18% 5  -0.35% 1   0.13% 2  -0.19% 3  -1.09% 4    -1.32% 1976-4      -0.12% 4  -1.02% 5  -0.13% 1  -0.77% 2  -0.25% 3    -2.30% 1980-4       1.55% 2   1.33% 3   0.76% 4   0.97% 5   1.86% 1     6.46%  Avg          0.38%     0.01%     0.31%     0.16%     0.11%       0.97%  1984-4      -0.52% 5  -0.89% 1  -0.63% 2  -0.70% 3   0.30% 4    -2.44% 1988-4      -0.25% 5  -0.19% 1  -0.28% 2   0.46% 3   0.19% 4    -0.07% 1992-4       0.24% 3  -0.36% 4  -1.40% 5  -0.71% 1  -0.10% 2    -2.32% 1996-4       0.17% 1   0.26% 2   0.71% 3  -0.18% 4   1.25% 5     2.21% 2000-4      -1.49% 5  -0.02% 1  -0.68% 2   0.55% 3   0.14% 4    -1.51%  Avg         -0.37%    -0.24%    -0.45%    -0.12%     0.36%      -0.82%  2004-4      -0.02% 4   1.52% 5   0.32% 1  -0.06% 2   0.67% 3     2.43% 2008-4       5.27% 2  -0.32% 3  -4.03% 4  -1.35% 5  -3.85% 1    -4.27% 2012-4      -0.45% 5   0.27% 1   0.09% 2   0.36% 3   0.72% 4     0.98% 2016-4       0.80% 5  -0.33% 1  -0.50% 2   0.43% 3   0.05% 4     0.45% 2020-4       0.83% 3   0.53% 4  -0.96% 5   1.80% 1  -1.40% 2     0.80%  Avg          1.29%     0.33%    -1.01%     0.24%    -0.76%       0.08% SPX summary for PY4 1928 – 2020Averages      0.32%     0.09%    -0.13%     0.23%    -0.38%       0.13%% Winners       50%       46%       50%       58%       58%         63%MDD  10/5/1932  9.33% —  10/6/2008  9.26% —  10/3/1984  2.71% SPX summary for all years 1928 – 2023Averages     -0.02%     0.09%     0.13%     0.23%    -0.13%       0.29%% Winners       45%       52%       63%       57%       54%         60%MDD 10/5/1931  12.33% —  10/5/1932  9.33% —  10/6/2008  9.26% OctoberSince 1963, over all years, the OTC in October has been up 56% of the time with an average gain of 0.9% During the 4^th year of the Presidential Cycle October has been up 33% time with an average loss of -1.9 (helped considerably by a 17.4% loss in 2008).  The best October ever for the OTC was 1974 (+17.2%), the worst 1987 (-27.2%).The average month has 21 trading days.  The chart below has been calculated by averaging the daily percentage change of the OTC for each of the 1^st 11 trading days and each of the last 10.  In months when there were more than 21 trading days some of the days in the middle were not counted.  In months when there were less than 21 trading days some of the days in the middle of the month were counted twice.  Dashed vertical lines have been drawn after the 1^st trading day and at 5 trading day intervals after that.  The line is solid on the 11^th trading day, the dividing point.In the chart below the blue line shows the average of the OTC in October over all years since 1963 while the green line shows the average during the 4^th year of the Presidential Cycle over the same period. Since 1928 the SPX has been up 59% of the time in October with an average gain of 0.5%.  During the 4^th year of the Presidential Cycle the SPX has been up 57% of the time with an average loss of -0.4% (helped by losses of 13.9% in 1932 and 16.8% in 2008).  The best October ever for the SPX was 1974 (+16.3%), the worst 1987 (-21.8%).The chart below is similar to the one above except it shows the average daily performance over all years for the SPX in October in red and the performance during the 4^th year of the Presidential Cycle in green.  Since 1979 the Russell 2000 (R2K) has been up 58% of the time in October with an average loss of -0.2%.  During the 4^th year of the Presidential Cycle the R2K has been up 36% of the time with an average loss of -2.4%.  The best October ever for the R2K, 2011 (+15.0%), the worst 1987 (-30.7%)The chart below is similar to those above except it shows the daily performance over all years of the R2K in October in magenta and the performance during the 4^th year of the Presidential Cycle in green. Since 1885 the Dow Jones Industrial Average (DJIA) has been up 56% of the time in October with an average gain of 0.4%.  During the 4^th year of the Presidential Cycle the DJIA has been up 59% of the time in October with an average gain of 0.6%.  The best October ever for the DJIA was 2022 (+14.0%), the worst 1987 (-23.2%).The chart below is similar to those above except it shows the daily performance over all years of the DJIA in October in blue and the performance during the 4^th year of the Presidential Cycle in green. ConclusionAgain the blue chip indices closed at all time highs on Thursday and Friday. Seasonality for the coming week has been mixed. The strongest sectors last week were Precious Metals (for the 3^rd week in a row) and Basic Materials while the weakest were Energy and Health Care (for the 2^nd week). I expect the major averages to be higher on Friday October 4 than they were on Friday September 2Last weeks negative forecast was a miss.   More By This Author: